Marketing Mix Decisions Critical Discussion

Published Date: 02 Nov 2017

Intake: 4473

Student number: 63756

Qualification: MBA

Module name and code: Strategic Marketing Management

Total number of pages: 19

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INDEX

Executive Summary page 2

Assignment Question page 2

Introduction page 2

Goal Setting page 4

Situational Analysis page 6

Creating a Marketing Strategy page 11

Marketing Mix Decisions page 13

Implementation and Control page 17

Conclusion and Findings page 19

References page 19

EXECUTIVE SUMMARY:

MacDonald (1995) suggests several stages that need to be completed in order to arrive at a strategic marketing plan. (Riley, Marketing Planning Process - Introduction) During this assignment I will compile such a marketing plan for KeyStone Strategic People Solutions and highlight the relevant steps. KeyStone Strategic People Solutions has expressed the need to expand their services into Africa and has tasked me to design a marketing plan. I have identified Angola as a country in which we can introduce our services. During this assignment I will highlight the mission and corporate objectives of KeyStone Strategic People Solutions and compile a situational analysis of Angola. I will also highlight the potential gaps/opportunities that I have discovered and compile a formal marketing strategy highlighting the market segmentation, targets, and potential value propositions. Lastly this assignment / marketing plan will suggest an implementation plans for KeyStone going forward. A formal marketing plan does not have to be daunting in fact the keys seem to be simplicity and consistency. According to the Journal of Financial Planning you need to know who’s your market, what’s your goal and then simplify your plans in order to avoid juggling a dozen marketing strategies at once. (Schulaka, March 2011)

ASSIGNMENT QUESTION:

Your organisation is currently looking to expand its products / services into the international market. They approach you to advise them on compiling a marketing plan for this endeavour. Write a report and ensure that your report includes discussions on the following:

A situation analysis: critical discussion on the various analytical frameworks used for analysis (5 C analysis / PEST analysis / SWOT analysis) and explain why you selected the specific situation analysis tool;

Marketing strategy: critical discussion on segmentation, targeting, positioning, and value proposition within the chosen country’s market and explain why your marketing strategy was developed based on the situation analysis;

Marketing mix decisions: critical discussion on product development, pricing, distribution, and promotion within the chosen country’s market and substantiate why you developed your respective marketing mix decisions;

Implementation and control.

INTRODUCTION:

Businesses that succeed do so by creating and keeping customers. (Riley, Marketing planning - The link with strategy) The starting point of this success is strategic management. Strategic management can be viewed as a set of decisions and actions that result in the formulation, implementation and control of plans that are designed to achieve an organisation’s vision, mission and strategic objectives within the specific environment in which it operates. (Pearce & Robinson, 2007) The growth in international trade and the opening of economies (especially in Africa, Asia and South America) have given organisations global access. This growth have resulted in increasing competition as well as increased opportunities. (Neves, 2007 ) The spread of a global culture has been facilitated through the proliferation of transnational corporations, the rise of global capitalism and the widespread aspiration for material possessions. (Agarwal, Malhotra, & Bolton, 2010). A strategic plan thus sets the direction of the business by aligning the products and services with the organisational goals. (Regenesys, 2013, p. 18) Strategic marketing on the other hand plays a key role in strategic planning, because it is the job of marketing management to understand and manage the links between the business and the "environment". (Riley, Marketing planning - The link with strategy)

Drucker argued that the aim of marketing is to know and understand your customer so well that the product or service sells itself. (Relivingmbadays) Marketing can be defined as a process that defines customer needs and wants and finding ways to satisfy these. This generates customer loyalty, which generates incomes, which translates to profit. (Regenesys, 2013, p. 12)

Having considered the different theories of what Marketing Management is, I have decided to define it as follows: Marketing management is an all-embracing function focused at achieving corporate goals through identifying customers, meeting and exceeding their needs beter than the competition do and by ensuring the right product to the right place at the right time. This ultimately leads customer satisfaction and business profitability.

