The following paper intends to take an objective look into how the formulation, implementation of marketing strategies and planning have contributed to better performing multinational corporations. Given today’s competitive business environment, commercial success in the corporate world can only be achieved through proper coordination between the top and middle management, and the subordinates and involving both in the strategic management process. The extend of ambiguity that organizations face in the commercial environment require business executives to understand that goods and services would not just sell themselves, but as the selling concept of marketing postulates, some effort to sell must be put in place by those responsible. Consequently, the selling efforts usually manifest itself in the form of strategies which usually manipulate the marketing mix to achieve what is best for both the organization and its consumers. Therefore, this is the reason why business executives must involve their organizations in numerous and rigorous research processes so that they can understand what is specifically targeted to consumer market usually need and therefore attempt to make strategies that favor their consumers.
It is thus assumed strategizing in certain functional areas such as marketing makes sense of security in the organization, increases the chances of success. In a case where an organization lacks sound marketing strategies and other strategies that are used in various functional areas, an organization is likely to face a lot of ambiguities and hence sub-optimal use of resources within the organization and even failure or numerous inefficiencies could be imminent.
Table of contents
Introduction Research question Findings and analysis Strategy and Planning Marketing Strategy process and illustrations The process of planning and formulating marketing strategy Illustration 1: The Coca-Cola Company Illustration 2: The Apple Company Conclusion and recommendation Works cited Appendix
Starting and successfully running a business is a daunting and exhausting task that is not just achieved overnight or by wishful thinking (Campbell, Stonehouse & Houston 11). Entrepreneurs are aware of the consequences of not planning well, which can make even empires collapse, and are always a keen to boundless benefits that arise out of the planning process. With numerous resources being dedicated in the production of products, it becomes necessary for a business to implement sound strategies that will make sure that it sells its inventories and realize revenue streams from the various avenues (Frey 112). Looking at the world’s largest multinational companies like the coca-cola company, Nike, starbucks, Toyota, Sony, Mitsubishi, Amway and many others, it is quite clear that a company which desires to join the market leaders must apply some form of extra effort so that it can achieve its vision and mission in the business community (Kotler 62). Turning a blind eye on the importance of planning is like committing a commercial suicide. With limited funds and resources commercial organizations and entrepreneurs are more critical and aim to obtain an optimal mix that would enable them realize high levels of efficiency and consequently achieve their targets.
Companies ignorant to planning find themselves in all sorts of financial and environmental problems that could threaten their existence. If a commercially-oriented business is about to delve into the global market or operate with the main goal of making profits, it is necessary for it to be extremely careful and use systematic approach. This is because companies that are much more experienced and highly skilled in the art and science of strategy can easily take advantage of lesser experienced companies and make them face multiple hurdles when operating. Consequently, management must carefully assess a comprehensive market analyses, look at various available forms of strategies of entering the market as well as various partnership candidates that will enable it enhance its business prospects. Enterprises wishing to be successful in the international market need sufficient management resources coupled with superior research, strategy and planning techniques (Porter 82).
This paper will use secondary sources of data including books scholarly articles and data from the internet and conduct a case study looking into how both the coca-cola company and Apple have both successfully implemented the strategic management process especially on the functional area of marketing to achieve organizational success. Additionally, charts and diagrams will give more insight into how strategy management is applied within organizations.
Recent business trends among the world’s largest multinational corporations have led business executives believe that organizational success is dependent upon how well a commercial organization embarks on formulating, implementing and continuously involving itself in the process of monitoring and evaluating marketing strategies. This poses the several questions on business executives: Does the implementation marketing strategies hold the key to success, thus to what extent does the adoption and implementation of marketing strategies guarantee the success of multinational organizations such as The Coca-Cola Company and Apple Inc?
Findings and analysis
Strategy and Planning
According to Kotler (23), strategic management is the process by which an organization, through its human resources, formulates short term, midterm and long term plans, implement these plans and continuously evaluate and control these plans with the aim of realizing the overall organizational objectives included in its mission and vision statements (illustration fig. 1).
Businessmen and business executives always find themselves in a dilemma, because of their ambitious nature, which often leaves them wondering how they will get out of their current situation and get to the position which they wish. There exists a big gap between the present and the future forcing them to decode the how and come up with a clearly documented process that will enable them surf smoothly from their now to the future because without doing this, then the company may never reach where it desires to be. Hence, this becomes the basis of forming and formulating strategy, as each and every functional area of the business requires strategy in order for effectiveness and efficiency to be realized (Geoff & Withey 63). The hierarchy of strategy suggests that there are three levels of strategies that are arranged in an ascending order, corporate strategies, are the highest level of strategy that can be set in an organization and define the specific direction that a company is to follow in order to realize its goals and objectives. Corporate strategies may include ensuring stability, achieving growth or employee downsizing. The second level of strategy is business level strategy, which is basically strategy that occurs at the business unity or the product level and can either be categorized as either competitive or cooperative. The last level of strategy is functional strategies, which are carried out in specific functional areas within a business.
