Marketing Strategy Analysis – Wello

Executive Summary:

The present study has done a concrete analysis of marketing strategy of Wello for fulfilling customer needs and to do potential promotion. The water wheel produced by Wello can become a potential substitute of the traditional water reservoir. However, Wello’s operational strategy such as targeting of rural people, following sound pricing policy and unique distribution policy has created a potential impact on its brand reputation. Continuing this, Wello could reach higher levels of profitability. On the other hand, the entry of new entrants could significantly reduce the sustainable position of Wello in international market. Marketing mix policy and virtual promotion policy could be effective for Wello in preventing from losing market share.

Task 1:

01: Know how to appraise and develop strategies for the value proposition of an organisation competing in a market sector:

1.1 Define a value proposition for an organisation:

The value proposition is an agenda which significantly convinces potential customers to consume specific products from an organisation. As stated by Ahuja and Lampert (2011), value proposition adds more value to the product offered by the organisation. Presently, South African rural regions are suffering from water impurity which is creating complex diseases. Statistical data show that more than 3 billion illness has occurred due to this and almost 5 million deaths have occurred. Taking the issue into consideration, Wello had introduced water wheel into the market aiming to provide hygiene and safe water for reducing death ratio from 88% to nil (Wellowater.org, 2014).

 Wello has experienced higher customer value proposition as it has become capable of offering 20 gallons fresh water to the inhabitants who were used to get only 5 gallons water in the conventional method. However, Arimura (2009) mentioned that unique product offerings such as plastic coating, high durability and handle pulling system had added higher value to the product offerings of Wello.

1.2 Analyse an organisation to establish its value proposition:

 The value proposition is done by offering distinct product features to the customers which can meet the unmet demand of the users. According to Asobie (2011), Wello has captured the rural area of South Africa by helping inhabitants to prevent several complex diseases occurring from unhygienic water. Prior to the service of Wello, the local inhabitants had to travel more than 8 hours in a day to fulfil water needs. Considering the fact, well had introduced water wheel having a 20 gallon capacity, which was found 4 times better than available offerings (Ban and Rao, 2008). However, non profit organisations and other private firms are also walking in the same way to serve the customers and it could create a potential threat to the business operation of Wello. To perform in as per level, Wello can focus on creating a varied volume of ware wheels consists of purified and healthy water.

1.3 Evaluate people management strategies their contribution towards the value proposition:

The people management strategy holds a significant position in building value proposition as a combined effort of all departments make organisation able to reach its goals. To achieve value proposition, disruptive innovation plays significant role which sometimes requires overall restructuring of organisations (Bates, 2005). Furthermore, monitoring and evaluating performance is necessary to control changing workforce activities in order to restrict any deviation. The mission of Wello is to produce water wheels effective in reducing time and physical labour of the inhabitants of rural South Africa. For achieving the same, Wello had employed a dedicated team who were responsible of collecting trash and recycling process. As stated by Belk (2010), without proper coordination between departments and any single aberration would fail to achieve customer needs which could hinder overall growth opportunity of Wello in the future.

1.4 Explain how value proposition can generate competitive advantage for an organisation

Value proposition provides potential alternatives to meet unmet demands of customers. In this context, Bracker et al. (2008) stated that most of the contemporary business organisations undergo inventing new products having additional features and simple configuration to achieve customer value proposition. Taking this into consideration, Wello has tried to make a new product which can significantly reduce the problems and issues of the inhabitant. As stated by Thomas and Luis (2008), implementing a handle into water wheel Wello has made easy operation while carrying it from one place to another (refer to appendix, exhibit 1 and 2). This innovation has led to the increased value proposition for Wello in the belt of rural South Africa.

1.5 Evaluate the value propositions offered by competing organisations:

Evaluating value proposition of competitors requires a complete market survey and it requires lots of time. As stated by Callender (2011), market survey helps organisation to understand actual shortcomings of other organisations that are failing to fulfil the demand of the customers. However, continuous monitoring is needed to identify a rival’s value proposition in the dynamic market situation. Wello is presently experiencing lesser competition as the number of rivals found very less in that region.

Most of the non profit organisations are offering 10-25 gallon water drums to the inhabitants, whereas, Wello is offering 20 gallon water drums which is more advantageous to the inhabitants. However, Brown (2011) cited that a minimum offering of non profit organisations was found unable to fulfil daily requirements of the inhabitants. This shortcoming has made Wello understand what the need of customers is. After evaluation, Wello started making water wheels having higher capacity and higher operational flexibility which has become an advantage for Wello in capturing the market share of rural South African region.

