Strategic Marketing Management

Edexcel Strategic Marketing Management Assessor: Submitted By: Student ID: Table of Contents Introduction2 1. 1)Importance of Strategic Marketing2 1. 2)Marketing Planning Process3 1. 3)Links between strategic marketing and the corporate strategy5 2. 1) Values of the models in the strategic marketing6 2. 2) Positioning and marketing Tactics7 2. 3) Relationship marketing7 3. 1 ) Exploiting the Growth factors8 3. 2) Response to a change9 3. 3) Strategic marketing Objectives10 4. 1) Changes to the external market11 4. 2) Internal Analysis11 4. ) Marketing Responses11 Conclusion12 Web References14 Introduction Strategic marketing is an essential element in the process of making better plans for the future. Even though it is targeted at marketing, it will be the driving force of many companies to reach the organizational objectives. A strategy could give different divisions blended together and linked to the future. Therefor a better understanding is essential of how the strategies work and how they will be changed in the time to come and the changes one can do in relation to their functionality.
The below assignment will provide the necessary details for those. 1 Importance of Strategic Marketing A Marketing strategy is a long term oriented tool used to make sure that no deviations are done to the marketing and the marketing function of the organization will be maintained all throughout the organization as a philosophy. It will be the key to drive an organization to its peak as marketing brings the organization to its customer. So as a result, the ability of a company to maintain and penetrate the market would be through the marketing strategy.
Therefor a marketing strategy is an essential element. Under the strategy the main elements would be the pricing, the distributions and the modifications to the marketing mix such as product ranges, after sales, and etc. A concept such as branding also goes along with the marketing strategy (Proctor, 2000). For companies such as IKEA, the need for a proper marketing plan is much essential. Products such as home appliances, furniture and their innovative stuff would need to properly address the target market properly with their pros and cons.

Elements such as folding chairs, folding tables would need to be to the customers’ attention or otherwise the customers won’t know about it. So the awareness advertisement campaigns are a must element for any company such as IKEA. Mass advertisements, public Relations are a must element for them. For IKEA the most suitable marketing strategy is to keep updating the innovative products and put the concept ‘Visit us because we have everything needed for your house’ into the mind of the customer (Blythe J. et alTop of Form , 2000).
With the competition of Damro, Wal-Mart, the level of competition would be sky high and the level of innovation that those companies perform are much more equal and the pricing strategies used by Wall- Mart are a major threat. Therefor better pricing, product ranges and better market positioning are a must. Therefore a good marketing concept and a strategy are a must element for companies such as IKEA (CravensBottom: o. Form , 2009:p. 71) 2 Marketing Planning Process In strategic marketing the key concern should focus on the long term orientation.
Therefore when maintaining connections with the strategy, the following should be concerned, (Donnelly and Harrison 2009), the first step involved in the strategic planning mode, is the situational analysis. Under that the main idea is the analysing the current situation and the current suitability of the company for such changes. Therefore in order to carry out the initial step, Marketing Audit must be carried out. Under the marketing main idea is to detect the possibilities of the current organizational marketing orientation to meet the desired outcome.
Mainly the SWOT analysis and PEST analysis can be used in this approach. According to McDonald, (2008) under the SWOT analysis (strengths, Weaknesses, Opportunities and Threats) the main concern should be made on the company strengths. Strengths are those which the company is good at doing something. For IKEA the current market position in the minds of the existing customers all around the world for the home appliances clearly distinguish IKEA. The high quality yet the reasonable prices for their products, will give the prominence in the minds of the customer in any country.
That strong global brand will make IKEA to penetrate countries such as Indonesia with ease even though there are existing players such as headache without too much pressure. (Stevens et al 2006) The current weakness in IKEA of having no Corporate Social Responsibility (CSR) in China is a huge underlying problem for the company. Such problems will make the company’s brand image to decline especially in East Asian Countries. Also their level of brand maintenance has been poor especially in China. Indonesia being a closer country to China will get some reputation loss due to that.
