Standardization European marketing strategies in Consumer Electronics Industry

PROCESS STANDARDIZATION

The focus in standardization of international marketing strategies has mainly been on marketing programs. This might be called surprising since many scholars and practitioners have mentioned that process standardization should be easier to achieve as well as provide some significant benefits (Douglas & Graig, 1983; Kreutzer, 1986; Sorenson and Wiechmann,  1975; Walters, 1986; Halliburton & Hünerberg, 1993).

 In chapter 1, a process was defined as: a set of sequential interrelated activities and subsequent tasks.

 Kreutzer presented a number of conditions that a process must fulfill to be standardized:

"The process steps and activities have to be visible, it has to be possible to fix the single steps and the process steps and activities have to be repetitive and predictable, because when activities are very variable, standardized procedures may show dysfunctional effects" (Kreutzer, 1986).

Before it is possible to discuss process standardization it is helpful and necessary to describe the main marketing processes that are presented in literature.

1       Marketing processes

In this paragraph the main marketing processes presented in literature will be described. These processes are: the strategic marketing process, the marketing planning and control process, the new product development process, the marketing communications process and the sales and services process.

1.1    Strategic marketing planning process

 The strategic marketing planning process can be defined as (Luck, Ferell & Lucas, 1989; Boyd & Walker, 1990):

 The process of planning for a set of determinations that guides or directs the managers of an enterprise to reach their desired long-term market position within a certain target market.

 A distinction must be made between the strategic planning process, which spans a time period of 3 to 5 years, and the marketing planning which will be made every year. Besides the annual marketing planning process, a marketing control process exists. These different processes are distinguished because of the generally known importance of producing both short and long term marketing plans

 The strategic marketing planning process consists of the following sequential activities (Nieuwland, 1994):

 Figure 4.1 The Strategic Marketing Planning Process (SMP)

Input of the process.

The input of the process is the corporate marketing plan, which provides direction on the businesses the company should be in and the company’s growth policies (Boyd & Walker, 1990). If the company is operating on an international basis, the strategic marke­ting planning process is mostly practiced on a decentral level within the organization. For this purpose, the company is divided in Strategic Business Units (SBU's) which consists of Product Divisions (PD's). PD's itself can be split up in Product/Market-Combinations (PMC's) (Van der Lee, Moëd & Dierckxsens, 1987). When these sub-levels can be identified in a company this means that every level has its own input in the strategic marketing process.

 The steps shown in figure 4.1 will be explained below:

 Research of environment and situation.

Before the corporate, SBU and PD strategies are determined, the company has to examine the current, general environment of the company, like the demographic, socio-cultural, economic, political/legal and technological trends (Luck, Ferell & Lucas, 1989). Besides, an analysis of the marketing environment is necessary. This includes analyzing the industry (for instance entry and exit barriers, degree of concentration etc.) and the market situation (for instance market potential, market size, growth and shares and actions of competitors). 

SWOT-Analysis.

After studying the environment and the situation, it is neces­sary to do a SWOT analysis. This analysis provides an overall overview of the strengths, weaknesses, opportunities and threats of the PMC. Strengths are the necessary internal competencies a company needs to have and weaknesses are the competencies that the company does not have (Kotler, 1991).

A marketing opportunity for a company is an attractive area for a marketing action in which the company would enjoy a competitive advantage. On the other hand, an environmental threat is a challenge posed by an unfavorable trend or development in the environment that would lead, in the absence of purposeful marketing action, to the erosion of the company's position (Kotler, 1991).

After having performed the SWOT analysis, the company will use these findings to define the main issues that must be addressed in the strategic marketing plan. Decisions of these issues will lead to the subsequent setting of objectives, strategies and tactics.

Forecasting market and sales.

Before realistic marketing objectives can be set, market and product sales forecasts have to be determined, for example through making economic models, extrapolation, moving averages or estimation (Dillon, Madden & Firtle, 1990). The setting of real­istic and dependable forecasts is a difficult task and it becomes even harder in times of economic turbulence and infla­tion (Hopkins, 1983). It becomes even more difficult in the case of a new product, for which no market existed before. 

Objectives setting.

The forecasts of market and sales will be the guidelines to determine the objectives and the marketing strategy and program.

Research and designing of strategies.

After the objectives have been approved by the PD, the PMC should determine their target markets, because serving the total market is often impossible since it is often too large.

Target marketing consists of three major steps: market segmen­tation, market targeting and product positioning. Market seg­mentation is the act of dividing a market into distinct groups and buyers who might require separate products and/or marketing mixes. Markets can be segmented by for instance, geographical location, behavioral and demographic characteristics. The second step is market targeting, which means that a company develops measures of segment attractiveness and se­lecting one or more market segments to enter. The last step is product posi­tioning, the act of establishing a viable competitive position of the firm and its offer in each target market.

 Strategic marketing program.

The last step of the strategic marketing planning process is the formulation of a strategic marketing plan and budget for each target market, which have to be approved by the Product Division management.