The marketing strategy is the foundation of a marketing plan. A good marketing strategy should be drawn from market research and focus on the product mix in order to achieve the maximum profit and sustain the business. A Start up or a company’s strategy combines all of its marketing goals into one comprehensive plan.
How to build a successful business? If this question had a simple answer, all the business would be successful. No one wants to waste their time, efforts and money to build a missed business. An indication of the complexity of the answer to our question is precisely the fact that many businesses that are born each year are doomed to failure. Few survive the first year of operation. I wander: why? The first answer you will hear from all sides will be that .. the affairs are like a gamble. ” There is in the Romanian spirit the temptation of fatalism and the desire to destroy the merits of someone who succeeded in any field, fuelling the idea that “luck” and “opportunity” make the difference in business. Moreover, because of such a stereotype of thinking, the Romanian entrepreneur spirit is so anaemic.
Business is first built into the imagination of entrepreneurs and then these constructions are transposed into the real world, which is more complex than one’s imagination can conceive. A first model that I am proposing is precisely that of complexity. A business is first a dream and then a practical way to tackle complexity. Another serious stereotype is the idea of “business as theft”, or the idea of “better poor but honest.” Indeed, Romania for the past 14 years has been the scene of many fraudulent businesses, almost synonymous with the theft, and this feeds the inhibition of Honest man in front of the world of business. Moreover, the underworld is sometimes confused with the business world. All these concepts destroy the entrepreneurial spirit from the ground, actually hiding reality: success in business is personal merit, and the construction of a business is the result of higher thinking and assiduous work. If we study different business people who have demonstrated long-term success, we will find a common denominator: common sense. Common sense is rather difficult to define, rather we can trace its components: practical sense, sense of money, sense of time, sense of orientation, sense of ridicule, sense of humor, sense of property, etc. Numerous examples show that they succeed in the business of those entrepreneurs who: have imagination, are creative, show original thinking, have leadership qualities, know (have methods) or know how to deal with complexity. We will deny the role of luck in business, but we will try to build businesses that make the most of any luck, and bad luck and defeats transformed into victories. The formulation of a business plan is generally done at the stage of market research or project evaluation during the creation of a business. The business plan is also used when setting up new activities but, above all, it allows to describe how the company operationalizes the creation and the capture of value. It allows to deepen a commercial project throughout its conception, to judge its feasibility and to follow the realistic trajectory of its evolution. It is also the preferred tool that can be used to succeed in research and fundraising.
Literature review
1.3.1. Micromedium (Boston Consulting Group, Model PORTER, AIDA model)
The Boston Consulting Group Matrix
Strategic planning is the process of creating and maintaining a strategic adequacy relationship between the objectives and capabilities of the organization on the one hand and its ever changing marketing opportunities. It implies defining a clear mission of the company, setting goals in accordance with the mission, designing a judicious portfolio of activities and coordinating functional strategies. The best known portfolio planning method is the one developed by Boston Consulting Group , a leading firm of management consultanc (Van den Bosch & De Man, 2013). The method evaluates the company’s strategic activity units from the point of view of the rate of market growth and of the relative market share. The four possible types of units are: starters, demolition cows, dilemmas and millstones. Using the Boston Consulting Group, the company classifies all its strategic activity units the growth-development matrix . On the vertical axis, the market growth rate indicates the degree of market deactivity. On the horizontal axis, the relative market share indicates the company’s strength in the market strategic unit of activity of the company has a separate mission and objectives and can be planned independent of other company activities (Augier & Teece, 2008).
The BCG matrix
(Boston Consulting Group) defines four units: stars
(Stars) are activities or products with high growth rate and high market share. They often need massive investments to finance their rapid growth. Ultimately, their rhythm of growth is diminishing, and stars will turn into milking cows.
Milking cows
(cows) are activities or products with low growth rates and high market share. These well-established and successful services / products need less investment to keep the market share. Therefore, they produce abundant liquidity, which the company uses to pay its bills and support other strategic business units that need investment. Dilemmas (question marks) are units of small market activity in markets and with a high rhythm. They need a lot of money just to keep their share, let alone the increase. I want to know what kind of dilemmas she should try to turn them into the stars and what is the point to give up. The stones of the mill (dogs) are activities with low growth rates and small market share. They may have sufficient cash to secure their own survival, but do not promise to become liquidity sources.
