Importance Of Market Research, Competition, PEST Analysis And SWOT Analysis

Market Research for Developing Effective Marketing Strategies

Discuss about the Marketing for International Journal of Economics.

Determining the demand, competition, market conditions, current marketing trends, scope of entering the market, etc. are certain crucial elements of market research. Outcomes originated from market research helps the organization to develop strategies in relevance with setting up an effective image in the target market (Armstrong, Adam, Denize & Kotler, 2014).

For example: Nokia Corporation was the leader mobile manufacturing brand for a long period of time. Organization developed brand value since 1977 and enjoyed the success with the brand name till 2004. But after the introduction of Android operating system and when Apple introduced their first mobile phone in 2007, Nokia lost its leading position as they failed to adopt the change. Recently, Nokia Corporation is trying to enter into the mobile industry again and for the same, marketing team of the organization has conducted market research to evaluate the current marketing conditions and trends so that they could enter with an effective marketing strategy in order to make distinctive and separate position from existing companies in the industry. Market research activities analysed that the current marketing trends of mobile industry describes that the demand of phones by Apple and Android operating system based smartphones is very high. Thus, in order to enter into mobile industry with an effective approach, Nokia needs to adopt Android operating system in their smart phones along with the adaptation of differentiation strategy to make their smartphones unique and different from existing brands of the industry (Lamberg, Laukian & Ojala, 2014).

Thus marketing plan will help the organization to develop an effective marketing plan with appropriate goals, clear marketing objectives as well as vision and mission statement. Further, organization will require adopting appropriate branding and positioning strategies so as to attain its desired goals in relevance with gaining competitive advantage in the target market.

Competition is considered as an effective tool for developing new ideas and methods of differentiate organizational products from others. Competition means when more than one company manufactures same type of product or services in the same market. In relevance with gaining competitive advantage, every company present in the competitive environment will put unique efforts so as to make its products different from others. Main motive of performing these activities is to enhance revenues, profitability as well as market share and customer base. Innovation and creativity are primary reasons for competition and in absence of competitive business environment, market will not be able to grow and expand (Pride, Elliott, Rundle-Thiele, Waller, Paladino & Ferrell, 2006).

For example: Coca-Cola and PepsiCo are known as the biggest rivals for each other. Both these brands are well known established multinational brands. Except these two, there are small level or local manufacturers are available in beverage industry. But PepsiCo and Coca-Cola are primary and direct competition for each other in every market across the globe. In relevance with gaining competitive advantage, both have developed separate research and development team with regards to fulfil its target audience’s articulated as well as unarticulated demands. Apart from this, organizations also take small steps such as modifying packaging, reducing prices, adopting unique promotional and marketing strategies, etc. with the objective of gaining competitive advantage in the global level market.

Competition as a Tool for Developing Unique Products

Competition is also beneficial for market as well as for consumers because it increases their bargaining power. Along with this, competition leads to enhance product offerings by companies engaged in competitive business environment along with enhancing choices for consumers. In this rivalry, Coca-Cola always wins the competition and it has covered almost 48% market share in the global market whereas PepsiCo, nowhere stands around this figure. Still PepsiCo is the biggest competition for Coca-Cola due to its international presence and regular efforts put by the organization to enhance their market share.

PESTL/PESTLE analysis is a crucial tool for evaluating the impact or force of external environmental factors over business. Analysing these factors’ impact helps the organization to develop or adopt appropriate strategies so as to make an effective position in the target market. Generally, this strategy is executed at the time of entering into new market with existing or new products or while diversifying the product offering in different product lines.

For example: Apple Inc. conduct an external environmental analysis before launching of new products with the objective of determines the impact of external environmental factors over them. The same analysis was conducted at the time of recently launching of iPhone 8, iPhone 8 Plus and iPhone X. Following is the analysis conducted by marketing team of Apple Inc. with relevance to gain appropriate information about the marketing conditions:

P: These phones were launched in various parts of the globe, thus, it is necessary to consider the impact of political factors such as tax rate, governmental rules and regulations, policies, etc. before launching.

E: Preaching power of audiences, inflation rate, economic growth are certain crucial economic factors which affect organizational performance. Before launching the phones in the target market, organization considers these factors so that the desired goals could be accomplished (Khan, Alam & Alam, 2015).

S: As demand for Apple’s phones is quite high, thus, effective promotional campaigns were introduced so as to maintain the curiosity about the new phones before their launching.

T: Apple Inc.’s phones are based on their own operating system and in terms of technology, their gadgets always score high marks. Thus, this factor was also not given much importance as other external environmental factors were given.

L: Before designing of the products and adding new features, it is necessary for every organization to evaluate certain legal obligations such as copyrights, patent, etc. This helps the companies to avoid glitches in organizational functionalities.