The diagram below defines the process that I will follow during this assignment. It is adapted from Macdonald 1995. (Riley, Marketing Planning Process - Introduction) KeyStone is a small and undiversified business that understands their market offering and positioning. Therefore the marketing plan will be less complicated and very focused. My marketing plan will comprise of the dimensions as shown below:

Marketing Planning Process

(Riley, Marketing Planning Process - Introduction)

1. GOAL SETTING

KeyStone Strategic People Solutions (Pty) Ltd is a professional O.D. (Organisational Design) business network specialising in the effecting of efficient and effective organisational relations.

Having been well established within the mining and manufacturing sectors of South Africa the company have decided to expand operations into Africa. M.D. Johan du Toits explains: "Life is about relationships. The workplace is no different from social life and people want to connect, want to be ‘belong’. The successful business organisations have reintroduced ‘humanity’ to their operations. It involves leadership, engagement, communication and people development. The core reason of our existence as KeyStone Strategic People Solutions (our mission statement) is therefore to create meaning and to add value."

‘Modern’ management practices, much of which dates back to the 19th century, has reached the limits of improvement. Definitions of work along the lines of hierarchy and control are being severely challenged. Most companies strive to maximise shareholder wealth and in this new and emerging definition of work and motivation, it lacks the power to fully mobilise human energies. Apart from not being specific or compelling enough to spur renewal, it is also an insufficient defence when people question the legitimacy of corporate power.

Organisations of the future are really their people and the business strategic definition with regard to its ‘people’ component deserves much more thought and attention. This involves aspects such as business philosophy, governing values and a clear understanding and expectation with regard to leadership, engagement, people- and team development.

KeyStone Strategic People Solutions represent a total and fundamental change in business culture – from status and coercive dynamics to care, support and acknowledgement. From bureaucratic to engaging, from management of people to inspiring leadership.

Relationships on all levels must be evaluated and redefined. This is done through unique programs and interventions such as:

Improving Workplace Relations – leadership development, engagement design & execution, communication (free flow of information).

Resolving Industrial Relations Conflict - union relationships and interaction; industrial procedures & agreements; leadership competence & confidence.

Developing Customer Relations - customer intelligence, emotional engagement, customer value propositioning, service agent profiling/support.

Strategic objectives of KeyStone can be summarized as follows:

KeyStone Strategic

Objectives

Strategic Measurements

Lag Indicators

Lead Indicators

Financial

F1 - Increase Return On Investment

F2 - Broaden Revenue Mix

F3 - Improve Operational Efficiency

Return on Investment

Revenue Growth

Customer Profitability

Revenue Mix

New Revenue Sources

Customer

C1 - Increase Customer Intimacy With Our Products & People

C2 - Increase Delivery Performance For Customer

Share of Segment

Customer Retention

Depth of Relation with customer

Satisfaction Surveys

Internal

I1 -Understanding Customers Needs

I2 -Create Innovative New Products

I3 - Maximise Quality of Consultation

I4 - Develop Cost Effective Marketing Programs

I5 - Exceptional Service

New Product Revenue

Develop Customer Self Service Projects

Automate Processes / Streamline Manual Process

Customer Complaints

Product Development Cycle

Hours with Customers

Product research

Learning

L1 - Rewards & Recognition

L2 - Appointing Right People

Employee / Job Satisfaction

Revenue per Employee

Strategic Job Coverage Ratio

Strategic Info Availability

KeyStone Values (our reference point for conduct and decision making):

Professional (proactive, relevant)

Localness (local solutions for local problems)

Passionate (high energy, commitment)

Innovation (imaginative, original)

Inquisitive (relentless curiosity)

Fun (do not take yourself and life so seriously)

KeyStone consists of a management team and a network of consultants with diverse skills in terms of HR transactional and transformational dissiplines, project management, IR (industrial relations) and strategy development and execution.

