Critical Evaluation of the Contribution

Question: Discuss about the Critical Evaluation of the Contribution of Current Marketing Management Theory and Practice. Answer: Evaluation of the strengths of Ferrero Rochers approach in delivering value There are several significant approaches of Ferrero Rocher which have significantly supported the organisation in having a strong global presence and extended market share. But it is also essential to evaluate that whether these approaches helped the organisation in delivering appropriate value to its product Ferrero rocher chocolate or not. The following is the evaluation of the strengths of Ferrero Rochers approaches in respect with various marketing theories, philosophies and concepts: Innovation Innovation is the biggest approach of Ferrero Rocher. The company takes use of highly innovated strategies and procedures for the continuous development of the products (ferreroindia, 2009). As per the innovation philosophy of marketing, the individuals at the organization are considered as the central part of the company. There is employee involvement in the development and research for generating new and innovative ideas for best fitting the needs of the market (Kanagal, 2015).In a similar way, Ferrero Rocher also have high involvement and engagement of its workforce for achieve innovative practices in the organisation. The company has spent around $57 million recently in India for having noteworthy innovations in the production and distribution of Ferrero rocher chocolate in Indian market (Malviya, 2015). The company also invests in research and development department so that there can be attained innovativeness in its business operations and the company can attain great competiti ve advantages. Thus, as per the innovative marketing orientation, Ferrero rocher chocolate is a successful and recognized brand name (ferreroindia, 2009). Global Expansion As per the globalization theory of marketing and holistic marketing approach, it is essential that in such a competitive market, the companies must globalize their business so that they can achieve long-term sustainability (Gary, 2014). Ferrero Rocher follows this marketing approach in a very thoughtful manner. There are approximately twenty eight countries which have the presence of Ferroro Rocher chocolate (ferrero, 2016). In all these countries, the company effectively supplies its chocolate (Stiff, 2006). It shows that globalization which is the biggest approach of the company is based upon the marketing concept of holistic marketing and with this combined approaches; the company attain huge success and growth (Cambieri, 2011). Brand Equity Ferrero Rocher possesses high brand equity as the organizational brand is well-known and recognized across the world. This brand equity is the key approach of the company as the customers facilitate by the visibility and competency of the brand in the FMCG confectionery industry. In the marketing concepts, brand equity is one of the major concepts which depict that to achieve high recognition and improved sustainability, it is necessary for an organisation to build strong brand equity in the market. The stronger the brand equity is, the greater is the visibility of the organisation and its products and services (Sharma, Davcik and Pillai, 2016). Therefore by evaluating the strength of Ferrero Rocher over the grounds of marketing concept, it can be analyzed that the company is high in delivering value to its customers (economictimes, 2013). Consumer Centric One of the approaches of Ferrero Rocher is that the products are manufactured in such a way that they are extremely customer centric, specially the Ferrero rocher chocolate. The customers get a direct satisfaction to their needs and demands by consuming Ferrero rocher chocolate. In marketing, it is vital to deliver the customer centric products and services as per the marketing concept of 4Cs (Ali, Ilyas and Rehman, 2016).The customer is the key factor which can either build or destroy any brand. Therefore, it is essential to have complete focus upon the requirements of the customers. The Ferrero rocher chocolates are manufacture after performing an in-depth analysis and evaluation of the specific markets and the market demands. It results into identification of the actual needs of the diverse consumer group, so that, the can be met in a successful manner. It is also one of the aspects of relationship marketing, where the company first develops an association with the customers, iden tify their needs and demands and then deliver chocolates which satisfy their demands at the most. It helps in developing a reliable association with the customers (misbbocconi, 2016). Differentiation and high quality As per the theory of industrial organisation and one of the marketing mix approaches, it is analyzed that if the customers get the high quality of products and desirable experience then in that case, the customers are ready to pay high and premium prices of the products too because of the differentiated products they are receiving (Davcik and Sharma, 2015). Ferrero also implements differentiate marketing approach so that the customers can get a diverse set of experience from the products of Ferrero. This diversification strategy is one of the chief approaches of the company which helps the organisation in delivering the products in a differentiated form. As per this differentiated philosophy, it can be understand that each customer is different (Progressive Grocer Bureau, 2015). Therefore, number of time the companies