In 70s, the Hong Kong garment industry was dominated by small firms. However, a lot of them have been eliminated, leaving those with high competitiveness, have developed into sizeable companies, Crystal Group is one of them. It has been successfully transformed from a family business into an enterprise of over 35,000 employees. The success is mostly attributed to a reliable and effective management and marketing strategy. Actually, Crystal Group has different marketing orientations during its past 40 years.
In 70-80s, it specialized in product orientation as much as possible of a given product or service. Thus, this signified Crystal Group exploiting until the is reached.
In 80-90s, Crystal Group moved to sales orientation focuses primarily on the selling and promotion of its products. Consequently, this entailed simply selling an already existing product, and using promotion techniques to attain the highest sales possible. Emphasis was placed on the whole relationship between suppliers and customers. The aim was to provide the best possible customer service and build customer loyalty.
After Yr.2000, Crystal Group has changed to the marketing orientation of which is perhaps the most common orientation used in contemporary marketing. It involves a firm essentially basing its marketing plans around the marketing concept, and thus supplying products to suit the consumer tastes. E.g., Crystal Group’s Product Development team not only helps its customers stay on top of the latest styles and trends.
In this new stage of marketing, its focus of relationship marketing is on a long-term relationship that benefits both the company and the customer. The relationship is based on trust and commitment, and both companies tend to shift their operating activities to be able to work more efficiently together. One of the most prominent reasons for relationship marketing comes from Kotler’s idea that it costs about five times more to obtain a new customer than to maintain the relationship with an existing customer.
As a strategic partner, Crystal Group grows together with its customers and goes deep into their businesses to help them achieve their overall business goals.
II.II) Crystal Group’s existing marketing strategies
Marketing is the process used to determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. It generates the strategy that underlies sales techniques, business communication, and business developments. It is an integrated process through which companies build strong and create value for their customers and for themselves.
Crystal Group, under B2B, is dealing with other organizations in their marketing activities, rather than with the end consumer. Surely, the end consumer choice is one of the key factors to influence Crystal Group’s marketing strategy. Another one is eco-friendly of which the societal marketing concept deals with the needs, wants and demands of customers: how to satisfy them by producing superior that should satisfy the customers and promote the well-being of society. The producer should not produce products deemed hazardous to society.
City clusters are made up of groups of large, nearly contiguous cities with many adjoining satellite cities and towns. Over the past two decades, such clusters have played a leading role in the economic growth of China, owing to their collective economic capacity and interdependency. However, the economic boom has led to a general decline in environmental quality. China is expected to quadruple its GDP by 2020 (using 2000 as the base year for comparison) and, consequently, will face even more serious environmental challenges. Improving energy efficiency and moderating the consumption of natural resources are essential if China is to achieve a balance between economic development and environmental health. Therefore, China is aware of its environmental problems and firmly determined to seek solutions, with full recognition of present and future obstacles and priority in legislation. Recently, China Government develops and implements environmental protection laws and policy. Due to the above-mentioned government policy changes, Crystal Group focuses on social marketing. For example, Crystal Group develops products and processes that are greener and more eco-friendly. In addition, Crystal Group began ‘green journey’ in 2007 when it established the environmental policy, objectives and five-year targets. This strategy, aimed at building a healthier, cleaner and more sustainable business, has already delivered results, including a significantly reduced carbon footprint, cost savings and improved productivity. It has also boosted employee morale and strengthened our relationships with customers, local governments and partners, presenting added opportunities for business growth.
II.III) Crystal group’s holistic marketing
A that is by thinking about the as a whole, its place in the broader and , and in the lives of its . It to and on the company’s .
For Crystal Group’s holistic marketing, I want to use the marketing mix (4P’s) to elaborate its business as a whole:
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Price – In Crystal Group, it is pricing its product in virtual vertical set-up. It will join effort with Fabric Mill (Crystal Group’s suppliers) to quote the price with its customer.
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Product – In Crystal Group, its tangible product is quality garment and its intangible product is competitive pricing and on-time delivery. To retain its competitiveness in the market, is required and is one of the strategies to differentiate a product from its competitors.
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Promotion – In Crystal Group, its promotion is ‘GREEN’! It’s customers are famous brands in the world e.g. Gap, Levi’s, M&S, Uniqlo etc of which are concerning eco-friendly and green products for their end-customers.
- Place – In Crystal Group, it has efficiency of logistics and supply chain management available to make sure the product delivery on-time and in right quantities.
II.IV) Past barriers/ challenges
A product orientation is chiefly concerned with the quality of its own product. There is an assumption that its product was of a high standard, people would buy and consume the product. encapsulated this viewpoint, stating: "Supply creates its own demand". To put it another way, "if somebody makes a product, somebody else will want to buy it". This orientation rose to prominence in an environment which had a shortage of manufactured goods relative to demand, so goods sold easily.
During 80s, China opened her market to the World! Many Hong Kong manufacturers (including Crystal Group) moved into China of which provided many and cheap land, labor, energy and so on. Due to production bases rapid increasing in China, the business environment was changed from shortage of supply to excess. Therefore, Crystal Group had to change its marketing strategy from production orientation to relationship marketing to overcome these challenges.
Sales in relationship marketing should encompass the following: open communication, employee empowerment, customers and the planning process, and teamwork. First, communication is essential in figuring out what the customers need and determining how the firm can satisfy those needs. With open communication, both sides can express what they are trying to do and can work out a way to make it work together. Second, employee empowerment is important so that the employees are able to satisfy customer needs. Without empowerment, they may be limited in their solutions and cannot creatively satisfy needs. Third, customers must be involved in the planning process. Customer input is invaluable, as the customer is the one who will be using the product. If the customer is not satisfied from the beginning, there is no way to gain approval after the product is incorporated. Lastly, relationship marketing must emphasize teamwork. Several people who can help solve customer problems should work together and use their talents to best serve the customers.