Porter’s Five Forces (Tebekin, 2018)
Threaten entry of new competitors refers to barriers to the commercialization of new businesses. If entry barriers are small and new companies operating in the market do not expect retaliation from existing companies, the situation is excellent for market companies, for which the profitability of the industry is moderate . The calculation formula is market capitalization plus the market value of debt and cash and short-term investments.
Figure 1. PorteR’s strategy
Intensity is enhanced when: (Bucurean, 2001)
• Low sales growth
• High level of fixed costs because there is no reconversion possible (too expensive)
• Many competitors of the same size
• Sector evolving towards a concentration
• Lack of differentiation of products, making consumers less loyal, hence low cost of change
• Intermittent overcapacity
2. Threat of new entrants
Threats are low when there are barriers to entry. That is to say, a set of factors that impose on new entrants costs that are structurally and durably higher than those of companies already in place. These may be financial barriers (capital-intensive for entry into a sector and economies of scale), technological barriers (resource-related, patent existence, scarce resource ownership) . We also note the trade barriers (reputation, brand image, prestige) and the regulatory and legal barriers …
3. Clients’ bargaining power This power is strengthened when (Singh, Sharma & Chahal, 2011):
• Strong relative concentration of customers (central purchasing)
• When existing customers are very important opportunities for the supplier
• Low change costs for customers
• Importance of the purchase in the client’s budget
• Low product differentiation
• Low brand image of the products on offer
• Financial capacity of the customer conducive to upstream integration (ability to purchase the supplier)
4. Bargaining power of suppliers
It is reinforced when:
• The product sold is very specific and essential to the customer
• There is differentiation of products sold
• For the customer, the costs of changing the supplier are high
• There are no substitutable products for those delivered by the supplier
• Purchases are a strategic issue for the customer
• The supplier has sufficient financial capacity to pose a real threat of downstream integration.
5. Substitute products (Campbell, Stonehouse & Houston, n.d.)
A product is qualified as a substitution when it fulfills an equivalent mission through different technologies.
Competitive pressure is strong when:
• Good price / performance ratio of substitutes
• Low cost of change for customers
• High propensity of customers to accept substitutes
6. The role of the state
This is not a competitive force identified by Porter. Nevertheless, the state can have a strong influence. The state has a significant role in competition in a sector, particularly through regulations (Porter, 2014).
AIDA is a theoretical model of how advertising works. Acronym that summarizes the four fundamental points to which a notice must deal to be effective: Attention, Interest, Desire, Action. Attention (Attention or Awareness). An advertisement must first of all capture the consumer’s attention: every day a person is exposed to a number of ads that varies (depending on the estimates) from 300 to 3000. Of these only a small part is perceived. And only an even smaller part would have the opportunity to actually influence the consumer. In this context it is clear that the message must not only be good, but exceptional.
2. Interest (Interest). An advertisement must ignite the consumer’s interest: it is not enough to capture attention, it is necessary to be able to be read, to be looked at and to be looked after. The message must capture selective attention.
3. Desire (Desire). An advertisement must trigger the consumer creation process of desire: the formal element that is combined with the concept of empathy is prevalent here. When the consumer identifies himself (or identifies his model of reference) in the proposed advertising situation, a sort of projection of his ego, of his personality, occurs in the message itself (Conţac, 2013).
4. Action (Action). An advertisement must lead to action, which results in the purchase of the service or product: a message must induce you to do something. And usually, this “something” is buying.
5. The AIDA was presented for the first time in the year 1898 by Elias St. Elmo Lewis, and later in the 1920s by E.K. Strong, to then become popular starting from the sixties. Historically it represents one of the first “models” developed to implement an advertising campaign. Over time the models of advertising that have come and gone have been innumerable, all more or less right, all more or less wrong: usually more useful a posteriori to explain the success (or failure) of an advertisement, which does not a priori to design it and then predict its success (or failure).
6. Today the AIDA is considered an excessively simple and naïve model, and that suffers a lot from the behaviourist culture in which it was formulated (see the advertisement / buy the product). In particular, the last point, the one concerning the Action, assumes a power that advertising does not have. This to the extent that effective advertising means, in the first place, a réclame able to create goodwill (that is, a positive attitude, benevolence, friendship, sympathy) towards a product or a brand, and therefore capable of to evoke the desire, the conviction that the advertised product represents a valid and desirable solution, indeed the best possible solution. And therefore stimulate a propensity to consumption or even before an intention to purchase. But not directly buying.
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