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Introduction

This report will discuss the Orb Group’s short term (1-3 years) objectives, which include global
expansion and recognition. As an organisation we have achieved vast success as we are the largest
promotional merchandise distributor in Scotland. However, we come to a decision of expansion, and
we are going to expand into the United States of America. We found this fitting as the US is a
dominating country with a lot of power. This as a result will be beneficial to us as an organisation as
we will become globally recognised through the use of our strategic planning on our marketing. We
have given ourselves a timescale of 3 years to reach our objectives. We plan on attaining additional
recognition by working with more well-known organisations such as, Microsoft. For example, The
Orb Group can promote Microsoft’s upcoming software and products.

Entry Methods
The value chain is an approach to investigating the internal analysis of an organisation. The frame
work was developed (Porter, 1985) as a way of examining the nature and extent of the synergies, if
any, among the internal activities of a firm (West, et al., 2015). All of the internal activities of an
organisation are carried out to support its products. With the Orb organisation having over 100,000
products in the promotional merchandise range, it is crucial that all internal activities support the
products and maintain its versatility amongst clients.

After looking at the current market conditions of many countries we decided to choose the United
States of America due to their ability of staying ahead of all markets, and also as we have worked
with the US before, we are aware with what to expect.

We have analysed the marketing environment and also identified the internal and external
strengths; weaknesses; opportunities and threats and have chosen exporting to be our entry
method. We believe that this is the most appropriate entry method as it will be beneficial due to fast
entry and low risk. This as a result simplifies the entry method.

Exporting is the sale of products and services in foreign countries that are sourced from the home
country. (saylordotorg.github, n.d.)

Organisations must establish a method in distributing their products and also marketing them
within the chosen country. This will allow the organisation to avoid costs of producing operations in
a new market and country. The disadvantage of choosing export as an entry method is that the
organisation will not have a vast amount of control and not much local knowledge. On an
environmental point of view, the transportation aspect can also have a negative impact on the
environment along with the transportation costs.

See Appendix B for S.W.O.T. Analysis

Communication channels
The Orb organisation have decided to utilise many methods within our communication channels, the
methods we propose to use are; email; social media; e-commerce and digital marketing.

Email is an efficient method in receiving information worldwide. It is cost effective and email
marketing is vital in creating and building consumer relationships. This direct communicating
method will be appropriate for the Orb Group to utilise.
Using social media is a clever platform in making yourself globally aware as an organisation. This is
why the Orb Group have decided to utilise this digital marketing method in order to make their
international expansion aware and gain more prestigious clients.

As the transport when exporting goods will be costly, it is important for an organisation to carry out
cost effective communication channels. Electronic commerce will be highly beneficial to the Orb
Group due to finding that this method will decrease costs, this is due to using direct online
advertising will create low human resources costs. The global availability that electronic commerce
provides makes it crucial to utilise as it will allow you to gain consumers and clients worldwide.

Marketing Intelligence

Marketing intelligence is factual information which is used to examine current market situations,
competitors and consumer demographic behaviour (Lapido Patric, et al., 2017)Marketing
intelligence is made up of seven vital factors; customers; sales force; government resources;
Internet; suppliers; customer advisory panel; retailers and distributors. Using this model will enable
us to establish a true picture of the goings on in the USA market (See Appendix B)

Pricing Strategy
In (Tanya Sammut-Bonnici, 2015) states that pricing strategy is the procedure a firm
implements to regulate what the firm will charge for its products and services. These
strategic plans falls largely into the three groupings which are cost-based pricing,
competition-based pricing, and value-based pricing. Pricing strategy is an important variable
in financial modelling, which determines what the company revenues has been achieved,
the profits earned, and the amounts reinvested in the firm's growth for its long-term
survival.
The Orb Group deciding on a pricing strategy should not be done alone but has to be in
relation to their evolving business strategy to the next level which with the Orb Group
wanting to expand internationally. The firm has to be clear about what their pricing on
objectives are and how they link in with their marketing and sales plans. As follows

