An Evaluation of the Best Marketing Strategies for a Business
Table of Contents
Reason for using PEST Analysis in our Case Study. 5
An Evaluation of the Best Marketing Strategies for a Business
Introduction
Rapid growth in the telecommunication sector has seen players in the industry experience an upsurge in the numbers of data consumers. Rivalry in this space means that service providers have to meet customer expectations regarding quality while also serving the big names. There is an urgent need to leverage on this high demand while maintaining the quality of the service. The success of an organization under such stiff competition requires the implementation of appropriate marketing strategies. Every organization is only able to apply a policy, which focuses on its strengths to gain a share of the market. The intricacy with this is that the market is diverse, implementing the best strategy to evaluate the dynamics appropriately involved.
Moreover, assessing the competitors is vital in establishing ideas that can and cannot work. Marketing strategies theories have been developed over the years to help organizations find the best way out of a problem or simply improve in their brand. An organization that does not change in an environment that offers stiff competition is sure to fail. This paper analyzes the different strategies an organization will use to bridge the gap between current and future requirements to capitalize on growth.
Background of the Case Study
The case study for this paper is Keysight Technologies. The name was changed from Agilent in the year 2013. The split was necessitated by Agilent proposing the existence of the two as different public limited companies. It is an industrial, technological company that deals with measurement in wireless and linked software solutions. The company was founded in the year 1939, headquartered in Santa Rosa, California. The mode company, to date, brags of nearly 12600 employees operating in countries more than 80. The products offered by Keysight are aimed at helping scientists confront challenges with more assurance. The company has two segments that it uses to operate.
One segment focuses on services to the client while the other looks into the measurement solutions. The client services offers repair services to those who have bought products from Keysight. Their product line works on improving networks provide electronic gadgets at the best price. It is estimated that most of the sales come from the United States, Japan, and China. According to the company’s director, Narduzzi (2019), he emphasized the need to maintain quality in electric car models. Increasing customer demands for Keysight means they have to be more strategic. Finding the best approach to reaching out to the customers is essential in maintaining a good rapport and reaching different geographical segments.
Strategic Marketing
Strategic marketing is an integral part of the success of any business. Analysis conducted to identify factors affecting the internal and external environment is part of an organization’s objective (Aaker & McLoughlin, 2010). Doing a review and later implementing developed strategies enhances the production. Successful strategies involve the critical assessment of both the external and internal environment. Our case study will be beneficial to future companies in implementing their strategic marketing ideas. Areas of focus are mostly customer satisfaction, quality of a product, and sales.
Markets are analyzed according to the interests they serve. The idea is to have the attractiveness of the market in place. Analysis of the market dimensions will be used in this study. According to Aaker & McLoughlin (2010), aspects of a market analysis include its lucrativeness, growth rate, market size, expansions and trends, the cost structure of the industry, and channels of distribution. Moreover, other aspects such as: legal, environmental, functional roles, social and human characteristics should be explored (Porter, 2004). In analyzing our case, this study will use both PEST and SWOT analysis methods of strategic marketing.
Marketing strategy is a process that involves two methods; the first is the destination of the organization, while the second is the steps you intend to follow to reach there (Tanwar, 2013). Generic strategies are the basics that an organization seeks to achieve to maintain its position in the environment. Generic marketing strategies include: cost leadership that aims to have the least cost of production, differentiation strategy that concentrates on offering unique product or service. Lastly, we have the focus strategy that operates on a selected market rather than a broad market with many customers.
PEST Analysis
The approach of this technique is not sophisticated. The word PEST is an acronym for Political, Economic, Social, and Technological factors that affect the environment of an organization. PEST analysis promotes intuitive thinking essential for strategy development. A breakdown of each element is a critical better understanding.
Breakdown of PEST Analysis
Political factors include issues relating to the government. Taxation, consumer protection, trade barriers, corruption, and approach towards employment are some of the defining parameters. Economic factors are those which result from legislations made by the political decisions(Law,2016). They include stoke exchange, rate of demand and supply, inflation levels, tax, and trade regulation, perception of customers, education, religious, and cultural beliefs form part of the social factors. Rapid change in technology affects the models of many businesses. Technological advancements in areas relating to the supply chain, for instance, affect the distribution channels and means of communication.
Reason for using PEST Analysis in our Case Study
PEST analysis is paramount is establishing those significant factors that will affect the business. The PEST analysis influences decisions an organization will make, providing an avenue for examining the SWOT analysis.
