The industrial market can be highly specialised targeting niche markets in difficult circumstances. Hutt & Speh (2008) identify that the nature of industrial markets poses ‘unique challenges and opportunities’ for companies. The theory continues around the subject of ‘demand’, demonstrating key characteristics and considerations of a marketing strategy. These include derived demand, fluctuating demand, stimulating demand and demand elasticity. The need to identify markets, monitor changes and nurture growth is crucial to the success of the strategy.
Frameworks such as Porter’s Five Forces Analysis (Porter, 1979) assists in identifying the attractiveness of a B2B market in terms of potential entrants, substitutes and the powers of suppliers and buyers, therefore assessing the complexity of the market and potential threats.
The European Perspective
Europe is one of the worlds largest trading domains and this is an imperative factor of the UK’s growth in such markets. Following an article produced by Civitas (2012) the Single European Market describes the EU project as a method to ‘create free trade within the EU and to mould Europe into a single economy’. The European Markets account for a large percentage of the UK’s overall export of goods and services. The reduction of trade barriers between the E.U and UK has ultimately created more potential for trade opportunities and access to larger markets. Growth within the E.U is important to the UK economy, especially in the current climate and fiscal constraints. According to Hutt & Speh (2008) the ‘demand for industrial good and services is growing more rapidly in many foreign countries’. This provides positive connotations for the proposal of growth in to the European market for Fairhurst Stone.
The opportunities for growth will ultimately develop the competitiveness of the European markets globally.
Product Purchasing
The continued focus on ethical trading over recent years has seen the introduction of a branded logo, encouraged by Euroroc, a federation that believes ‘a common European standpoint is needed. The product needs a face. The consumer has to be sure that he gets real stone, competence in quality, and knowledge about the stone’ (Euroroc, 2012).
Due to the current European economic situation, Bonney (cited in the Journal of Commerce, 2012) suggests that ‘trade volumes will remain on the decline as import growth rates are in negative territory and exports have been flat for some time’.
In respect to the stone industry, Hutt & Speh (2008) observe that ‘raw materials are processed only to a level required for economic handling and transport and enter the buying organisations production process in their natural state’. According to Johnson, Whittington & Scholes (2011) ‘the relative importance of product innovation and process innovation changes over time’ indicating that businesses need to remain vigilant of markets and environmental factors affecting the objectives of the marketing strategies.
Competitor Analysis
The Confederation of British Industry (2010) assessed the effects of the macro & micro environments in relation to the Natural Stone industry and the challenges faced with regard to entry in to the European Markets; paying specific attention to the affects of competition from Developing Countries.
‘Developing Countries are challenging the margins, due to their competitive prices’ (CBI Report, 2010:8) However in response to this, the UK stone industry offers a good quality product and is ‘dropping prices, assuring high quality, durability & elegant appearance’ (CBI Report, 2010:8)
In contradiction to the CBI report (2010), Bonney (2012) also indicates that markets in developing countries will not pose as big a threat as originally anticipated.
External issues relating to trade in the EU Markets, specifically in Developing Countries include ‘health and safety, discrimination, and child labour’ (CBI 2010:10). In a study by the Employment Policy Primer (2008) it is stated that ‘an increase in exports and loss of protection, is forcing firms to attempt to reduce costs by worsening work conditions (for employees) in developing countries’.
The earlier works of Prahalad & Hamel (1990) state that ‘resources, capabilities and competences are critical in acquiring and sustaining competitive advantage’. This theory remains relevant but does not take in to consideration the recent emphasis on technological progression.
Marketing Strategy
Haliburton & Hunerberg (2004) reviewed the strategic marketing issues facing Europe concentrating primarily on the development of the internet and the ‘Glocal’ phenomena - global versus local marketing. Think globally, act locally.
Halliburton & Hunerberg (as cited in Kaynak and Jallat, 2004) state that ‘a major factor has been the development of the internet as a new business model as well as a communication medium’.
In this report, they elaborate on their earlier theories posing the question ‘is Pan European Marketing a question of Myth or Reality’ (1993) but readdress the ‘relevance or irrelevance’ of this strategy (2004). Halliburton et al (2008) propose that companies with the same internal resources ‘can act very differently depending on local market conditions’. This corroborates Halliburton’s earlier study on the Pan European / Glocal marketing theory.
Stuart-Kregor (ND) suggests that the Pan European strategy is ‘not necessarily looking at a single strategy for all; but a necessity and a reality - doing it well is the challenge’.
He continues with some ambiguity ‘it is not clear if it is beneficial to European marketing’.
According to William Kennard of European Voice (2012), there are currently ‘too many barriers to market entrants, innovation and growth. Matters could be made worse if member states erect new national barriers in response to emerging technologies and business models, such as nanotechnology and cloud computing’.