 Increasing sales volume and or sales revenue


 Increasing market share
 Achieving a specific rate of return on sales or investment
 Maintaining or improving growth
 Gaining a competitive advantage
 Enhancing the image of the business, product, or service
 Survival in a challenging market place.
Once the Orb Group are clear about their pricing objectives the next step is to decide on the
best strategy to achieve them. Taking everything into consideration we recommend that the
consider using value-based pricing.
Many literature theorists across all industries have concluded that value-based pricing is the
optimum pricing strategies especially when the firm main objective is profit maximisation.
(Hinterhuber, 2008). Value-based pricing mainly emphases on examining what the product
is worth to consumers and a firm sets the price accordingly. The aim of this type of pricing
strategy is avoid charging too little and so missing out on crucial revenue while not setting a
price where by it is higher than what the customer sees value and their willingness to pay.
The aim of this strategy is to identify the benefits the firm offer the consumer to understand
and value them. While this is an excellent strategy for Orb Group they need to review the
competitive environment of the industry as it is particularly important to distinguish the
firm’s products by demonstrating the uniqueness of their products. The more the Orb Group
can enhance the exclusivity and the uniqueness of their products the easier it will be for
them to either increase or demand for higher price. The Orb Group choosing the value-
based as their pricing strategy there are a few drawbacks they need to look at. The main
disadvantage is that they need to have the correct information when doing their market
research. The research information on what consumers are willing to pay can be gathered
from customer surveys, monitoring competitors’ pricing strategies, or simply through trial
and error.
This is further confirmed by (Hünerberg, 2003) that companies that implemented value-
based pricing strategy earned 31% higher in operating income than the use of competitors
based pricing strategy. The explanation to this success is that fact that prices stemmed from
value-based pricing depend customer perceived values requirements instead of the
requirements coming from the supplier.
Customers will not feel neglected in the process of pricing the product and may accept to
buy a somewhat more expensive product if it delivers higher customer perceived value
(Hinterhuber, 2004). The Orb Group needs to take geographical pricing into account as
variations in price in different parts of the world. For example, shipping costs can potentially
increase prices. In some countries the co-operate tax rate differs on certain types of product
which makes them more or less expensive e.g. in the UK tax rate is 19% compare to the USA
which is 35% (Trading-Economics, 2017).
With the Orb Group being a SME company and is making plans to expand into the
international market. Using the form of Penetration pricing as a strategy in conjunction with
value-based pricing is the optimum strategy they can adopt. This is because penetration
pricing is a form of strategy that involves temporarily setting prices low than the cost price
(Sammut-Bonnici, 2015). This is to maximise rapid market entry new markets or even
market entry of new products into existing markets. This method of pricing strategy can
greatly benefit The Orb Group as they make plans to expand internationally. This will enable
the company to gain customers to sustain in the market. This can affect the turnover in
negative manner however, this is only temporary issue as in the long run Orb Group will
create a strong customer base which in turn will generate income from its stocks, or
generating revenue.
When Orb Group has been established in that new market it discourage competitors to also
enter that market this is because they cannot match companies with the lower price
The company can run into difficulties when adopting the penetration pricing strategy, while
a low pricing can produce demand for their products, however the company must be able to
provide for this huge demand if not then there will be an issue of disgruntle customers. As
the Orb Group offers products for the prestigious market the loss of demand can create a
loss of brand equity. The Orb Group needs to keep in mind that when the company start of
using a low price start up (penetrating price) there’s a possibility of diluting the brands best
strategy. A consumer who buys their products will feel that their social status has been
minimised (Spann, et al., 2015).
The Orb Group also needs to consider Price elasticity of demand as it is one of the most
important elements to be considered when setting prices, It measures the quantity of a
product or service demanded responds to any changes in price. There are some factors that
affect PED are such as:
• The availability of a suitable substitute
• Whether or not the product or service is regarded as a necessity
• The percentage of income or budget the price represents
• The loyalty strength that clients have for the brand
• The duration of the price change

