The marketing director argues that the company’s marketing strategy should be to develop new products aimed specifically for the Chinese market rather than traditional ‘British’ products. Do you agree that this is right? Justify your decision (18 marks)
Marketing strategy is the goal of increasing sales and achieving a sustainable competitive advantage. The new marketing director of Burkinshaw, the traditional British pottery company, proposes to change the company’s strategy from market development to diversification, entailing a large risk. The reason behind the proposed change is that a ‘large department store’ in China has asked for new exclusive range of products to sell. The potential benefits are huge but is it necessary for an already successful business to take such a risk?
One method of assessing the potential risks and rewards of a particular marketing strategy is to use Ansoff’s Matrix. This identifies 4 major strategies including market penetration, market development, market penetration and diversification. In the case of Burkinshaw, diversification is the new strategy being considered. The company’s marketing director argues the company should be developing new products for a new market, the large Chinese department store. The store has shown an interest in placing a large order, giving the company huge potential being entered into such a complex market. Moreover, it guarantees Burkinshaw future orders as well as growth. As the large Chinese department store expands, so will the sale of their products as it’s reaching more areas. From this it can be said although risky, the potential the Chinese department store offers is huge for Burkinshaw.
However is the Marketing Director correct in his decision? Burkinshaw’s current marketing strategy is market development giving the company success of 3% market share. From this factor alone, if the company is already gaining success in Britain, then why push it into the riskier Chinese market? By...
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