Thursday, June 25, 2009

Marketing Dissertation

Effective strategic marketing planning is essential for any organisation to succeed in its chose market. Kotler (2003) states that the key to achieving organisational goals consist of the company being more effective than its competitors in creating, delivering and communicating customer value to its chosen target markets, therefore the organisation must know as much about its competitors, as it does about itself. When attempting a marketing plan it is important to include seven integrated components; Background situation, Marketing objectives, Marketing strategy, Marketing mix, Action plans, Budget and Organisation implications. According to Doyle pg 101, (2002), these will provide us with the information needed as well as a structured path to fulfil the plan. It should also be noted as Kotler (2002) suggested that a degree of openness should be allowed which will help innovative ideas within the total planning systems. This flexibility adds kotler is also a potential source of competitive advantage. Barriers identified by McDonald (2002) which cause problems in implementing plans, ranged from little senior management support, inadequate marketing and planning skills to confusion and delegation of plans. These barriers need to be addressed by the organisation to ensure effective strategic planning.

ANC rental Corporation is a car rental company and is made up of three distinctive brands, National is a well know corporate (business) brand, Alamo car rental has a strong presence in the retail market while the third brand, Guy Salmon is a prestige name in car rental through which they hire executive vehicles. Together the Alamo and National brands make up one of the world’s largest car rental companies with annual revenue of $2.4 billion in 2002. To ensure an effective strategic marketing plan they must be able to give themselves a competitive advantage over rival firms. Wilson & Gilligan (1997) suggests how market orientation requires a focus on customers, competitors, changing environment and company culture. Despite competition ANC rental can rely on numerous strengths. Firstly it has the largest fleet of cars (55,000) (ANC start right, Dec 2003) in the UK, 10,000 more than its nearest competitor Avis. Secondly it has a service support network connected to its 135 branches through out the UK as well as a global reservations office, which can handle 8 languages. This last point proves that ANC is a global brand, which it must incorporate into its strategy if it wants to compete in today’s global economy. The information it collects must be used to give the company global competitive advantage which Yib (1989) states can maximise worldwide performance through sharing and integration. However its weakness includes a lack of identifying small but potential gaps in the market. Wichan pg 151, (1998), states how opportunities do not present themselves, they have to be actively sought out. ANC must use its current resources such as staff to seek new opportunities before the competition does. Another weakness, which is a main cause for its position is lack of brand awareness and image, which in today’s business environment is a key, factor in an organisations success. According to Fill pg 216 (1999), Brand equity is a measure of a number of different components including the beliefs, images and core associations, consumers have about particular brands. Ambler (2003) continues to confirm its importance by stating that firms that measured their main marketing asset (Brand equity) and used both financial and non-financial metrics to assess performance were less likely to cut budgets. He adds that marketers who align their agenda with the corporate goals are under less threat. This is no exception in the car rental business where customer’s needs are to feel “looked after and counted. Marketing plans are needed for ANC’s slogan “ Freedom we’ll take you there” and logo to be seen and heard using different media. Before they can expect to beat their competitors, they first need to strengthen its current position in the consumers mind. A good example of this is when Avis ran their campaign “ We’re number two, we try harder” this showed how they acknowledged its second position in the rental car business.

A marketing audit needs to be executed which according to Lancaster & Massingham (1998) pg 14, is a systematic internal and external environmental review of the companies marketing performance for a given period of time. ANC rental should look at all financial reviews and their position in the industry for the last 5 – 10 yrs which not only will provide them with essential information but also will help them to see what changes are needed to take them where they want to go, Be number 1 in the market place. The structure of the audit that suggests Lancaster & Massingham (1998) will provide the basic for subsequent SWOT analysis, while the external audit will examine the PEST factor. Such issues, which affected the car rental industry, was September 11th, which reduced the number of tourists and social culture which has increased customer demands and wants. Globalisation, Levitt (1983) is a major cause of this, which increased brand equity and competition. ANC should also conduct their marketing audit on a continuing basis that according to McDonald pg 537 (2002) will make it a useful source of information to draw on for decision-making throughout the year. This will give the flexibility needed which will help the plan to succeed. Management at ANC should also understand the twelve guidelines for effective marketing which McDonald (1992) lists are important for companies if they want to gain competitive advantage. This gives them extra information, which is needed when the plan is being created. After they have collected the bulk of the information they must produce a mission statement which according to Doyle pg85 (2002), motivates employees by providing them with an external goal worth striving for. Also a Mission statement represents a visionary view of the overall strategic posture of an organisation and as Johnson & Scholes (1999) suggest is likely to be a persistent and resistant influences on strategic decisions. Therefore it is important to display the mission statement where all employees can see it, canteen, reception, etc. this will give employees a sense of direction which according to Doyle (2002), will identify major policies that define how to treat customers, fellow employees, suppliers and other key stakeholders. This will also take away the traditional strategies used be finance directors, which caused confusion among line managers, which prevented them for taking them seriously. McDonald (1995) suggests marketing planners place a greater emphasis for essential data only and use phases, which explain the underlying thinking behind the objectives and strategies. This way employees at ANC from top management all the way down the chain of command to drivers will understand what the company stands for, its values and where it wants to be. In ANC’s case “To be the Global car rental company of choice”. The marketing team at ANC have done this and have changed the structure of the organisation to adapt to its plan. The importance of drivers as a customer contact point was noted which promoted them to change the driver’s title to key time worker. According to Lancaster & Massingham (1998) pg 17, objectives and strategy can only be achieved through people, structure, systems and methods. ANC’s new consideration for all its employees and other resources help bring about the changes required to meets the organisation’s objectives. This gives staff a sense of belonging and having a say in the company they work for. Satisfaction levels must be high within the organisation before positive results can be achieved.

