Strategy
- The company intends to increase market share by heavily investing, in long-term markets of new countries.
Marketing Mix
Products
- The company produce the most advance defence system, geared for military purposes. For land – missile launchers, air- T-45 helicopter, sea – submarines.
Place
- BAE is geographically dispersed increasing their value chain. Creating a strong
image and distribution channel in every country they operate in.
Price
- Because of the nature of the business, pricing fluctuates. Taking into account economic, geo- political factors such as war between Iraq and US.
Promotion
- The business does not promote media advertisement. However BAE sponsors scholarships, Christmas box, entertaining troops and out reach programs
People
- The company continuously encourage their staff to undergo new forms of training.
- Responsibility for delivering a service that individuals are to be reminded that they are protecting human rights and not degrading humanity, therefore they should take their job seriously.
Physical Evidence
- Their products are designed to protect and defend for unexpected events, such as war.
Process
- In order to access the company’s product, a website is developed where customers must fill out a form as one of the many negotiation process.
Packaging
- Packaging the company’s product is a complex and highly sensitive procedure. Because of the features and capabilities of the product, round the clock surveillance guards are placed to ensure it does not fall into the wrong hands.
- Not all of the products are packaged because of the size. However other products are packaged using materials such as wood, aluminium and titanium steel crates.
Political
- The political environment is assumed to be relatively stable.
- Polices have been placed to ensure compliance of all laws governing political activity.
Economic
- Devaluation and weakness of the $US will greatly affect profits.
- Different currencies would hinder trade.
Social
- They try to maintain ethical and responsible image, they are concerned with the safety of citizen of each county whose freedom is threatened.
- Provides employment within communities.
Technological
- Known for there advance innovative technology, the company is seeking partnerships that will enhance their knowledge in the US.
Legal
- The company tries to conduct their business in an ethical way. Following all laws governed with in the respected country they operate in.
Ecological
- Global Warming is possibly the biggest environmental threat. BAE has agreed to limit the amount of carbon emission, noise and vibration.
- Design environmentally compliant platforms and equipment
SPICC Factors
Suppliers
- Saudi Arabia is their main suppliers for oil, while the US (Microsoft Intel) supplies innovative technology and man labour. They try to maintain a reliable and trustworthy relationship with the members of their value chain.
Publics
- The company continues to be suppressed by many pressure groups. Such as Green Peace, Anti terrorism and warfare groups and many more humanitarian activists.
Intermediaries
- Saudi Arabia Royal family has added valuable ties, handling trade negotiations of BAE products.
Competitors
- The increase of major competitors such as General Dynamics causes the business to loose market share and profit.
Customers
- There is a growing need for military defence capabilities in Saudi Arabia, South Africa, Iraq and America.
- The company realise that their customer needs better military aerospace safety technology at a negotiable price. Driving the company to continuously develop engineering capabilities.
Target Markets
- Defence and Safety capabilities for land, air, sea and space
- Military, tactical rescue mission
Market Demographics
- Governments of Countries such as coast guards, navy, army and business that require Military Defence (security guards)
- Targeted areas are Saudi Arabia, South Africa, America and Iran
Behaviour Factors
This would include the level of terrorism and global crime wave that threaten freedom. Also including the level of income, GDP, culture and foreign exchange rate.
Market Growth
Since the September 11th 2001, there was an increase for heavy military armaments. The war in the Middle East between America and Iraq has increased profits by 70%. Continuously demanding more innovative technological products to meet the need of tactical military, geospatial needs.
Two major competitors directly affect BAE Systems market share and profits.
General Dynamics and Lockheed Martin, the following is an analytical comparison of both companies using acronym s.w.o.t.
Strengths
- Both companies have developed more advanced IT technology
- General Dynamics control a large proportion of market share in the US
- New mergers and acquisitions of other companies.
Weakness
- Unable to meet consumer innovative requirements
- Higher prices
Opportunities
- Venturing into overseas market, gaining market share
- Obtain new strategies to improve their quality of service and products.