SWOT analysis is a significant tool which is used for underlining the internal as well as external environmental factors of the current marketing environment. SWOT stands for strengths, weaknesses, opportunities and threats and amongst these, strengths and weaknesses are considered as the internal factors while opportunities and threats are considered as external environmental factors.

McDonald’s is a multinational player of fast food industry in the global market. Below is the table consisting SWOT analysis of McDonald’s:

After executing SWOT analysis for the organization, organizational marketing team could develop further strategies so as to convert opportunities into strengths and reduce the impact of threats as well as weaknesses so as to enhance organizational performance.

PEST Analysis and Its Impact on Business Strategy

STP strategies referred to as the segmentation, targeting and positioning strategies and these are executed at the time of finding appropriate market for a new product launch as well as for expanding business in new market. According to current market trends, customer’s needs and requirements are changing rapidly. In relation with the apparel industry, it has been noticed that majority of audience is shifting towards branded apparels. The major reason behind increased demand for branded apparels is the economic growth and increased purchasing power of consumers. Before introducing new products and services in the new market as well as in the existing market, external and internal environmental audit is being conducted following with effective marketing and promotional strategies.

For example: H&M is a Swedish apparel manufacturing brand especially known for producing fast-fashion cloths in all categories. With regards to the current marketing trends, organization has decided to diversify its product offering along with increasing the demand of their products in the international market. To avail this opportunity, organization has adopted various advanced measures in terms of promotion and marketing in order to attain organizational goals and objectives. But before adopting and implementing marketing and promotional strategies, it is necessary for the organization to determine the most appropriate target market along with the help of segmentation, targeting and brand positioning strategies (Zeriti, Robson, Spyropoulou & Leonidou, 2014).

Segmentation strategy is used for segregating the huge target market into small segments with the objective of analysing the most appropriate target market so that the desired goals and objectives could be attained. Target approach is used for convincing and influencing the selected group of target audience in relevance with the attainment of desired goals and objectives. This could be done with the help of trending digital strategies such as email marketing, social media marketing, etc. Apart from this, brand positioning strategy is another crucial aspect through which an effective brand image could be developed in the new target markets as well as H&M would be able to fix a brand image in the target audience’s mind-sets. So, from next time when consumers think regarding the apparel brand, H&M should come first in their mind-sets.

Samsung Electronics is a South Korean consumer goods manufacturing company and today, its products are distributed in almost every part of the globe. Brand management is the technique which is used to develop an effective and positive image in the competitive business environment along within the customer’s mind-sets. With this regard, Samsung focus over raising its revenues along with this, it also focus over customer satisfaction and quality of services and for the same, they provide after sale services for making better customer relations.

For example: Samsung is a leading player in mobile industry. Amongst their mobile phones, Note series is quite famous as well as reliable. Today company has launched 8 phones in this series, but launching of Note 7 was a big blaster for the organization. This phone was introduced in the market on 19^th August 2016 and its initial sales period was quite impressive but after certain period of time, complaints were raised by the consumers regarding blasting of phone while connecting the charging cable. After that, number of complaints was increased and due to this, company needs to recall all its sold mobile phones in order to avoid further incidents. This incident affected organizational image and it took various efforts for company to regain its lost reliability over target audience (Jung, 2014).

Apart from this failure of the organization, there is one boost up moment which was Samsung S7 phone. S series phones have also effective brand image in the market but the revenues generated from S7 were the highest for the organization till today. This product was launched on 11^th March 2016 just before few months the biggest negative incident for the organization i.e. Note 7.

Thus, above these incidents showcases the negative as well as positive incidents through which organizational goodwill and reliability over target audience increased whereas with the effect of other device, organization lost its goodwill.

References 

Armstrong, G., Adam, S., Denize, S. and Kotler, P. (2014). Principles of marketing. Pearson Australia.

Jung, S.C. (2014). The analysis of strategic management of samsung electronics company through the generic value chain model. International Journal of Software Engineering and Its Applications. 8(12). pp.133-142.

Khan, U.A., Alam, M.N. and Alam, S. (2015). A Critical Analysis of Internal and External Environment of Apple Inc. International Journal of Economics, Commerce and Management. 3(6). pp.955-961.

Lamberg, J.A., Laukia, A. and Ojala, J. (2014). The anatomy and causal structure of a corporate myth: Nokia by the book. Management & Organizational History. 9(3). pp.235-255.

Pride, W., Elliott, G., Rundle-Thiele, S., Waller, D., Paladino, A. and Ferrell, O.C. (2006). Marketing: core concepts and applications.

Sachdeva, A. (2015). Evaluation and selection of differentiation as a strategy for McDonald’s.

Zeriti, A., Robson, M.J., Spyropoulou, S. and Leonidou, C.N. (2014). Sustainable export marketing strategy fit and performance. Journal of International Marketing. 22(4). pp.44-66.

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