Proposal of a marketing strategy



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5 EVALUATION OF A STRATEGY


This chapter´s target is to describe the way the proposal of a marketing strategy is going to be evaluated. There are four main criteria a strategy must fulfill in order to be pronounced as a good and useful one.


  1. Consistency – we will observe set goals and policies to eliminate possible inconsistencies among marketing objectives themselves and towards other company objectives

  2. Consonance – there is always a need to comply with researched information, in our case marketing analysis, in order to address in a strategy adaptive response to external and internal impacts and to bring critical changes withing the strategy

  3. Advantage – a strategy must provide clear proof of economical effectivity and profitability for a company

  4. Feasibility – in accordance with above mentioned advantage, feasibility should encompass the strategy evaluation in terms of available resources (financial, personell etc.)

If a strategy is to be called to life, we will have to pay close attention to its evaluation according to final analysis. We have chosen three basic analyses which can give us an overview of all four characteristics an effective strategy should have. Therefore we would like to briefly outline their content, procedure and results expected.


5.1 Qualitative Analysis


The above discussed chapter on CRM benefits has introduced some ideas on the measurability of criteria and therefore of results of CRM use. Qualitative analysis will concentrate above all on those positive and negative outcomes of a strategy that cannot be assigned to direct economic results. Qualitative analysis should point out the most important qualitative characteristics which a strategy is to bring thanks to its implementation.

5.2 Quantitative Analysis


In this part we would like to estimate all costs brought in by strategies whose results can be in contrary to the above mentioned qualitative analysis accounted and compared with either direct expected increase in sales or decrease in cost. We will use the cost-benefit analysis.
This method estimates and summarizes equivalent money value of benefits and costs of a project. The aim is to find out if the activity is worthwhile. Jules Dupuit wrote in 1848 an article mentioning the basic features of this analysis, however it was later Alfred Marshall who set up the conception as useful in 1936. This method started spreading after WWII.
There are some basic principles which must be upheld. The first of them is a common unit for any expected results, be it benefits or cost. Money is a good unit, though it cannot always be used. Secondly, time plays an important role. Therefore in this analysis interest rates are usually counted in order to outweigh the difference in today´s cost and benefits and future costs and benefits. The Czech Republic is nowadays experiencing dramatic movements in exchange rates and this, as well as other factors, gives the best insight in the changing value of money. For the purpose of this work we will however calculate with cost and benefits not to be influenced by inflation rate since the time of occurance of individual items in CBA analysis cannot be exactly specified.

6 DESCRIPTION OF THE COMPANY


This chapter should make the current status of Styl 2000 more understandable, that´s why we only describe how does the company look like, what are current mission and vision and objectives as well as business portfolio and customers.

6.1 Classification and Its Core Business


The company Styl 2000 has been providing its services on the market in the Czech Republic since 1990. From the very beginning the company has focused its business on supplying Italian ceramic tiles and pavements, and in 2003 the company started to deliver also glass mosaics and agglomerate stone. In 1993 the company enlarged its major business activities of delivering construction ceramics and pavements and facades with the delivery of pensile, ventilated facade facings, mainly with use of porcelain stoneware MIRAGE and ARKIM.
Based upon classification suggested by the Czech Statistical Office (www.czso.cz), STYL 2000 belongs to a group of small and medium enterprises in nonfinancial institutions, into a group of 10-19 employees, where average of employed persons was in 2005 counted to 13,8 and where the value added per person is the highest of all size groups.
Since there has come to a change in classifying companies in the Czech Republic we will follow the new methodology of the Czech Statistical Office and classify STYL 2000 accordingly.51 The company can thus according to Industrial Classification of Economic Activities (CZ-NACE) be found under no. 46.73 – wholesalers with building materials and sanitary products. The subjects of activities are: Construction of buildings, their changes and removal, further business activity in buying goods with the purpose of further selling and in selling.
STYL 2000 is an Ltd. Company whose only owner is the company Fasádní systémy a.s. Its shares are partly held by both present CEO´s and partly by two more shareholders who strongly influence the existence and activities of STYL. A three-member advisory board is constituted by current company employees. Turnover of the company is around 9mio CZK, its net profit approx. 450 th. CZK. Exact financial situation will be subject of analysis with the prospect of setting the right marketing strategy.

6.2 Strategy

6.2.1 Mission and Vision


Styl 2000 is a well known and stable company with a good reputation in the building industry market. Its success is based upon high quality of its personell and of service standards, further upon long-term history and collected experience. Its mission is therefore orientat around communicating these qualities to external customers, while internal customers are in the mission addressed through fair attitude and promise to further develop their qualities and prospective chances in their job.
The company´s strategy is to satisfy the most demanding requirements of architects, investors and facade creators through the application its plentiful professional experience and new information from the realization of over 160 important facing facades throughout the Czech Republic. The company´s aim is to retain its important market position achieved through the capability of its personnel and its progressive approach to clients needs. The mission contains also expression of the desire not only to deliver materials convenient for facades, cladding and floors, and engineering services, but also to execute building works. As Johnso and Scholes state, „Values and expectations of higher management, who can also be the owners, are very important. .. Small companies will be set under a big competitive pressure unless they find market niche. …Another problem for small companies can be inability to collect enough capital means which can limit their strategical opportunities.”52 All of his expectations seem to be valid for Styl 2000. Problems caused this way have not been solved so far by any strategy applied upon company. Its vision is defined by statement: „Styl 2000 is an acknowledged and stable company with a good reputation on the market. Thanks to a high standard of services and quality of personnel, gained experience and good technical conditions the company represents the top in the business area and offers the clients professional and qualified solutions.”53 Company´s strategy was revised in 2003 most recently, in the year of excellent growth in construction industry, and since then it has remained unchanged.
Following Harrell´s quote, „At the level of the organization, strategic planning consists of activities that lead to development of a clear organizational mission, organizational objectives, and strategies that enable the organization to achieve its objectives“54, management of a company should have clear idea where to direct company to and revise its overall company strategy in accordance with up-to-date situation of both the company and the industry as a whole.

6.2.2 Objectives


In compliance with company´s vision the main objective is to keep a good reputation, in other words loyal customers by perfect services. The company´s target is not to grow, at least not at this moment, and rather concentrate on increasing profit margin through perceived added value. As for maximisation of customers´satisfaction we believe that increase in perceived added value would be the biggest help. Company would also like to increase the interest of potential customers and ensure the complexity of assortment. This should be fulfilled by partial objective to stabilize the relationship with suppliers. Not only can success in this objective lead to lower transaction costs, but stability would surely increase the certainty of customers concerning deliveries (length of a cycle, eliminating possible delays).
As for finances the main objective of the company is expressed as creation of long-term profit. How the company has to or should reach cannot be found in any company´s documentation, be it internal or external.

TAB. 24 Overview of Objectives

Departement

Stated objective

Finance

Long-term stable profit

Marketing

Increase of interest in company´s products and services

Maximize customer´s satisfaction (through helpfullness and accomodativeness)



Sales

Ensure the complexity of assortment in building ceramics and facade cladding through enlarging product portfolio (different price levels)

Purchase

Stabilize relationships with suppliers

Resource: internal materials
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