1.6 Analyse the use of market research in competing organisations:

Market research helps organisation to evaluate current preferences of customers and the level of competition exists among the rivals in that place. Marker research would make Wello to understand the level of product acceptance in that place and whether it could be able to meet consumer demand (Bradley, 2009). Market survey indicates that water entrepreneur can earn revenue of $80 per month by doing business in South Africa (www.thewaterproject.org, 2014). Similarly, this survey would help Wello in maintaining flexible pricing strategy which can serve both customers as well as organisation also.

1.7 Develop appropriate strategies to synthesise a value proposition for an organisation and consider:

People management:

A skilled and dedicated workforce has been employed by Wello in order to improve the overall performance of the firm. To collect the trash, a dedicated volunteer team has been employed by Wello. On the other hand, another team has been employed to conduct the recycling process. Cantwell and Mudambi (2005) stated that Cynthia has managed all level of people in the organisation starting from collecting trash to final distribution of water. The people management process of Wello has helped it to satisfy customer needs by offering innovative products in a lesser price offering.

Tools:

While introducing new business venture, it is mandatory to follow an effective promotional tools for creating product awareness within consumers’ mind. However, Deshpande and Damodar (2007) stated that virtual promotion might not be much effective as the literacy ratio is found very less in the rural South African region. Instead, direct visiting and personal selling could be a better option for Wello to increase the awareness. On the other hand, the water supply needs to be hygienic as well as it needs to solve the issue of the target mass. Additionally, the pricing policy of Wello is also found under control which has enhanced its product acceptance in the South African belt.

Task 2:

01: Be able to evaluate marketing opportunities in a sector of the economy

2.1 Identify sources of information that would assist in obtaining important information for an organisations value proposition:

Before designing product USP, it is necessary to analyse the profile of target customers, their needs, existing product feature and the nature of competitors. After integrating all these factors, business strategy can be formulated to obtain the value proposition (Ellig, 2011). Fundamentally, market analysis suggests organisation which strategy needs to be implemented to achieve organisational success. On the other hand, Dussauge and Garrette (2008) cited that local accessibility issue and the bargaining power of the buyers also need to be considered as an important factor while achieving value proposition.

Achieving potential information from a rural place is not very easy and it requires lot of dedication to gather sufficient information. As stated by Foss and Foss (2005), sometimes direct visit becomes necessary to obtain relevant information from the sources. 13 gallons water is required to serve household purpose in a day in the rural South African region (www.thewaterproject.org, 2014). On the contrary, majority family are found suffering and falling 3 gallons water short per day. Considering the situation, Cynthia has visited the place directly to understand the problems and issues of South Africa. After interacting with local people, Cynthia had come to know that majority people are suffering from complex diseases and even death also.

During the summer, the degree of water crises becomes higher which mainly occurs due to drops in water level. Gulati and Frankel (2010) cited that only a few members of non profit organisations had come at that time and served only 10 gallons of water drums.

For enhancing value proposition, Wello has introduced 20 gallon water wheel which is flexible to carry and it can fulfil the requirements of household for a single day. In this context, Hall and Howell (2012) stated that handle driven product offering of Wello has increased the convenience level as compared to before. Additionally, the pricing strategy of Wello cannot be ignored. The overall analysis has made Wello aware about the customer need and all specifications have been implemented accordingly.

2.2 Gather relevant information from a range of sources for the formulation of a value proposition:

Higher product offerings against a lower price can significantly build value proposition in the global market. Considering the fact, Wello has started producing water wheels for people who are earning $2 per day. The demand of fresh water is rising day by day in the rural South African region and it could rise up to US$ 20 billion in the future (Wellowater.org, 2014). As stated by Kappen (2011), water wheel manufacturing unit can become a profitable business venture for many contemporary business organisations. No potential competitors are found in the area of rural South African region. Furthermore, no organisations are found who can serve well than Wello who is offering highest volume of water wheels to the inhabitants. So, targeting the area of rural South Africa could be advantageous for conducting business venture to the Wello (Thorelli and Becker, 2008).

Analysing economic and health issues of rural South Africa, Wello had started manufacturing special water wheel which could meet the affordability as well as health care for the inhabitants. As cited by Kauser and Shaw (2008), poor economic situation has made the inhabitants incapable to consuming more than one water gallon even if any urgency occurs. Considering the situation, Wello has offered reusable water gallons which can be used up to five years. In this context, Knight (2013) stated that quality, durability and affordability are considered as main factors of formulating USP. Other competitors are found incapable of serving customers as compared to Wello. Hence, Wello could attain a competitive advantage by leading these three factors in the rural South African region.

2.3 Conduct situational analyses for a given organisation:

While operating business, every organisation needs to analyse all favourable and unfavourable situation in order to reduce the uncertainty and risks of the operating firm. However, situational analysis describes about internal and external influencing factors of organisations by utilisation of SWOT model.

