Market Buzz International: A CASE STUDY

BY: Sonakshi Kalra Firangiz Akbarzade Aveenash Sekhar (M00427220) (M00387317) (M00190946)

MARKET BUZZ INTERNATIONAL: CASE STUDY

GROUP ASSIGNMENT

NAME AND MISIS NO: Sonakshi Kalra Firangiz Akbarzade Aveenash Sekhar COURSE: MA marketing communication MODULE TITLE: Strategic Marketing MODULE CODE: MKT4100 WORD COUNT: 3492 SUPERVISOR: Dr. Doug Young

(M00427220) (M00387317) (M00190946)

MARKET BUZZ INTERNATIONAL: A CASE STUDY

Table of Contents
ABSTRACT .................................................................................. 4 INTRODUCTION ........................................................................... 4 COMPETITIVE LANDSCAPE ....................................................... 5 SOCIAL MEDIA ERA.................................................................... 6 NICHE STRATEGY....................................................................... 8 RELATIONSHIP STRATEGY ....................................................... 9 QUESTIONS FOR THE CASE STUDY ....................................... 10 REFERENCES.............14

ABSTRACT This case study details the start up and growth of Market Buzz International, a small-scale marketing consultancy in the Middle East. The corporate vision of the company is to make a difference in the small and medium sized business clients and creates satisfied customers to attain success. The objectives of the company have been to gain a sustainable competitive advantage and work towards the growth of the organization. The case study begins with an introduction section, which includes the complete background of Market Buzz International. The competition of the company has been described by an accurate industry analysis using porters model to explain the basic nature of the industry. The following sections also explain obstacles faced by the company in its journey such as the changing social media, cut throat competition and lack of financial and human resources. The company made strategies to overcome these obstacles. An advanced strategy was adopted by MBI to overcome the changing face of social media marketing. To gain a competitive edge in the industry the company followed a niche strategy and a relationship strategy implying the importance of collaborations and alliances was taken up to deal with the limitations of financial and human resources. INTRODUCTION In the year 2000, Mita Srinivasan started the company Market Buzz International. A small-scale business, MBI is a marketing consultancy company, which provides clients services like advertising, PR, brand building and communications support to new and existing businesses in the middle east. The company has a small team of five members and works with freelancers for certain projects. MBI combines its own expertise and resources with the outsourced strengths of experienced freelance executives, providing its clients access to a wide network of industry professionals. MBIs focus is technology and gives technical solutions to small and large companies. The company goes beyond contractual obligations to satisfy customers and works diligently to humanize the business. The slogan of the company your voice delivered by our passion shows that the company lays emphasis on being passionate about the projects taken up and the team is result oriented aiming to create a difference in the customers business. The growing sophisticated demands of consumers have led the business to understand the importance of marketing and social media to make the business a success. Thus companies are looking for professional consultants to build up brand image and market the products effectively. The industry of marketing consultancies is increasing which in turns increases the competition for MBI. The small-scale businesses are important for an economy and the strategies adopted by them should be studied. (Cooper et al, 1986). The business objectives of the company have been to grow in the industry and attain a sustainable competitive advantage. The company has faced many challenges in these years due to the changing scenario of the market.

COMPETITIVE LANDSCAPE To attain the objective of sustainable competitive advantage it is important to know the positioning of the company as well as competitors. It is vital to analyze the competitive forces of the industry. MBIs competitive forces can be understood by Porters five-force model, which gives information about the industry and competition of the company and forms the basis of strategies followed by the company. PORTERs FIVE-FORCE MODEL

The five forces of MBI are explained as follows: Bargaining power of customers: The bargaining power of customers can bring down the profitability of the consultancy industry. They pose a threat of integrating backwards which increases their power. The bargaining power of consumers is mediocre in this industry as they can lower the prices of the services due to large number of competition but to achieve success in their business they have to seek professional help, which suits their company. Threat of new entrants: The business can enjoy a better position and profits if there are barriers to new entrants in the industry but MBI faces a high threat of new entrants as there are no barriers to entry and the business can be put up with limited capital and experience. The new era of social media as and its usage has given rise to large number of companies entering the industry and continues to enter.

