COMPANY’S MARKETING STRATEGY IN A VIEW OF ITS LIFE CYCLE

Baranova Svetlana Andreevna1, Dmitrieva Maria Andreevna2, Sokolova Elizaveta Leonidovna3
1Siberian State Aerospace University, student, International High Business School
2Siberian State Aerospace University, student, International High Business School
3Siberian State Aerospace University, Scientific supervisor, Candidate of Economics, Assistant Professor, International High Business School

Abstract
The article allows an organization to determine the stage of its life cycle and to choose the right strategy for this stage. The authors believe that the company can significantly extend the term of its existence by choosing the right marketing strategy.

Keywords: analysis of the organization, life cycle, management, marketing, marketing strategy, organization strategy, strategic management, strategy


Category: Economics

Article reference:
Company’s marketing strategy in a view of its life cycle // Humanities scientific researches. 2016. № 1 [Electronic journal]. URL: https://human.snauka.ru/en/2016/01/13884

View this article in Russian

Company’s marketing strategy in a view of its life cycle

The success of an organization often depends on marketing solutions and strategies adopted by the leadership of the organization. It is very important to take into consideration that company’s management should follow certain marketing strategies at different stages of the organization life cycle in order to extend firm’s successful existence and to achieve better results [4].

The marketing strategy is based on the marketing management’s fundamental components, such as market segmentation where the organization plans to develop, design and position the goods and the output of this product on the market, as well as the pricing policies’ defining and methods of products’ sale. The importance of marketing strategy cannot be overstated, since it is the key to survival in a market economy. However at each stage of the life cycle of the organization, marketing strategy should be carefully selected.

According to scientists, there are five stages of organization’s life cycle: establishment, growth, expansion, maturity and decline [3].

Company adheres to a marketing strategy at the each stage. Detailed description of the mapping is presented in Table 1.

Table 1. Marketing strategies at different stages of company

Options

Marketing tactical decisions at stages

Establishment

Growth

Expansion

Maturity and decline

Marketing target Attract the attention of innovators

 

Increase sales and product line Develop competitive advantages Suspend the fall and renew the demand
Product Main Increase nomenclature New Leave the market
Volume of sales Increasing Intensive growth Stable Reducing
Consumers Avant – gardists Well – off consumers Massive market Late majority, the Conservatives
Price Low or high Higher than at the first stage Discounts and technical actions regarding prices Matches to demand changing
Sale The distribution of goods is limited, focusing on one segment

 

Fast sales expanding. Focusing on new segments Intensive Selective distribution of goods
Product promotion on the market Considerable effort

 

Maximum effort Weakening effort, but providing sufficient profits Remove goods from the production
Service If it is possible – centralized control If it is possible – decentralized control Supervision by the service organizations Using the service in order to create new sales opportunities
Competition Insignificant Growing Tough Insignificant

The organization can survive and go again for the next cycle of development only if it can find new, attractive goods for consumers or to take a new position in the market. If it is managed successfully, company goes through all stages again, where would unavoidably be replaced by a new crisis.

Crises are inevitable in the development of the organization. According to management consultants, even the most conservative companies, characterized by sustainable position in the market, is facing a crisis at least once in 50-60 years. For the unstable Russian conditions development stage may last a year, and often several months [2].

Thus, at each stage organization implements a specific strategy development. A view at the organization through the lens of developmental stages allows for more accurate identification of its main targets and strategic and orientation [1].

For example, in Krasnoyarsk in 2012-2013 was fierce competition between “Leroy Merlin” and “Dommer”, which both were specialized on products for building and repairing. “Leroy Merlin” company has a lot of branches in Russia while “Dommer” is Krasnoyarsk brand. “Dommer” was the only competitor, for which “Leroy merlin” applied damping strategy. Due to the fact, that it was a big chain they could afford to perform with losses by selling product cheaper. After that almost all customers went to “Leroy Merlin” in order to get purchase profit. Moreover, location of  “Dommer” was next to its competitor, what aggravated the situation.

Due to this condition “Dommer” was in the stage of crisis and went bankrupt. However, “Dommer” management found the solution. They applied a strategy of diversification, which allowed penetrating another market niche.

Nowadays, in a large shopping mall, which was previously fully occupied by “Dommer”, there is the first in Krasnoyarsk hypermarket of electronics “MediaMarkt”. Dommer Stutze Company starts a rebranding of  “Dommer” in a new format – as “a set of home-making solutions”. The goal of the new “Dommer” project is to collect goods, which will help visitors to make home more cozy and extraordinary.

However, not only time and market saturation may be a reason of the crisis. Also there are other unseen circumstances. As an example, one of the most popular Russian airlines company “Siberia” now well-known as “S7 Airlines” was in crisis due to fall of its two aircrafts in 2004. After those events passenger flow decreased by 15% in five days. “Siberia” reduced ticket prices and made seasonal sales to recommit passengers’ trust. As a consequence, board of directors decided to change marketing strategy. This strategy was about re-branding and increasing the business by access to international market. Since 2006 “Siberia Airlines” has promoted its services under the trademark “S7 Airlines”. Previously “Siberia Airlines” was associated only with the coldest part of Russia, and had not been able to become the all-Russian, especially – international. According to the fact that people who fly a lot are agile and have itchy feet, they would choose airlines company alike their ambitions. The success of this experiment was impossible to predict, but the bright colors of “S7 Airlines” ousted “Siberia” and at the moment “S7 Airlines” is one of the leading airlines in Russia.


References
  1. O. Walker ml. Marketing strategy, [Text]: a course for MBA / O. Walker ml., H. Boyd ml., JK Larcher, J.. Mullins – The top 2006.
  2. Kotler Р. Marketing Management, [Text] / F.Kotler – St. Petersburg: Peter Combe 2011.
  3. Semenov K.D. Modern marketing, [Text] / KD Semenov – M .: INFRA-M, 2012.
  4. Matantsev A.N. Strategy, tactics and marketing practices, [Text] / Matantsev A.N.  – M .: Publishing house “Finpress”, 2010.


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