Strengths of Wello:

Basic strength of Wello is offering higher quality fresh water in a cost effective and convenient way. As the access of getting fresh water in the rural South Africa is very low, providing higher amount of hygiene water (20 gallons) has become strength to the Wello. However, Lampel and Shamsie (2010) mentioned that carriage problem was a major issue as it was required 8 hours travelling to carry water storage from one place to another. To mitigate the issue, Wello has introduced flexible handle system which is more convenient than previous one. It has also acted as potential strength for Wello to compete with the local non profit organisations.

Weakness of Wello:

Wello has produced water wheel considering standard family strength where 13 gallons water is sufficient enough to fulfil household purposes. As cited by Levinthal and March (2003), Wello has not prioritised emergency cases where 20 gallons water might not be sufficient to serve the family. During this time, the family needs to collect water from other sources. Apart from this, for a higher strength family 20 gallons water could become inadequate to serve all household purposes. On the other hand, the longevity of the water wheel also found less which is only five years. Short term longevity is limiting long term reusability of Water wheels.

Opportunities of Wello:

Fresh water demand is increasing in the rural South African belt day by day. Analysing overall market scenario, it is clear that true demand of fresh water would become US$20 billion in next five years (www.mckinsey.com, 2014). According to Mezias (2009), across five regions entrepreneurs can earn more than $80 per month in water supply business.

Threats of Wello:

As water wheel manufacturing unit is found as a booming sector, many rivals can come into the business which could result in reducing market share of Wello (Mudambi and Navarra, 2004). As Wello is not financially sound, adopting higher technology could become a problem to Wello. On the other side, potential market entrants can offer several other features to the customers which can reduce the profitability percentage of Wello.

2.4 Identify marketing opportunities and threats that are related to an organisation in a given economic sector, to include marketing concepts and theories:

Wello, a water wheel manufacturing unit is earning higher value product acceptance in the region of rural South Africa. Staring from the initial, Wello has become successful in spreading its business across South Africa. It has focused on that zone where overall community is suffering from the lack of fresh water. Hence, Wello needs to communicate frequently with the inhabitants to understand the changing demands and customers can be served accordingly (Narula, 2006). However, one problem issue is that the majority population is illiterate, which can become a potential threat to Wello in expanding its business.

Opportunities:

Market opportunity opens the door of increased sales which eventually brings sustainability in the competitive environment. Wello has taken initiative to make the inhabitants healthy which could become an opportunity for Wello to expand its business. This venture is advantageous to the government as it directly linked to enhancing the social value across the suburban South African region (Olomola, 2004). Hence, the production of water wheel by Wello could become a potential opportunity to expand its business across the overall South African region.

Threats:

Threat can come from two different sources- one is from the entry of new rivals and another is inability to serve and satisfy larger families. As stated by Ozughalu and Ajayi (2004), flexible storage capacity ware wheel of rivals can significantly reduce the profit percentage of Wello as it only offers only 20 gallons water wheels. The storage capacity of the water wheel is sufficient to serve only standard family strength which can create a negative impact on the rest of the people.

03: Construct an integrated strategic marketing plan for an organisation

3.1 Create a strategic marketing plan for a given organisation, to include the following areas:

Marketing objective:

Wello’s marketing objective is to provide a healthy and hygiene water transport carriage system for serving the inhabitants of rural South Africa.

Advantages and disadvantages of various camping channels:

Multiple campaign channels can be used for advertising particular products. Personal selling, advertising through virtual media and news paper channels have been extensively used by Wello. Pedersen and Thomsen (2012) stated that virtual media helps organisations in gaining higher access of the customers as compared to other media. On the other hand, as the literacy rate of rural South Africa was found very poor virtual media might not be effective in that place. Instead, personal selling could be an effective media to Wello as it involves direct communication with the customers.

Design of marketing campaign:

Marketing campaign needs to be designed in such a way which can create wider range. A potential market campaign could significantly help Wello in creating higher awareness among the customers (Phan, 2008). Considering the fact Wello has initiated door to door direct marketing in order to make inhabitants aware about the utility of water wheel. However, Cynthia had designed a special marketing campaign where foreign members will soon be interested to invest on the venture. Furthermore, marketing campaign via virtual media can create some restrictions on the venture of Wello. Considering the fact it would be a better option for Wello to opt for traditional marketing policy in getting wider spread of the business.

