Describe the growth stage during implementation of a market strategy by a small firm.
What will be an ideal response?
Once a small firm begins to grow, it can adopt one of three strategies: expand products to reach new classes of customers, increase penetration in the existing target market, or make no marketing innovations but try instead to hold its present market share by product design and manufacturing innovations.
To reach new markets, it may add related products within the present product line, add products unrelated to the present line, find new applications in new markets for the firm's product, or add customized products, perhaps upgrading from low-quality to medium- or high-quality goods. This is diversification, or product line expansion, which tends to increase profits; contribute to long-range growth; stabilize production, employment, and payrolls; fill out a product line; and lower administrative overhead cost per unit. The major pitfall of diversification is that the firm may not have the resources to compete effectively outside its established market niche. But the advantages seem to outweigh the pitfalls in most cases.
The firm may want to increase the sales of existing products to existing customers. If so, it might reduce the number and variety of products and models to produce substantial operating economies.
The strategy of retaining current marketing practices without trying to innovate may suit a small firm if its strength lies in its technical competence. It is often advisable for retail store owners to follow this strategy.
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What will be an ideal response?
Which of the following statements is true regarding activity-based costing (ABC)?
A) It is based on the concept that a single cost driver can drive all overhead costs. B) It is based on the concept that activities drive overhead costs. C) It is based on the concept that unit-level costs drive all overhead costs. D) It is based on the concept that either the number of direct labor or machine hours incurred drives all overhead costs.
It has been found that providing employees with personal days has been ineffective as a way of handling absenteeism
Indicate whether the statement is true or false.
Jaime, a cocoa bean farmer in Columbia, forms an alliance with Irwin, an importer and marketer in the United States. Their products carry a Fair Trade label. This means that Jaime
A. accepts whatever price for his products that the market will bear. B. receives a stable minimum price for his products. C. employs forced labor at a fair price whenever possible. D. produces crops as cheaply as possible to keep his prices minimal.