Marketing a Market Follower Is a Company Term Paper

Pages: 6 (2316 words)  ·  Style: APA  ·  Bibliography Sources: 5  ·  Level: College Sophomore  ·  Topic: Business - Advertising

Marketing

A market follower is a company that is comfortable not taking the lead in a market share system, they are happy taking a part of the market share without incurring the costs of a market leader in the process. The company usually utilize four broad strategies to achieve their market goals, including utilizing the best practices of the market leader, offering a smaller more personal approach to meet market demands, reducing the need for expensive marketing by utilizing an existing market and strategy and utilizing existing market design and product. (Pan & Li, 2003, p. 22) company might employ a market follower strategy to avoid expensive research in development of both product and market strategy, in so doing they incur lower costs for most of its business needs and still maintain a market share. A market follower strategy would be employed to reduce start up and running costs. The market follower might also employ such a strategy to fill a need in the market if they do not have the resources and/or investors to fight for a lead position in a market. The strategy is a good solid strategy for a new or existing business who wishes to diversify product without building a whole new set of plans and procedures, but instead utilizing one that has already been proven by the Market Leader to be effective. Lastly, the market follower may be entering the market late, e.g. far after another organization has found a niche and achieved success, especially in an uncertain market. (Pan & Li, 2003, p. 20)

2. There are many factors in marketing that have changed the nature and importance of packaging as part of a market strategy. The package has in many cases become the first exposure the consumer has to the product and the brand and name as most retailing is now done from a distance, rather than in previous times where consumer sought a product directly from the manufacturer. One example of the success of a packaging market tool, would be Gateway Computers, as the black and white cow print boxes have become their most recognizable symbols. The type of business is also a great example of the manner in which manufacturing has been removed from the retail, in that the company utilized mail order almost exclusively, in the beginning and only developed the rare brick and mortar store later in the game. Additionally many products, if not most products have competition, and often on the same shelf as the initial product. Comparative packaging can actually change the manner in which the consumer responds to the product, i.e. buying one brand over another. Some demands on packaging are also demonstrated by certain retailers, i.e. they demand that packaging meets certain size and aesthetic demands to be displayed within the retail outlet. ("Selling Your Big; Just," 2006, p. 4)

3. Service branding has also become an important market issue, especially with regard to the national tradition of the changing business climate to service industry as apposed to manufacturing, as it has been in the past.

LePla & Parker, 1999, p. xii) in new strategies associated with service marketing branding is integral as the service provided is not a tangible good that can be viewed and/or held by the consumer. Service branding therefore must be specific to the service and stress those issues that are perceived to be important to the customer with regard to service. Quality, must be stressed and the humanity of the experience of the service must be taken into consideration. (LePla & Parker, 1999, p. 1) Different service companies use brand recognition to convey the ability of the service company to meet the needs of the consumer in a manner that makes them feel as if the service was provided with professionalism as well as human kindness. "The company's brand personality includes traits of passion, integrity, empathetic, collaborative, and creative." (LePla & Parker, 1999, p. 181) an example of service branding which has become increasingly successful is the managed care company Kaiser Permanente, new marketing strategy that demonstrates their desire to provide health as a holistic commodity, including preventativ3e medicine and easy access to communications with doctors.

4. Price inelasticity occurs when a product or service cannot support a price increase. The most often occurrence of this circumstance is when the competition between providers for the same product or service becomes so tight that the consumer refuses to accept a price increase and simply changes to another alternative when one occurs, resulting in the loss of revenue to the provider and potentially a market loss in a large scale. Price inelasticity can be seriously proven when a competitive business creates a product or service with a significantly lower price, causing the other provider to need to discount a price farther than the development of the product can absorb. (Cassady, 1963, p. 39) an inelastic demand would be determined through the expression of a product or service that cannot absorb price increase, even when the product is better than another product, as price will change the consumer reaction to the product and in a heavily consumer-based market the consumer will simply choose to buy the less expensive product for the simple reason that its available at a lower price and provides a comparable service. This can be seen very clearly in the discount department store models that are emerging today as the preferable source for many if not all consumer products.

5. In the distribution question many companies desire the ability to transfer from exclusive or selective distribution policies to intensive distribution policies. In exclusive or selective distribution the policy and distribution plans limit the number of retailers who can carry and sell the products they make. In an intensive distribution model products are carried by many or all-possible distribution locations. Exclusive distribution contracts are often delineated by geographic location, i.e. only 1 retailer can carry a product in a 50-mile radius, creating an exclusive distribution pattern that causes prices and quantities to be limited by the manufacturer and the retailer, rather than the whole market, as would be the case in the intensive distribution plan. The long-term goal of many companies is to change from exclusive distribution models to intensive ones, to increase sales, yet the long-term effects of such a move can cause the product price to be reduced to such a degree that the company will be providing product that does not profit as highly as if it were exclusive. The end situation being that the company will have to expend more resources to make and distribute products that make less money per item and therefore more work is expended. Additionally, intensive distribution is a model that can only be implemented in cases where there is price inflexibility anyway and the service or product is produced by many people, creating a need to have the initial product available everywhere that competitors products are available. (Baghai, Coley, White, Conn & Mclean, 1996, p. 39)

6. In general wholesalers are most effective when they perform specific functions because the volume of wholesale production and distribution is self-limiting. In a self-limiting situation the ability of the existing wholesale distributor is limited by the size and model of distribution and if diversification increases to such a degree that drastic changes must be made than the ability of the company to serve the market may be limited. When a wholesale company is so diversified that the products they distribute take differing space on shelves and require different storage environments there will be significant challenges to the abilities of existing services to meet the needs of the product and the consumer. If a company was to stay within the confines of an existing specialized product then the facilities and staff will not have to alter circumstances to create appropriate storage and environmental circumstances for the storage demands as well as processing demands. It is for this reason that most wholesale businesses deal with specific product types, such as drugs, shoes, tires, carpet and other products. Each distribution point then has to deal with only one type of product with similar space and distribution needs. If a company were to diversify to greatly the conditions of the situation might become so confused that the products they wholesale, which did not fit into a particular parameter would be lost in the shuffle and not receive the needed attention.

7. The six modes of marketing communication are, electronic (e.g. via the internet) television, radio, print, direct marketing and word of mouth marketing. All six modes are important to a good marketing strategy as they all serve different purposes for the consumer and because some are more influential for differing consumers than others. Some people are exposed to radio, more than say television of the internet. Direct marketing serves the purpose of creating a direct link to consumers, usually via telephone or through appearances, and can reach people, presumably when they are at ease and not influenced by other… [END OF PREVIEW]

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