There are key reasons why KeyStone has decided to venture into the Angolan market. For one, Angola have seen a GDP growth rate of over 11.6% over the past decade (since the end of the war in 2002), and this ranks Angola as one of the fastest growing economies in the world. (Jover, Pinto, & Marchand, 2012) Much of the growth seen in Angola is due to the booming oil and gas sectors. It is clear that the rapid economic growth of Angola has not gone unnoticed, considering the amount of foreign investment into the country. KeyStone has shown great successes with improvement programs within the mineral resources field (in South Africa) and believes that the same value can be added in the Angolan market. This relates to the oil, gas and mineral resource companies in Angola. Further to this, the Angolan government is actively encouraging foreign investment into the country’s mining industry, with the aim if exploiting and diversifying the country’s extensive mineral resources. (Embassy of the Republic of Angola, 2012)

This marketing report will highlight if there is opportunities for KeyStone in Angola and the feasibility of such an expansion project.

2. ANALYSING THE CURRENT SITUATION (Situational Analysis)

The aim of conducting a situational analysis is to establish gaps and trends in the proposed market. I will be conducting a PEST and SWOT analysis in order to establish gaps and trends.

2.1 PEST

The PEST analysis is an analysis of the external macro-environment. (NETMBA Knowledge Business Center) This acronym can be explained as follows: Political, Economic, Social and Technological. These external makro-environmental factors are out of KeyStone’s control, but will have a profound impact on the business, often in the form of threats. The reverse can also be true that a proper PEST analysis will highlight opportunities for the business. Herewith the PEST analysis on Angola:

Political Analysis:

Angolan people gained their independence from the Portuguese in 1975. Soon thereafter the country entered into a period of violent civil wars. These wars lasted 27 years and millions died due to the conflict between UNITA Jonas Savimbi and the MPLA government of President Dos Santos. This conflict ended in 2002 with the death of Jonas Savimbi. Today the Republic of Angola is a unitary republic (single state with central government) with a multi-party presidential regime. The constitution in Angola was adopted on the 5th February 2010. The country has three independent branches: executive, legislative and judicial. (Jover, Pinto, & Marchand, 2012, p. 5) The country’s first legislative elections took place in 2008 and President Dos Santos was re-elected as leader of the MPLA and the country. Angola is considered to have a solid presidential system, with the president being both head of state and commander in chief of the country’s armed forces. Angola is divided into 18 provincial governments with 163 municipalities. The legal age for voting in Angola is 18 and the national assembly is made up of 220 seats. Currently MPLA occupy 191 of the seats, with UNITA havening 16 seats and three smaller parties 13 seats collectively. The country has been politically stable for the last 10 years.

The legal system in Angola is based on the Portuguese civil law but the system. The judicial system is composed of the Constitutional court, Supreme Court, Court of Auditions and Supreme Military Court. Judges for all courts are appointed by the President. In terms of international relations Angola has moved away from the alignment with the Soviet Union and Cuba (1975-1989); towards relationships with Western countries. The country also participated in the 2009 G8 summit. Angola’s main international relations are with China, Portugal, United States of America, South Africa, India, Brazil, United Kingdom and France. (Jover, Pinto, & Marchand, 2012, pp. 12-14) China currently owns 9 out of the 34 oil blocks in Angola, however there is little information as to the terms under which China obtained these oil licenses. (Global Witness, 2012)

Of note is the trade agreements signed between South Africa and Angola. South Africa is definitely a favored trade partner. The most prominent agreements relate to oil and mining. Certain trade agreements allow South Africa’s state oil company PetroSA and Angola’s Sanangol to work together in oil projects, exploration, refining and distribution. These agreements of of critical value for KeyStone as the target market in Angola will be oil and mineral sectors and such trade agreements can make initial negotiations easier.

Business hours in Angola is from 08h30 am to 12h30 am and 14h00 pm to 18h00 pm. Saturdays 08h30am to 12h30 am. The country has 11 public holidays including Christmas and Easter. The monetary unit in Angola is the Kwanza (AOA) and current exchange rates are as follows: R1 = 10.91 AOA (as at 27/02/2013).

Angola is also a member of SADC (Southern African Development Community). One of the bigger government challenges for Angola will be to create and maintain a legal and institutional infrastructure that will encourage growth in the private sector. (Jover, Pinto, & Marchand, 2012)

Economical Analysis:

According to The World Bank Angola is rated 172 out of 185 economies with regards to "Doing Business". (The World Bank) This is a far cry from going into an easy business opportunity. Yet Angola has a thriving economy and one of the fasted growing economies in the world.