Critical success factors
- To gain a competitive edge the company needs to lower their prices
- Needs to develop products that are unique and innovative
- Develop new products and venture out into new market segmentation
- Place new tactics of luring major customers away from competitors
The following table is a swot analysis of BAE System
- OBJECTIVES AND ASSUMPTIONS
Short term objective -1yr
- To increase market share and profits by 15% with 1 year
- To leave a lasting impression on customers, by lowering prices 4% less than competitors
- To increase customer loyalty and decrease customer complaints
Long term objective - 3yrs
- To develop stronger partnership alliance, expanding operations increasing the value chain
- To develop new innovative military combat armaments and security projects
- To enhance the quality and service of existing products
- Heavily invest in R&D to improve technological advantage
Market Penetration and new product development strategy by Igor Ansoff would be used. These methods can give profitable results satisfying the objectives of the company. The company’s current situation is threatened by political in stability. The United States of America is currently selecting their next president. The out come of this election, would determine whether or not BAE’s biggest client would abort all military action overseas. As a result sales would decrease as well as market share and profits.
MARKETING TACTICS: Strategy 1- Market Penetration
Market objective short term – To increase market share and profits by 15% with in 1year
Target Market- Government’s Defence force of South Korea and Italy. With the objective of catering for, full scale military defence and Government forces Navy, Coast Guards and Land reinforcement armaments.
Justification
This strategy keeps with in the scope of BAE’s mission statement “offering innovative technology for a safer world”. Market penetration would seek to strengthen BAE’s present position and increase sales, due to high competitive rivalry and low profits. The company can benefit from economies of scale and low taxes from other countries. This method would be used to secure additional market shares as the company would block competitors. Gaining the competitive advantage over their rivals empowering them to control price, as well as decrease cost and making full use of company resources
Product strategy:
Presently both countries defence and military armaments are out dated.
BAE Systems intend to make the product better by making minor modification. This would satisfy consumer needs adding core value to the product, when in heavy artillery combat. Products that would be offered would cater for air, land, sea and space. Some examples are: T-145 machine guns, Fighting jets F-16, Hawk trainer jets.
Puma HCMK1 – Puma and Gazelle helicopter
- Use for transporting personnel and equipment around the battlefield
- Can carry 16 equipped solider or lift a load of 2 tonnes
- Deemed no1 brand for airworthiness
- Logistic support of technological advancement
-
Management rotable component repairs and depth maintenance.
Price strategy:
The company prices are higher than their competitors. By using a cost reduction method and decreasing prices by at least 4%. The company can secure increase volume in sales and a higher market share. The company has to take into consideration political and economic factors such as currency fluctuation and GDP of the country. This strategy also seeks to leave an impressionable impact on customers decreasing customers’ complaints.
Place strategy:
Through selective distribution the company would be assured that lobbying on behalf, of the company would be done ethically and responsibly. After the first six months of the first year, other well known partners will be added to the distribution channel. The company is hoping to attract strong desirable partners that would help increase and secure market at a globally dispersed level.
Promotion strategy:
The company would promote their product through trial basis period and military demonstration as well as air shows. This form of promotion seeks to attract a large clientele, to retain and motivate partners for a pull strategy. Other forms of advertising would be done through the Internet; clients would have to go through a negotiating process.
MARKETING STRATEGY 2: New Product Development
Market Objective Long term year 2 and 3
- Development of long term market partnering increasing sales by 20%
- Design of new innovative products
Target Market – Defence force of Governments with in the European Union, U.S., Saudi Arabia and any other country that seeks to maker their population safer.
Justification:
With the continuous need for emerging and innovative, high geared technology to meet consumers ever demanding need. BAE has to invest in new groundbreaking research and development methods, in order to satisfy consumer need while staying ahead of the competition. Inventing new products in existing markets would literally blow away the competition increasing profits.