Various management tools and techniques involved in marketing planning:

SWOT and PEST analysis are considered as effective tools used in marketing planning scenario of contemporary business organisations (Pieter et al. 2008). However, SWOT analysis would help Wello in analyzing external and internal factors of organisation which can influence its business performance either positively or negatively. On the other hand, PEST analysis would help Wello in understanding political, economical, social and technological factors of the host country which can have a direct impact on the business performance of the well (Prahalad and Hamel, 2005).

Tools and techniques to create solutions and benefits to customers:

Increased communication with the customers could become an effective tool to solve any kind of implications. AS stated by Reilly and Tushman (2004), increased communication would help Wello in understanding the actual need of the customers. However, Wello can establish distribution channels very closer to the residential place to serve customers in an effective way.

3.2 Evaluate the strategic marketing plan:

Strategic marketing plan can become fruitful to Wello as it helps to improve the communication level between the organisation and customers. Eventually, increased communication will lead to enhanced customer satisfaction resulting in revenue increase. As the product price offered by Wello is very less there might be a chance of achieving higher product acceptance in the rural area (Stokes, 2005). This intended strategy would become effective for Wello in serving customers in broader way.

Task 3:

01: Be able to appraise the main characteristics of process of design and innovation for a product or service from a marketing perspective:

1.1 Use the marketing mix to analyse the design and innovation of a product or service:

To evaluate product innovation and design strategy, organisations need to follow marketing mix tools. As stated by Tallman and Chacar (2011) product, price, place and promotion are the basic 4 factors which Wello need to follow before innovating the product.

Product:

Product offerings are made in order to attract wider base of customers. Wello has introduced a flexible water distribution channel in order to serve rural inhabitants who were suffering due to lack of fresh water. As stated by Teece (2007), Wello has introduced 20 gallons water wheel to serve the community where as only 13 gallons of water is found sufficient to serve all household activity (www.mckinsey.com, 2014). Additionally, Wello has made the product user friendly by introducing a handle to the water wheel which is found more convenient to carry from one place to another.

Price:

Pricing strategy of Wello has been made by considering the economic status of the local inhabitants. The majority of the rural South African people was found to earn only $2 per day. Considering the fact Wello has offered the water wheel at an affordable price.

Place:

Finding the proper place before introducing the business venture is very necessary as it directly influences on the business growth of the organisation. Wello has targeted broader mass of rural South Africa where actually intense need of fresh water was found. As stated by Thomas and Luis (2008), majority of the child deaths were occurring due to the utilisation of unhygienic water. In this scenario, place identification made by Wello is found sound enough to successfully run the business venture.

Promotion:

The founder of Wello, Cynthia had employed “Personal selling” in order to make each and every inhabitant aware about the utility of using fresh water wheels offered by Wello. Not only this, to achieve business growth in the global market, Cynthia had employed product promotion through Google press on CNN which has created lot of awareness about the product (Thomas and Luis, 2008).

1.2Develop a proposal for innovative of a product or service, giving consideration to

  • Novel concepts for design and innovation
  • The designing process
  • Enhancement of the competitive edge in a target market
  • The use of mass customisation

Wello has manufactured water wheels which are having capacity of 20 gallons water. It is found sufficient enough to serve the daily need of each family. On the contrary, Wello has failed to understand the requirement of a bigger family (Bracker et al. 2008). However, Wello can mitigate this problem by offering water wheels of various ranges starting from 10 gallons up to 40 gallons. This initiative could serve overall rural inhabitants of South Africa.

The designing of Wello has been prioritised on the re – usability parameter. The water wheels of Wello can be used for 5 years and the user can clean it as and when required. Furthermore, Thomas and Luis (2008) stated that Wello has introduced a special padding system to enhance the convenience of carriage through rough surface. However, extended re-usability up to at least 12 years could significantly enhance the value proposition of Wello.

The pricing strategy of Wello was found convenient to enrich the affordability ratio. As Wello doesn’t have sound economic potential it has targeted on cost leadership factors which could significantly help Wello in capturing the target mass. On the other hand, production of water wheels having varied shape, size, and colour and water capacity could be a vital agenda for gaining competitive advantage in the global market.

2.0 Understand the importance of innovation protection for new products and services:

2.1 Evaluate appropriate innovation protection methods for a new product or service:

Wello has launched a new water wheel product to serve its customer of the rural South African region. Before launching the product Wello had undergone several research and developments in order to mitigate the water issue immediately in a cost effective way (Olomola, 2004). Wello had followed ad-hoc type of innovation, which actually requires continuous evaluation of customer needs and frequent development of products accordingly. Considering the fact, Bracker et al. (2008) stated that Wello could follow a “Non-statutory” protection method as it has invested more on research and development. However, innovation protection is needed in order to avoid any duplicity or any ethical issues. Wello has implemented technological formulas to offer customised products and lack of protection can allow the competitor to copy the invention. Wello had acquired a copyright for the product which would act as a protection from duplicity by the competitors.