Bargaining power of suppliers: If the supplier forces up the price paid for inputs, profits can be reduced. The bargaining power of suppliers is low in this industry as the cost of switching to a different supplier is low and large numbers of suppliers are present in the industry with advanced technical skills and knowledge. Threat of substitute products: The extent of threat from substitutes depends on the price and performance of the substitute. The substitute for this industry is online, do it yourself software available for business to develop strategies and help marketing their companies at a low cost but the professional help need for starting up and building a brand cannot be completely substituted by software. In-house marketing and media team is also a substitute but involves high cost of maintenance and thus the threat of substitutes is low. Competitive rivalry: It relates to the competition for market share in the industry. The industry has large number of small and large marketing and communications consultancies, which leads to nominal profits being earned. The current competition in this industry is heavy and leads to loosing of projects to other clients.

By analyzing all five forces a complete picture of factors influencing profitability of the industry can be obtained. The game changing strategies can be developed at an initial stage (Porter, 2008). The above model analyses the industry of MBI and gives and thus develop basis to understand the strategies followed by the company. The model represents the key factors required for sustainable competitive advantage and value added drive from an analysis of the industry and its market structure which includes the number of firms and degree of rivalry, market conduct which shows how firms behave with each other which influences strategy and the overall market performance of the company. The following sections shows the strategies used by Market Buzz International keeping in mind the five-force model by porter.

SOCIAL MEDIA ERA As mentioned above the companies main objectives are to gain a sustainable competitive advantage and a to have internal growth and an important obstacle faced by the company to reach its goal has been the evolution of social media. Social media is not a traditional way of advertising. It is a way to communicate with the audience and involves skilled knowledge about the market and the business to successfully implement it in the business. In todays world social media can make or break the business and MBI understands the value of social media and thus it uses extensively when marketing or building a brand image for its clients. The company also uses social media to market itself and build an online reputation for the business. The current state of flux in the evolution of social media makes it difficult to pick a platform as the Facebook changes frequently whereas Twitter goes up and down in popularity, LinkedIn has set of etiquettes and rules to be followed and sites like MySpace have fallen off the map altogether. Apart from instability of the social media the security is always a difficulty, which is considered as a major threat to the business. The company uses an advanced strategy to overcome the dangers of social media and use it effectively. The advanced social strategy goes beyond the normal social media presence. It reinforces the marketing message while pushing the user to another profile. (Balwani, 2009) MBI thus uses this strategy by using multimedia messages. It develops the campaigns for its clients based on multimedia to attract attention to the company it is marketing. It also integrates offline and online advertising which develops a better communication process and builds customer interest. Company believes in customizing different messages for different sites so as to have the planned affect on consumers and also helps to avoid repetition. The company also believes in open communication with its consumers on a regular basis. The owner of the company regularly writes blogs and is active on Facebook so that potential customers and existing customers can communicate with the company without any barriers and their ideas are also shared on social network sites. MBI handles social media without it becoming a time drain and also ensures that the privacy concerns of the clients are well taken care of by contemplating what is safe to divulge in a social setting. Therefore the company recognizes the fact that social media is here to stay and uses it widely to attain success. It has a social optimization system (SOS) which involves developing a consistent plan for social media usage, measuring its effectiveness and follow up to make the required changes. This leads to optimum utilization of resources and maximizes the customers satisfaction.

NICHE STRATEGY The above competitive landscape and industry analysis shows that MBI faces a lot of competition in the industry. Businesses have recognized the need of professional media and marketing consultancy to succeed and thus to satisfy these growing needs a large number of marketing consultancies have come up. The evolution of social media and its significant effect on the marketing world has also added to the competition of the company. The company understands that in this fast growing competitive industry it is imperative to have a sustainable competitive advantage to succeed, grow and have a leading position in the long run so that major projects are not lost to competitors.