(Jover, Pinto, & Marchand, 2012, p. 8)

Growth in Angola has largely been driven by crude oil production and exports, but this has also paved the way for fiscal expansion and an outward shift in domestic demand. Together, these trends have stimulated other sectors of the economy, including financial services, construction, manufacturing and agriculture. (Jover, Pinto, & Marchand, 2012, p. 8)

Angola managed to decrease inflation from over 100% in 2002 to just 13% in 2006, largely due to the inflow of oil revenues that assisted stimulated development in other sectors. While Angola is a very difficult country to do business in, this should be weighed against the wonderful opportunities presented by such a rapid growing economy.

Of note is the tax system in Angola. Industrial tax (for individuals and entities) is 35%. Personal tax is to a maximum of 17%. Training tax will also be relevant to KeyStone. This is a mandatory contribution for the training of Angolan employees within oil sector companies. Companies (like KeyStone) providing services to an oil operator—under an agreement longer than one year and where the referred services are entirely rendered in the Angolanterritory—are subject to training tax at the rate of 0.5%. This tax should be considered as a final tax. (Jover, Pinto, & Marchand, 2012)

Of further note are the underdeveloped mineral resources in Angola. Vast opportunities exist to extract resources such as copper, gold, iron ore, lead, silver, zinc and uranium. The diamond industry has dominated the mining industry of Angola. Angola is rated as the 3rd largest diamond producer in the world and accounts to 9% of global production.

Angola has a thriving telecommunications sector with in excess of 13 million subscribers. This makes them one of the largest Sub-Saharan telecoms markets. The banking industry in Angola is growing at a steady pace with 80% of all banking assets belonging to 5 bank groups. A recent KPMG report indicated that the bigger banks have been loosing market share to smaller players in this market. This is a sign of healthy competition.

The construction sector of the Angolan economy makes an important contribution at an estimated 8.9% share of GDP in 2012. Sadly the same cannot be said for the agriculture and fisheries sector of Angola. Ten years into a free and fair economy and despite all of the oil and diamond wealth, Angola cannot produce enough food for its people. The country has vast potential with 58 million hectares of potential farming lands. Prior to 1975 Angola was self sufficient in most major food crops. The good climate and good water resources makes farming a feasible opportunity for Angola.

Social Analysis:

Angola’s population is estimated at 19.6 million (2011). Luanda is the capital of Angola with a population of 5,8 million people. The Angolan population are young (due to the wars) with 48% of the population under 15 years old. Life expectancy is estimated at 51 years. Portuguese is the official language but Angola has 20 official languages. The business languages are Portuguese and English.

The 3 main ethno groups are: Ovimbundu (37%), Kimbundu (25%) and Bakongo (13%). Over 50% of the population is Christian with 47% indigenous beliefs. Adult literacy in Angola is high at 70%.

The living standards in Angola are very low despite the healthy GDP. According to the HDI, 54.3% of Angolans live below the poverty line.

Technological Analysis:

The most recent technological development in Angola related to the oil and telecommunications industry. This is no surprise if one considers the size of oil and gas in the economy. The oil industry is fast growing and Angola is the 2nd biggest oil producer in Sub-Saharan Africa after Nigeria. The growth in the telecommunications industry is largely due to the poor maintenance of the of the fixed line network. 13 of the 19 million people in Angola make use of a cellular phone. This advancement in telecommunications will lead to continued business opportunities across the country. The biggest technological challenge in Angola remains energy. Capacity is far behind demand with regards to electricity. As much as two thirds of all business relies on generators in order to conduct business. Only 30% of the population has proper access to electricity. (Jover, Pinto, & Marchand, 2012)

Current government policy objectives include:

Creating political stability

Maintaining and developing a macro economy

Improving productive and social infrastructures

Reviving production of goods and services

Improve heath and education

2.2 SWOT Analysis of Angola

Based on the PEST analysis I conclude the following SWOT for Angola:

Strengths:

Fantastic GDP growth over a 10 year period.