II.V) Existing barriers/ challenges and suggestion
As a leader of a forward-looking business organization, Crystal Group have to spend more time developing a corporate social responsibility vision, entrusting much of the day-to-day management, improving products and making every employee proud to be a part of Crystal Group.
While relationship marketing is largely held as the most recent stage of marketing, there is speculation that we are now entering into a new era of marketing called the social/mobile marketing era where companies are connected to customers 24/7.
When Crystal Group enters a new era of marketing, there are barriers in its IT technology limitation. To overcome the above-mentioned barriers, there are the following suggestions:
- To serve the customers better by automating processes, creating efficiencies and optimizing performance.
- To enable efficient production planning to maximize factory capacity.
- To enhance material control and procurement, advance management system includes high quality production data capture to improve workflows and processes.
- To integrate its systems with customers’ one to create a smooth production cycle and order status transparency.
- IT investments are also aimed at moving us towards a paperless organization. This will increase workforce productivity while achieving our environmental goal.
PART B
III.I) Crystal Group’s marketing research and evaluation
Market research is any organized effort to gather information about or customers. It is a very important component of . The term is commonly interchanged with ; however, expert practitioners may wish to draw a distinction, in that marketing research is concerned specifically about marketing processes, while market research is concerned specifically with markets.
Market Research is a key factor to get advantage over competitors. Market research provides important information to identify and analyze the market need, market size and competition.
Market research pertains to research in a given market. As an example, a firm may conduct research in a target market, after selecting a suitable market segment. In contrast, marketing research relates to all research conducted within marketing. Thus, market research is a subset of marketing research.
Marketing research, as a sub-set aspect of marketing activities, can be divided into the following parts:
- Primary research (also known as field research), which involves the conduction and compilation of research for a specific purpose.
- Secondary research (also referred to as desk research), initially conducted for one purpose, but often used to support another purpose or end goal.
By these definitions, Crystal Group’s primary research is using top managements’ personal relationship with customers and vendors to collect information of which enhances the right decision making. In addition, there are annual conferences held by Crystal Group with its customers to confirm their needs and wants.
In the consumer-driven approach, consumer’s wants are the drivers of all strategic marketing decisions. No strategy is pursued until it passes the test of consumer research. Every aspect of a market offering, including the nature of the product itself, is driven by the needs of potential consumers. The starting point is always the consumer. The rationale for this approach is that there is no reason to spend R&D funds developing products that people will not buy. History attests to many products that were commercial failures in spite of being technological breakthroughs.
According to the following selling process, another primary research of Crystal Group is using sample to test the market needs of its B2B customers:
Stage 1 – Understand customer need. It has “product development department” to understand its customer’s need and design the sample to fulfill customer’s requirement.
Stage 2 – Sell the sample. It has regular appointment with its customer to sell the sample. In the sample meeting, its sale person has to negotiate the coming seasons’ trend and pricing strategy of which is transparent and negotiable with its customer.
Stage 3 – Order confirmation. After sample and price offering, the customer has to confirm the order or not.
However, primary research is often expensive to prepare, collect and interpret from data to information.
Nevertheless, while secondary research is relatively inexpensive, it often can become outdated and outmoded, given that it is used for a purpose other than the one for which it was intended. However, Crystal Group involves a lot of resources (including time and money) into secondary research. It collects the information from website, industry journals and sometimes purchases the professional research from open market. Using the above-mentioned information sources, it develops its own website: CRYSTAL Business Environment to monitor the following areas’ market changes:
- Retailer – its customer
- Manufacturer – its competitor
- Cotton price – its raw material
- Cotton news
- World cotton supply
To maintain this website, Crystal Group has to employ a searching team and involves management’s time and effort to comment the existing business environment in the website. Actually, it provides a lot of information to its sales team in the market trends and needs.
In the mean time, Crystal Group holds an executive forum to discuss the global business environment. For example, it covers global market review, retail market forecast, cotton supply, competitors performance benchmarking, Crystal Yr.2020 plan, etc.
In fact, it as an OEM company is good enough in marketing research to maintain its current market shares and certain growth in the future 5-years, e.g. turnover HK$7,800m to HK$13,500m.
III.II) Suggestion
The task of marketing research is to provide management with relevant, accurate, reliable, valid, and current information. Competitive marketing environment and the ever-increasing costs attributed to poor decision making require that marketing research provide sound information. Sound decisions are not based on gut feeling, intuition, or even pure judgment.
First, marketing research is systematic. Thus systematic planning is required at all the stages of the marketing research process. The procedures followed at each stage are methodologically sound, well documented, and, as much as possible, planned in advance. Marketing research uses the scientific method in that data are collected and analyzed to test prior notions or hypotheses.
Marketing research is objective. It attempts to provide accurate information that reflects a true state of affairs. It should be conducted impartially. While research is always influenced by the researcher's research philosophy, it should be free from the personal or political biases of the researcher or the .
If Crystal Group wants to become one of leaders in garment industry, it has to improve its industry convergence of which has to collect more information in vertical integration e.g. M&A with fabric mills. To achieve this purpose, it has to use exploratory research as a tool to make systematic and objective planning. The objective of exploratory research is to gather preliminary information that will help define problems and suggest hypotheses. After exploratory research is systematic gathering and interpretation of information about M&A using statistical and analytical methods and techniques of the applied social sciences, Crystal Group could gain insight or support its decision making in industry convergence.
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