Earlier works by Root (1966, as cited in Stone & McCall, 2004) identified the expansion of trade in to Europe using a model outlining the strategy planning process. The three stages included ‘identifying market opportunities, developing the export marketing strategy and implementing the strategy’.
This basic model has since been developed to a further degree of complexity by various academics, ‘Porter’s Diamond’(1998) as one example (as cited in Johnson, Whittington & Scholes, 2011:270) & ‘The McKinsey 7S Framework’ (c1980) as a second (as cited in The Global Management Journal, 2011).
Methodology
The contents of the literature review has covered an extensive range of existing theory, including the views of respected theorists, academic journals and industry professionals. The areas covered include buyer behavior, more specifically industrial consumers (B2B) and marketing strategy.
The contents of the methodology identifies the types of research required to carry out the work based project and the methods used to collect data. The limitations of the research including ethical considerations and reliability of the data collected will also be addressed.
Due to the constraints of the project, with the main factor being time; it is difficult to explore every opportunity when carrying out the necessary research.
Therefore, in terms of sampling the variety most applicable to the research process for the work based project is non-probability sampling methods and in particular purposive sampling. This method will allow individuals to be chosen who are relevant to the areas related to the work based project. Selecting a variety of individuals within this field demonstrates a varied view point. The key informant technique (Tremblay, 1982 as cited in Jankowicz, 2005) allows those with specialist knowledge within the areas of European Business & Marketing Strategy to express their views and offer their expertise on the subject.
Equally, they may also recommend other professionals within the field, in the form of snowball sampling (Reeves & Harper, 1981 as cited in Jankowicz, 2005) in order to generate more accurate results. Therefore, the sample size is currently hard to define.
The non-probability methods are a flexible means of sampling especially in the initial stages of the project. A further method of sampling, possibly relevant to those contacts made via the networking portal, Linkedin, is accidental sampling. This method could prove unreliable and bias.
Case Study Approach
- According to Bennett (1986) cited from Jankowicz, the case study method process involves four stages. These include:
- Determining the present situation
- Gathering background information on the present situation.
- Gathering specific data
- Present recommendations for action.
The key to Bennett’s proposal is the importance of detail and accuracy when analysing macro / micro factors affecting the company and its operations. Jankowicz (2005) continues to describe the case study method as ‘comprehensive’ and suggests a sampling method that ‘generalises conclusions’ but assures that the case study method provides a ‘rich and varied’ analysis of events. Yin (2002) cited from Jankowicz (2005), emphasises the importance of clarity, whilst Hartley (1994) cited from Jankowicz (2005) remind that the case study should convey a theoretical element. A combination of primary and secondary research methods should relieve these concerns.
The method of triangulation may well be required to confirm initial conclusions of the project (Jankowicz, 2005). The works of O’Cinneide (1986) as cited in Jankowicz (2005) offer an insight to case studies related to the enterprise and growth of a variety of businesses and therefore the research carried out by this theorist may be of value when preparing the final report.
Data Collection
In an effort to acknowledge the theories of Jankowicz et al and in order to obtain a realistic insight to the strategies used by the UK stone industry, qualitative research will be carried out and analysed accordingly. Semi-structured interviews with professionals within this field will be conducted via Skype, video link (such as the Adobe Meeting Rooms) or in person wherever viable. The purpose of carrying out semi-structured techniques for this particular project allows the interviewee to express views in a definitive way. The opportunity may arise for additional questions to be asked where answers to questions are unclear and ambiguous. The interview’s will be recorded in order for a transcription to be created and form part of the appendices in the final report.
The proposed interviews will take place in a variety of contexts and interviewee’s will be selected subject to key relevance to the content of the work based project and all questions will relate to European Marketing and Business Strategy in an attempt to ascertain the viability of the proposal. The core research will be conducted when attending two trade shows. Firstly, the Stonetec show in Germany and the second in London in March 2013. A selection of interviews may provide different views of how industry professionals may respond to the product. A third show in Verona, Italy in October 2013 will exceed the time scales for this project, however, the research can be continued beyond this date.
The focus of the research carried out will be through qualitative methods in the first instance in order to generate a realistic response to the marketing strategy proposal. However, samples of data collected via quantitative methods such as questionnaires will be relatively small as the response rate is deemed low and not provide the depth of information required to complete the project.
- Secondary Research - Methods of Research
The wealth of the literature available is apparent in the literature review and the continual changes in research and ever changing economic conditions allows the project to move forward in the correct context and remain up to date.