Good Makro economic stability.

Inflation is almost at single digit figures.

Enough natural resources (water, oil, gas, minerals)

Petroleum / oil wealth.

Weaknesses:

No balance in economy – relying solely on oil sector.

There is a shortage of skill in the labor force.

Difficult and expensive business environment.

No stock market in the country.

Corruption and red tape.

Poor distribution of wealth in the country.

Poor infrastructure and energy supply.

Opportunities:

SME’s – Government should support development thereof.

Rising middle class with more income to dispose of.

Potential for booming industrial and mining growth.

Improvement in infrastructure to assist agriculture,

Cell phone banking. (due to high number of cellular phone users)

Up skilling and training in the oil and mining sector.

Threats:

Oil price fluctuations.

Relationship wit China going sour.

Growing inequality can create social tension.

Mismanagement of oil revenues.

Gaps identified in terms of the KeyStone model relates to skills shortages and low productivity within the oil and mineral sections of the economy. Given the priority placed on oil and diamonds I foresee opportunities in terms of improving workplace relations, leadership development, engagement design & execution, and resolving Industrial Relations conflict.

2.3 Internal KeyStone Analysis

From an internal perspective a SWOT analysis bases on the Angola marketing plan would be as follows:

Strengths:

Strong skilled team of individuals those are willing to travel into Africa.

Understanding local Southern African culture in terms of relationships as well as African culture.

Unique product offering.

Lean organisation with low overhead costs.

Virtual network. (No central office)

Strong technological acumen.

Stable organisation with roots well established in SA.

Diverse skills of core management team.

Strong research division with partners at two universities.

Weaknesses:

Many consultants but few marketers.

Interventions can take anything from 3-5 years. Some clients are willing to partner for such a long period of time.

Only electronic communication (email and skype) due to no physical offices.

Limited company cash flow.

Small networking footprint.

Opportunities:

Increasing market share in Africa.

Angola oil and mining companies are an untapped market.

Mergers, joint ventures in Angola.

Low productivity outputs in oil and mining sector creates a need for our product.

Threats:

Market demand – economy, political unrest and legislative challenges in Angola.

Price wars and competition.

Taxation in Angola.

3. CREATING A MARKETING STRATEGY

The KeyStone offering is a market driven strategy (outside-in) in that the customers/market/external environment will dictate the specific need. Our core methodology remains to improve workplace relationships but the client’s needs will determine the length and involvement of the intervention. The customer is always right, and as a successful company we need to be able to change strategies based on demand. The opportunity for KeyStone in Angola is to improve workplace relationships through leadership and engagement and IR interventions. The aim is to improve productivity by improving relationships and up skilling individuals. The market research thus far indicates an economy that is 80% reliant on an industry that we understand and have worked in. Now that the opportunity has been identified a strategic plan needs to be developed. This is done by:

3.1 Market segmentation

Market segmentation can be seen as the identification of portions of the market that are different from one another. (NETMBA Knowledge Business Center) By segmenting the market KeyStone will be in a beter position to satisfy the needs of potential customers. Marketing segmentation can be defined as dividing prospective buyers into groups (segments) that have common needs and will respond similarly to a marketing action. (Regenesys, 2013, p. 35) According to Regenesys three criteria are used to identify market segments:

1. Homogeneity (common needs within the segment)

2. Distinction (unique from other groups)

3. Reaction (similar response to market)

For the purposes of this assignment the focus will shift from segmenting consumer markets to industrial markets. Industrial markets are less in numbers but purchase larger quantities. This segmentation process is more suited to the KeyStone model that focuses on cultural changes in organisations. These interventions can end up being a 3-4 year projects. This means one big corporate client can keep KeyStone busy for a long time. Therefore the marketing focus will be to find one or two "big" clients instead of many clients with smaller interventions.

Industrial segmentation can be classified as follows:

Location

Company type

Behavioural Characteristics

(NETMBA Knowledge Business Center)

Location

When dealing with industrial markets location could be vitally important in terms of shipping costs. In some industries firms tend to cluster together geographically and this could mean that they have similar needs. In terms of the Keystone model this is very relevant. The industrial markets aimed for will be oil companies or diamond mines. In both cases location will be relevant. Oil and diamond fields are grouped together and segmenting this market accordingly will make sense.