Distribution channel
Generally, distribution channel is all the activities that enable the transfer of material and/or
economic power over tangible and/or intangible goods from one economic subject to
another and it delivers a well through direct channel. This will be the best distribution
channel as there are no intermediaries. (Szopa P., 2012) stated that all information’s
exchanges including orders between the Orb Group and their clients will be through mail,
phone, catalogues and their e-commerce website. Direct channel can provide a reliable
supply and at a cost effective price and it can be extremely convenient by saving physical
shop facilities. However they are prone to problems of availability, speedy supply, and
there could be difficulty in providing good service and support. It gross simplification, but
on, the whole the direct channel is the best when the strategy is cost focus for niche market
the Orb Group (West, et al., 2015). We recommend that Orb Group considers using value
added reseller (VAR) as it works with end-users to provide solutions that are unique to the
client and also helps businesses reach places where direct channel could not (Marketing-
Mo, 2014). With VAR, the Orb Group will build a relationship with each individual VAR and
treat that VAR as a potential customer who buys from them in various quantities on an
ongoing or one off basis. As Orb Group is an expert in their industry and work intently with
their clients to create the right products for their promotion purposes, VAR will allow the
firm to build a strong customer base over many years.
Product Portfolio Strategy

Product portfolio strategy is helps an organisation make better resource allocation,


marketing activity, and product strategy decisions by providing an overall picture in both
current and future market positions of all products and services an organisation provides
(DOORASAMY, 2015). The Orb Group should offer an inseparable type of services whereby
they are in constant interactions with the client they are working with. The need to find out
exactly what the client is looking for so that in the end they are content with the service and
the product the Orb Group designed together. In doing so, this will create a niche product
for each client seeking their services as there will be uniqueness in each product. Product
portfolio strategy analysis is crucial and it is important to do this on a regular basis and
thorough portfolio analysis helps a firm:
• Maximize the value of products: Different products contribute to your company’s bottom
line differently. Making sure that products will survive a company short term and long term
goals.
• It helps Identify the optimal product mix: A portfolio that crosses multiple market sectors,
product categories, and technologies helps protects your company against marketplace
changes. Investing the returns from current products into longer-term products helps
stabilize your company’s returns over time. Established, low-risk products help balance out
the riskier ones.
There are several tools to use to analyse The Org Group product portfolio, however since we
have come to a decision that the Orb Group is to provide niche products we recommend
using the Boston Consultant Growth to analyse the Orb Group product portfolio and also
the Ansoff matrix. The Ansoff matrix is a tool that investigates the relationship between new
and existing products, new and existing markets, and all the risk associated. As the Orb
Group looking into expand to new markets Ansoff matrix is the model to use. On the grid of
Ansoff matrix the orb group will be placed at the market development as they already have
products in place however they are looking into expanding internationally. This is where
new pricing strategy will be used to attract new customers and also new distribution
channels will be created.

Conclusion
This report will discuss the Orb Group’s long term objectives, which include global expansion and
recognition. As an organisation we have achieved vast success as we are the largest promotional
merchandise distributor in Scotland. However, we come to a decision of expansion, and we are
going to expand into the United States of America. We found this fitting as the US is a dominating
country with a lot of power. This as a result will be beneficial to us as an organisation as we will
become globally recognised through the use of our strategic planning on our marketing. We have
given ourselves a timescale of 3 years to reach our objectives. We plan on attaining additional
recognition by working with more well-known organisations such as, Microsoft. For example, The
Orb Group can promote Microsoft’s upcoming software and products.
Appendix A
P.E.S.T. Factors as to why we came to a conclusion to expand into US market

Political

The United States has a strong democratic set up and effective rule of law, there elections are
considered fair and transparent. The United States are recognised as the leading superpower in the
world.

SMG (Sports merchandise Global) have had experience with the US market.

A language barrier does not exist.

Economical

The United States is the largest economy in the world. The economic system is well developed and
gathers its strengths from its services and manufacturing industries.

Social

The education and healthcare system is one of the best in the world. However, increasing illegal
immigration is a concern as there are more than 11.7 million people currently living illegally in the
United States. (Preston, 2017).

Technological

I.T. is a field that the United States are exceling in. However, they face intense competition from
countries like China and India.
Appendix B

S.W.O.T. Analysis on The Orb Group

Strengths Weaknesses

 Strong market position  Small organisation which can make it


 Large range of products to suit difficult to work with big organisations
all clients (100,000)  Changes in exchange rates
 Previous experience with
international markets

Opportunities Threats

 Expand cliental  Competition of other promotional


 Expand market share merchandise organisations
 Global expansion  Lack of local knowledge (U.S.)

Marketing Intelligence Diagram