The competitive strategy used by MBI is niche strategy, which involves reducing the size of playing field and concentration on a segment of market. The emphasis is laid on niche strategy by MBI so that they can capitalize on the power of leverage, which means the power of doing more with less. The company does market segmentation for which it uses different customer requirements to segment the market. The company concentrates on B2B market and thus focuses on this segment. It looks for unmet needs and needs the existing companies are not completely meeting. It makes and effort to know what the consumers want more than the consumers and start with the consumers and not the services they provide. All these factors form the part of niche strategy. The company strengthened its position by finding a segment that is B2B segment that targets the IT sector as it has immense knowledge and experience in the IT sector. Market Buzz International uses the focus strategy. It focuses only on a part of the industry rather than the whole industry. IT targets a narrow segment and within that segment tries to provide differentiated services based on information technology and also capitalizes on its experience and skilled IT journalist in the Middle East. . MBI is a small sized business with limited capital and thus cannot compete with large firms on low cost and standardized products as the company needs to cover its operational expenses and also expenses incurred on freelancers for the completion of Minimizing the playing field can reduce the barriers and thus niche strategy was adopted. To successfully implement the focus strategy the company works to define the target market effectively and also look for unmet needs that are not met by existing companies. Using mobile technology to do marketing can be an example of such needs that business marketed using the applications present in the smartphones. The focus strategy proved to help the company to concentrate on its strengths and manage the target consumers at a low cost, which is essential for a small-scale business like MBI. (Cooper, Willard & Woo, 1986).

RELATIONSHIP STRATEGY Strategic relationships among suppliers, producers and distribution channel organizations occur for various reasons. It can be done to enhance value offerings, reduce the risks generated by business changes, share complimentary skills or obtain resources beyond those available to the company. (Cravens & Piercy, 2003). MBI uses the relationship strategy due to the lack of human resources. MBI lacks human resources as it works with a team of only five members and uses freelancers for certain projects. It is not a magnet for talent from elite educational background, as it cannot offer high compensation due to the lack of financial resources, as it is a small-scale business. The lack of staff also affects the continuity of the business, as the company is solely dependent on the founder Mita Srinivasan and there is no successor to the founder. MBI has thus collaborated with and is part of the OXYGEN Group (Network) helping to represent several of its European clients in the Middle East region. OXYGEN initially focused on the new technologies sector, but its unique business model and professional consultants have since achieved outstanding results in many other industries, including consumer goods & services, healthcare & early years, gastronomy and lifestyle, sustainable development, construction, corporate, and humanitarian aid. (http://www.themarketbuzz.net/aboutus/)Thus MBI collaborated with OXYGEN to reach new horizons in the business. This collaboration also helped MBI reach market outside the Middle East and boost its growth with limited human resources. The company also believes in strategic alliances, which involves collaborative relationships between the company and its competitors. MBI uses these alliances to enhance the market position in the market and add value to their services. It maintains a cordial relationship with its competitors and works with them on certain projects and thus it involves actively participating in a common project that is strategic in scope. The competitive realities of surviving in the changing industry encourage companies to form alliances. MBI thus understands the importance of alliances as being a small scale and not having enough resources can pose as a threat and alliances helps in pooling of resources and so reduces the risk of the company. The company also learns new skills from alliance partners and these alliances provide an edge to the company and assist it to manage time and resources effectively to gain success and work towards growth of the company. Trust and commitment between the partners are critical in building these relationships.

QUESTIONS FOR THE CASE STUDY 1.How should Market buzz international face the growing competitive landscape to gain a competitive advantage? MBI faces direct and indirect competition and to prosper in the marketing consultancy industry the company needs to understand the competitive point of difference. The business having a sustainable competitive advantage can survive in this cutthroat competition. This is explained with the help of Porters Model.

It can be seen from the above figure of porters generic strategies that a firms strengths can fall into two categories that are cost advantage and differentiation. (Porter, cited in Dess and Davis) These strengths can be placed in either broad or narrow scope giving rise to three generic strategies that are cost leadership, differentiation and focus. The generic strategy of cost leadership involves selling the product or services at lower prices than the average industry prices to gain a wider market share and thus attain higher profits whereas differentiation strategy involves development of product or services that are unique from that of competitors and consumers value the uniqueness that the business offers and thus can charge a premium price for it. Lastly, the focus strategy includes targeting a narrow segment and within that segment makes an effort to achieve cost leadership or differentiation. Thus it can be seen from the case study that Market Buzz International competes with the focus strategy. For MBI to have a sustainable competitive advantage only focus strategy is not enough. According to porters model a successful business should compete only on one of the three generic strategies where as Wright (1987) believed in a combination of strategies that can be adopted to attain success and the size of the business plays an important role in deciding upon the competitive strategy.