Company type

Customers can be classified according to the following types:

Company size

Industry

Decision making unit

Purchase kriteria

During this segmentation process KeyStone will look to larger size companies in very specific industries. (Large oil, diamond and mining companies)

Names of big mining companies in Angola are:

Franco–Nevada Corporation

Gem Diamonds Limited

Gilla INC.

Trans Hex Mining

Names of big oil companies in Angelo are:

Grupo Simples Oil Lda

PGS Angola Ltd

Sonangol Shipping

Svenska Petroleum Exploration AB

Vitol (Angola)

BP Angola

BP Petroleum Development Ltd

Empressa Servicos Sondagems Angola

Esso Exploration Angola

Ministry of Petroleum

Norsk Hydro (Angola)

PAI Limitada

Petroplus Africa

Sociedade Nacional de Combustiveis de Angola

SONANGALP

Sonangol Pesquisa e Producao SARL

A vary similar strategy will be followed at each of these companies with regards to the decision making unit and purchase criteria. Normal entry point is through the HR director / Senior O.D. manager. Purchase criteria will be based on customer needs but within the O.D. interventions framework.

Behavioural Characteristics

In some industrial markets patterns of purchase can be the basis of segmentation. This could include usage rate, buying status and purchase procedure. (NETMBA Knowledge Business Center)

3.2 Targeting

Targeting a market means deciding at whom to aim the products. (Regenesys, 2013, p. 36) Target options include:

Undifferentiated marketing – this option targets all markets.

Differentiated marketing – this option is when several segments of a market are targeted.

Concentrated marketing – this is when an organisation targets one segment of the market.

In this case of KeyStone it would be far more effective to focus on concentrated marketing.

3.3 Positioning

Should customers compare the positioning of KeyStone they will find that due to the unique products, the positioning in the market is also unique. With some research I found a company similar to our offering (to some degree), OIM International (http://www.oimgroup.com/ ). One has to consider the differential advantage. The competitive advantage will not be price driven in this unique and niche market, rather product / solution driven.

3.4 Value proposition

A value statement should convince a potential customer that one particular product or service will add more value than similar offerings. (Investopedia) In other words, a value proposition explains to customers how the product will solve their problems. In terms of KeyStone the value proposition should encompass key words relating to customization of the interventions, increased productivity, improved workplace relationships and industrial conflict resolution.

4. MARKETING MIX

Marketing decisions mostly fall into four controllable areas (see diagram below)

The Marketing Mix

(NETBMA Business Knowledge Center)

The four P’s are parameters that managers are able to control. The goal is to make decisions that center the 4 P’s on customers in the target market. (NETBMA Business Knowledge Center) By doing this KeyStone will create perceived value from potential customers and also generate more leads and positive responses.

Let’s consider each of the dimensions in terms of the strategy to expand KeyStone consulting services into Angola:

4.1 Product

Product often refers to a tangible or physical product or as in the case of KeyStone, a service. In terms of product decisions for the Angola market, the product offering will remain the same. The proposed KeyStone intervention (product) is well defined in distinct steps as seen below:

This product rolls out from within an existing people strategy for the business. If a people strategy has not been developed, then that is the starting point. Given the research done and the fact that the KeyStone offering remains an intangible service, the product as is should remain the same when marketed in Angola. The only variation will be the Industrial Relations Workshops (depending on the need in Angola these might not be necessary).

The levels of the product can be explained as follows:

Core Benefit

Up skilling of workforce through leadership and engagement workshops, main benefit will be increased productivity.

Generic Benefit

Workshops, focus groups and project meetings to address the issues that were raised in the workshops.

Expected Benefit

Increased productivity, higher levels of employee engagement, employees going the extra mile (discretionary effort).

Augmented Benefit

Staff retention, increased levels of leadership maturity.

Potential Product

Products start of as a survey, develops into workshops ‘product’ and finally into workplace plans ‘project product’ to resolve issues (project plan).

