3.4 Marketing strategy

3.4.1 Justify marketing strategies appropriate to a given situation:

• Importance of different elements of the marketing mix in influencing consumer decisions in given circumstances
• Recommend and justify an appropriate marketing strategy in given circumstances

3.4.2 The nature and impact of legal controls related to marketing:

• Impact of legal controls on marketing strategy, e.g. misleading promotion, faulty and dangerous goods

3.4.3 The opportunities and problems of entering new foreign markets:

• Growth potential of new markets in other countries
• Problems of entering foreign markets, e.g. cultural differences and lack of knowledge
• Benefits and limitations of methods to overcome such problems, e.g. joint ventures, licensing

‌Marketing strategy definition

‌A plan of action designed to promote and sell a product or service.

‌It is a way of combining the 4 P’s of marketing (Product, Price, Place, Promotion) in the right combination to achieve a marketing objective.
For example:

• Increase sales
• Increase market share
• Entering a new market

You can watch this lesson in video format here

Why is strategy important?

Strategy is like a roadmap. it tells you

• How to get where you’re going
• what you will need to get you there
• estimates how long it will take to get there
• where dangers lie in wait

without a clear strategy you will make lots of mistakes, waste time and other resources and likely never reach where you intended to be

‌Legal controls on marketing

‌The law gives customers protection against unfair selling practices.
You need to understand how fair trading regulations protect consumers.

‌The consumer has basic legal rights if the product is:

• Given a misleading description
• Of an unsatisfactory quality
• Not fit for its intended purpose
• Misleading promotion – Falsely advertise a product.
• Weights & measures – Businesses can’t sell underweight goods (e.g. chocolate bar containing less chocolate than advertised)
• Sale of goods – Businesses can’t sell products that are faulty or doesn’t work like it is advertised.

‌Opportunities and problems of entering new markets abroad

• ‌Low trade barriers – This allows businesses to trade easily and profitably between countries.
• Home markets are saturated – demand for the product are no longer growing in the country of birth.
• Countries developing – New markets opens up abroad as other countries become more developed, this results in demand for the products of developed countries.

You can watch this lesson in video format here

‌Problems businesses face when entering a new market

• ‌Communications – Cultural misunderstandings arising from miscommunication are one of the biggest challenges which foreign companies face
• High transport costs – increased costs as businesses have to pay to ship products abroad.
• Lack of knowledge – Company may not know consumer habits in the country they are expanding to. (e.g. where consumers like to shop)
• Trade barriers – Countries may have trade barriers to protect local businesses, this may make importing products less profitable for the business.
• Exchange rate changes – Exchange rates can change which may mean cost of importing products may become more expensive.
• Communications – Cultural misunderstandings arising from miscommunication are one of the biggest challenges which foreign companies face

‌Overcome these problems

• ‌Joint ventures – A joint venture can be created between a business in different countries.
• International franchising – An example of this is McDonald’s a US company can sell its franchise to a franchisor in any country with local knowledge.
• Licensing – Businesses can sell the license of their product to a business in another country to avoid trade barriers
• Understanding Another Culture – where you want to do business.