SWOT Analysis
The SWOT technique is used for analysis of the markets when determining future practices. SWOT is an acronym with each letter having a symbolized interpretation. The first two letter s stands for the strengths and weaknesses of the business entity, respectively. The next two define the opportunities and threats bound to be experienced. The organization competes in a very dynamic environment, and SWOT analysis is particularly critical in shaping strategies needed for decision making, resource allocation, and competences. Analysis using this method is significant in meeting market demands. Moreover, the application of this technique is perfect because of its flexibility and personal reasoning.
The application of this analysis method is dependent on the area under study—the strengths of a business assists in grasping the opportunities. The weaknesses neutralize the threats. Forces are internal and are under the control of the organization. Selected examples of strengths of an enterprise are mainly of the essence when it comes to innovation, advancement in technology, customer loyalty, patents, and general management. Advantages are core to any business and should be treated with the utmost precision. Strengths are evaluated and selected after careful thought.
Weaknesses are also internal factors. Organizations have minimal control over them, and this often obstructs the accomplishment of objectives. The competitive advantage, as a result, is significantly compromised. Weaknesses that an organization is likely to experience include: poor strategic vision, weak brand, wrong promotion methods, and incompetency of the workforce, poor management, less production, financial constraints, poor distribution channels, economic and increased levels of production costs. Although weaknesses point out areas that are not managed effectively, these areas must be entirely addressed. Leaders of organizations should be real when providing answers to pressing issues.
Opportunities are external influences, and their control is beyond the organization. The capacity of an organization to achieve growth depends on the opportunities they can capture. Improved technology, potential growth resulting from market demand, customer acquisition based on their preferences, versatility in transmission of technical expertise, and dwindling barriers to trade are some of the situations that can lead to increased opportunity. An organizations opportunity could be a possible threat to a different organization. Acquiring chances are pivotal in claiming a more significant market share
Threats are another faction of external factors. They cannot be controlled. The existence of risks is harmful to an organization. A business entity with many competitors should always have mechanisms of dealing with threats. Examples of threats include: varied customer needs, recession, influence from the environment, alteration of foreign trade procedures, surging costs, business phase, product diversification, and improved competition. Comparing the possibility of a threat and that of emerging opportunities to the organization’s goals is the best way of mitigating their impact.
Reason as to why SWOT Analysis is used for our Case Study
SWOT analysis provides the initial step in determining the strategy to be used by a business. It is simple and looks into the different scenarios that affect a business. However, its simplistic nature may not portray an accurate picture of the organization. SWOT analysis for our case study will help pave the way for the Ansoff Matrix, which is critical in informing the growth mechanism for the selected objective.
Ansoff’s Matrix
Ansoff Matrix provides an elaborate grid that represents the growth strategies. Four elements are defining how a business advances the market and product range (Ansoff, 1965). The Matrix’s focus is to reveal critical areas that are critical in terms of market development and penetration, product diversification, and development. Figure 1 below shows the Ansoff Matrix.
| Existing Products | New Products | |
| Existing Markets | Market penetration | Product development |
| New Markets | Market Development | Diversification |
Market Penetration
It involves a growth strategy focusing on the same line of products and services directed towards a large group of consumers (Lancaster, 1988). The approach has to maintain originality and ensure that there is an increase in sales. Kotler (2000) states that an organization will strive not to change its products or market niche. The goal is to penetrate the market. Aggressive marketing will help improve on penetration of the market. While grasping the market, establishing areas of strength will help develop the idea to the targeted group.
Product Development
Kotler(2000) asserts product development occurs when an organization stabilizes in the same market but diversifies on its products. Organizations which develop their product are mostly in familiar territory when it comes to the market. This development improves on the scope of the business. However, the risk involved here is that the customer target is specific (McCarthy, 2000). Organizations must strive to offer the very best of their products. Product modification is not a bad idea, but it requires with surety, as the market remains constant.
Market Development
Products, in their current form, are taken to new markets. This is achieved by exploring segments that were previously ignored or establishing a completely new market (Ansoff, 1965). This kind of strategy is will be productive if the organization focuses on its key attributes in determining the new market. A business entity is able move its existing products to different geographical segments. The success is better if they are able to increase sales targeting the newly acquired market niche.