4.2 Price

Correct pricing can have an incredible impact on the success of product or service. In the mind of the customer there is a direct link between the price and the quality / design of the product. The market price of a good is determined by both the supply and demand for it. (NETMBA Knowledge Business Center) In other words, the price charged for goods will be determined by a point when the quality supplied is equal to the quality that is demanded. (see graphs below)

http://www.netmba.com/images/econ/micro/supply-demand/supplydemand.gif

Factors that will influence price in the KeyStone model are:

Price of goods supplied by competitors.

Number of competitors in this market (O.D. consulting).

The cost of resources (fees paid to consultants in this case) to produce the service.

Technology could influence price. Some workshops could be replaced by online e-learning modules.

KeyStone pricing objectives in Angola should consider the following:

How to create maximum profits and revenues.

Delivering maximum quality of consultation work.

Pricing in terms of an O.D. intervention seems more complex and easier at the same time. Albeit that the Angola currency is far weaker than the Rand, most big organisations in Angola pay in Dollars. This exchange rate benefit in itself creates a beter opportunity for KeyStone revenues in Angola than in South Africa. As with most consulting services, there is no tangible product but rather a service. Price based on the KeyStone model has to include amongst other:

The cost of transport of consultants to and from Angola.

Accommodation costs.

Meals and transportation to and from the mines, plants or rigs.

Workshop material.

Liability insurance.

Fees payable to the consultant on site.

Fees payable to the project manager on site/country.

Profits for the shareholders.

Marketing costs.

General administration costs.

This consultation model does not allow for price discounts, but rather a carefully calculated project plan with costs calculated upfront over the total time period of the project. Establishing a budget when analysing the customers needs is thus critical. The available budget will determine the size and length of the intervention. When considering pricing approaches (cost based, customer based or competitor based) this product pricing approach should be customer based. The price for interventions will be based on the budget and needs of the customer. Moving into a new market it seems logical for KeyStone to focus on penetration pricing instead of price skimming. Penetration pricing is normally used when a new product is introduced into a market, and to encourage customers to buy the product the price will normally be lower. (Regenesys, 2013, p. 46) Price skimming is normally used for technological products that are unique and a premium is then added onto the price. This KeyStone intervention is a new product in the Angola market; penetration pricing will encourage customers to buy into these consulting services.

4.3 Place (Distribution)

How will this product be moved to the end user? Being an intangible product makes distribution easier. No warehousing or inventory management is needed. Neither do we need transportation or logistics. The product (intangible) will be distributed directly from the consultant on site to the end user without any additional costs. Channel is thus Producer to Consumer.

The questions beg if KeyStone should open up a local office in Angola? The answer is no. KeyStone operates as a virtual network in South Africa and operations should happen in a similar basis in Angola. The good cellular coverage in Angola is advantageous to the KeyStone model, as all communication can be done through this channel. Only when a contract has been secured will KeyStone allocate consultants to the site in Angola. Work Visas will be required but due to the good relations between South Africa and Angola these should not be a problem. (South Africa and Angola Chamber of Commerce)

4.3 Promotion

Promotion strategy assists the overall marketing strategy by identifying ways how potential customers will find the product. This is all about communicating the product to the right target group. In the case of KeyStone the following strategies will be effective in terms of promotion in Angola:

Customer Referral Program (some existing clients like Anglo Gold Ashanti have operations in Africa.)

Email (sent from South Africa to Angolan companies as an introduction of the business)

Company appointments. (A list of potential target customers has been selected). A telephone call should serve as entry point for a formal meeting in Angola with the relevant decision makers. Trips into Angola can be planned in such a way that many companies are seen in a two or three week period of stay.

Advertising in local industry magazines.

Register as a member on the South Africa Angola Chamber of Commerce website. (South Africa and Angola Chamber of Commerce)

Finding South African based companies whom already have offices in the oil and mining industry in Angola. The benefits will be that meetings can be set up locally. One such company that I have found during my segmentation process is Tans Hex Mining. (3rd biggest Diamond mine group in SA with offices in Angola). Some other companies are Afrox and the de Beers group.