2.2 Critically evaluate the risks associated with:

In order to gain competitive advantage a continuous upgrade of the product is done to meet the additional customer requirements. Furthermore, product innovation requires a lot of fund to invest on the R & D purpose. On the contrary, Thomas and Luis (2008) cited that satisfying overall mass is very difficult due to the existence of varied type of customers having different types of need. Hence, it can be stated that Wello’s product innovation acquires cost enhancement risks as well as customer dissatisfaction risks. However, Wello can mitigate this problem by focusing extensively on market survey and changing consumer demands.

Although Wello has introduced 50% of increased water access to the inhabitants of rural South Africa it has failed to offer different shapes and sizes of water wheels (www.gizmag.com, 2014). For providing increased water access, Wello has used special technology which had cost significant amount of funds. Wello is trying to flourish its business across the globe and it needs to focus on product variety as the water requirement is not found significant enough to other countries.

3.0 Know how to develop and apply appropriate marketing strategies for global markets:

3.1 Evaluate the global market potential for possible business expansion:

Global market potential fluctuates depending on the environmental factors, legal and political barriers, and economic situation and most importantly on the need of the customers. On the other hand, Bracker et al. (2008) stated that competitor’s market positioning cannot be ignored as it holds a significant position in developing appropriate marketing strategy. Wello has considered economic downturn of the country and the spending capacity of the customers were taken into account. However, the pricing strategy of Wello has been made by considering the factors.

Additionally, Wello has prioritised on maintaining “environmental Stability” of the rural South African region before introducing business operation. Not only this, Wello has conducted all legal processes and government taxation policy while operating its business in rural places. After completion of all legal and regulatory activities Wello has introduced the manufacturing unit of water wheels to serve the overall community of South Africa.

3.2 Apply appropriate global marketing and communication strategies to the identified international market, to include the following areas:

  • Utilising of various information sources to acquire relevant data
  • The reliability and validity of each source of information
  • Assure the effective use of obtaining information

Data collection holds significant position in identifying the target market. Before initialising the operation, Wello needs to focus more on the target market in order to assess the feasibility of conducting the business (Olomola, 2004). Considering the fact, Cynthia had gathered several primary and secondary data to identify the market potential of the rural South African region. To gather data Cynthia had visited the place and worked with the labour to feel the actual problem issues of the inhabitants. Furthermore, Thomas and Luis (2008) stated that while residing there Cynthia has gathered political and legal information in order to obtain the viability. Additionally, Cynthia had gathered secondary data by using various magazines, newspapers, journals and websites.

In order to check the reliability of data, Cynthia had engaged a voluntary team whose responsibility was taking interview of the inhabitants to check the authenticity of data. In this context, Bracker et al. (2008) stated that the volunteer team has made increased communication with the inhabitants for the good will sake. After conducting data validation, Wello had started planning on producing water wheels.

After successful completion of data collection and data validation, a overall marketing strategy has been drawn by Wello according to the situation of Rural South African belt. However, all gathered data had been taken into consideration to avoid ethical and political issues that might arise in the host country while operating its business.

Task 4:

4.0 Be able to determine the internationalisation process for a range of companies in various global markets:

4.1 Identify the factors that would facilitate internationalisation for a selected organisation:

In the recent era, most of the contemporary business organisations are opting for internationalising for growing their business in foreign countries. However, internationalisation sometimes might become risky for small medium enterprises (SMEs) such as Wello, as it doesn’t have sufficient resources for optimum utilisation. The below mentioned potential factors would significantly facilitate the internationalisation for Wello:

Government support:

Government support plays a significant role of SMEs in operating its business on foreign land. SMEs can acquire government support in terms of proper infrastructure, funding and channelization of good resources. On the other hand Thomas and Luis (2008) stated that political and legal support from the government’s side is equally required to make the business ventures successful in foreign countries. As a matter of fact, lack of proper government support could lead to massive hindrance to the functional process.

Wello could offer higher quality products to the community if it receives potential support from the government in terms of infrastructure, transportation facility and good quality of resources. The mission of Wello was to serve the inhabitants of rural South Africa by providing better healthcare facility as well as creating job opportunities. In this context author stated that the proposal was considered by the government and it had taken the initiative to promote Wello’s concept. The government had conducted “Assistance Promotion” programme by collaborating with “Foreign Exchange Allocation” to provide financial support to Wello (www.gizmag.com, 2014). However Bracker et al. (2008) stated that the government has supported Wello in an optimum way to promote higher sustainability in the South African region.