have to take use of differentiated strategy. Ferrero delivers products by taking use of differentiated marketing approach. The quality of the products of Ferrero rocher chocolates are much high which differentiate its products from other competitors services and products (pressreader, 2015). Limited but vigorous product portfolio There are limited numbers of products under the umbrella of Ferreros brand. The limited but vigorous and strong product portfolio is the key approach of the organisation. Because of such strong brands Ferrero has gained global recognition (ferrero, 2016). Brand sustainability marketing is one of the major concepts of marketing which shows that the organisation is working over building a strong internal marketing approach with its existing brand. By delivering such recognized product, Ferrero is able to strengthen is internal marketing and with this there is attainment of several competitive advantages (Chun, 2015). Hence it can be stated that there is effective delivery of value from the limited but strong product portfolio of Ferrero to the customers. Marketing, Promotion and Brandings As per the classic marketing theory, the organisations must have their complete focus over these three elements, i.e. effective marketing, high promotion and strong branding. With all these three key elements, the organisations can significantly deliver high value to the customer (Medway and Warnaby, 2014). The focused and robust marketing, promotion and branding are the major approaches of Ferrero. The company is well-known for its promotional activities which takes place across the world. Ranging from television advertisements to great marketing campaigns, Ferrero rocher chocolate is well recognized for its efficient marketing and branding. By evaluating the strength of the company over the grounds of classic marketing theory, it can be stated that the company put enormous efforts in increasing the brand visibility and delivering high value. From the concept of social marketing, it is analyzed that, Ferrero has its strong presence over various social media platforms as well as the company takes efficient use of the social media platform for the marketing of its products. Distribution and supply channel Ferrero possesses a strong and lengthy supplier and distribution network. There are approximately authorized distributors in over 160 nations which together have built such a vigorous distribution network in the company (ferrero, 2016). It is a key and vital approach of Ferrero which enables the faster supply of products and extended international reach of the companys products. Because of such high number of suppliers, there is achieved great customer base across the world. Evaluating from the perspectives of the concept of marketing network, it can be identified that Ferrero has a strong reach in new and untapped markets too which helps the organisation delivering increased value to the customers of all areas and regions irrespective of the dimension and density of population. (Sarkar, D.N., Kundu, K. and Chaudhuri, H.R., 2016). Dynamics and trends within the marketing environment identifying the key factors that could positively or negatively affect In the external marketing environment, there are several key factors which may have a negative or a positive affect over the performance, sales and revenues of Ferrero Rocher. Following are those key factors: Competitive Factors In the marketing environment, the most dynamic trend or key factor which impacts the performance of an organisation is the competitive factors. There are several competitive factors such as new sales channels, trade terms, promotional incentives, pricing, etc. These factors pose both a positive as well as negative impact upon the organizational performance. The positive impact over Ferrero of these factors can be explained as that because of high competition, Ferrero takes use of innovation and this innovative feature in its preimary product i.e. ferrero rocher chocolate and it has provided several competitive benefits to the company. The continuous global expansion and high sales through internet channel are also the effects of the rising competition in the market. If there would be no competition in the FMCG confectionery sector then Ferrero has not taken use of such strategies. On the other hand the negative impact can be explained as because of high competition, it becomes essent ial for the company to revise the prices of its products otherwise the competitors would capture the market. Hence, the reduced prices decline the profit margin of the company (Palacios-Marqus, Soto-Acosta and Merig, 2015). Financial Factors The next key factor which impacts the performance of an organisation is the financial factors. There are several financial factors such as financing plans, investment, requirements of cash for the current operations, repurchase activities, acquisitions, cash flow expectations, etc. These factors impose both a positive as well as negative impact upon the organizational performance. The positive impact over Ferrero Rocher of these factors can be explained as that if there are increased numbers of investors, or there is more inflow of cash, then it results into high liquidity which provides several benefits to the company. By effective financial planning, Ferrero can attain a proper ratio of sales and can have reduced expenditures. But on the other hand, the negative impact can be explained as that if the investors have broken their partnership or there is more cash outflow. Then it will result