The importance of these strategies that are primarily concerned with nurturing a distinctive competence for an organization’s various functional areas, including, marketing departments, finance department, manufacturing department, research and design departments, and the human resource department, with the number of functional areas within an organization varying from organization to organization.
Marketing Strategy process and illustrations
Marketing is all about selling goods and services to consumers with an aim of satisfying them. All commercial organizations more often than not aim to satisfy their consumers and maximize the revenue streams got from selling their products.
And this is why the phrase ‘customer is king’ is familiar to all those commercial enterprises that have consumers as the pivot of their day to day operations (figure 3). Marketing is a broad and wide discipline but in order to understand how commercial companies understand and approach marketing it is critical that the facets of marketing to be used in order to formulate and develop strategies. The most common facets of marketing are the 4P’s that represent place, price, product and promotion. The most successful companies in the world have understood the importance of these facets and therefore dedicate huge efforts and massive resources towards developing strategies that will enable the marketing function of their organizations operate as world class organizations.
Since understanding the customer is the fulcrum of strategic planning in marketing, each and every effort of altering and maneuvering the marketing mix should be made in the context of the targeted market. There is simply no way that a company that has superior marketing mix can fail to perform better as compared to a company, which has poor marketing plans. Marketing involves groups and individuals who create and exchange goods and services aspiring to bring about satisfaction. Customer needs and wants are the major reasons behind why companies design, manufacture and distribute products into the market.
On one hand, consumers demand for satisfaction and companies therefore sell to make a profit and meet their other objectives such as growth, and ensure continued existence.
The process of planning and formulating marketing strategy
A company’s marketing goals may often involve setting high revenue targets and unit sales and by having such an objective a company can go ahead and set the particular strategies that will enable the end targets to be achieved. A company’s overall mission and goals are vital to the process of strategic planning and often decide the end product of the strategic planning process. Furthermore, marketing strategies must be aligned with overall corporate strategies (figure 4). This is simply because a failure to align marketing strategies and corporate strategies can end up endangering the existence of the whole organization. It is therefore in the same way that a company’s mission and vision operate, for instance Nike intends to be a world leader of high performance athletic shoes, and hence they make sure that their marketing strategies portray this. According to Wikinvest 2010, Nikes outshone competitors especially Reebok, Puma, Adidas, despite the stiff competition they offered to Nike. In the last financial cycle Nike made revenues of $ 17.
9 billion. Current statistics as suggested by Bloomberg Business weekly magazine show that Nike enjoys a 37.5% lead on the entire global market share as compared to Adidas’s which has enjoy also an impressive 33.5%, and these is attributed to Nikes superior marketing strategy techniques (Kourdi 101).
The company has a very aggressive marketing communication strategy that costs it well over $ 1 billion annually (Wireless News) It’s therefore essential that the management sets goals that are really achievable and realistic in the planning stage. When the goals and objectives of the entire planning process are clear and understood, then it becomes simpler and clear to proceed into the other stage which is analyzing the current situation that the company is in and coming up with a comprehensive current report of the status which the company is in. Back in the 1970s and 1980s, IBM was the world’s giant in the computer industry but as the 90s approached things started going wrong and 1991 through 1993 the company made very huge loses running up to $15 billion dollars (Wheelen & Hunger 73). But with the coming of the then new CEO, Louis Gerstner, the company was forced to analyze its current situation then and conduct a serious marketing audit, SWOT analysis that was to assist in carrying out a turnaround strategy that luckily also turned around the marketing strategy of IBM and pulled the company out of the mud. A marketing audit is a systematic process that is carried out in order to identify any weak links in the currently existing marketing strategy and systems, therefore an audit will look at elements that belong to the 4P’s of marketing these include pricing, advertising and other marketing communication avenues, distribution and also product design. By looking at marketing strategy then a company may be forced to take a clear look at its segmentation, targeting, positioning and other marketing variables. Often companies which lack a clear vision that describe their specific target market that the company intends to cover and how it intends to cover this market the company may in turn send mixed signals to the market.
Commercial organizations should therefore clearly evaluate the effective strategies that intend to highly differentiate and send a clear message to their target market. Furthermore, during the process of analyzing the current situation becomes very important for a “SWOT analysis to be carried in order to ascertain the validity of the strengths, weaknesses, opportunities and threats that the company faces” (Wheelen & Hunger 68). A situation analysis is a process by which the current position that the company faces is critically analyzed using the key performance indicators, which include sales, brand switching, revenues. This is because it would be ignorant to assume that the environment is static and not change.