Indonesia is not a country which they mainly concern about the concepts such as Carbon footprint. Therefore, it must be advised that there is an opportunity for IKEA to use their packing materials in a Green Manner which will make the company image more in line to the mindset in Europe. The major threat for IKEA in Indonesia will be the Damro and Wall-mart. Such global companies will make a significant impact over the products of the company. There for IKEA must pay solid attention to analyze the above aspects to a deeper manner when setting their objectives (www. arketingteacher. com) When it comes to analysis the external market, the key priority must be given to the areas such as Political, technological, Economic, Social. When looking at the Political factors it can be seen that there are many government relate policies such as budgetary allocation to the national trade, government attitudes and so on. Special technological advancements such as level of internet penetration, and e commerce must be taken carefully (McDonald and Wilson 2011). E-commerce will impact IKEA drastically, with the internet use level in Indonesia.
Under the economic factor the main point would be the use of the countries’ economic factors such as the global recession and disposable spending of the households must be looked at. Competitor analysis must also be carried out in the areas such as analyzing the key competitors, entry and exit barriers and etc. Once the corporate appraisal is done then the objectives should be defined clearly as to where the company wants to be in the future under the marketing strategies and how the company should be driven to reach the goal.
When reaching to the defined organizational goal the main strategist must then be developed. One could use the Target market strategies such as segmentation, targeting and positioning. Another way would be Marketing mix strategies where marketing mix is used to develop the strategies. Growth strategies such as Ansoff Matrix can be adopted to see whether it fits into the organizational culture (Weingand, 2000) Figure 1: Ansoff Matrix Source: Smartdraw. com Once the correct path is chosen having concerned the internal and external appraisal and objective, then the corrective action plans and tactics must be developed.
Finally the evaluation and control tactics must be clearly defined to obtain a gain for the company (Doole and Lowe 2008). 3 Links between strategic marketing and the corporate strategy When developing a corporate strategy the steps are almost the same as mentioned above in the marketing strategy setting process. But the difference would be the scope and the coverage. It is essential for the company to make sure that functional strategies such as marketing must tally with the objectives of the corporate strategy.
Therefore in order to demonstrate the link between these two strategies porters five forces model can be adopted (Smith et al 2000) Figure 2: Porters’ Five Forces Source: Notedesk. com A company will have the customers due to the power and effectiveness of their marketing strategy which will link to the overall competitiveness of a company. If a company’s marketing strategies are stronger and powerful than the entire company will proceed. According to Michel Porter, the main emphasis was that all the elements shown above will influence the overall strength or the competitiveness of a company.
From the SWOT analysis which was mentioned above the link can be seen of the corporate and marketing strategy of a company. This can be analysed from the view points of the weaknesses. If the company is having a poor marketing strategy, then the overall company’s ability to penetrate the market opportunities will be low. Then the necessary adjustments will be made to the marketing strategy to merge the organizational strategy to marketing strategy (Lowson, 2002). Comparing this concept with IKEA Indonesia the level of customer bargaining power is high. This is due to the available options in Indonesia.
Companies such as Hithachi, Damro, and Wall- Mart will make the consumer buying more and more wide which makes IKEA will have to adjust themselves more and more price conscious. The levels of bargaining power of suppliers are also a critical factor. Since the company has maintained significant contacts all throughout their history with suppliers, the level of bond IKEA has with the company is immense. Therefore a loss of a supplier will make the company to increase the price but which is impossible in Indonesian market. In relation to the substitutes which IKEA has in Indonesia could be said as a minor effect on the operations.
Because even though IKEA is in to Home appliances, their competitors don’t look as innovative as IKEA. Also IKEA concerning about the market pattern changes will make the company to compete in the market more freely. New entrants to the market will not make IKEA to be concerned a lot. But a multinational will be a key issue as they already have the economies of scale and dominate the market with no issue. When analysing the PEST factors, with regard to the Social factors, if the marketing division is not strong then the appropriate adjustments will be made to the existing marketing strategy.