Resources and markets:

The success and failure of business organisation depends on the skill set of resources in the host country and the market scenario in which it is operating its business. As cited by Thomas and Luis (2008), Wello would fail to achieve its business goal if it doesn’t receive potential resources and a strong marketing platform in the rural South African region. On the contrary, underdeveloped market can significantly prevent the chances of Wello in achieving higher business growth.

Strategic Orientation:

Strategic orientation holds significant position in influencing overall organisational performance. According to Belk (2010), organisational objectives, ability to cope up with challenges, risk taking attitude and other factors are influenced by the strategic orientation of the firm. However, Thomas and Luis (2008) cited that imposing strategic orientation before identifying problematic issues could create hindrance in the operational process of organisation. All the necessary parameters taken into consideration, Wello had started visiting places in order to get the knowledge about actual problem situation. After analysing the situation, Cynthia has formulated an appropriate strategy which could be significant while operating in rural South African region.

Technologies:

Technology helps organisation in offering higher quality features to the customers. As stated by Bracker et al. (2008), technological support could lead to increase in an export ratio that eventually reflects on the profit gaining ratio of the organisation. As Wello is manufacturing water wheels, no such technical specifications are required to manufacture the product. Wello can easily manufacture water wheels with the absence of higher technology and it can also deliver considerable number of water wheels to the customers in a convenient way.

4.2 Develop internationalisation strategies for a company focusing on the processes:

Internationalisation is defined as a process of introducing strategic changes into the system in order to increase organisational growth and opportunity. Considering the case of Wello, Thomas and Luis (2008) stated that strategic alliances and franchisee scheme could be an effective alternative in developing international strategies.

Strategic Alliance:

Strategic alliance makes the firm able to fulfil the shortcoming parameters of both parties. By doing alliance, two separate firms can set a common goal and utilise its resources in a combined way by operating in an individual way.  Considering the case of Wello, it can make an alliance with local distribution channels in order to make the logistic process easier. As stated by Bracker et al. (2008), strategic alliance would help Wello in achieving optimum utilisation of resources in the host country while doing business in the rural South Africa. On the other hand, it could improve the relationship between the inhabitants and the Wello as it employs frequent communication between local employees and local inhabitants.

Additionally, a strategic alliance of Wello can also create more awareness about the product and it could build the brand value also. Changing requirement of customers can also be drawn by utilising local resources and the product alteration can be done accordingly. Furthermore, the local subsidy could motivate local inhabitants in a better way to purchase products from Wello by explaining the utility and necessity of purchasing water wheels from Wello. Hence, the alliance process could significantly improve the brand awareness of Wello and it could effectively enhance the market share of Wello in the water wheel industry.

Franchisee Scheme:

In a franchise scheme, the parent organisation becomes free from taking responsibilities of the operational unit. In this context, Thomas and Luis (2008) stated that franchisee scheme would help Wello by focusing more on strategic issues by channelizing less important operations to the franchisee. Furthermore, the local franchise scheme can help Wello by providing administrative, financial and operational support to its organisational process. As a matter of fact, well could focus more on brand development activities and latest development in the globalmarket, whichh could eventually increase the revenue earning of Wello. On the other hand, Thomas and Luis (2008) argued that wrong utilisation of franchise system could significantly hamper the reputation of Wello. In order to mitigate this problem, Wello needs to be aware to prevent any unethical trading made by franchisee firm. However, taking legal guarantee from the franchisee would be an effective step to mitigate this kind of problem. Otherwise, Wello might incur huge losses from the franchisee end.

4.3 Identify issues of internationalisation and take appropriate measures to mitigate these:

While doing international business expansion, it is advisable to the organisations to be aware of all possible merits and demerits. Considering the case of Wello, the demerits can oppose the chances of flourishing the business expansion globally. Both the internationalisation process includes some pitfalls. Few common problem issues are cultural gap between the countries and the lack of availability of land to establish the manufacturing unit. Considering the fact, Belk (2010) cited that this opposition to Wello might lead to business failure in the future. While doing franchisee business, Wello needs to recruit people and train is to be provided accordingly. It might take a lot of time to initiate business operations.  On the other hand, Thomas and Luis (2008) mentioned that lack of dedicated approach of franchisee could lead to reduced brand image of Wello. However, poor brand image of Wello could impose significant barriers in the foreign market entry. Instead, following a Uppsala model, Wello can achieve higher benefits while conducting global operations. According to Uppsala model, Wello needs to primarily enter on close market and get into the outer market in the next phase. It could reduce the risks associated with franchisee model.