The works of Solomon et al (2006) will provide the essential textbook reading for my research and will provide a substantial amount of theory required to create a structured marketing strategy. The use of data collection companies is also a viable option, should a generous marketing budget be allocated, giving accurate data without the excessive time element required to carry out the research independently. Reports are available to purchase such as ‘Global Stone Blocks – Market Opportunity and Environment, Analyses and Forecasts to 2016’ at a cost of circa £10’000.00 (PR Web, 2012) as one example. The use of media in the form of specialised magazines could be explored to advertise products and the responses generated analysed after a specific period of time. Other methods will include free reports and journals available online, comparative case studies, marketing magazines and newspaper articles in order to remain up to date with macro economical factors such as the state of the Eurozone fiscal situation, which could ultimately affect the marketing strategy.
Limitations To The Research
Subject to the specialised nature of the work based project a number of limitations are apparent. Ethical considerations should be addressed before any form of project or research is carried out. Due to the sensitivity of some aspects of business and the reliance on stakeholders of the organisation, confidentiality is paramount.
In any circumstance, the companies and individuals the research includes should be approved and consent gained prior to the commencement of the interviews .
Secondly, the reliability of the research should be taken in to consideration. It is possible that due to to the nature of the research and the fact that the interviewees are not necessarily stakeholders of the company, that these individuals may not appreciate the importance of the study and therefore vague and ambiguous answers to questions may occur. Finally, more obvious limitations such as word count, time and financial implications may prevent the project fulfilling its true potential. The case study method is critiqued by Flyvbjerg (2004) based on the theory of ‘misunderstanding’. The five areas of misunderstanding include:
- General theoretical knowledge is more valuable than concrete, practical knowledge.
- Generalisation cannot take place based on one individual case.
- A case study is more useful at the initial stages of the process.
- A case study contains bias.
- It is difficult to develop theories based on a case study.
All these potential ‘misunderstandings’ should be taken in to consideration when carrying out the research. Further, the lack of comparative case studies and theory available relating to industrial marketing strategy will limit the research to some degree and research will be reliant on the qualitative research methods.
Expected Findings
Due to time constraints for the draft proposal, an outline of the preliminary findings to be developed in the final proposal are to include:
- The difficulties of gaining entry in to the European Market.
- The impact of competition, especially competitors in developing countries.
- The influences of the economy on trade in Europe.
- The feasibility of creating an EU Marketing Strategy & the receptiveness of the product in Europe.
The list is not exhaustive and consideration of changing factors affecting the findings is likely to change over the course of the work based project.
Proposed Research Plan
As an appendix (To follow as part of the final proposal)
A detailed outline of events between October 2012 & May 2013 relating to research and anticipated action plan and timetable of the work based project discussing related costs associated with proposed research.
Conclusions
The complexity of the European Market is demonstrated in the comprehensive literature review conducted as part of the proposal. A combination of external factors including the state of the economy and the environment influence the ultimate success or failure of a marketing strategy in both local and European markets.
Through close observation of these factors as demonstrated by Hutt & Speh (2008) the influencing factors can be monitored and the strategy modified to ensure growth and success within the market. By conducting a thorough catalogue of primary and secondary research, a wealth of realistic and beneficial information is anticipated. The factors affecting the collection of data are not related to the wealth of theory available in marketing strategy and Business to Business markets in Europe, but the lack of information, including actual case study examples available for specialised industry and specifically the stone industry is noted.
Like all proposals, the affects of a modern global economy are constantly changing, hindering the transition of proposal to project. Therefore it should be considered that elements of the project are likely to change and all proposals act as a foundation for future exploration. The benefits of the research plan and timetable will assist with the constraints of time and eliminate some of the challenges associated to this type of project.
It should be known that the expected findings of the proposal are not in any way guaranteed and the data collected relies on the cooperation of those individuals involved, with ethical considerations in relation to these individuals adhered to.
It is anticipated that the future outcome of the proposal will be favorable, however, the limitations provide some obstacles, including those described by Flyvbjerg’s (2004). The specialised nature of the industry has demonstrated a lack of historical data or theory and the research most beneficial to the success of the project is to be conducted in October 2013, following the submission of the dissertation.
In preparation for the subsequent proposal, due on Friday 14th December 2012, it is anticipated that the following tasks are completed:
- The development of the expected findings of the project and further analysis of the case studies relating to the industrial markets carried out by O’Cinneide (1986).
- The production of a timetable and research plan, outlining costs and details of proposed interviewee’s.
- A one to one meeting with MJL in order to discuss the future development of the proposal and best way forward.
- Finalise conclusions and prepare an action plan for future months.
It is apparent that in the ever changing and competitive markets the need for growth by businesses is becoming a common factor of trading. However, in the case of Fairhurst Stone Merchants; the highly specialised nature of the company, the knowledge of the industry and the ambition & creativity to grow has already been demonstrated through the continuing success in UK markets, making this proposal a viable prospect.
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by
cbell360 (student)
