Colorado Technical Applied Managerial Marketing Discussion Questions

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Now that you have evaluated the marketing environment and established some marketing goals for MM, it is time to get started with the new product plan. The first step is to research the mobile phone market. Without knowing who is buying phones in certain market segments, Michelle won’t know how to market MM’s new product. She needs your help to determine who the market is for the new product.

Primary Task Response: Read the dialogue below. Within the Discussion Board area, write 400-600 words that respond to the following questions with your thoughts, ideas, and comments. This will be the foundation for future discussions by your classmates. Be substantive and clear, and use examples to reinforce your ideas.

Michelle knows that MM needs to determine who the target customer is for the new product. She knows that marketing research needs to be done as part of this market segmentation and product development processes, but she is not well-acquainted with some of the details that are involved in the processes. She has stopped by your office to ask some questions.

“Thanks for canceling your other meeting this afternoon,” she says.“No problem,” you say. “I rescheduled my meeting with multimedia; it actually works out better for them, too.”
“I’ve heard about quantitative and qualitative research, but I’m not sure I really understand the difference between the two,” she begins. “I’m sure there are advantages and disadvantages to each of them, but without knowing, I’m not sure which type of research we need to conduct. What do you think?”
Before you can respond, Michelle’s cell phone vibrates.
“Excuse me, I have to take this,” she says.
Michelle takes her call and then stands up.
“Well, I’m sorry to do this, but I have an emergency that I have to deal with right now,” she says. “Would you do me a favor? Send me a memo that explains the two types of research and include brief explanations about the advantages and disadvantages of each as related to how they could be used by MM. I’d like to be able to speak intelligibly to this at the next board meeting.”
“Sure,” you respond, thinking that this will make for a pretty lengthy e-mail. “I'll also include how each method can help us define our target market. Will that help?”
“Yes, great idea,” she replies.

“Ok! I’ll get that to you by close of business tomorrow,” you say.

Instructions:

Unit 2 DB Instructions:

  1. Within the Discussion Board area, write 400-600 word primary post that explains the difference between/shows advantages & disadvantages of the following:
    1. primary and secondary research TYPES;
    2. quantitative and qualitative research METHODS.
    3. be substantive (specific & detailed) and clear, and use examples to reinforce your ideas as well as APA format


