3.4 Marketing strategy

3.4.1 Justify marketing strategies appropriate to a given situation

Marketing strategy – Plan to combine the 4 P’s of marketing (Product, Price, Place, Promotion) in the right combination to achieve a marketing objective.

Examples of Marketing objectives

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

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3.4.2 The nature and impact of legal controls related to marketing

Legal controls on marketing

Here are a few examples

• 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.

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3.4.3 The opportunities and problems of entering new markets abroad

Why businesses enter new markets abroad?

• Low trade barriers – low trade barrier allows businesses to easily and profitably trade between countries.
• Home markets are saturated – demand for the product are no longer growing the country.
• Other countries developing – New markets opens up abroad as other countries become more developed.

Problems businesses face when entering a new market

• High transport costs – increased costs as businesses have to pay to ship products abroad.
• Lack of knowledge – Company X 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.

Ways for businesses to overcome these problems

• Joint ventures – A joint venture can be created between a business in country X and another business in country Y, this means that business X can gain information from business Y.
• International franchising – An example of this is McDonald’s a US company can sell its franchise to a franchisor in China with local knowledge.
• Licensing – Business in country X can sell the license of their product to a business in country Y, This can avoid transport costs and trade barriers