CTH 1505 Related Diversification A process that takes

CTH 15/05

Related Diversification • A process that takes place when a business expands its activities into product lines that are similar to those it currently offers. • For example, a manufacturer of computers might begin making calculators as a form of related diversification of its existing business. • a shoe producer starts a line of purses and other leather accessories

Unrelated diversification • Diversifying into a completely different industry from a firms current operations. • Unrelated Diversification is a form of diversification when the business adds new or unrelated product lines and penetrates new markets. • An example of unrelated diversification in a business could be a toy manufacturer that is also manufacturing industrial wiring for the construction industry.

Growth Strategies – 1) Joint Ventures • Joint Venture occurs when 2 or more companies for a temporary partnership for take advantage of on some opportunity. • Examples – domestic organization forms a joint venture with a foreign company. • 2 firms complement each other well • When projects are very profitable but requires a lot of risk/ resources. • When 2 smaller firms have trouble competing with larger firms.

Famous Joint Ventures Chery Jaguar Land Rover Automotive Company The British luxury car manufacturers entered into a joint venture with the Chinese company Chery Automobiles. The joint venture company is known as Chery Jaguar Land Rover Automotive Company. The investment will include a new plant in Changshu near Shanghai. It will start operating in 2014. Cars shall be modeled while keeping in view the needs of Chinese consumers. In a joint statement, the chiefs of JRL and Chery proclaimed, “We will now begin working in close collaboration on our partnership plans to harness the capabilities of our respective companies to produce relevant, advanced models for Chinese consumers.

• Sony-Ericsson is a joint venture between Sony and the Swedish company Ericsson is the Swedish manufacturing company of the telecommunications equipment while Sony is a mobile phone manufacturing company

Growth Strategies 2) Acquisitions/Mergers • A merger occurs when two organizations of about equal sizes unite to form one enterprise.

Growth Strategies 2) Acquisitions/Mergers • Acquisitions occurs when a larger company purchases a small firm

Marketing communication • Marketing communication can be described as all the messages and media you deploy to communicate with the market. • The promotional elements of the marketing mix which involves the communications between an organization and its target market. • Core importance – Inform – Persuade – Image Creation and Reinforcement.

Aim of Marketing Communication • To develop brand values by using advertising to set up feelings about the product/service, to create vision and improve beliefs and perceptions. • To make customer behave in a beneficial way in order to make them buy the product/service

Marketing Communication Strategies • A pull strategy involves motivating customers to seek out your brand in an active process. • 'Pull strategy' refers to the customer actively seeking out your product and retailers placing orders for stock due to direct consumer demand. • Examples: • Advertising and mass media promotion • Word of mouth referrals • Customer relationship management • Sales promotions and discounts

Marketing Communication Strategies • A push promotional strategy involves taking the product directly to the customer via whatever means, ensuring the customer is aware of your brand at the point of purchase. • "Taking the product to the customer" • Examples of push tactics • Trade show promotions to encourage retailer demand • Direct selling to customers in showrooms or face to face • Negotiation with retailers to stock your product • Efficient supply chain allowing retailers an efficient supply • Packaging design to encourage purchase • Point of sale displays

Communication Mix

Integrated Marketing Communication