A Discussion on Tools for Strategic Marketing Strategy - Free Essay Example

Introduction The objective of this discussion document is to find out the tools for strategic marketing strategy for Wholesale Electrical Industry. The purpose is to define Porters Model, PEST analysis; direct response marketing strategies and customer retain strategies relating to the small business. Below mentioned parts are discussed in the discussion document: Porters Five Force Model- This model defines five competition forces that emerges in every industry. Small business should be aware of these forces so as to have higher positions in the market. Competition in the industry: Small business must be aware about the number of competitors in their market and they should know about their business. Threat of new entry: New entry should be restricted so that it should not have any impact over our small business. Buyer Power: Customer should remain in touch with the business and should not move to the competitor. For it, business can use various marketing strategies. Supplier Power: Switching costs to move from one supplier to second should be low, and then we can easily change the supplier. Threat of Substitutes: Substitutes of product in the industry should be less, and then it will be strength for the business. PEST analysis- In the discussion document, we are analysing the PEST which means Political, Economic, social and technological influences that can affect the performance of the business. Political factors cover the type of government that is running in New Zealand. Economic includes exchange rates and interest rates that are having influence over the business. Social factors cover age groups, demographics, lifestyle that influences the whole electrical industry. Technology relates to the latest technology that is going on the market. Business should use latest technology so that sales can be increased. Marketing Strategies-To increase the sale of the small business, various marketing strategies are used by the small business such as offensive strategy, obtaining new customers, increasing customer satisfaction. Offensive strategy is the strategy used for the competitor to push him back so that its sales can be decreased and our business should grow. Business should plan to gain new customers by building relations with the loyal customers. In addition to it, increasing customer satisfaction will help the business to increase sales and can increase faith of the customer in the business. Customer Retaining Strategy- In retaining the customers, small business uses the strategy such as product bundling, cross selling and loyalty programmes. In the discussion document, we are using product bundling which means offering two to three products in adding to the product. It will help the electrical business to increase sales and it will help in retaining the customer. Cross selling is another customer retain strategy in which with the same product, electrical business encourages and influences the customer to buy another product. Loyalty programme helps the small business such as electrical wholesale business to keep the customer and build its interest in our business. Loyalty programme is programme in which companies give frequent cards to their customers who have already visited the business for 4 to 5 times. Discussion Five Porterà ¢Ã¢â€š ¬Ã¢â€ž ¢s academic models. a. Threat of fresh rivals: The more fresh rivals can come into in whole-sale electrical industry; more easily prices and income reduce. Forces that bring to an end towards the inside of new rivals and keep hold of the in progress rivals are called incoming trouble. They are economy principles, high point of savings on equipment, high height of diversities in productions, the high cost to exit, imperfect access to allocation channels, governmental policy and be short of threat. b. Consumers bargaining capability: an additional environmental force in whole-sale electrical business is consumer bargaining ability. It refers to any condition that consumer has further power than wholesaler. In the some situations consumers have extra authority to bargain: Little figure of consumers Big quantity of buy fast right of entry to information regarding the quantity of demand and cost of sale in whole-sale electrical industry Power of shopper to decide or adjust the supplier c. Threat of production and replacement service: This threat is also called indirect rivals. In lots of whole-sale electrical industries, companies fight with producers of alternative production. If the cost ratio of substitute production and expenses reduce, anywhere substitute production is, the rivalry is extra difficult and as a consequence there will be extra force. So it is understandable that close substitute productions can be second-hand to decide the price. d. Competition between industrial companies: This factor is as well measured as a competition in the middle of opposition whole-sale electrical companies. It has the mainly great influence between other essentials. The majority current elements that boost the sense of competition between whole sale electrical companies of an industry are as follow: Time-consuming development of industry Far above the ground permanent costs Lack of variety in productions Huge number of rivals Risk of impediment to exit e. Provider bargaining capability: If provider has additional power, they can have an effect on whole-sale electrical business profit in a system that the business canà ¢Ã¢â€š ¬Ã¢â€ž ¢t recompense the boost of costs by rising prices. The power of all provider depends on the circumstances of market and it trade by way of business depends on its performance. The bargaining capability of providers can be improved by factor such as restricted number of providers, narrow parallel goods and services, independence of provider from the raise of deal, guarantee of providers that producer require them, and the outstanding presentation of providers can get better the bargaining capability in an manufacturing surroundings. 2. Pest analysis PEST is an examination of the political, economic, socials and technical factor. These are used to measure the condition in the market. With the help of PEST the whole sale electrical Company can find the critic factor. These factors play the importan t role in every small or big business in achieving the goals of the company. Political. Political factors include ecological/environmental issues, current legislation home market, future legislation, international legislation, regulatory bodies and processes, government policies, government term and change. Political factor is playing the vital role in whole-sale electrical company. Every time policies towards the business are change when the government change. When the new government come they make new policies. Economic. Economic factor contain economic development, interest rate, exchange rate and the inflation. These entire factors are important in whole sale electrical business because these factors have major impacts on how business operate and how make decision. For example, interest rates have major impact on the cost of capital in electrical company and consequently to what level a whole sale business grow and expend. Exchange rate also affects the costs of exporting goods and goods the supply and price of import goods in a market. Social. Socialfactors also contain the cultural aspects and include health awareness, residentà ¢Ã¢â€š ¬Ã¢â€ž ¢s development rate, age allocation, profession attitudes and importance on safety. Social factors have the effect on demand for a whole sale electrical companys product and also how that company operates. For example, in social factor the age group is very important. We mostly divided it into three groupsà ¢Ã¢â€š ¬Ã¢â€ž ¢ adolescence, maturity and aged group. The group of maturity people is the target of the electrical whole sale company because the use electronic product most. So, company may change a variety of management strategies to settle in to these social trends. Technological. Influence that put impact on the organization, the latest equipment used by the company. Much latest technology comes in the market. The company should need to use latest technology so company can run very smoothly. Due to increase reliance on equipment, technical factor exert a more considerable more important affect on business. Offensive strategies Defensive business strategies are reactionary and involve a wait-and-see approach, observing what competitors are doing and then responding. Offensive business strategies involve taking proactive, often aggressive action in the market. This action can be focused directly at competitors or aimed at securing market share regardless of the existing competition. A few business systems can be seen as opposing, while others go on the offense. Protective business procedures are reactionary and include a lie low approach, watching what contenders are doing and after that reacting. Hostile business methodologies include taking proactive, frequently forceful activity in the business sector. This activity can be concentrated specifically at contenders or went for securing piece of the pie paying little heed to the current rivalry.