Exhibitions relevant to Angola such as:

http://www.esi-africa.com/event_calendar

http://mea.economistconferences.com/events

http://www.petro21.com/events/?id=578

http://www.iirangola.com/

http://www.railwaysandharbours.com/

5. IMPLEMENTATION AND CONTROL

There is often debates as to which is more important – strategy or execution? Drucker noted that "a plan is nothing unless it degenerates into work". (Kotter, 2003) But the reverse can also have dire consequences – a poor plan well executed is no good. So fact is that we need both, a good plan well executed.

There are 3 approaches towards implementing a marketing strategy:

Implement by demand

Implementation through change

Implementation through consensus

Good implementation does need buy-in from all parties involved, however, in the case of KeyStone it would be implementation through command. Top management have decided to develop this marketing strategy and consultants will have the opportunity to work in Angola should they wish to gain the experience.

In terms of controlling the project in Angola, a project manager will be appointed to oversee and manage this project. This project manager will have the authority over formal controls (input controls, process controls and output controls) as well as the informa controls (employee self control, social and cultural)

Control is a method of ensuring that highlight failures with regards to the implementation of the strategy. Below find 4 types of controls (Kotter, 2003) that will be used during the implementation of this marketing plan.

Types of marketing control according to Kotter 2003:

Type of Control

Prime Responsibility

Purpose of Control

Approach

1. Annual-plan control

Top management; middle management

• To examine whether the planned results are being achieved

• Sales analysis

• Market-share analysis

• Sales-to-expense ratios

• Financial analysis

• Market-based scorecard analysis

 

2. Profitability control

Marketing controller

• To examine where the company is making and losing money

• To evaluate and improve the spending

 

Profitability by:

• Product

• Territory

• Customer

• Segment

• Trade channel

• Order size

 

3. Efficiency control

Line and staff management; marketing controller

• Efficiency and impact of marketing expenditures

Efficiency of:

• Sales force

• Advertising

• Sales promotion

• Distribution

 

4. Strategic control

Top management; marketing auditor

• To examine whether the company is pursuing its best opportunities with respect to markets, products, and channels

• Marketing effectiveness rating instrument

• Marketing audit

• Marketing excellence review

• Company ethical and social responsibility review

 

Annual and profitability control will be done by the KeyStone M.D. and directors. Efficiency control can be done by the relevant project manager in charge of the Angola project. Lastly, strategic control should be done by the M.D. or external auditors.

There are 5 steps that assist in controlling the implementation of a marketing plan:

1. Understanding the marketing mix variables by re-evaluating the 4 p’s on a regular basis.

2. Conducting regular audits to confirm if customers needs are still being addressed.

3. Monitor your pricing on a regular basis.

4. Keep on evaluating product placement. Is the product accessible to the target market?

5. Reposition products if necessary to ensure customer satisfaction.

The key principle is to understand that implementation and control is only part of the full marketing process and it is best to know as much as possible about every aspect of it.

6. CONCLUSION AND FINDINGS

Marketing shapes the future of any company, as in the case of KeyStone Strategic People Solutions. By carefully understanding needs of customers any organisation can grow in market share and succeed. Angola presents an array of opportunities for a company that has a risk appetite, but there are also challenges. This is not a market for the faint-hearted, but the rewards will be big. In rapid changing markets we often see an array of technologies, shortages of skills and resources and more demanding customers. (Percy, Naicker, & Watson, 2010)

Angola has shown consistent improvement in areas such as economic opportunities, human rights, human development and safety. The government in committed to combat poverty. The current ruling party MPLA states the following in their 2012-2017 manifesto:

"Angola is a young country but it has been attracting attention – people are taking a hard look at what is going on. Businesses are attracted to Angola at first by the oil money but are now staying as the country experiences increased stability and gradual improvements to state institutions, basic rule of law and institutions of accountability. There has been a noticeable opening up of the political space and a slow but steady improvement of infrastructure." (Angola-today.com)

Based on the research I see this as a viable and feasible business opportunity for KeyStone. I suggest that the marketing be implement as stated in this report.