One common example would be, if the company is in an Islamic country and if the company uses models with inappropriate dress codes, then the taste of the product will go down. Especially with IKEA in their launch to Indonesia had to use the most effective marketing and ethical ways to grab the market. If the organizational objective is to penetrate the competition, then due to the particular objective, obviously the market share will increase (Frain, 2000).
When compare the economic recession in Europe it is essential for IKEA to expand their operations in Indonesia as Eastern Asian countries were not destroyed due to the economic recession in Europe. Even though Indonesian per capita is US$3, 900 which is slightly below the par in comparison to other operating countries, still the expansions could be made as there is significant growth in the market due to the Foreign Direct Investments. The level of Internet penetration in Indonesia according to the Jakarta post. om the level of internet penetration in Indonesia is more than India but below the Korean Republic. Therefore it is likely that IKEA will adopt the concepts such as E-commerce to be available for the customers. 2. 1) Values of the models in the strategic marketing With the use of the marketing planning tools such as SWOT Analysis, PEST Analysis and Ansoff Matrix the following applications can be made. With a good SWOT analysis, it will be very easy to make a company such as IKEA to analyze their current position and to develop any further adjustments such as the implications of the Ansoff Matrix.
One common example would be if IKEA lacks in their branding, then through the new products the relative awareness can be made (Carpenter, 2012). The value of the strategic marketing tools such as PEST Analysis, SWOT Analysis is as follows in relation to the penetration to the Indonesian Market. PEST Analysis Under this approach the above theoretical understanding was gained as to how the Political, Economic, Social, Technological factors affect a market. When considering a deeper analysis, the Political Factor is a key Concern as according to the CIA, (2009) the corruption in the government is all spread and rooted.
Therefor when IKEA looks to enter the Indonesian Market the political factor should be counter attacked through Corporate Political Activities. The economic factor is a sound characteristic out of all the four items in the PEST Analysis. Even though it is mentioned above the ability of the Indonesian market to be survived from the global recession due to their sound Fiscal and monetary policies, yet the threat of Earth Quake factor is there. According to the British Geological Survey (2012), the possibility of earthquakes in Indonesia is high and the low restiveness must be carefully analysed.
Special tactics such as Natural Disaster Management must be adhered in all their processes and the economic impact must be analysed as well such as the drop of the interest rates, Taxation, minimum and maximum pricing must be carefully submitted. According to the Euro monitor International (2012), the possibilities that IKEA will launch their outlets are high. As per the article, the interest levels of the households to reach the shopping malls rather than the traditional markets are increasingly growing.
Also to the improvement of the household disposable spending, the amount of spending on the IKEA items will be high. As a result IKEA will locate their outlets in shopping malls largely. Also it should also be remembered that the amount of technological penetration happening in Indonesia is increasing. The usages of Smart phones are increasing, which will later influence the mobile marketing and specially developed apps to bring the latest products to the customer. Therefor from the PEST analysis, IKEA will experience the above factors and move in to IKEA.
SWOT Analysis and Five Forces The current opportunities available in the Indonesian Market According to Euro monitor International (2012) are as follows. The main development of the areas such as Emerging Markets will open up the space for IKEA to enter to the Market. Companies such as TESCO will also try to grab the opportunity but IKEA will rush through the opening process as the abilities of the organization such as the Strong Brand Image, Vast distribution channel across the globe and the skills they have shown in the markets such as Japan and China will be the main tactics.
With their affordable prices, this would be again easy. As the disposable income and the per capita income of Indonesian whose holdings are below in comparison to other countries, still lower labour cost and economies of scale will enable IKEA to profit. Therefore the SWOT Analysis will be used in many ways and the justification would be that there are many targets which IKEA can dart at. When analysing the Ansoff Matrix according to the dimensions, IKEA can develop their own likings and match them to their SWOT Analysis.
One common example would be, if there is a big raising good faith is there in Indonesia, IKEA can look to expand their carbon footprint experience of the companies into packaging and strengths the supplier relationships. Therefor the tools used the in the assessment of the strategy planning are vital and crucial. 2. 2) Positioning and marketing Tactics Strategic positioning is the final stage of the target market. In strategic positioning the key variables to focus on are as follows. Basically positioning is the place attributed to the minds of the customer in relations to the competitor product.