Because at the end of the day the strategy that is formed may turn out to be completely useless because the elements of the SWOT analysis might have changed. Today’s business environment is full of challenges that may hamper corporations from achieving their main objective and it therefore becomes necessary to continuously scan the environment so that the businesses can thrive or else die. Due to the dynamic nature of the environment, a SWOT analysis should cover economic forces, technological forces, sociocultural environment, political forces and legal forces, and also take a look at other publics such as stakeholders and shareholders such as suppliers, employees, competitors, trade associations, regulatory bodies, activists, creditors, special interest groups, the government, and the media among others (Wheelen & Hunger 73).
And lastly the internal environment which exists within organization which also plays a big role in ensuring the organization is highly dynamic and in line with the outside environment consists of various elements such as the organization structure, the organizational culture and furthermore organizational structure. After the organization has conducted a marketing audit and identified where it is currently and where it would like to be, it needs to formulate the actual marketing strategy that will act as a blue print and radar for guiding it to reach where it is heading to. It is therefore safe to say that a company that has perfect marketing strategies will manufacture the right products, price them well, distribute them well, promote them well and satisfy all its consumers (figure 5).
Illustration 1: The Coca-Cola Company
The Coca-Cola Company is a good example of company that operates in multiple geographical regions and formulates their marketing strategy in order to please diverse consumers. Especially when it comes to issues of distribution which is really a problem to many multinational organizations, Coca-Cola has successfully come up with franchising agreements that ensure timely and efficient distribution of its products and ensure that its soft drinks always reach where they are intended to in time. The Coca-Cola company headquarters in Atlanta handles much of the advertizing and promotion activities by itself and has developed a multinational marketing communication mix that is able to make consumers aware, remind them and persuade them to buy their products. The Coca-Cola Company uses both a push and pull strategy that normally involves using a lot of investment on trade promotion and getting hold of shelf space by both offering franchisers benefits and the later strategy which habitually involves using a lot of money in advertising to pull products through channels.
Therefore, by using both these strategies in a promotion exercise the company is able to maximize unit sales and revenue streams for their numerous product lines (Wheelen & Hunger 73). With a superior product strategy the Coca-Cola Company has been able to come up with various product lines that have a much deeper product mix. The advantage of having such a large product line and a much deeper product mix within each and every product mix is that the market and consumers in turn have a wide variety of choice and therefore the company has a better chance of having maximized revenue streams. The coca-cola company’s product lines include carbonated soft-drinks, energy drinks, juices, and water and the product depth within the carbonated soft drinks include Coca-Cola, Fanta, Sprite and Krest.
Within the product line of Coca-Cola itself there consists’ a further product variety of Diet Coke, Vanilla Coke, Cola Green Tea, Cola Lemon, Cola Orange and Cola Raspberry. The company follows a highly differentiated approach which is costly and risky, but the company has been able to carry it out successfully by coming up with a superb product strategy by coming up with superior product designs and development plan that has made good flavored carbonated soft drinks and managed to keep their formulae secret. Not only does the Coca-Cola Company has a perfect product mix but the company has gone ahead to develop a more superior marketing strategy that is able to complement and increase the sales of their products. Coca-cola is known for using a discriminatory pricing strategy that prices its products differently across the various regions. The company understands that the purchasing power parity (PPP) and issues to do with GDP per capita is not universally equal and therefore a man living in India and a woman leaving in Australia will therefore not be equal when their purchasing powers are compared. Therefore, the company is able to practice both a skimming/milking pricing strategy and penetration price strategy depending on the purchasing power of a county and therefore that is why the same bottle of Coke can be cheaper in an Africa country and more expansive in Switzerland (Wireless news).
The advantage of such an approach is that a company can tremendously increase its revenue streams and obtain a suitable revenue mix by stimulating unit sales and using the higher mark-up profits obtained from one region’s make up for low mark-ups obtained from regions with lower purchasing power. This is the reason why the company has successfully operated in over 190 nations and has been able to sustain a very stable business model since its inception in the 1890s (Porter 43).
Illustration 2: The Apple Company
In the 1980s, while working for Apple, Steve Jobs’ ideas were found too radical and somehow out of the ordinary. He soon fell out with the board and went to start his own company, called NeXT, but soon after, Apple bought his company with an aim of having his inventing talents back to Apple (the Rest is now history).
Apple is now a leader in manufacturing and selling premium electronic, communication and software products in not only America but also throughout the world. Apple is not only known to have good functional strategies that govern its research and design department but it also has marketing good marketing strategies. The facets of marketing that are associated with apple products have made it also possible for individuals to understand and embrace its products. While consumers always desire to run away from purchasing premium and expensive products, especially given this economic hard times, Apple has made this possible with millions of people always lining up to get their products as soon as they are launched.