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FAQ: Marketing Methods and Challenges Question 1: What types of information should I research about my industry? Answer 1: The following are some industry-specific data you should collect: Market size: This is generally stated as annual revenue or sales figures with growth rate projections. Competition: Who are the competitors, and what is the market share, product offering, and financial status of each? Regulatory environment: This is a list of regulations and government organizations that govern your industry. Innovation: This refers to the technological or other changes and improvements occurring in your industry. Question 2: Why is it important to conduct market research? Answer 2: The data points collected in your market research will contribute to your marketing efforts and plans. First, understanding market size and competition is very important when it comes to preparing plans and setting marketing initiative objectives and goals. For example, if you are in an industry with $1 billion in annual revenue and you predict growing to a 5% market share, setting a $100 million annual sales goal would be inconsistent and rather unrealistic. Second, if you understand the regulatory environment, you will avoid paying costly fines because you have followed government restrictions or guidelines in the production, distribution, or marketing of your product. Finally, a grasp of the your industry's innovations will allow you to make realistic projections regarding product releases and production schedules, as well as preempt any competitive moves that might undermine your marketing efforts. Question 3: How can market research be used to determine metrics for success? Answer 3: In doing market research, you will collect data that you can use to measure your own success. For example, if you know that the largest market share of the top competitor is only 12%, you can feel a lot better about a 4% market share than if the top competitor has a 72% market share. Also, the number of competitors should be considered. It is also important to understand customer metrics such as wallet share. If you know customers spend an average of one hundred dollars per year on a product you carry, your goal should be focusing consumer spending on your brand. 1 FAQ: Marketing Methods and Challenges Question 4: How can I learn what consumers like and want? Answer 4: General market data are easily found on the Internet or purchased from research firms that specialize in gathering and disseminating market data. More specific methods such as focus groups or surveys once a specific target market is chosen. These methods can be used to collect data that can be even more helpful in determining product mix, branding, marketing campaign approaches, distribution, and pricing. Question 5: What is meant by marketing campaign? Answer 5: A campaign is a marketing plan that may include one or several different methods of communicating a specific message or promoting a specific product. For example, a company launching a new line of desserts and snacks will launch a campaign that might include television advertising, newspaper coupon inserts, and in-store samples. The campaign is viewed as a set of efforts with a specific goal, such as successfully introducing a new product to a market, increasing sales, or decreasing returns and customer service inquiries. Question 6: What are the various options for advertising a product or service, and why would I choose a particular one? Answer 6: There are numerous venues and channels for advertising, which include Highway billboards Television Newspapers Magazines Internet banner ads Radio Signs buses and taxis Within each of these, are numerous choices to make, such as length or size of the advertisement, network, specific publications, and so on. Your choice will depend on what you learn in your market research. For example, if you decide your target audience is business travelers, you should advertise your product in magazines most often distributed on airplanes or on the in-flight media presentations. 2 FAQ: Marketing Methods and Challenges Question 7: When is it appropriate to engage in direct marketing? Answer 7: Direct marketing requires contacting individual consumers directly, which means a company needs to obtain addresses, phone numbers, or e-mail addresses for targeted customers. Direct marketing can be very expensive, but generally has a higher response rate because it is sent directly to a customer. If a marketer can learn more about a customer’s demographic data or preferences, the message can be tailored and become even more effective. For example, a video rental store company could send a mailer to those who rent mostly video games with offers for rentals and purchases on new video game releases. Question 8: What are the restrictions and roadblocks to direct marketing? Answer 8: One of the greatest challenges encountered when embarking on a direct marketing project is obtaining accurate and complete data. Consumer data can be purchased from many companies, but it is very difficult to maintain a high level of accuracy on that data. Additionally, there are many privacy laws that protect much of that consumer data. A company wishing to use data to market directly to customers should be fully aware of the regulations and guidelines suggested by governing bodies to avoid any costly fines. Question 9: How do advertising techniques apply to a business-to-business (B2B) scenario? Answer 9: Many companies engaged in B2B will use traditional advertising for a mass audience targeted through a specific publication. For example, an investment bank is more likely to run a print ad in Forbes than in People magazine. Other common B2B marketing efforts are: Trade shows: Many companies within an industry or complimentary industry gather in one place to display their wares. Field sales force: These are generally divided by geography. Conferences or seminars: These are designed to educate the customer on product features or on industry knowledge. 