Marketing Diploma Course – Question on Unit Nine Aleksandre Ananiashvili – S12976

Name of student: Aleksandre Ananiashvili (S12976)

Name of lecture: Marketing Diploma Course
Date of assignment: 03/Mar/2010
Assignment Title: Answer the Questions
Unit Number: Unit Nine

(Resource Item 9.4)

1. What are the key issues outlined in the article that are forcing brand manufacturers to revise their
marketing strategies?
2. What responses does the article suggest manufacturers should make to ensure they maintain their
presence on the shelves of the multiple retailer of the future?

Time to Shed a Little Tier or Two

As firms pursue increases in revenue and profits, they select from a variety of marketing strategies. Implicit
in these strategic choices is the need for appropriate implementation and control actions in a diverse set of
functional units. This general sequence of managerial perspective - from strategic to tactical - is described in
many popular planning models utilized by a variety of industries, firms, and business units. In addition, many
organizations have begun to focus their planning improvement efforts on the linkage between strategic and
tactical actions.
Nestlé’s announcement that is to axe a number of second tier brand names highlights the huge cost of
maintaining ad spend. However, while a ‘great brand cull’ is on the agenda, huge opportunities exist for a new
range of genuine niche brands. Companies are all organizations (and thus in competition with each other) each is
in a different medium and at a different stage of development, so the strategy for each has its own unique
characteristics. However, several common themes that have contributed to their success become clear. Those
are:
 Understanding the product - Each of the news organizations is very clear about what it does and the value
proposition of its product. Understanding the origin of each product -- whether it's a new brand extension or
a reinvigorated old product - is crucial to defining that value. This origin not only shapes the product but
also defines the business objectives beyond profit.
 Knowing what the target audience is - Since each product is clearly defined, the organization must
understand which audience its value proposition appeals to. That knowledge allows targeted marketing and
shapes promotion strategies for the product's market space.
 Resourcefulness - All huge organizations have only a limited ability to take advantage of the distribution
and marketing channels that their products traditionally use, and they have restricted marketing budgets. As

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Marketing Diploma Course – Question on Unit Nine Aleksandre Ananiashvili – S12976

a result, organizations have had to devise unconventional strategies that leverage their competitive
advantages as cheaply as possible, using such phenomena as viral marketing and earned media.
 Competition - In the hyperactive - competitive business today, no new organization can succeed without
understanding and responding to the competition. These retailers have unconventional views of, and
responses to, their competition. Strategies reflect the organization’s unique understanding of their market
environment. Moreover, competition comes not just from other existing retailers; organizations must also
anticipate the challenge of future technologies and not yet existent rivals, and find new ways to increase
their audience and expand the relevance of their products.

The sales force may play a critical role in the formulation and execution of marketing strategies. Given the
variety of strategies in practice today and their potential for impact on corporate performance, the relationships
between sales force activities and strategy options is an important area of study. This article focuses on tactical
sales force activities and their links to broader marketing strategies. More specifically, the article has three main
objectives:

1. To relate the importance of selected sales force activities of a firm to its size and to the product-service
mix of its offerings.
2. To relate the characteristics of a firm to its long-run strategic options (market penetration, product
development, market development, and diversification).
3. To relate the marketing strategies of a firm to selected sales force activities of that firm.

Two distinct categories of brand merchandise in consumer purchasing goods, for today's market are:
 Proprietary or manufacturer-owned;
 The retailer-owned or ‘own label’.
Dealers between manufacturer and store brands, from the manufacturer perspective, undertake the shelf
management actions. Particularly, to know whether there is an agreement in manufacturers' perceptions on the
merchandising of the different brands on the shelf or, on the contrary, whether different groups of manufacturers
can be identified – in the latter case, to characterize these groups of manufacturers.
On average, manufacturers consider that retailers are favoring unequal competition terms between
manufacturer and store brands through better merchandising management for their own brands. Nevertheless,
different groups of manufacturers are identified according to their perceptions. The potential contribution of this
research lies in the identification and characterization of different groups of manufacturers regarding their
opinions about shelf management actions undertaken by retailers. Moreover, the results evidence an increasing
power of retailers and show manufacturers how they can respond.