into reduced availability of cash and will restrict the company in performing its operation i n an effective manner. A poor financial planning can quench the organisation and can mark it as a failure in the history of the organisation (Baos-Caballero, Garca-Teruel and Martnez-Solano, 2014). Therefore, it is necessary to maintain the adequacy of the financial factors as with the changing market, there are also several changes required to be done in this factor. Employee-related Factors The next significant factor which impacts the performance of an organisation is the employee-related factors. There are numerous employee-related factors such as mortality, retirement age, turnover, retention rate, health care cost, and expected return over human assets, etc. These factors levy both a positive as well as negative influence upon the organizational effectiveness. The positive impact over Ferrero of these factors can be explained as that if the employees have a long-term connection with the company and the retention rate of the workforce is high then it will help the company in saving numerous costs of recruitment and other employee related expenditure. The repetitive cost of training are also saved as the existing employees already have an efficient knowledge of all the operations. But these factors also have negative implications such as, because of high market volatility and competition if the employees leave the company, then the attrition rate of the employees will be high (Malik, Butt and Choi, 2015). This will affect Ferrero in various ways such as the brand has to invest both its time and capital to recruit and train new employees. The brand also has to bear several health related costs for having an efficient and productive workforce. Therefore all these employee-related factors affect the performance and productivity of Ferrero. Economic Factors Economic factors are the one of the most crucial factors which has a high dynamicity with the changing market environment. These factors are directly related with the organizational performance. The economic factors includes disruptions, economic and political uncertainties, economic growth, different rates of inflation, changing currency values, etc. (Borner, Brunetti and Weder, 2016).All these factors affect Ferrero Rocher in both ways i.e. negative as well as positive. The positive impact can be understand as if there if increasing and rapid economic growth or there is positive change in the currency value, then it will boost the sales and business of the company. The economic growth escalates the sales of the products which results into high profits. Whereas on the negative side, these factors can weaken the company as there is high inflation in the economy or there is negative change in the currency values or the nation faces a political instability, then all these factors decre ase the buying power of the consumers. It ultimately results into squat sales and declined profits. Therefore, it is essential that these factors must be forecasted so that the company can prepare itself by developing appropriate strategies. Social Factors Another vital factor which affects the performance of the company is the social factors. The social factors include the corporate social responsibility, sustainable practices, etc. there are positive impacts of these factors as Ferrero is a well-known name in maintain high corporate social responsibility. The company takes number of initiatives to uplift the society and develop the living standard of the masses (ferrerocsr, 2015). Therefore, it has helped Ferrero in building a sustainable environment and supported the organisation to attain high customer base and governmental support. But if in any case there is declined in such CSR activities, then it will suddenly deteriorates the image of the company for not able to fulfilling its promises and social undertakings (Saeidi, et al., 2015). Other Factors There are numerous other factors which have significant impact on the organizational performance, productivity and efficiency. These factors includes, natural disasters, terrorist activity, macroeconomic environment of the nations, operating plans, market share, underlying product life cycles, brand history, market share, etc. Some of these factors have a positive impact such as Ferrero Rocher holds a strong brand history which enables the customers to rely and trust over the brand without any advertisements or other promotional things. The high market share of the company impacts the buying tendency of the customers and thus there are upsurge sales and high revenues earned by the company. On the other hand, there are negative implications such as, the undesirable change in the macroeconomic environment of the nations or the probability of taking place natural disasters or terrorist attacks then it adversely impacts the sales of the company (Elyasiani, Mester and Pagano, 2014). There fore, having an insightful knowledge of these factors is must for marinating the organisational sustainability and efficient performance of the company. Recommendations to increase profitability, market share, and the sustainability of Ferrero Rocher Chocolate Ferrero has gained a strong market share, sales and revenue in the last few decades. The organisation and the sales of the ferrero rocher chocolate is rising rapidly with continuous success and global expansion. In the year 2014-15, the brand has shown a consolidated turnover of around 9,542 million Euros which shows a significant rise of 13.4 percent as compared to the last year