3 FAQ: Initial Development of the Marketing Plan Project Question 1: Where and how should I begin my initial analysis for my marketing plan project? Response: A clear strategy is critical when beginning to develop a marketing plan. The best place to begin a marketing plan project is to remember that your ultimate goal will be to produce a comprehensive marketing plan that develops a new product or service. It is therefore essential to begin by choosing a company that you are able to find data to research. The data, which could include sales and market information, is essential for you to access so you can develop a clear marketing analysis and build a strategy that fits that company. Said another way, do not choose a firm that is privately held or has no public data or that is unwilling to provide you with data so you may complete your project. It is recommended that you make a list of four or five firms and do some preliminary research. If one stands out as to the wealth of data, which might include access to executives, that it will provide or is accessible that firm might be an excellent choice. If possible, you should consider the firm for whom you currently work; however, before you begin, be sure to speak to management to guarantee that you will have access to the information you need. Question 2: Should I work in a group or alone? Response: The choice of working in a group or alone should be based upon careful reflection. The following are some basic considerations: Do you prefer to work alone or in a group? If you prefer to work alone, you have an advantage because you will not have to depend upon anyone to perform his or her share of the work. Conversely, it can be a tremendous help to have another student to bounce ideas off and to share the workload. There are advantages and disadvantages to either choice. Are you able to identify group members with whom you have worked before? Have they proven to be reliable and as committed to the quality of work as you are? Do they feel the same sense of urgency to complete work on schedule? If you choose to work in a group and the members do not perform as promised or expected, you may have to make up for their dereliction by doing a larger proportion of the work. 1 FAQ: Initial Development of the Marketing Plan Project If there is a dispute in the group, are you prepared to negotiate and compromise if necessary? Remember that once you have made a commitment to a group, you cannot change your decision. Likewise, if you begin the project independently, you will not be able to join a group during the process. Carefully consider these points and choose wisely. Question 3: When I do the SWOT analysis, what should I learn from the strengths of a company? Response: The strengths of a company should give you insight into what new markets you might enter and what types of products you are able to produce. The strengths will also highlight areas where the company can compete and prevail over competition. Company strengths involve and are related to many areas or facets of an organization. Some organizational strengths may be operational or process related. Business processes are the procedures and activities that, after being refined, may help deliver a competitive advantage. For example, an organization may possess a powerful distribution system. Powerful distribution systems allow firms to quickly cover market segments with a product that a competitor with poor distribution systems may not be able to match. A company with this type of strength can quickly bring new products to market and gain a first-to-market advantage. Other company strengths may be related to personnel: Companies with a keen or specialized talent can create highly competitive organizations. One example of specialized talent is a highly effective and productive research and development team. Companies that possess strong research and development functions are often able to leverage their skills by developing more advanced or innovative products. Research and development skills may then provide the organization a way to bring ever more attractive products to the market, which helps them maintain or develop competitive advantage in a market. Question 4: When I do the SWOT analysis, what should I learn from the weaknesses of a company? Response: While it is wise to understand and take advantage of the strengths a company possesses, it is equally wise to fully consider and take into account a company's weaknesses. Company weaknesses could be deficiencies or a lack 2 FAQ: Initial Development of the Marketing Plan Project of abilities when compared to competition. In either case, strategic planning will generally account for company weaknesses in two general ways. The first general strategy is to attempt to minimize the effect that a weakness may have on operational effectiveness. This type of strategy is meant to isolate the weakness to keep it from disrupting our competitive position. For example, planners might decide to outsource some or all business processes to use specialized and more proficient labor. The second general strategy designed to deal with organizational weaknesses is to invest in the improvement of the weak area or areas. For example, the organization’s ability to recruit talented employees is found unsatisfactory. In addition, this ability is deemed essential for a firm to remain competitive, or if this inability keeps the firm from entering a new and attractive market, one would need to take action. In this case, strategic planners might consider investing in that area by increasing salaries or improving human resource’s abilities to recruit. In addition, a company might invest in training