The target of my diploma thesis is to use theoretical as well as practical experience in order to create a marketing strategy for a small company, STYL 2000, spol. s r.o. This thesis will be particularly concerned with analysing the present situation in marketing in the company while taking into account its results in the last two years, further to collect information on the status quo of the company as well as the market and finally propose an optimal marketing strategy fully in accordance with further documents and directions of the company stated for following three years.
The main hypothesis, „marketing analysis together with proposal of a new marketing strategy using mainly CRM software and methodology will increase company´s profitability“ is to be divided into two partial hypotheses:
Increase in company´s profitability will be caused by costs saving, increase in sales and elimination of the opportunity loss – all results of CRM implementation and use.The actual ratio of implementation cost and profit will be gained through criterial analysis.
Marketing analysis will help company set up criteria important for decision on look of the new strategy and on expected economical results.
Methods to be used in this thesis will cover a wide range of processes occuring during the various individual stages of creating a marketing strategy. The first part aims to collect the notorious facts on marketing issues regarding the main hypothesis of this work. Up-to-date knowledge on the current developments in marketing such as relationship marketing, e-marketing or direct marketing and the marketing strategy process will be brought up by the descriptive method. Both well-known quotations of authors and definitions from „marketing bibles“ will be confronted with each other while the outcome of this comparison will be clearly assesed in order to outline the opinion pool to be followed in the practical part.
When creating the proposal of marketing strategy, mainly analysis (of secondary data as well as the analysis of costs, profits, competitive environment, customers etc.) is to be used at first. The application of deduction as the main tool for inferring conclusions and completing a mind map of assumptions will be accompanied by economic-mathematical methods such as criteria and financial analysis. Main part of the practical task will rely upon the method of creating a marketing plan followed by simulations and comparisons betweed the original and newly gained results.
1 MARKETING FUNCTION IN A COMPANY
There are many ways to evaluate a company´s performance. Usually the economic outcomes, such as profit before tax or the value of shares, are the key statistics. In this chapter we would like to summarize why marketing is supposed to be the cornerstone in a company´s journey towards reaching good economic results.
Marketing is one of the most important functions in a company, if not exactly the most important. Peter Drucker once wrote, „A business has two…and only two basic functions: marketing and innovation. Marketing and innovation produce results: all the rest are costs.“1Also David Packard, the founder of the famous Hewlett Packard remembers the importance of marketing: „Marketing is too important to be left to the marketing departement.“2 Kumar, Aaker and Day (2001, p. 6) consider marketing to be playing the principle role in a business, since „marketing decisions involve issues that range from fundamental shifts in the positioning of a business or the decision to enter a new market to narrow tactical questions of how best to stock a grocery shelf“. All these statements confirm the importance of marketing in a company and therefore underline therefore the importance of its strategic planning.
After defining the role of marketing, the content of this chapter will clarify how wide the scope of its tasks actually is. Through the definition of Kohli and Jaworski3 or the definition of the American Marketing Association4 we will be able to specify which field we should be interested in when planning the strategy.
The level we will mainly be focusing on is strategic marketing, which is concerned with the relationship of a company with its competitors, particularly with creating and maintaining competitive advantage over rival companies. However, in the definiton of strategic planning Solomon, Marshall and Stuart5 believe strategic planning to be general planning not exactly oriented on marketing, while specifically marketing plan for the future is discussed as a tactical issue in the three-year plan. As it can be clearly seen, there are different approaches to this, so we decided to follow the process suggested by Kotler in his Marketing Management where strategic planning is described as the eight-step-process (see FIG. 1). Marketing strategy as a part of this chain then specifies target market, positioning, product line, price and promotion (in other words the entire marketing mix), personell, services, sales support, research and development and marketing research. (Kotler, p. 186)
FIG. 1 Process of Strategical Business Planning
Resource: Kotler, P. Marketing Management, p.90 In this chapter we confirmed that scholars consider marketing function to be highly important for a company trying to reach its economic goals and targets. An important fact was also mentioned: that it is not only the everyday functioning of a company which clearly contributes to final income, as accounting is to prove, but above all a strategic level of marketing is of high importance. This strengthened our belief that having a good strategy, good marketing strategy, must lead to the healthy performance of a company.