The whole process must have an effective structure for it to succeed (Wilson & Fook, 1990 Pg 23), this shows how it is no good creating a marketing plan if you don’t lay down a structured plan to implement it. Staffs training programmes need to be implemented to increase performance as well as effectively communicating the strategic plan to staff. MacNamee & McDonnell pg14 (1995) suggest how incentive schemes can generate staff motivation and reward them on the plans’ attainment. This will encourage staff to achieve the plan’s objectives who in short are the key people who ANC rely on to ensure their customers position ANC as their global choice in car rental. Delta Airlines in the US realised in the early 90’s, a simple fact, that by treating its staff well and keeping them motivated and trained, high productivity and superior customer service was implemented which helped them to differentiate the airline from its competitors. ANC will need to introduce a continuous appraisal system to measure staff performance and can help managers assess the ongoing strategy. Structuring the organisation can cut mistakes when implementing the plan, Mintzberg’s (1979) Division of Labour can help the different departments understand their core duties and standardise procedures. However solid communication must allow certain change if needed to take place with minimum fuss. I agree with Alexander (1985) when he brings up the point that top management must first of all clearly communicate with all employees what the new strategic decision is all about. In the rental industry when the drivers have a close contact with customers it is important that these employees feel they have an important role to play in the organisation. Alexander continues to stress how two- way communication within its organisation where e.g. Bolton branch is short two cars but the Manchester branch is slow to cooperate. ANC’s new strategy where “working together” is a key value, they have changed the structure where four or five branches in one area are part of one region, which encourages cooperation and can lead to healthy competition between other regions in the future. The development and management of the strategy can be implemented more successfully through the “lens of design”. This according to Johnson & Scholes (1999) uses economic forces and constraints on the organisation, which are weighed carefully through analytic and evaluative techniques to establish clear strategic direction. This backs up Alexander’s point that top management need to lead the development of strategy in the organisation. This controlling will help determine smooth operation of the strategic plan. But will only work when used with other methods to control the plan and eliminate barriers.

It should be noted that a lot of these barriers, which could render the plan useless, are human made and according to Ambler (2003) lacks an experienced marketing director who understands the fundamentals of marketing. Assertiveness and cooperation is essential to work together with marketing people to understand that contribution and profit is far more important than executing expenditure. Traditional managers concentrate too much on yearly finance reports rather than on long-term strategies. ANC rental have given their marketing department much more power as the strategy is integrated into the total corporate planning system which McDonald (1996) states needs to be achieved by all departments in the organisation such as distribution, finance, process and personnel. To break down some of the barriers to Marketing planning, McDonald (1992), ANC should use methods for implementing the strategic plan. A successful method was developed by Robert Kaplan and David Norton in 1992, called The Balanced scorecard methodology. This is an analysis technique designed to translate an organization's mission statement and overall business strategy into specific, quantifiable goals and to monitor the organization's performance in terms of achieving these goals. The methodology examines performance in four areas: financial analysis, includes assessments of measures such as operating costs and return-on-investment; customer analysis looks at customer satisfaction and retention; internal analysis looks at production and innovation, measuring performance in terms of maximizing profit from current products and following indicators for future productivity; and finally, learning and growth analysis explores the effectiveness of management in terms of measures of employee satisfaction and retention and information system performance. However as MacNamee & McDonnell (1995) argue that the balanced scorecard is not a template that can be applied in every business, each organisation such as ANC rental can develop their own customised scorecard to fit their goals and strategy.

When correctly done, strategic planning takes into account all aspects of your organisation and provides criteria for making day-to-day decisions about operations within and outside the organisation. This gives a template against which all such decisions can be evaluated. This leads to greater focus and effectiveness. But by just collecting all the relevant information and using the best components in formulating a strategic plan it must be agreed that this work is rendered useless if it cannot be effectively implemented by the organisation. Successful controlling requires performance measures, suitable reward systems and flexibility embraced by the structure of the organisation. This is needed to create a balanced environment for the plan to go from “idea” to an actual working plan. Motivated employees are the key success factor in implementing a successful plan. This is why strong leadership make the strategy real at a level of achievable that is both meaningful and actionable. This critical leadership issue is how to lead from a position of strength based on a view of the future, and a plan for getting the organisation there. This leadership should come from both marketing planners and the top leadership team which in some organisations are the same. Good communication at all levels of responsibility will create an understanding to highlight the benefits of actually carrying out and keeping to the plan. Obstacles will always occur, internally or externally, but if the necessary foundations are in place; vision, skills, flexibility to change, strong leadership and communication; Management will and should be able to ensure effective planning. For each barrier the remedy is different, and appropriately identifying those barriers is an important step in effective strategic planning. Therefore the plan must have adaptiveness, flexibility, and responsiveness. In the cases of major business change initiatives, success or failure will hinge on the effectiveness and strength of the vision and strategic plan. Also controlling systems such as collecting data with other reports and statistics can help you anticipate and resolve issues before they become problems, or at least minimize the effect of problems by early action. This with enhanced strategic feedback and learning for future results may create new opportunities or risks not anticipated when initial strategies were developed. This forward thinking approach will help any organisation to respond quickly and effectively to changing environmental conditions.

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