Essay, Pages 6 (1444 words)
Stovall Home Products is the largest retailer and different buyers have different evaluative criteria about what constitutes the right choice for performing the function. As a consequence different offerings will attract different buyers.
Buyers within a segment are more homogeneous in their market wants when compared to those who are in the market at large but differences will always remain in wants among those within a segment notwithstanding this similarity. A marketer can always achieve additional homogeneity by subdividing the original set of segments further until, theoretically speaking, we have segments to which only one buyer belongs.
At the most detailed level, every buyer is a market in himself for every buyer’s ‘want’ is probably distinct in some way. On the basis of similarities and differences, such unique wants can be grouped into sub-classes. What it means is that wants within a sub-class are more related to each other than wants between sub-classes.
Economic Environment and Business:
The business environment influences business management and the critical elements of the business environment often interact with the critical elements of business management.
The critical elements of business management are: planning, direction, organization, control or coordination, leading and motivation and evaluation. The management of Stovall Home Products at all levels, top, middle as well as supervisory, is concerned with these critical elements to a certain degree. Similarly, these very critical elements are the concerns of the management in different functions such as production, finance, marketing, purchase, inventory control, personnel, public relations etc.
Management at all levels of specialized functions is influenced by the critical elements of the business environment.
When an industry faces business recession, Stovall Home Products may decide to cut down the rate of production or to pile up inventory. When the market is being invaded by an increasing number of closely substitutable products, the management may decide to go in for aggressive advertising to face cutthroat competition. When the financial institutions start interfering too much with the day-to-day business operations of a firm, the firm’s management may decide to do away with borrowed capital and depend upon its own resources.
One can also segment the market on the basis of life style or mode of living. This helps to understand what those who are in the market do. Some of the products where life style approach has been used for segmenting the market are women’s clothing, cigarettes, cosmetics, alcoholic beverages and furniture. Another basis is need- based segment, with companies making direct appeal to the loyal user. Companies selling in a brand-loyal market have a hard time gaining more market share. Similarly, companies that enter a need based market have a hard time getting in.
Strategic analysis is concerned with the structuring of the relationship between a business and its environment. Disciplined approach by Stovall Home Products is emphasized. resulting in functional improvement in quality and processes. The environment in which business operates has a greater influence on their successes or failures. Political ideology and political stability strongly influence the pace and direction of the economic growth. It contributes to the economic environment which is conducive to Stovall Home Products to grow in the situation Nevertheless, the deteoriating standards in politics, increasing corruption and the criminal nexus are creating hurdles for business in certain areas.
The external environment in the Stovall Home Products Group is dynamic and changing holds both opportunities and threats for the organizations. The factors in the environment affect the attractiveness or risk levels of various investments of the organizations or the investors The macro environment in which Stovall Home Products operates broadly consists of the economic environment political and legal environment and the socio cultural aspects.
The competitive environment is the situation when the organization faces within its specific area of operation. In a given industry different organizations have different intermediate basis of understanding its relative position with respect to other organizations in the industry. Entry of a firm in and operating in a market is seen as a threat to the established firms in that market. The competitive position of the established firms is affected because the entrants may add new production capacity and it may affect their market their market shares. The technological temper and its progress has been the key driver behind the major changes witnessed in the internal environment of Stovall Home Products making it increasingly complex.
Customer and market analysis
Customers with a stronger bargaining power relative to their suppliers may force supply prices down or demand better quality for the same price and may demand more favorable terms of business. There will always be a difference in the bargaining power between an individuals and a bulk buyer. Customer’s buying behaviors vary with respect to their sensitivity to prices. Depending on how important the item is for the customer’s usage and proportion he may be spending on the item concerned, buyers’ sensitivity to price varies. Any customer with high price sensitivity gains advantage in its bargaining power.
In order to take full advantage of its assets the organization needs to develop skills, as experience suggests that with similar assets two different firms may add value of different amount for them selves. This difference can only be explained by the differences these organizations carry their capabilities in utilizing these assets.. This is greatly reflected in the type of organizations that pick them up for employment and the kind of job responsibilities they are offered.
This difference in output can be explained on account of the skills which these institutions carry with themselves. This position has been found true in case of Stovall Home Products. Organizations need a set of threshold resources to perform in any market and there is a continuous need to improve such resources to stay in business. This becomes inevitable because of the competitors and sometimes the new entrants..
Formulating strategic alternatives
Stovall Home Products follows strategy and maintains its current business and product portfolios; maintains the existing level of effort; and is satisfied with incremental growth. It focuses on fine-tuning its business operations and improving functional efficiencies through better deployment of resources.
All the elements of marketing mix are arrived upon and implemented in the broad framework of a marketing programme. Therefore, to appreciate the relationship between the marketing planning process and the elements of the marketing mix, the various components of marketing plan. are: description of the current marketing situation, i.e., ‘where we are’ or situation analysis, identification of problems and opportunities in the situation, definition of objectives of the marketing plan, i.e., ‘where we want to be’, designing the marketing strategy, developing the marketing programme, and estimating the necessary appropriations, i.e. budgeting, forecasting sales and estimating cost and profit contribution.
Marketing planning, like any other planning process, is an intricate process and has to he done on a continuing basis. In other words, what is needed is constant monitoring, redefinition, adaptation, and re-evaluation of objectives and strategy, its implementation and control in an effort to obtain maximum payoff from ever-changing market situation.
There are other factors as well, besides the ones listed above which a marketer has to
consider. The promotion mix is the particular combination of advertising, personal selling and sales promotion that is used in communicating with consumers. Generally, advertising is employed to reach large groups of consumers at a low price per contact. It is widely used by firms selling consumer durables as well as by selling consumption items like toiletries to serve a mass market.
Financial Opportunities Comparison of Stovall Home Products
- Improve Financial Performance: To exploit diversification opportunities because of liquid resources far in excess of the total expansion needs or the intention of tiding over its financial problems.
- Profit Stability: New business reduced the variations in corporate profits by expanding the company’s lines of business. This occurred as the core business was dependent on sales that were seasonal or cyclical. Diversification strategy was followed to avoid instability in sales and profits.
- Growth: Diversification is basically a way to grow. Unlike organic growth, which is slow, an acquisition or merger (inorganic) can deliver the results rather quickly since resources, skills, other factors essential for faster growth are immediately available. Fig. 4 takes into account the risk accounts of Stovall Home Products involving modernization and adaptation of technology at suitable time
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