results, which reported 8,412 million Euros as the consolidated turnover (ferrero, 2016). But still there are few places over which the company is required to improve itself for achieving increased market share and upsurge revenues. Following are few recommendations which can help the company it attaining a better strategic view and improved sales in eth upcoming future: Recommendations on Segmentation Targeting and Positioning (STP) strategy of Ferrero Rocher The STP strategy of Ferrero Rocher chocolate is extremely potential and strong as the company segmented is market on the basis of demographic and psychographic factors such as youngsters, children and adults are the main target customers of the brand. It also segments on the basis of income group, lifestyle etc. but still it recommended to Ferrero to revise its STP strategy and laid focus upon targeting the untapped and medium range markets by positioning its products in those regions. One of such successful example in the FMCG confectionery sector of regional marketing is Cadbury Dairy milk (forbes, 2011). The urban and the regional marketing is one of the fastest developing segments in the FMCG industry. Therefore, it recommended that Ferrero should also extend its reach in the untapped urban and regional markets and achieve high market share and growth (Neuwirth, 2014). Recommendations regarding brand building Ferrero Rocher is a successful and recognized brand because of its high brand visibility. But in the FMCG confectionery sector, it is necessary to enhance brand building even now and then. The consumers used to forget a brand because of the fact that there are several new entrants in the market as well as the existing competitors lays own high pressure over the brand building concept. The major examples in the FMCG sector who have attained high profits by effective brand building are Cadbury and Nestle. These brands have gained an extended market share with potential brand building strategies. Therefore, it is recommended to Ferrero to have continuous efforts over the strong brand building of eth company across the world so that the people can facilitate and become potential customers of the company. Shaping the market offering and marketing metrics Ferrero Rocher is considered as one of the market leaders in the FMCG confectionery industry because of its extensive brand recognition, long history, high quality and global presence. But it is also essential for the companies to have an appropriate marketing metrics as well as well-structured market offerings. Ferrero has developed plans for shaping its market offering but still there are rooms for effective marketing metrics. One of the successful examples in this segment is Nestle. The company as a well structure marketing metrics which provides efficient growth and sales to the company a Nestle can effectively distribute its efforts. Thus, it is recommended to Ferrero that it should develop and implement a strategic and vigorous marketing metrics for the future coming period. Strong and vigorous operational and financial planning The effective the financial planning of a company is, the greater is the probability of success and development. Operational, as well as, financial planning are the two main sources of any organisation to achieve continuous success. Ferrero has strong operational and financial planning but there are times when a company needs some strategic interpretation in these planning. One of the recognized examples of resourceful and efficient operational management is Nestle (Ngonga, 2011). The company has its high focus upon the quality management, capacity and process design, layout strategy, job design, financial cash flows, etc. all these have supported Nestle in developing an international brand. Therefore, it is recommended to Ferero that it should have high focus upon strategic operational and financial planning of the business for enjoying the market leadership. More of green and sustainable practices The primary vision and mission of ferrero rocher is to have sustainable marketing practices of production and marketing so that the consumers can get fresh, high quality and safe offerings. Across the world, the company is known for its significant innovation, quality and safe research practices (Singh and Pandey, 2012). The company has attained number of awards for working over such sustainability principles. There are other FMCG confectionery companies also who have taken use of the green and sustainability practices for achieving high market share such as Cadbury. There have been implemented and incorporated green initiatives by the company (talkingretail, 2008). This puts pressure over the innovative practices of the Ferrero as in the green practices there is rising of competitors. Hence, it is recommended that, Ferrero rocher should maintain its innovativeness of green and sustainability practices by having continuous innovation and strategies. So that, other companies cannot gi ve Ferrero a tough competition in this segment. Development of Risk-mitigation plans There are several contingencies which appear suddenly in business operations. It is necessary that the companies must prepare themselves for all those dynamic situations. The contingencies can be in the form of economic instability, change in currency values, high inflation, economic crisis, political instability, etc. Ferrero Rocher is a well-reputed organisation which has massive capital for dealing with such contingencies (Smith, 2013). 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