 

However, following Uppsala model can help Wello in tapping its local market first and then entrance into foreign markets accordingly. Considering the fact, Thomas and Luis (2008) stated that penetrating local market is easier and less risky as well. Hence, willow needs to focus more on penetrating local markets rather looking for the wider market. Furthermore, the Uppsala model would help Wello in determining the practical point of view to understand and deal with a present marketing strategy of the target market.

 

Strategic alliance is treated as an important agenda in business venturing, yet it is not averse with the negative consequences. Various limitations of strategic alliance can prevent Wello in experiencing desired market growth. As stated by Belk (2010), strategic alliance might not become successful in places where extreme market uncertainty exists. Considering the case of Wello, it is operating in an underestimated market. As, the economic condition of rural South Africa is found miserable, entering into strategic alliance could significantly impact on the earning revenue of Wello.

 

Potential land or existing cultural issues for a business that is to enter international markets:

Wello can face cultural issues after doing a strategic alliance with another firm. As stated by Belk (2010), cultural gap can significantly reduce the communication between customers and Wello which could further impact on the business growth of Wello. However, another problem Wello can face is a scarcity of potential land for establishing manufacturing unit. Several government laws can prohibit production of Wello which can be highly mitigated by doing a strategic alliance with local organisation.

Task 5:

01: Analyse an innovative marketing strategy for an SME:

1.1 Analyse the industry in which the particular SME operates:

To implement innovative marketing strategy, organisations need to analyse the type of industry in which it is operating its business. It is most important in the case of manufacturing industry as the worldwide manufacturing zone has undergone immense changes (Teece, 2007). Considering the case of Wello, it is presently operating its business in the rural South African region where most of the customers are found to prioritise on the very basic need. The water wheel manufacturing industry does not have a good backbone in the South African region and Wello can be considered as a pioneer (www.thewaterproject.org, 2014). As the fresh water demand is increasing in the rural belt, Wello can expect to earn higher revenue by offering more products according to the increased demand of inhabitants.

 

1.2 Carry out a stakeholder analysis of an SME:

The stakeholders of Wello are local inhabitants, employees, government, local labour, supplier and distributor. All the exhibited actions by stakeholders could significantly impact on the overall performance of Wello by means of:

Common goal:

As the sole aim of Wello is to serve the rural inhabitants from water crisis, Wello needs to create potential awareness among all stakeholders to achieve common organisational goal. According to Thomas and Luis (2008), it could help Wello in maintaining integrity in the workflow. However, continuous monitoring and evaluation is needed to prevent any kind of misconduct among the stakeholders of Wello.

Increased stakeholder participation:

To achieve higher sustainability in the rural place, Wello needs to focus more on inventing customised products as per the changing demands of inhabitants. Being a part of stakeholder, local government and inhabitants can significantly increase participation ratio in the decision making process of Wello. As stated by Belk (2010) it could make Wello able to identify changing needs and demands of the customers and product development will be done accordingly.

 1.3 Analyse and evaluate SME’s current marketing strategy:

The market where Wello targeted to operate has a very poor affordability being the rural belt. As well it had a scarcity of freshwater storage for a sufficient period of time serving families of varied strength (Teece, 2007). Considering the fact, Wello has introduced the water wheels at an affordable price for the masses and comfortable to carry through long distances. Also a volume of 20 gallons of water could serve an average family size comfortably. These factors do make the product of Wello a good choice for the intended mass.

Product promotion via Google press on CNN, Ashoka’s change makers, Skoll’s social edge and Starting BlcFellow would help Wello in promoting its product features and attract investors invest in its product manufacturing process.

1.4 Develop a marketing strategy to increase customer value for a SME and include the following:

Plan how to monitor the effectiveness of the developed strategy against relevant KPIs:

A KPI is used to evaluate organisational achievement against its previously set operational goals (Gayet and Revel, 2010). By implementing KPI process, Wello can identify the measuring parameters followed by gathering data from authentic sources and make the data available to the resources. In the later phase, Wello can analyse the data and communicate with the respective authority to achieve improved performance. This approach would help Wello in maintaining performance standards which could prevent Wello from any aberration.

Use of traditional marketing models with respect to SMEs

Traditional marketing model could become helpful to Wello in creating intense interest among the inhabitants. As Wello is operating in a niche market, it needs to build enough product awareness to capture the target market (Teece, 2007). By using this model, Wello can create the awareness first followed by interest which eventually turns into the desire of purchasing a product.