Apple has a very successful segmentation and target marketing strategy targeting high end market clients who are mainly attracted to products that are highly differentiated and leading in technology. With such a market the company is able to use a price skimming approach and therefore charges high prices that go forward to pay for the high product development costs that the company generally incurs during the process of manufacturing (Wheelen & Hunger 73). With products such as Mac book, music production software, iPhone, iPAD, Mac OS and many other products the company cannot go wrong the product strategy of iPod is quite clear and precise and thereof consumer oriented. Current consumer trends suggest that individuals have desired to have products that have good display and moreover easy to use and understand plus additionally consumers desire to have products with sleek and superior design. The iMac Book super ultra slim design that has both the central processing unit and the display joined together is quite convenient and beautiful, and therefore this is why consumers are willing to part with $ 1200 to have the computer. Moreover, apart from having good product design strategies, appropriate pricing and product distribution strategies, the company has a good strategy for promoting its products (Kourdi 108).
The company normally publicizes the launch of its products and releases a limited number of copies, therefore with all the hype plus the few number of copies consumers more often than not rush into the outlet stores to acquire their copies, thus forcing consumers who are considered as early adopters to get copies within the first days of the launch. A unique integrated marketing communication program like Apples should therefore aim to: identifying target audiences, analyzing the situation, setting marketing communications objectives, developing strategies and tactics, setting a budget and finally evaluating the effectiveness of the campaign. From the above diagram it is clear that the message sent must be customized specifically to reach the target audience and therefore bring desired results for the sender which is normally to initiate purchase and adoption of Apples products addressing the target market. Both coca-cola and Apple typically operate with back-up strategies that by and large can be used to counter any form of crises. Coca-Cola frequently adjusts its advertising programs depending on the sales and forecast targets and therefore when they are well over their targets the company habitually may decide to reduce or increase the amount of investment spent on promotional activities. The 2007-10 recession that led to a credit crunch frustrated many businesses, entrepreneurs and business executives around the world, the scarcity of resources to expand and better business organizations especially commercially-oriented enterprises, led to closure in worst case scenarios and change of strategy by companies which intended to survive. Both Coca-Cola and Apple were faced by the same and had to pursue alternative strategies that were to help them save on funds and optimally use available resources to maximize their revenues. Apple reduced the amount of money it normally allocates to research and design, it counterpart, Coca- Cola, also reduced the amount of funds that it spends on mass advertising and instead concentrated on trade promotions therefore saving funds.
Form the above illustrations it becomes quite clear that both Coca-Cola Company and Apple participate in the process of strategy formulation, implementation, and evaluation and control. It is not enough for an organization that is commercially-oriented to only develop strategy but also to put its money where its mouth is (Geoff & Whitey 122). The strategic management process has a high affinity for resources because the process of implementing strategy regularly involves putting in place programs, procedures that more often than not involve the consumption of a lot of resources that include money, human resource and money. Because strategic management is usually a continuous process, which is applied from the short-run to long run it becomes apparent to have a detailed action plan report that consists of detailed incremental action plans. It is also important that strategic controls are intertwined with marketing plans so that any deviation from expected results can be smoothly corrected. In addition, business executives should incorporate the use of gaunt charts and other measures to assist them in ensuring that incremental action plans are set up in time.
Conclusion and recommendations
It is apparent that successful firms should institute marketing strategies and embrace the importance of strategy in their operations. Through strategy, it becomes possible for the organization to move forward carefully since its strategy is somewhat equated to the radar therefore enabling the organization to do what is considered best and good for the organization. The discipline of strategy is therefore vital in organizational success and organizations ignoring this fact, however successful they are, may find it hard to steer their organizations especially when a crisis hits them. Organizations with superior planning and strategy, such as the Coca-Cola Company, Apple and Nike, can attribute their success to the strategic planning process. It is thus necessary for any organization which wishes to replicate this kind of success to emulate them and dedicate resources and time in coming up with marketing strategies that will in turn increase unit sales and hence enable them compete equally in their respective industries. Furthermore, the strategic management process is not optional as it involves the whole organization starting from top to bottom, meaning that the management should institute techniques that will enable subordinates embrace and accept the importance of formulating, implementing and continuously assessing strategies.
It will therefore not be enough for the organization to only apply too much effort towards formulating, implementing and controlling marketing strategies but rather apply the same zeal towards other functional areas of the organization such as logistics, finance, research and design, manufacturing and so on. By doing so, the organization will gain some form synergistic advantage that would translate to a positive effect on the performance and efficiency of the organization as a whole. It has as a result become quite clear as the thesis suggested that commercial success of the world’s most prosperous companies such as coca-cola and Apple Inc. Can be attributed to the fact that the companies have rigorously and continuously dedicated a lot of resources and effort towards putting in place relevant and essential marketing strategies that have contributed highly to the success they enjoy in the market.
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