Benefit positioning is where the focus is given to the benefits of the product. For a mosquito repellent the main idea will be a good sleep. An example would be in a bed, comfortable sleep and etc. This should be made in line with customer expectations. In order to reach this position the tactics such as benefit focused marketing must be used in order to fix the product in the customer’s mind (Graham, 2008). The product category leader is the positioning the product in a product category such as for home appliances IKEA.
Competitive positioning where KFC comes ahead of McDonalds or vice versa. If the products have a unique feature such as door cooling technology, then the brand is LG. That positioning is called as unique selling proposition. If the product is a high quality one, then tactics such as premium pricing, personal selling can be adopted. As mentioned above, the tactics which are short term focused will lead the positioning to a long term orientation (Graham, 2008). 2. 3) Relationship marketing
For a company such as IKEA, the use of the relationship marketing will be highly essential. The connection can be identified through the ladder of customer loyalty. Figure 3: Loyalty ladder Source: IndianMBA Under the ladder company must make sure that a prospect must be converted through the marketing promotional strategies to a buyer to be the prospect of the company. An existing customer can be converted a loyal customer through loyalty schemes and membership cards. A customer can be converted to a supporter through marketing activities such as differentiating.
A supporter can be converted to an advocate through the marketing strategies such as Permission Marketing and finally through activities such as Branding and customer oriented marketing tools, a partner can be sought where a partner will be engaged in the word of mouth marketing (Peck et al2012). 3. 1) Exploiting the Growth factors There have been many opportunities aroused with the level of increase of the market share. With the change of the market population especially in emerging markets such as China, Brazil, Russia, South Africa (BRICS) the ability of the companies such as Tesco and IKEA have penetrated the markets like never before.
The growth has happened not only in the way of population, the technological advancements especially in China, have caused IKEA a big impact where most of the IKEA products are produced in china and as well as India due to the advanced technologies and larger economies of scale in the production (Stone, 2001). When there is a high amount of reverse engineering concepts adopted in countries such as China and India, the level of new innovations can be done. IKEA’s latest products in the home appliance division have made a big impact on their product mix…
The latest innovative multi use tables, beds are the latest innovations from the production plants in China and they have successfully implemented those products in Middle east and USA obtaining a larger number of sales and customers to their premises those concepts have made the consumer to visit the place again which proves the correct marketing has been done in the most precise manner (Bachmeier, 2009). Changes to the buying behavior has caused the company to focus on their products more closely to make sure that they can create a switching cost among IKEA products and other brands.
The main way of keeping the brand loyalty for IKEA is the provision of customer oriented products such as easy to use steam ironing machines which can be used not only to iron but also to clean the curtains and wall clothes. Such items can certainly penetrate the market and they will be the attractiveness with the level of customer busyness and complexity in their minds (Lester, 2009). On the other hand the emerging markets provide IKEA a better market positioning. Being a multinational, the levels of influence of the local players are high. Especially with Wal-Mart’s absence In the BRIC countries, IKEA has been able to perform better.
That is due to the level of efficiency and the effectiveness of their brand. Therefore IKEA has been able to address to the opportunities in the BRIC markets in an effective manner (Proctor, 2000). 3. 2) Response to a change As per Pride and Ferrell (2011), as the market has changed specially with the recession and spatial concepts such as globalization there has been a vast amount of changes to IKEA. The most recent change made due to the global recession from which customers had to cut down their spending drastically and also they wanted to pay lower prices.
But the worst thing was that wall mart was able to penetrate the market much effectively and efficiently with their low cost meals and low cost products. Therefor IKEA was compelled to use low pricing strategies. In return IKEA made the products to be even more creative and the Chinese production plants made the products at a low cost. Therefore the ability of the IKEA to cut down the costs and to be efficient in the marketing was a possibility. The other change was the newer manufacturing systems. Concepts such as flexible manufacturing and Just in Timer (JIT) systems are possible options if IKEA to use in their stock management.