its current employees to a level that would restore or improve the firm’s competitive position. In any event, one must account for and deal with weaknesses in the firm. Question 5: When I do the SWOT analysis, what should I learn from the opportunities of a company? Response: Opportunities are those market conditions that fit into organizational strengths. Opportunities may take several forms and carry varying risk levels. Some opportunities will involve completely new products in new markets. Understand that the products themselves do not have to be new to the world; they would just be considered new ventures for the company. New products in new markets tend to carry a fair amount of risk for the organization. This is because of the fact that as an organization, it may have to learn and apply new processes to new customers. These customers may demand a level of service that will require much more than the company's previous markets did. The risk is that the organization will fail to learn and adapt to the new product and market—no matter the size of a firm, it can be very difficult to change organizational behavior. Other opportunities may involve partnering with another firm in a joint venture. This is usually done because each organization has identified strengths that are unique to them, and by partnering, they can bring a very competitive offer to market. The risk in this option is that the organizations will not be able to cooperate enough to make the venture work. Companies, like individuals, have different ways of doing things and communicate in vastly different ways. This leads to confusion, and some joint ventures are 3 FAQ: Initial Development of the Marketing Plan Project abandoned because of these issues cannot be overcome. There are other opportunities that may be completely external to the organization. For example, a change in laws may ban certain products or services. This may create an opportunity for the organization. Any time there is change or turmoil in a market, there are opportunities. The key is to understand that for something to truly be an opportunity it must correlate with organizational strengths, and the organization's strengths must be sufficient to compete with current firms that are serving that market. Question 6: When I do the SWOT analysis, what should I learn from the threats to a company? Response: Threats should also guide one's decision making because they focus the attention on market conditions that may prevent a firm’s success. Threats may be short-term in nature or long-term threats. In either case, each threat should be evaluated and categorized. One factor would be to categorize the threat in terms of their impact in a monetary sense. For example, some threats may make and have a small impact on cash flows and others may potentially be quite large. Another critical category would be an evaluation of the probability of whether the threat will materialize. Some threats are projections or involve scenarios that may develop. For example, some threats are based upon several economic events that would need to happen at the same time. While these events would be a real threat, the probability of them happening at the same time may be small. This is critical to evaluate because it gives the organization a way prioritize and plan to deal with threats and not waste resources on low probability risks. Other threats involve competition from other companies. If a company is currently serving a market successfully and there is a threat of a large and very aggressive firm entering a market, this could pose a very large threat. A firm could not keep another from entering the market; however, it should plan to meet the threat and not fall into a reactive "let’s see what happens" type of situation. If a company has not planned and developed contingencies to meet this type of threat, then by the time the threat becomes real it may be too late to plan and react. Another very real type of threat involves government regulation. Governments—local, state, and federal—may pass or enact regulations that have a very negative impact on operations. The good news is that government will likely not change rules or pass regulations without some 4 FAQ: Initial Development of the Marketing Plan Project forewarning. This should allow a firm to prepare for the changes and in some cases lobby the governing body for a more favorable change. Question 7: What is a PEST analysis, and how will it help me make decisions? Response: PEST is an acronym that stands for certain factors included in an analysis of the macroenvironment: the political, economic, social, and technological variables of the environment external to the organization. These factors affect all firms and may include more or fewer factors depending upon the needs of the planners. These variables are almost always beyond the control of the firm and are often viewed as threats; however, changes in these variables may also create opportunities. This analysis is often used in conjunction with a SWOT analysis and together serves to give a very comprehensive picture of the strategic environment. In addition, keep in mind that many of these macroenvironmental variables are nation specific. This is extremely helpful when planning for international expansion. The following examples are some of the criteria that might be considered when performing a PEST analysis: Political factors in a country should be considered, including the political stability of a country. The legal system and how contracts are enforced are also evaluated. Trade regulations and taxation regulations are also very important. Additional political considerations include wage and work regulations such as industrial safety rules. Economic factors of a nation are very important as well. For example, whether the economic system of a country is capitalistic or socialistic is