 

02. Be able to analyse the critical success factors for an SME within an industry

2.1 Identify the critical success factors for the SME:

Critical success factor helps organisations in inventing potential marketing strategy to achieve organisational success in the competitive market. As stated by Thomas and Luis (2008), Wello can significantly compete in homogeneous market by offering varied range of water wheels to the inhabitants. Basic six critical factors which Wello needs to focus are:

  • Maintaining sharp focus on the market
  • Bring more to the party
  • Operate with financial discipline
  • Right sizing
  • Increasing international outlook
  • Managing present and future

2.2 Identify issues for an SME in a particular industry and implement strategies to mitigate such issues for business success:

Wello being an SME could face significant issues while operating in the South African manufacturing industry. However, Foss and Foss (2005) stated that retaining highly skilled labour, increased global competition and increased government regulation are basic three parameters which can be experienced by SMEs. Conducting periodic market research could significantly help Wello in overcoming key issues mentioned above. The periodic market survey could make Wello efficient in altering its product specifications according to the  changing needs of customers.

03: Related theoretical constructs associated with the marketing in the public sector

3.1 Define the cultural, political and organisational aspects of public sector marketing:

Cultural aspects:

Wello needs to evaluate cultural aspects before initialising marketing under public sector area. Cultural diversity might impact significantly in the operational process of Wello. Any cultural deviation might create negativity among the inhabitants about the firm Wello.

Political aspects:

According to the law of regulatory bodies, Wello needs to follow all legal restrictions while operating in South Africa. Due to the heavy vigilance of government, Wello might experience hindrance on its operational process. However, the political stability of South Africa was found more stable than others which could make the operational process smoother to Wello.

Organisational aspects:

Wello intends to operate all its functional and operational aspects in a manner that it leads to the central objectives of the firm. However, existence of diversified work culture and non parity of opinion can create a threat in the overall operation process of Wello.

3.2 Design a theoretical construct that covers cultural, political and organisational dimensions:

It is essential to maintain balance between driving forces and the restraining forces while conducting international business. In this context, Thomas and Luis (2008) stated that Wello can conduct a “Force Field Analysis” which could help Wello in maintaining cultural, political and organisational dimensions in an integrated way (refer to appendix, exhibit 3).

3.3 Assess how theoretical constructs can ensure customer orientation in the public sector

Driving forces such as political, environmental and economical factors would help Wello in making changes in the overall system. On the other hand, restraining forces could prevent Wello from undertaking changes (Gayet and Revel, 2010). In this scenario, if Wello fails to control driving force it could convert into restraining forces which would be difficult to control. It might result in an in equilibrium states. Hence, Wello needs to maintain the equilibrium by imposing driving forces and avoiding restraining forces into its organisational boundary.

3.4 Develop customer oriented strategies for the public sector to improve performance:

 Organisational performance is judged based on the degree of satisfying customers. Considering the fact, Foss and Foss (2005) stated that Wello can improve its performance by analysing actual need of customers and it would help the firm in making specific products. This approach could save execution time, which could be invested in further research and development. Wello can direct its operations into niche markets, which would make Wello able to produce specific products and it will improve the overall performance of Wello.

04: Appraise the effectiveness of marketing in a public sector organisation

4.1 Assess the effectiveness of marketing in a public sector organisation:

In order to establish the brand image, willow needs to achieve considerable amount of good will in the marketplace. To achieve this, the brand needs to serve quality products and services to the customers along with its changing requirements. Considering the fact, Foss and Foss (2005) stated that while can enhance its competitive advantage by promoting its brand within the public sector. It would help Wello in promoting USP in the market, thereby differentiating itself from the competitors. Promotional marketing tool could significantly enhance the brand value of Wello to the target customers, which eventually leads to increased sales. However, periodic evaluations of market forces are needed to ensure meeting higher product standards in the global market.

 

4.2 Identify current or possible issues relating to marketing in a public sector organisation:

 In case of public sector organisation, it is very difficult to forecast future policy and the product sustainability in the marketplace. As the regulatory body imposes specific rules to public sector firm, it becomes very difficult to predict future scenarios accurately (Teece, 2007). The management body becomes engaged in promoting present value and does not focus much on formulating new product development strategy. Hence, the sustainability ratio becomes uncertain for the public sector organisation.

 

4.3 Develop marketing strategies to overcome identified issues in a public sector organisation and consider suitable marketing theories:

The identified issues can be solved by utilising potential marketing theories. As cited by Thomas and Luis (2008), Wello can conduct marketing mix policy and promotional campaigns in order to overcome the barrier. Promotional campaign can enhance the awareness of the target mass and Wello can enhance its brand identity in the rural South African area. Segregation of the marketing team is also required in order to mitigate the issues of the existing market. Wello can divide the marketing team into two segments- one is to maintain present promotional activity and other is to build future sustainability. Furthermore, Thomas and Luis (2008) cited that by adopting a potent marketing mix strategy Wello can meet the preference of target mass in a significant way.

 

 

 

 

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