Also the concepts such as online stores such as amazon. com and ebay. com have made a severe impact over the IKEA products and those are easy for the customers to reach. Therefor IKEA can adopt and the option is available whether to move into the particular online concepts or not. Online marketing concepts such as web 2. 0 have also made a rapid change. Over the social media they have been effective like never before. Especially the blog marketing and social network marketing are now considered as a new methodology to carry out the marketing changes (Weitz and Wensley, 2004). . 3) Strategic marketing Objectives When setting objectives for IKEA the main concepts of the objectives must be looked at. Those are the specifiers, measurability, achievability, realistic and time orientation must be within. For IKEA there should be new ideas if they are to penetrate the market. One objective for IKEA should be to expand their online store up to an extent where they can obtain the online reviews about the products and concepts such as virtual testing should be made available.
By those concepts, the ability of company to penetrate the new customers will be more effective (Fifield, 2012). Expanding their operations to countries like South Africa, Sri Lanka, India, Brazil, Argentina will be the key countries for them to look at as there are no innovative household appliance providers currently. Therefor the ability of the IKEA to expand their sales will be immense. On the other hand company must focus on CSR as they are currently lacking in that field. Relevant people must be allocated and also relative administration and stakeholder awareness about the CSR should be done.
If the company is focused on the CSR then there will be a good chance of entering to the BRIC economies as there are a large number of helpless communities are available. Therefor company must target their branding and awareness in those parts The World (Schmid, Top of Form2007). Moving into the vehicle accessories selling market will also be another objective for the IKEA to look at. Using renowned brands to merge with IKEA they must maintain the vehicle market mainly to penetrate the car accessories market as their potential buyers are having vehicles at their home.
Therefore the ability of the company to maintain their target customer base will become easy. Maintaining their pricing strategy all through the different divisions will make sure that IKEA will be a differentiated brand (MacDonald and Keegan (2002). 4. 1) Changes to the external market If there are sudden changes to the market factors identified under the PEST factor, will make the company to make the relevant changes to the above PEST factors. Sudden changed to the price levels such as Tariffs will make a price to be expensive.
In such scenarios the relevant ad campaigns must be promoted in order to make the product to more and more meaningful despite the fact that they are expensive (Barker and Angelopulo, 2006). If there are changes to the taste situations such as people being health conscious, IKEA will have to use the best possible user friendly and healthy stuff. Tools such as non-stick cocking will items will need to be sold. And also sharp equipment must be adequately changed to the developing concept. 4. 2) Internal Analysis With regard to IKEA, in their new strategy development they have been able to penetrate the global market.
This has been a possibility due to their SWOT analysis. For IKEA the strengths would be the strong brand, better quality equipment, global operations, and innovativeness. With regard to a change, those keys will never be changed. Minor strengths such as profitability will decline to a given change in order to catch the market but the key concerns will never get changed (Lamb et al, 2011). But on the other hand, the weaknesses must be answered especially in the BRIC economies. Their inherent weaknesses such as maintenance of the product quality depending on the boundaries will be a severe concept to be maintained.
Also the needful of key low cost products to make sure everybody is within their premises is a current weakness that IKEA must pay attention to (Stickland, 2000). 4. 3) Marketing Responses Key elements to the changing contexts will be the use of the Target Marketing. , Marketing Mix change, and Growth Strategies. With respect to the key changes such as price could be tackled under the price mix element and according to the changes the corrective actions can be taken. Also the key challenges such as competitor actions must be adjusted through the elements such as segmentation, targeting and positioning.
If the marketing strategy is to diversify according to the taste of the citizens, then the appropriate segmentation can be done. Due to the PEST factor changes the major least resistive would be the marketing mix. Therefore according to the marketing mixes, the needful can be made (Hanssens, et al (2001). Conclusion When considering the planning processes and the relevant tools for strategic Marketing, were discussed in deeply. The relative models such as SWOT Analysis, PEST Analysis and their impact over the Indonesian Market were highly assessed.
