Marketing Management and Strategy

An African Casebook

George Tesar

• Publisher: Routledge
• Year: 2013
• ISBN:
  9781135096199
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

This book gives readers an understanding of the factors that shape the marketing decisions of managers who operate in African economies. It brings together fifteen African cases written by scholars and executives with rich knowledge of business practices in Africa.

By combining theoretical insights with practical information from the cases, the reader is introduced to issues relating to marketing strategy formulation, managerial actions in designing and implementing marketing decisions, as well as the operational contexts within which these actions are taken.

The book is essential reading for both undergraduate and graduate students in marketing, international strategy and international business who require an understanding of African business.

PART I

Regardless of their size, enterprises do not operate in a vacuum. They operate in well-defined external environments set by national boundaries or lawfully established geographic regions. Each entity, through societal interactions and cultural constructs, determines its own standards and guidelines for private and public institutions that operate within each national or regional entity. Enterprises are obligated to operate within the set standards and guidelines which are generally interpreted as external environmental forces that shape the nature of each enterprise.

The objective of this part is to examine particularly how external environmental forces impact strategies and operations of small and medium-sized enterprises and what methodologies are needed to assess and monitor the impacts of environmental forces on marketing management decisions. It is important to note that each external environment in which small and medium-sized enterprises operate is unique and reflects the dynamic of a country or region and its conventional markets.

FIGURE I.1 Forces shaping an external environment.

An assessment of external environments for enterprises

National or regional governments create environments, which are external to individual enterprises. Entrepreneurs, executives, and managers operate within these external environments by founding, developing, and growing a vast range of enterprises. It is generally assumed that the external environment set by top legal entities in each nation or region provides suitable conditions in which individual enterprises interact professionally and rationally with their customers and consumers. In addition, it is also recognized that the external environment determines the nature and character of their interactions throughout the entire value chain, between production and consumption, and related individual interactions with all intermediaries and constituencies connected with their market operations.

An integrated approach to marketing management is based on the notion that small and medium-sized enterprises are obligated to respect external environmental forces maintained by national or regional governments and the markets that operate within each country or region. Marketing managers must understand how individual environmental forces impact their strategic and operational decisions, how they serve as constraints in formulating marketing programmes and activities ranging from new product development to post-consumptive practices of end-consumers. In reality, external environmental forces, as they are presented in an evolutionary integrated decision process based on division of responsibilities and shared enterprise governance, provide guidelines for all the strategic and operational marketing processes of the enterprise. The content and the intensity of these forces vary from one country or region to another depending on how individual legal bodies in each country represent its social milieu and political interests. The forces are universal and can be identified in any country or region.

There are typically three categories of forces in the external environment recognized by executives and managers responsible for marketing management activities: (1) behavioural forces consisting of social, economic, and lifestyle forces, (2) technological forces, and (3) ecological forces.

The level of perceptual and applied integration among the forces has a direct impact on such aspects of enterprise strategy and operations as the nature of the legal climate among competing enterprises, including the extent of competitive positioning; levels of market operation; propensity to develop new products or services; and levels of pre- or post-purchase services that need to be offered to end-consumers. Each enterprise is expected to find a particular mode of operation along with a suitable market niche in order to be productive and competitive in a given external environment. These expectations also require that marketing managers must develop methodological approaches suitable for evaluation and continuous assessment and monitoring of all environmental forces since these forces change dynamically as the individual countries or regions change.

It is generally accepted in management theory and practice that marketing managers drive the strategies and operations of enterprises today. In other words, marketing managers are responsible for identifying marketing opportunities within the frameworks of their enterprises, and delivering products or services to fulfil these opportunities. This notion further suggests that market opportunities are created by end-consumers as a result of their economic, social, and psychological consumptive behaviour. Much of the consumptive behaviour takes place in a single clearly defined environment represented by markets. For example, much of food consumption is socially or culturally determined as much as private and public transportation modes are determined by a country’s or region’s road and communication infrastructure. Over time environmental forces have a tendency to change. General improvements in communication technology and introduction of mobile telephones impact how consumers use telephones. Population migration from rural to urban areas stimulates new housing options and introduces new lifestyles which create new markets for housing. Changes in any environmental force generate opportunities for marketing managers to develop new products or services for these markets.

A need for assessment and monitoring

Enterprises need to develop appropriate research methodologies to provide them with information they need to make solid marketing decisions. Information needs are highly individualistic, depending on managers’ abilities to process information into intelligence, and then use the intelligence to make a rational objective decision. Any such methodology must be suitable for assessing environmental forces at one point in time and for continuous monitoring. Assessing of environmental forces as well as their monitoring is not necessarily something that can be accomplished by trained marketing research specialists. Marketing research specialists more often than not execute well-organized and structured projects where the sought-after findings are more or less known or their existence is apparent. The specialists responsible for assessing and monitoring environmental forces not only need to understand what information they seek, but they also must be able to anticipate potential changes even before they occur.

That is why some large enterprises use social scientists, technologists, and even natural scientists to help predict what changes might be coming and their impact on future markets. Specific research techniques suitable for gathering such information include Delphi techniques forecasting, modified scenario research, or forecasting methods of economic analysis among others. Most of these research techniques are capable of producing objective findings leading to marketing opportunities. However, some information is simply obtained by trained informers who cultivate close contacts with leading specialists in various sections of a given external environment from which specific forces originate.

