In marketing practice, one of the key srategic decisions revolves around building relationships. Today Daimler, Renault and Nissan have announced a very interesting alliance. They aim to share production but also to keep exisiting relationships with Volkswagen. This means that costs of development and generate common parts and technology given the green agenda.
The challenge for all car companies is to meet the challenge of the environmental pressures. This is costly and incurs a high level of risk. Good marketing practice suggests that reduction of risk is key. Therefore this alliance has a number of really positive potential benefits.
This will build scale and offer huge opportunities for the future. Marketing practice suggests that this in difficult to implement in terms of brand. It will help the partners to increase competitiveness given the costs of innovation. This will push volume and generate lower costs.
“If you have scale but you don’t make scale work for you through sharing platforms and sharing engines and making smart decisions locally, geographically, scale is just complexity and confusion,” Ghosn the CEO of Nissan told a news conference in Brussels.
The brand of Mercedes needs to maintain quality and the use of Renault engines could confuse the market. So the alliance will need careful managment to avoid the problems Daimler encountered when it merged with Chrysler, which ended in 2007
Good marketing practice tells us that the foundation for a marketing strategy is to position clearly in the market. This is something that determines the whole of the marketing tools. If your business is positioned at the top end of the market, consumers expect more. The market size maybe smaller, more value must be added. This will determine the price and that requires careful calculation to ensure that the costs of adding the value are not higher than price the consumer is prepared to pay.
The market dynamics are also ever changing. Using Starbucks, as an example. They orginally occupied the top end of the market. Then moved into the mass market with lattes on every street corner. That market looked attractive and along come the likes of MacDonald who repositioned to compete by offering lattes and healthier options.
So how does Starbucks respond? They are now testing the top end of the market and offering more value adds. Interesting to see how that is received and how the competitors respond. Best marketing practice suggests that clarity and being able to differentiate is key to success.
Consider how your marketing practice in your business can use this idea. Think about the way in which the current assets are used. You might want to offer a streamlined version e.g express, or essentials. Marks and Spencer, Waitrose are examples of businesses that have offered a simpler version of their main business as an example of good marketing practice.
Another example is Only Men Aloud, the popular Welsh Choir who won a television competition and have gone onto enjoy successful concerts and record sales. They are now offering a slimmed down version for special parties and events. Not everyone has the space for a full choir so Only 4 Aloud. Clever use of the brand and being able to tailor the assets of the business, in this case the choir to the needs of the customer. A really good example of marketing practice at its best
If you are sitting a marketing exam this is a really good example of competitive strategy, positioning and branding. It shows how marketing practice builds the profitability of the business
For many years the Times on line service has been offered free content. From June there will be a charge. This is a new approach and the risk is that consumers will switch to other free services such as the Telegraph. Or less direct such as television news.
The Times is acknowledged to offer a wide ranging source of up to the minute news, articles and commentary. The BBC could compete as a free service and also dominate that space. This would mean that the Times will need to do more to persuade the consumer to pay. If this costs more than the revenue generated it will be a problem for the business.
If the Times need to generate cash it seems that there are other ways of achieving that objective. E.g if someone registers and then accesses tailored content. It follows that advertising very carefully tailored to this consumer with links to selected products, will generate revenue for the Times.
Time will tell if charging is a viable business model of if a customised service using tailored content and advertised product is a stronger model
It is good marketing practice to be able to develop a direction for your business. This will form the basis of the marketing plan.
There are 4 key stages in a marketing plan.
Firstly – analysis of the current situation. This will include an assessment of the key external issues. This can include the economy to changing customers to new competitors. It needs to decide how to respond and build for the future.
Best marketing practice will illustrate the challenges but also the options facing the business. It will need to decide who to compete with and on what basis. Is it better service, providing a solution or offering a low cost deal?
Whatever the issues the stages of the plan remain constant.
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