very important. Currency exchange rates and the stability of the financial markets are critical factors as well. The general business cycle should also be considered. For example, is the country in a recession or experiencing prosperity? Social factors are also critical variables. What include the demographics of a nation, and what social classes exist? Other social factors analyzed include education, how people use their leisure time, and what is the populations’ attitude toward work and culture. The last factor is technology. Questions to be asked and answered would include information about technological breakthroughs and the impact that technology may have on a firm or product. How technology affects costs and business processes is also considered. In 5 FAQ: Initial Development of the Marketing Plan Project addition, planners must consider how technologically advance a nation is. Question 8: What are the different types and sources of market research data? Response: Like any function in business, is it best to plan before beginning any task to maximize the results. A general framework for market research involves first defining the problem or opportunity and the objectives you need to accomplish. If an organization were performing primary research, the research plan would be for gathering data from sources external to the firm. Primary research attempts to gather primary data, which are data that are newly gathered for a specific purpose or need. The process of gathering primary data is complex, time-consuming, and generally expensive. Typically, primary data are gathered through observational methods such as watching people shop or other market-related behaviors. Focus groups involve groups of 5–10 participants that would have characteristics similar to the target market. This group would discuss topics of interest to the marketer. Mail and Internet surveys are also methods of gathering primary data. Secondary data are data that have already been gathered. Secondary data include sales information the company possess and data that other firms have made public. Accounting and financial data can also prove to be very helpful. Internal data that comes from purchasing, production, and the service department are often very useful. Other external sources include government agencies, trade associations, business publications, and magazine and newspaper articles. Marketing goals and plans should guide the information desired. For example, if a firm wishes to change an existing product by adding new features, it would be very wise to look at the sales history of the product and forecast based upon those sales. Needs then dictate where one looks for data and what type of data is considered. Question 9: How is a strategic plan applied? Response: A strategic plan can be applied to many business situations and forms. One way to look at strategy is from a corporate level of planning. Corporate 6 FAQ: Initial Development of the Marketing Plan Project planning is the broadest view, which usually applies to a large corporation with many divisions. This type of corporation is usually referred to as a conglomerate. Strategic planning at this level focuses on the broadest view of the organization. This type of planning covers the general direction for all the various divisions and sets targets for growth. The next level of strategic planning goes to the divisional level. Divisions are often called business units, and when planning, strategic business units. Planning at this level would become more specific and focus only on the business unit. For example, this strategic plan might call for moving the division into a new market or even getting out of an unprofitable market. Any plans, however, would be a reflection of the corporate strategic plan. The last level of strategic planning would move to the functional level. Functional levels or departments would set broad strategic goals that would help focus themselves on helping achieve the divisional goals. In each of the preceding cases, strategic planning is a long-term plan, usually a year or more in length, and it is typically done at the highest levels of management at whatever level the planning is taking place. Also note that strategic plans apply to small, entrepreneurial businesses. Small business, just like large multinational firms, must be able to plan for the long term and develop a plan to profit. The one advantage that a small business does have in a strategic planning sense is that it is usually able to change the plan quicker as results or feedback from the market are witnessed and recorded. The need to constantly revisit and analyze strategic plans is essential and vital to long-term growth. Question 10: What is a tactical plan? Response: A tactical plan is developed after a strategic plan is completed. A tactical plan is designed to put into action and accomplish the goals laid out in the strategic plan. Tactical plans tend to be much more detailed and focus on milestones that are yearly, quarterly, monthly, and weekly. The shorter time focus is essential because adjustments must be made more often to tactical plans than strategic plans. Because the operational environment is much more fluid in nature than in strategic plans, tactical plans are usually done by midlevel managers and affect line workers in daily operations. Tactical plans also tend to be more directly tied to annual budgeting processes. 