Although assessing and monitoring environmental forces should be continuous, small and medium-sized enterprises typically seek only the amount of information they need to make a specific decision at a particular point in time. Once a decision is made, new additional or updated information tends to be no longer relevant or necessary even though the information generated by environmental forces continues to be dynamic and evolutionary – better information is produced continuously as the total body of knowledge in each country increases over time. New information may eliminate old constraints such as traditional production methods or use of labour; or it may create new constraints such as knowledge that some existing products may be detrimental to health. In most instances, however, new information typically offers more options for marketing managers and better choices for end-consumers.

More specifically, marketing managers need to be constantly cognizant of market changes resulting from changes in environmental forces such as preferences for evolving lifestyles, communication alternatives, or consumption patterns. Marketing managers must be able to examine these preferences and relate them to markets. For example, new communication technology combined with availability of the Internet may point to more convenient shopping behaviour for rural consumers. Alternatively, improved safety standards and better health care may lead to market introduction of new leisure products. And, conversely, legal changes in consumer protection may lead to new awareness among producers of perishable goods to improve their quality control processes.

The above are some of the reasons why marketing managers need to continuously assess and monitor environmental forces, but each enterprise is unique and its information needs related to marketing management are different. Environmental changes need to be related directly to marketing strategies and operations which are the responsibility of marketing managers. Consequently, every enterprise, regardless of its size, needs to develop a sound information retrieval system capable of effectively and efficiently assessing and monitoring those environmental forces that are essential to its existence and those that potentially may, positively or negatively, impact their future marketing efforts.

The need to assess and monitor environmental changes has a strong effect on all levels of an enterprise. For example, on the corporate level, a small enterprise, in a relatively rural region of a country, is attempting to use as much relevant technology as possible to generate its own electricity for operating its machinery used in processing wood needed in furniture manufacturing. As available technology used in generating electricity in small quantities changes, and new, more efficient ways of generating electricity are found, the enterprise may benefit from them. However, without constant monitoring of technological developments in generating electricity the enterprise would probably not know of new developments. Similar examples can be found in transportation and logistical services connecting urban markets with rural suppliers. Similarly, downscaling trends in food-processing technology to enable more efficient local production and processing may also be a surprising new development for small food growers and processors in rural agricultural regions.

In some countries closer cooperation between smaller enterprises and governmental agencies may lead to better understanding of relevant environmental forces and, at the same time, this cooperation may improve market opportunities for the smaller enterprises. An excellent example in some countries is the cooperation between smaller exporting enterprises and governmental agencies promoting exports of consumer products which often leads to new or additional export opportunities.

On strategic and operational levels, new product development and market introduction of new products is frequently subject to development, production, and distribution standards, including regulations controlling what ingredients may or may not be used in consumer products, the predominant safety requirements for given line products, or how perishable food products may be transported over long distances under adverse climatic conditions. These requirements, regulations, and laws are typically available from governmental agencies and need to be continuously monitored.

Similar guidelines apply to engineering and production standards which stipulate how production lines must be built to protect worker safety. And various industry standards promulgated by governmental agencies specify the quality of material and methods of construction used in designing and building production or manufacturing lines. Such information needs to be monitored and regularly updated by marketing managers with appropriate and functionally specific executive oversight responsible for these aspects of a given enterprise.

Each enterprise has the social responsibility to keep current and operate within the guidelines and constraints of its external environment. In order to maintain a strong market position and remain competitive, each enterprise must have a unique way of retrieving the necessary information and monitoring dynamic changes in the external environment. In addition, if an enterprise begins to export or otherwise operate in another external environment, such as a foreign country, it has the same responsibility to assess and monitor forces in that environment. Each country’s environment and its markets are unique, and need to be respected.

Behavioural forces

An increasing awareness of societal needs, and the emergence of notions such as social responsibly and sustainability, make it even more important for small and medium-sized enterprises to constantly assess and monitor changes and developments in environments external to them. For many enterprises consequential changes and developments become integrated in their mission and eventually into their strategic and operational procedures and marketing practices. Each enterprise must be aware of behavioural changes that are continuously occurring in the external environment because behavioural changes produce behavioural forces that may present it both opportunities and challenges.

There are three categories of behavioural forces in the external environment: (1) social, (2) economic, and (3) lifestyle. They are very much interdependent and impact individual enterprises positively or negatively on all executive and managerial levels. It is generally understood that the three categories of behavioural forces are equally important in the formulation of strategies and operations by individual enterprises. Depending on their inherent abilities to retrieve relevant information from these forces, individual enterprises may gain better market position and become more efficient competitors.

Social forces

Most executives and managers of enterprises perceive social forces as primary indicators of the predominant nature of behavioural forces combined, mainly because the social forces represent the prevailing political, ethical, and legal climates in many countries. That is, the social forces become the starting point in assessing and monitoring the behavioural forces.

The social setting in any external environment is determined by the interactions of political, ethical, and legal forces. Some executives and managers believe that political behaviour within an environment tends to set the tone for ethical behaviour and, in turn, ethical behaviour typically leads to legislative action that inevitably results in laws and regulatory guidelines.

Unstable political behaviour in an external environment also has a tendency to tighten or loosen laws and regulations for enterprises depending on what agenda the regulatory bodies set at the time....

Table of contents

• Cover
• Halftitle
• Title
• Copyright
• Dedication
• Contents
• List of figures
• List of boxes and tables
• Notes on contributors
• Introduction
• PART I An assessment of external environments for enterprises
• PART II Perspectives on executive and managerial strategies and operations
• PART III Executive and managerial strategic action on the enterprise level
• PART IV Marketing action
• PART V Marketing rewards and executive and managerial control
• Conclusion
• Bibliography
• Index