The possible growth aspect of the strategy setting and the change is evaluated specially to the changes in the market forces. References Barker, R. and Angelopulo G. L. , (2006), Integrated Organisational Communication, Juta and Company Ltd Bachmeier, K. , (2009), Analysis of Marketing Strategies Used by PepsiCo Based on Ansoff’s Theory, GRIN VerlagBottom of Form Blythe, J. et alTop of Form , (2000), Strategic Marketing, Select Knowledge Limited. , P. 8 Carpenter, G. S. , (2012), Handbook of Marketing Strategy, Edward Elgar Publishing CravensBottom of Form (2009), Strategic Marketing, 8th edition, p. 71 Donnelly R. and Harrison G. , (2009), CIM Coursebook: The Marketing Planning Process, Routledge, p. 11 Doole I. and Lowe R. (2008), International Marketing Strategy: Analysis, Development and Implementation, p. 22 Frain, J. , (2000), Intro Marketing, 4th Edition, Cengage Learning EMEA, p. 22 Fifield, P. , (2012), Marketing Strategy, Routledge, p. 116 Graham, H. , (2008), Marketing Strategy And Competitive Positioning, 4th Edition Hanssens, D. M. et al (2001), Market Response Models: Econometric and Time Series Analysis
Lamb, C. W. et al, (2011), Essentials of Marketing, Cengage Learning Lester, A. (2009), Growth Management: Two Hats are Better than One, Palgrave Macmillan, p. 52 Lowson, R. H. , (2002), Strategic Operations Management: The New Competitive Advantage, Routledge | |McDonald, M. , (2008), Malcolm McDonald on Marketing Planning: Understanding Marketing Plans and Strategy, p. 38 | | |MacDonald, M. H. B. and Keegan W. J (2002), Marketing Plans That Work: Targeting Growth and Profitability, Elsevier | | | McDonald, M. and Wilson H. (2011), Marketing Plans: How to Prepare Them, How to Use Them, John Wiley & Sons | | |O’Guinn T. C. et al (2003), Advertising & Integrated Brand Promotion, Cengage Learning | | |Peck H. et al (2012), Relationship Marketing, Routledge | | |Smith, P. R. et al, (2000), Strategic Marketing Communications: New Ways to Build and Integrate Communication, Kogan Page Publishers, | | |p. 96 | | |Stone, P. (2001), Make Marketing Work for You: Boost Your Profits with Proven Marketing Techniques, How To Books Ltd | | |Proctor, T. (2000), Strategic Marketing: An Introduction, Routledge, p. 21 | | |Proctor, T. , (2000), Strategic Marketing: An Introduction, Routledge | | |Pride, W. M. and Ferrell O. C. , (2011), Marketing 2012, Cengage Learning | | |Stevens R. E. (2006), Marketing Planning Guide, Third Edition, Routledge | | |Schmid,Top of Form | | |(2007), E-Marketing Strategy for Reg Vardy, GRIN Verlag | | |Stickland, F. , (2000), The Dynamics of Change: Insights Into Organisational Transition the Natural World, p. 60 | | |Weitz B. A. and Wensley R. (2004), Handbook of Marketing, SAGE p. 134 | | |Weingand, D. E. , (2000), Marketing/Planning Library and Information Services: Second Edition, Libraries Unlimited, p. 16 | | | | | | Web References | | |Note desk. com,(2012), (online), available from:http://notesdesk. com/wp-content/uploads/2009/04/porters-five-forces-model. jpg, | | |{accessed on 3rd December, 2012) | | |IndianMBA. om , (2012), (online), available from: http://www. indianmba. com/Faculty_Column/FC807/Fc807. jpg, {accessed on 3rd December, | | |2012} | | |Marketing Teacher. com (2012), (Online), available from:http://www. marketingteacher. com/SWOT/IKEA-SWOT. html#, {accessed on 3rd | | |December, 2012} | | |Smartdraw. com, updated on (2012), (online), available from

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