This would only be accomplished if BAE maintains a unique designed product, complimented by a unique selling position strategy. Uniquely designed products and services that cannot be replicated would give the company a comparative advantage. This strategy encourages opportunity cost of the company as they stand to double profits or risk loosing everything.
Year 2 the company intend to create heavy partnering alliance with Saudi Arabia, South Africa, Europe, and Italy. This is aimed at further transforming the business defence sector, as well as the cost-effective and efficient delivery of industrial supply capabilities for long-term benefit. The company would seek sharing of new advance technology from Germany, Russia, and Switzerland while maintaining multi national trade relations with the U.S.
New Product and Service Designs
M16 Z1 artillery gun - £449.00 per rifle
The new M16 Z1 is a lightweight assault riffle; designed for soldiers in both long and short range combat. This form of artillery can be used on both land and air
Features
- Heat seeking bullets
- Fully automated
- Light weight – 5 lbs
- Titanium steel
- Infrared and fully equipped guidance system
- Hallow tip
Electronic Identification card project - $125,000,000
Using a combination of new advance technology and human DNA, this card would revolutionize public sector defence. Designed to meet the specification of Governments by monitoring their country ever growing population.
Special features
This card is designed to store an individual DNA - figure prints and iris scan.
Uses:
- Criminals would be easily traced
- Prevention of identity thefts
- To access personal record of individuals by the Government.
- Stop fraudulent activities.
Strategy for Year 3 is an extension of year 2
Market Objective:
- Launch of new product and services
- To create awareness of the new products and increase market share
- To increase market share and profits by 25%
Target Market: Military Soldiers and defence force of Governments at a global level.
Products
The new products would aid in tactical and execution mission such as kidnapping, terrorism, and fraud and safety precautionary measure. The innovative features would attract customers not only for tactical military defence but also public defence.
Price
New revolutionary technology was use to make the products, because other competitors does not posses this technology the company holds a competitive advantage in which they can control market prices.
Place and Promotion
The company would continue to use their on-line method and defence demonstrations. Promotion would be geared towards the 130 countries they operate in through selective distribution acquiring a dominant amount of market share.
People
The company would have to employ new marketing managers.
- Rapid change in global market climate
- Major clients decide to with draw from war
- Geo political forces forming treaties and multilateral trade
- Competitors creating more advance technology
- Increase need for local defence such as coast guard, Marine corps, Navy
- Increase in anti terrorism and humanitarian groups
- Restriction from Governmental Polices prohibiting testing
- International Institutions such as the World Bank holding peacetine talks
All marketing strategy objective added together will constitute an overall marketing objective of estimated
Estimated profits would be £245, 000,000
BUDGET:
This budget covers all short term and long-term goals. The new products would be launched over a three-year period with a budget of £19,980,000
Profit earned 2006 -2007 in United Kingdom £20.6 billion
Profit in the U.S 2006 -2007 £10 billion
Table 1.1 illustrates profits increase
The table illustrates the amount of profits that can be made with in a 3 year period in the U.K and in the U.S.
TIME SCALE OF ACTIVITIES
MONITORING AND CONTROL
- Managers would be place to better monitor and solve customer problems
- To efficiently monitor new development projects
- 24 hour service as well as on-line systems support would be provided.
BIBLIOGRAPHY
Armstrong, G and Kotler, P. (2006) Principles of Marketing, 11th Edition, London: Pearson Education Ltd, FT / Prentice Hall
Jobber, D and Lancaster, G. (2000) Selling and Sales Management, 5th Edition, London: Pearson Education Ltd
Kotler, P and Keller, K, L (2006) Marketing Management, 12th Edition, London: FT/ Prentice Hall
Lancaster, G and Massingham, L, (1998) Marketing Management, 2nd Edition, New York: McGraw Hill International Ltd
Wright, R, (1999) Marketing Origins, Concepts, Environment, 1st Edition, United Kingdom: Business Press, Thomson Learning
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