7 FAQ: Initial Development of the Marketing Plan Project The elements of a tactical plan may follow this broad process (Porter, 1998): Strategic planning must drive the tactical plan and its associated budget. At the beginning, it is wise to reconnect with the goals and objectives laid out by the strategic plan so as to assure alignment and efficiencies. Budgets tied to tactical plans are also reviewed at this time. Good tactical marketing plans should have elements such as a summary of the general marketing goals and sales objectives; a list of the essential marketing initiatives ranked in order of importance and likely success; a summation of the value that will be delivered to the target market; and segments for which and in which the firm will be competing. How the product or service will be differentiated and communicated should also be examined and stated. The plan should have a budget with estimates of both fixed and variable costs and assumptions as needed. The plan should be as action oriented as possible and be communicated to all affected areas of the organization. Unless the organization is a part of the process and well informed, the plan is not likely to succeed. Reference Porter, M. E. (1998). Competitive strategy: Techniques for analyzing industries and competitors. New York: Free Press. 8 FAQ: Quantitative and Qualitative Data Question 1: What is the difference between quantitative and qualitative data? Answer 1: In developing a marketing research plan, the proposed use of qualitative data is sure to lead to a spirited discussion. One side might argue that only "hard numbers" can yield truly accurate information with a definable confidence level. The other side would counter that knowing a fact does not necessarily explain why it is so. In practice, you often need both: quantitative data to show you specifics and trends, and qualitative data to help explain the reason(s) behind those specifics and trends. This is especially true when you are researching human behavior, because knowing how many boxes of corn flakes are being purchased is far different from understanding why people buy corn flakes. The quantitative method is based on the "scientific method," which has its roots in the physical sciences. It is a search for truth. This method has three steps: state the objective or hypothesis of an experiment, gather the appropriate data, and evaluate the results to ascertain whether the objective was met or the hypothesis proved or disproved. The scientific method requires structure. The researcher defines and frames the data to provide specific focus. The qualitative method is based more on the social sciences. It is a search for truth as well as for meaning. There is still structure, but emphasis is placed on identifying relationships and symbols as opposed to numbers. Qualitative methods include direct observation and interviews, either individual or group. The researcher endeavors to understand the issue from the subject's perspective. Some studies benefit from using qualitative methods to identify trends, then quantitative methods to measure them. Some, as the example above, start with the numbers and then look for meaning. Both types of methods are valid and very useful tools for the marketing researcher. Question 2: What is an example of the importance of qualitative data? Answer 2: The customer service department for a large business-to-business (B2B) manufacturer wanted to improve customer satisfaction. A survey was administered (quantitative) that asked the customers to rank certain servicerelated issues in order of importance. Customers consistently ranked having their calls answered promptly as very important to their satisfaction. The 1 FAQ: Quantitative and Qualitative Data company decided to use the incidence of customer hang-ups (dissatisfied customers) as the key measure of performance in this area. To reduce the hang-ups they shortened the queue, added staff at typically peak demand periods, used scripts calls to shorten call time, and so on. No matter what they did, however, the hang-up rate remained at about the same percentage of total calls. Finally the exasperated manager called a number of key customers to ask them about the hang-ups. The answer astounded him. It seems that this company, from the beginning, was the best in the industry for call pick-up. Customers therefore knew if the service reps were all busy on the first call, one would most likely be available if they called back. The customers found it more efficient to call back later than to wait in a queue because of this confidence, regardless of the waiting time. The original survey served its purpose—it found out in hard numbers what issues were important. What it failed to do is find out how the company was performing to customer expectations relative to those issues. Question 3: What is a data warehouse? Answer 3: The accumulation of an organization's data is its "data warehouse." Astute managers will work with their Information Systems department to automatically gather, process, and report information gleaned from the data warehouse. The only real cost is the initial set-up and the information could be priceless. Consider the following: • • • A sudden sales decline for a particular product might signal a new competitor initiative or the entry of a substitution product into the market A greater portion of sales shifting from smaller to larger customers may predict a maturing of a particular product or market A surge in spare parts sales might signal an increase in customer output, and therefore a building demand for new products Question 4: What is involved with data mining? Answer 4: Some of the most significant strategic information is found from indirect sources. All of a company's electronically saved data is stored in a computer in an application known as a database management system (DBMS). This system organizes the data and provides a number of tools (programs) to help retrieve and report on it. There are many reports generated for every function, from invoices to time cards to shipping labels, 2 FAQ: Quantitative and Qualitative Data and there are also special reports used by management to make key decisions concerning the business. These are called decision support systems (DSS) or Executive Information Systems (EIS). One particularly powerful