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Marketing Diploma Course – Question on Unit Nine Aleksandre Ananiashvili – S12976

(Resource Item 9.5)

1. What does the term ‘virtual company’, referred to in the article, mean?
2. What are the factors identified in the article that are critical to the success of a manufacturer
effectively competing in today’s markets?

A Jungle of Strange Bedfellows

Definition and description of ‘virtual company’ vary considerably and the features that are common to the
new organizational form can identify it. It can therefore be described as different form of ‘virtual company’ and
the conditions under which such organizations emerge listing the benefits to be achieved from virtual
corporations and their limitations. It seems likely that the ‘virtual company’ will fill the role in the first decade of
the new millennium. The ‘virtual company’ differs from the strategic alliance in that it places its emphasis, not
primarily on how two or more firms can work together on their mutual advantage, but on how one firm can be
created with flexible boundaries and ownership aided by the facilities provided by data exchange and
communication.
The strategy of the ‘virtual company’ is to concentrate upon a key competence, which could be marketing,
design or distribution and then contact suppliers to manufacture the products. The key to such an organization is
the control of information and the formation of close partnerships with suppliers.
There is, therefore, no problem, as there is in the traditional organization, with allowing extraneous matters
such as company loyalty or human relationships to enter the equation of how best to realize abstract goals in
concrete terms. Communication overcomes the problem of the spatial separation on inputs. The concept of meta-
management as central to operating the ‘virtual company’ effectively involves the following steps:
 An analysis of the inputs needed from outside sources, independent of the examination of particular
suppliers.
 Tracking and analysis of potential suppliers.
 Revising and improving the allocation procedure.
 Updating the requirement-supplier table.
Of course, measuring the level of demand will be the key to success as recovery gains momentum. One thing
is sure, however, in the commercial jungle described above, it is neither the manufacturer, retailer nor ‘virtual
company’ that rules – as the ultimate controller of demand, it is the consumer who is king.
Today’s challenging economy has businesses focusing more than ever on increasing their competitive
advantage. Many are looking for ways to control costs without compromising their products, innovation, and
customer responsiveness. Some are seeking to boost competitiveness through mergers or acquisitions. And
others are exploring adjacencies and expansions into new markets. To survive in a dynamic global economy,

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Marketing Diploma Course – Question on Unit Nine Aleksandre Ananiashvili – S12976

your company must make the most of your existing resources while delivering superior products and services.
The strategies can help you technology-enable your business to not only survive now, but also thrive with market
share and growth from this economy into the future.
Manufacturing portfolio utilizes the network as the platform for key business processes. The solutions focus
on four key areas:
 Customer Intimacy - You can enhance collaboration and enjoy more integrated service when your
channel, sales, production, supply chain, and R&D organizations are all networked. You can make
yourself more available to customers, resolve sales and service issues faster, build closer relationships,
and collaborate with customers on product development and supply chain processes.
 Continuous Innovation - You can dramatically speed time to market, increase product pipeline success
rate, and improve new product vitality. At the same time, you can reduce R&D costs by using
technology to enhance collaboration between customers, engineering, manufacturing, sales, and the
channel.
 Supply Chain Agility - An effective network helps you boost supply chain agility by providing a single
set of reliable, common data across the enterprise chain of supply and production. The network can
support secure, real-time, multitier visibility to enable root-cause responsiveness to issues, delivering the
right information to the right decision maker at the right time.
 Operations Excellence - You can deliver highly secure real-time access to people, processes. The result
is enhanced plant efficiency, throughput, safety, physical security, and superior return on assets.
It help your organization take advantage of the business imperatives, so you can increase the rate of
innovation in research and development; enable value chains to adapt to changing markets; improve the
efficiency and flexibility of production processes; and enhance the customer experience delivered by sales,
service, and all enterprise functions. By applying the power of the network to core business processes of
manufacturers, it enable you to not only survive in times of economic stress, but enhance customer satisfaction,
build loyalty, and set the stage for continued success over the long term.

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