3.4 – Marketing Strategy

• Marketing strategy: a plan to combine the right combination of the four elements of the marketing mix for a product to achieve its marketing objectives.
• Various laws that can affect marketing decisions:

  • protect consumers from being sold faulty and dangerous goods
  • revent the firms from using misleading information in advertising
  • protect consumers from being exploited 
• Problems of entering foreign markets::

  • Difference in language and culture
  • Lack of market knowledge
  • Economic differences
  • High transport costs
  • Social differences
  • Difference in legal controls to protect consumers
• Opportunities of entering foreign markets:

  • Increase sales, revenue and profits
  • Cheaper and easier to export products
  • Home markets might be mature
• How to overcome such problems:

  • Joint venture
  • Franchise/License
• • Advantages of Joint venture:
  • Reduces risks, cuts costs
  • Each business brings different expertise
  • The market potential in the joint venture increased
  • Market and product knowledge can be shared
  • Disadvantages of Joint venture:
  • Any mistakes made will reflect on all parties in the joint venture => damage their reputations
  • Different business culture or different styles of leadership => decision-making process ineffective
• • Advantages of Franchisor:
  • Rapid, low cost method of business expansion
  • Gets an income from franchisee in the form of franchise fees and royalties
  • Franchisee will better understand the local tastes and so can advertise and sell appropriately
  • Access ideas and suggestions from franchisee
  • Franchisee will run the operations
  • Disadvantages of Franchisor:
  • Profits need to be shared
  • Loss of control over running of business
  • One franchise fails => affect the reputation of the entire brand
  • Franchisee may not be as skilled
  • Need to supply raw material/product and provide support and training
• • Advantages of Franchisee:
  • Working with an established brand (chance of business failing is low)
  • Franchisor will give technical, managerial support
  • Franchisor will supply the raw materials/products
  • Disadvantages of Franchisee:
  • Cost of setting up
  • No full control over business (follow franchisor’s standards, rules)
  • Profits have to be shared
  • Pay franchisor franchise fees and royalties
  • Advertise and promote the business in the region themselves