use of these systems, from a research perspective, is known as "data mining." Data mining is the process of finding patterns and relationships among different types of data that are not typically obvious when the data is viewed separately. In other words, data mining can find questions to answers no one thought to ask! You may question the value of looking for something that might not be there, but too many companies have discovered significant strategic information in this way to disregard the opportunity. The data is already there, so it costs nothing to gather. The computer system already has built-in reporting capabilities, although the researcher might need some assistance from the Information Systems group. Go on an expedition. Keep your eyes open and there is no telling what gold you might find in your data mine. Consider the following: • • • Suppliers' increases in quoted delivery lead times for a critical component may predict growth in a key product segment as companies scramble to secure supply lines Increases in accounts receivable aging may indicate an inventory build-up in the field and predict an imminent sales slowdown Increased employee turnover might signal a tightening labor market Question 5: How can accumulated data benefit a company? Answer 5: Marketing research data is very much like cheese. Sometimes it gets better with age, but sometimes it begins to go bad almost immediately. Data are facts that are important today but often lose significance quickly. Data accumulated over time, however, can be recycled to plot trends which can be in turn be used to make predictions about the future. If past trends can be used to develop predictive models that test well against incoming data going forward, then the researcher has developed a powerful set of strategic tools for the organization. Question 6: Why do not all companies take advantage of these tools? Answer 6: Collecting data for trend analysis consumes scarce resources, 3 FAQ: Quantitative and Qualitative Data which often cannot be justified without an approved research program. Luckily, the technology available in most companies today can greatly simplify the task, thereby reducing the cost. Company databases are literally full of relevant facts that can be processed into useful information with very minimal effort and expense, if only someone would take the time to look into them. 4 Global Marketing Strategy There are many failures for every successful international venture. Understanding the rules of the match before getting into the ring can help a marketer get the edge on competition. A great product or service does not hurt either, but how exactly is this done? What are the rules? In this presentation, we examine these issues by focusing on segmenting, targeting, and positioning for advantage, the rules of exportation and importation, and the strategies available for market entry or expansion. Segmenting, Targeting, and Positioning There is power in superior global market segmentation and targeting. Why? Market segmentation represents an effort to identify and categorize groups of customers and countries according to characteristics. Targeting is the process of evaluating those segments and focusing marketing efforts on a country, region, or group of people that has significant potential to respond. Such targeting reflects the reality that a company should identify those consumers it can reach most effectively and efficiently. Finally, positioning refers to the act of locating a brand in customers’ minds over and against competitors in terms of attributes and benefits that the brand does and does not offer. In short, with proper positioning, a company can successfully influence the perceptions of it targeted customers. Exporting, Importing, and Sourcing It is hard to overstate the affect of exporting and importing on the world’s national economies. Most national policies, while extremely important, are marked by contradiction. For centuries, nations have combined two opposing policy attitudes toward the movement of goods across national boundaries. On the one hand, nations directly encourage exports; the flow of imports, on the other hand, is generally restricted. Global firms must navigate through this variety of regulations and simultaneously strategize customer value though their sourcing decisions. Making the decision to enter this global market or to expand one’s market position within the international context produces the need for even more organizational strategizing. Let us briefly look at these strategy choices. Global Market Entry Strategies Every firm, at various points in its history, faces a broad range of strategy alternatives. Some companies are making the decision to go global for the first time; other companies are seeking to expand their share of world markets. Companies in either situation face the same basic sourcing issues, but each must also address issues of marketing and value chain management 1 Global Marketing Strategy before deciding to enter or expand their share of global markets by means of licensing or some form of direct investment. Each available alternative has distinct associated advantages and disadvantages; in fact, the alternatives can be ranked on a continuum representing increasing levels of investment, commitment, and risk. Licensing, for example, can generate revenue flow with little new investment. A higher level of involvement outside the home country may precipitate the use of foreign direct investment, which can take multiple forms such as joint ventures or greenfield investments. Joint ventures allow two or more companies to share risk and combine value chain strengths, while greenfield investments allow a firm to obtain minority or majority equity stake in a foreign business or acquire outright ownership. Finally, cooperative alliances known as global strategic partnerships represent an entirely different form of market entry strategy that is particularly well suited to emerging markets in Central and Eastern Europe, Asia, and Latin America. Ultimately, the particular market strategy company executives choose will depend upon their vision, attitude toward risk, how much investment capital is available, and how much control is sought. 