16 - Marketing

strategy &
Marketing budget
Learning objectives
• To understand the importance of the marketing mix in influencing consumer decisions.

• To identify an appropriate marketing strategy in given circumstances.

• To understand the impact of legal controls on marketing strategies.

• To analyze growth potential of businesses in new markets abroad.

• To analyze problems of entering new markets abroad.

• To evaluate ways to overcome problems when entering markets abroad.

 Marketing strategy

An effective strategy that combines the four P's of marketing mix along with
product development

This is done in order to achieve marketing objectives by identifying a target

market and allocating resources to achieve them
 Marketing objective
• Increase sales of an existing product

• Increase sales by introducing a new product

• Increase market share

• Gain sales in a niche market

• Brand awareness

• Create a strong USP

 Market strategies should be flexible

A marketing strategy should

New businesses enter the market therefore try to predict how
Markets are always changing increasing the level of market conditions could change
competition over time and make changes
accordingly

If a product matures and sales

Businesses may be forced to re
brand their products and enter
overseas markets if the domestic
markets become too competitive
decline, then a business may
have to adopt product extension
strategies, cut prices or even re -
launch the brand image, they
could also use promotions etc
 Marketing budget

A marketing budget is an estimate of all the likely costs involved in creating a marketing strategy

It is a managerial tool that helps a business balance what needs to be spent on marketing against what it can afford

A typical marketing budget will consider all marketing costs like market research which includes design, conducting interviews and surveys,
test marketing, marketing communication costs; this includes printing, designing brochure, PR, advertising etc

Based on the sales made

Match the spending of competing businesses

How much the business can afford

 Legal controls on
marketing
• Weights and Measures – Retailers commit an
offence if they sell under - weight goods or use
inaccurate weighing devices and equipment.

• Sale of goods - It is illegal to sell goods

with sub - standard quality or flaws; products
which are not fit for the purpose intended by the
consumer.
Legal controls on marketing
• Trade descriptions - It is an offence for businesses or salespeople to sell a product or service based on mis
- information. If they were found in breach of the Act, it gave authorities the power to inspect and confiscate
goods and documents related to the product or service. Advertisements must be truthful as well.

• Supply of goods and services Act

• The Consumer Contracts Regulations - This applies to contracts made both on and away from business
premises, as well as contracts made 'at a distance'; there are also rules for businesses providing digital
content. The Regulations require detailed information to be given to consumers and give them a 14-day
cancellation period.

• It is illegal to make misleading pricing claims, such as $40 off this week only' when the product was being
sold for the same price the previous week.
Entering new markets abroad

• Home markets have saturated, and these new international markets give the
chance for higher sales, because for people in other countries the product will
be new.

• Trade barriers have been lowered in many parts of the world making it easier
and profitable to enter these new markets.

• https://www.capital-ges.com/8-reasons-to-expand-internationally-in-2020/
 • Cost of establishing and termination of an entity - Whether you
are planning a long-term expansion, or just testing a market you need
to prepare and factor in both setting up and shutting down costs.

Problems of Building infrastructure, setting up a business entity and paying local

workers can be very costly. Not to mention, very time consuming.
entering new • Lack of new market knowledge
markets abroad • cultural barriers

• Exchange rate problems

• Transport costs

• Import restrictions
 Methods to Joint ventures
overcome the
Licensing
problems of
entering new International franchising
markets
Localizing existing brands
What are joint ventures?
• A joint venture is a business arrangement in which two or more parties agree to pool their
resources for the purpose of accomplishing a specific task. This task can be a new project
or any other business activity. However, the venture is its own entity, separate from the
participants' other business interests.

• Example: Google’s parent company and the pharma company Glaxo and Smith decided to
enter into a joint venture agreement to produce bioelectric medicines the ratio of the
ownership was 45%-55%. The joint venture lasted and was committed for 7 years with a
capital of Euro 540 million.
What is licensing?
• Licensing is a business arrangement in which one company gives another company
permission to manufacture its product for a specified payment. Licensing generally
involves allowing another company to use patents, trademarks, copyrights, designs, and
other intellectual in exchange for a percentage of revenue or a fee.

• Some examples of things that may be licensed include songs, sports team logos,
intellectual property, software, and technology.

• Example: The Batman character has been licensed to many companies, such as Lego.