10

A differentiation strategy yields a longer lasting and more profitable edge over the competitors when based on factors that provide unique customer value. (Hammer et al, 1999) Market Buzz International success can be achieved by following differentiation and focus strategy simultaneously. MBI has the experience in local market on which the company can capitalize to earn higher profits. The company also has a team of highly skilled technical expertise and an advanced knowledge of social media usage with a creative bond. MBI should aim to provide superior customer service to follow the differentiated strategy with its experience and expertise. The company also humanizes the business, and it also manages online reputation to ensure that customers are satisfied and the company is marketed well. These competencies can provide unique customer value and in addition to these the company could ensure an impeccable security system to its customers so that they do not shy away from social media due to privacy concerns. These factors can be taken into consideration to differentiate the services provided by MBI and its competitors to earn a premium profit along with the niche strategy the company follows. 2. Is the relationship Strategy followed by Market Buzz International enough to overcome the hurdle of limited human resources to achieve success and ensure the continuity of the business? MBI works with a team of five permanent members, which affects the operations of the company and also is a threat for the continuity of the business. In this changing era of business the companies prefer a sophisticated system of work and when companies search for marketing consultancy they prefer a consultancy with all in-house talent company rather than company that outsources due to the difficulty in trusting the third party and also the additional mark- ups from third party suppliers are not appreciated. The relationship strategy of the company poses many risks as the company can loose its power and the credibility of the company can also be questioned. The alliances formed can be fragile and ineffective in the long run. It is thus integral to have a strategic human resource management that provides the company with an internal capacity to adjust to their competitive environment and exploit the growth opportunities. (Barrett & Mayson, 2007).

11

The following diagram explains the HR strategy that can be adopted.

MBI HR STRATEGY FRAMEWORK:

ACHIEVING THAT MBI HAS THE REQUIRED PERSONNEL

OPTIMIZE MBI TALENT RETENTION

OPTIMIZE MBI COST

HR planning in line with MBI strategies

Develop personnel abilities and knowledge

Develop leadership & teamwork culture

Manage and access HR personnel growth

As shown in the diagram HR strategy is divided into stages to have a clear understanding of the strategy and thus attain success. FIRST STAGE: the first stage involves the client-based satisfaction, which can be achieved through the right amount of members in the organization. MBI should thus recruit more members in the company, as a team of five members is not enough to provide impeccable services to the clients and also it leads to loosing of major projects that could help MBI grow.

12

SECOND STAGE: The second stage underlines the importance of finance as being a small scale the MBI works on a tight budget so the optimization of talent and cost is necessary. To ensure that there is no wastage MBI should adopt methods for talent retention such as providing an excellent working environment and giving the employees an opportunity to grow. New levels of productivity should be asked without providing methods so that the creativeness of the employees can be channeled. (Billington et al, 2007) THIRD STAGE: The third stage is the internal process of the company, which includes the planning of HR in line with basic strategies of the company, development of HR personnel and a strong leadership culture. A vigorous program of education and training should be provided to the employees, as employees should have complete knowledge about the social media and the advanced technologies in the market. Often, small business claim that they are too busy to train the employees and this is a very big mistake made by companies. (Webster et al, 2007) The marketing team should be trained in all facets of the marketing mix and be competent to work under tight budgets. FOURTH STAGE: Lastly it is important to access the growth and performance of the staff. The evaluation of the staff will help the company to decide the rewards to be given to deserving employees and also ensure that all the employees are dedicated to give their best in the organization for the success and growth of the company.

Thus it is advised to adopt the above-explained HR strategy to grow in the industry. The importance of training is explained above and though the training may be time consuming and resource intensive it can reap benefits for the company in the long run. (Beresford and Saunders cited in Webster et al, 2007). Consequently a strategic management approach is advised to the company rather than just in time approach followed by MBI so that the performance of the company can be improved. (Jennings and Beaver 1997) Having mentioned that, it is vital that the MBI continues to have a flexible approach as well so that the opportunities are grabbed without delay and the company does not looses any of the advantages of being a small scale

13

14