2 Environmental Factors Motivations to Market Globally The primary motivation for companies to go abroad is profitability. However, there are other motivations that are equally compelling for companies seeking global opportunities. These can be divided into internal and external motivators. Some internal motivators include a unique product, a technological advantage, or unused production capacity. A unique product that is hard to find elsewhere in the world can give a company the desired impetus to enter global markets. Similarly, having a product that has technological advantages can help persuade the company to enter foreign markets. Finally, the ensuing high-unit costs resulting from maintaining an inactive production facility can convince the most stubborn marketing executive to "go global." Less obvious external factors include a declining domestic demand, competitive challenges, and proximity to a country border or seaport facility. Consistent declining industry sales are a clear sign that the market may have reached saturation or that the product no longer meets the needs of the domestic market. Domestic competitors operating globally can pose a threat to the company's ability to compete with them at home. Finally, being close to a border or a seaport facility may convince a company to export its products to take advantage of its geographical location. The enactment of trade agreements (for example, NAFTA) and the drive toward economic integration (for example, EU) has provided many companies with an added incentive to market their products to these regional blocs. Most members of the World Trade Organization (WTO) are members of at least one regional trade agreement and, in some cases, more than one. The Global Marketing Plan Once the company has decided to market globally and has selected a foreign market, it needs to develop a marketing plan. The marketing plan is a unique tool available to all global marketing managers. Typically, a global marketing plan starts with the analysis of the company's internal and external environments. An example of an internal environmental analysis includes the revision of the company's mission statement as it relates to global markets. An example of an external environmental analysis is the analysis of factors that may influence the demand of the company's product in the foreign country. Once the company has formulated an objective as a result of the environmental analysis, the company should define the target market in the foreign country 1 Environmental Factors and the marketing-mix strategies necessary to reach it. Analysis of External Factors With the wide availability of the Internet, most people have access to data and information necessary for the environmental analysis of a foreign market. Factors to consider in the analysis of a foreign market include the following: • • • • • Legal and trade agreements Economic performance Social and cultural values Population demographics Marketing infrastructure Information on the specific factors that drive the demand for a particular product (or product category) is more difficult to track. Typically, this information is located in the company's own marketing information system, which consists of the company's own secondary and primary research efforts or from studies commissioned by the company to market research companies. Alternatively, industry and trade associations develop their own studies exploring the demand factors for specific product categories. There are global, syndicated marketing services dedicated to identifying and researching growing industries in anticipation of demand from interested parties. The Target Market and the Marketing Mix Sometimes the definition of the foreign target market is identical to the definition of the domestic market. However, more often than not, the definition of the foreign target market is based on the unique environmental characteristics of the foreign market. This definition must include information on demographics, lifestyles, benefits sought, and the circumstances around the use of the product. Subsequently, the process of designing the marketing mix for the target market is no different from the domestic process. The product, distribution, promotion, and pricing strategies should reflect the activities and policies necessary to reach the target market. 2
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Attached.

Running Head: DISCUSSION QUESTION

Discussion Question
Student’s Name
Institutional Affiliation
Date of Submission

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DISCUSSION QUESTION

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Discussion Question

Primary and Secondary Research Types
All research techniques are categorized into two broad types of research
encompassing primary and secondary research types. Primary research comprises information
or data collected through self-conducted research techniques. In particular, primary research
can be described as a methodology used by researchers to collect first-hand data or
information and thus directly rather than depending on the information that is collected from
previous research. The objective of primary research are to answer specific questions that
directly concern the project or topic under investigation. The methods of primary research
comprise observation, surveys, interviews, and discussion meetings. Fundamental study
techniques are associated with the provision o...


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