Diversification
Ansoff (1965) postulates that there are three levels of diversification. The first level comprises of both new markets and customers. Level two is where the markets are completely distinct but the products used are original to target new consumers and market. The last level comprises of dissimilar markets that are in need of new resources. This strategy is a rather complex method and its interpretation requires appropriate of the new products and market. According to Doyle (1994), the complication of handling both markets and products is a risk because the organization can easily deviate from its area of expertise.
Case Company using Ansoff Matrix
Market penetration. The case study a has a wide market share, and should assess if investing for additional growth can lead to decreased returns from activities that are development oriented . Reduction of costs will lead to increased profit as compared to finding a larger market share. Additionally, Keysight’s strong market share means that they can invest heavily on their products and services to gain more profit. The competitive position of the case study should able it fend off competitors.
Product development. Our case study company has specific line which it operates. They have a large market share in this line which makes it possible for the organization to develop their product further. The development of a product requires research as any fault may destroy the reputation of Keysight.
Market development. Keysight Technologies should be able to explore different geographical area. They can also target a different demographic group. The risk factor involved is minimal because they have a recognized brand that holds a huge portion of the market.
Diversification. The case study is already involved in diversification as the deal with a variety of products. However, this is only meant to complement the main line of service. Unrelated marketing may pose more risk to our case study because of its complex nature.
Segmentation, Targeting, and Positioning for our Case Study
Many organizations today use this model to develop their strategies. The model has a main emphasis on customers. The advantage of this model when developing a marketing statement blueprint, is that the dealers are able convey messages with a personalized touch. They do this by prioritizing main points. According to (Wind & Bell, 2007) the structure of STP is able to develop a market mix and position its product by selecting the best market section. The structure starts by market segmentation, deciding on the market niche, and ends with creation of a proper market mix as illustrated in Figure 2 below
Figure 2: Stages of STP
Segmentation
Segmentation is process of aligning customers into groups with common interests (Walletzký, 2015). Segmentation helps in obtaining areas with individual needs. The process leads to identification of developed markets and potential customers. Factors that include lifestyle, values, demographics, and beliefs are core to segmentation. In relation to our case study, segmentation is important for dividing the market.
The market of our case study is analyzed to measure its ability of providing different needs. The strategic positioning of the market aids in determining the organizations competitive advantage. Likewise, the firm is able to establish its weak points. Through analysis of the market, our case study is able to channel its limited resources to segments of the market with the highest profitability margins.
Targeting
Reviewing the potential individual market segment and selecting the best point of entry is a pertinent to our case study. The target market in our case aims at satisfying precise needs of consumers in the electronic sector. The factors that are considered in developing a target market for Keysight Technologies accessibility, money, size of the market and benefits that can be accrued. It is evident that the market size of Keysight Technologies is large enough to warrant its segmentation. The market is positioned to accumulate anticipated profit in each segment.
Product positioning
Product positioning forms the final stage. The idea here is to have the product identify itself differently to its consumers. This is achieved by creating a unique product or service. A customer is able to explain details of a product without any difficulty when it is perfectly positioned. Walletzky (2015) asserts that for an organization to gain a competitive edge, they must learn how to position their product properly in the target market. Moreover, marketing mix will help create calculated positions.
Keysight Technologies uses a combination of tall the aforementioned strategies. The stages are designed in a way that they are related and it is difficult to separate one entity from the other one. Furthermore, a business that intends to explore the market has to identify its clientele base before identifying marketing strategies that will enable it to progress. The STP model provides the possibility of going through each stage in a well define manner. To have a competitive advantage, organizations should endeavor to create the correct market mix. Ansoff’s Matrix will aid in understanding the progress made in an attempt to drive the company to greater heights.
Conclusions and Future Study
Various marketing strategies can be used to ensure the success of any business. However, strategies work differently depending on the type of business. Market planners have to conduct thorough research before engaging in any marketing strategy or mix. Aspects such as physical appearance and quality are particularly important for consumers looking to purchase a product. SWOT and PEST analysis prepares the marketers in initial stages of developing a market strategy. Ansoff’s Matrix relates closely to the STP model when emphasis is on sales.
The study is significant for any business operating the line of product and service delivery. Moreover, executive of organizations will be able to figure out customer preferences much better by establishing the correct market strategy. Future studies should focus appropriate methods of implementing some of the strategies mentioned. Likewise, the relationship between departments in an organization in implementing a specific strategy is an area for further research and discussions.