Management Report on Marketing Strategies for Equitek Ltd.

This assignment is based on different concepts and aspects of marketing and the contribution made in activities of business organisation. Marketing strategies have been included in this for helping the company achieve its goals and objectives. Equitek Ltd. Is a company situated in UK. Furthermore, it is a manufacturer of besposke saddle which is considered luxurious. It is launching leather belts in Germany in order to expand the market and customer reach.

Individual
Management Report

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................1
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
PESTEL ......................................................................................................................................3
Mode of entering the market.......................................................................................................6
Market segmentation...................................................................................................................7
Porter's generic strategy..............................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

EXECUTIVE SUMMARY
This assignment is based on different concepts and aspects of marketing and the
contribution made in activities of business organisation. Marketing strategies have been included
in this for helping the company achieve its goals and objectives. Equitek Ltd. Is a company
situated in UK. Furthermore, it is a manufacturer of besposke saddle which is considered
luxurious. It is launching leather belts in Germany in order to expand the market and customer
reach.
Furthermore, this report comprises of different parts which start with PESTEL wherein
micro environmental factors have been analysed.
The second part is about various market-entry options that can be considered by Equitek
Ltd. to enter the market. These include Merger & Acquisition, strategic alliance and many
similar routes.
Third section has elaborated about market segmentation as well as targeting which can be
considered by Equitek Ltd. for identifying those areas having greater potential. This helps in
formulating market strategy.
The last division has explained marketing strategies for achieving goals and objectives. In
this part, Porter's generic strategy model has been used to analyse the level of competition.
1

INTRODUCTION
Strategic marketing is a broad concept comprising of activities such as planning,
developing and implementing of plans and strategies formulated for this purpose. It is a process
which helps the company to outperform the competitors and create an identity which helps the
people differentiate it from other entities. In this report, Equitek Limited has been chosen which
is currently operating in United Kingdom. It has its headquarters in Burntwood, United
Kingdom. It has started in 2016 and wish to expand the customer base and market segment for
which it is planning to launch leather belts in Germany. This assignment comprises of analysis of
micro-environmental factors to determine opportunities and threats, various modes of entry in to
the market, critical evaluation of market segmentation and targeting and strategies of Porter's
generic model along with choosing one to apply within the organization.
MAIN BODY
Country and company
Equitek Limited is a medium sized entity incorporated in the year 2016 and manufactures
luxury equestrian products. The business is doing well and planning to expand the business
outside UK in order to provide the products which are in high demands. The quality of goods is
premium for which it charge prices that might be little more than the prices offered by
competitors. Currently, it has very limited stores but the expansion will help it to get a strong
base in the country. It has analysed the potential in the markets of Germany which can help
Equiteck Ltd. reach more customers with its products. Since, the chosen company is from UK,
which is a European country therefore, it has knowledge about the legal as well as taxation laws.
Furthermore, EU commission has provided some directives which is also known to the company.
Therefore, it is suitable market to launch the products. Apart from Germany, there are other
countries as well which can be considered to expand the business and these are China because it
is a developing nation, America due to its dominance position in the world and India because it is
also a developing country.
However, it is imperative on the part of this company to conduct detail analysis by using the
PESTEL in order to understand the impact of various micro-environmental factors. The same has
been provided below:
2

PESTEL
It refers to a tool utilised for analysing external factors which have impact on the
operations of the company. With the help of PESTEL, Equitek Ltd. can identify threats and
opportunities prevailing in Germany. The outcomes will be used for making plans and policies in
order to implement them within the organisation. The factors responsible for affecting the
business are shown with the help of PESTEL which is as follows:
Political factors- These include all the policies and plans made by the government for
the benefit of people and organisation in a country. Some of the examples are foreign trade
policy, tax policy, labour law etc. For the markets of Germany, trade is an important factor for
which the government has developed policies to ease the business dealings and reduce barriers
for international exchange of goods or services. It makes the economy attractive for investors to
invest.
 Opportunity- The government of Germany has formulated plans for making cross borders
companies to invest in the country. Stable political conditions are favourable for the
businesses which is a great factor in carrying the operations without any hurdle. This
support is constant and entities are encouraged to opt for this. Therefore, Equitek Ltd. can
easily get all the formalities done with the support of government in order to begin the
operations expeditiously. The political conditions are stable in the country as shown in
the chart.
3

Fig 1. Political risk index
Source: (Political risks in Germany, 2019)
 Threat- The main aim of the government of Germany is to make new laws and existing
enactments for business organizations. In this way, government intervene too much in the
matters which may cause issues in carrying business smoothly. In the context of Equitek
Ltd., it must consult government for every decision or action related to trade.
Economic factors- There are variables such as interest rates, tax rates, law, wages,
inflation, labour, demand and supply etc. These have direct connection with business and should
be considered for making decisions. Germany's economy is growing rapidly and gained a strong
position by earning surplus amounting to $130billion from the free global trade. There is huge
scope for household and personal products in Germany's markets.
 Opportunity- Germany offers huge benefits for making investment in household and
personal products. The government wish to have more investment due to which it has
increased ease of doing business. Equitek Ltd. can cover all those areas where household
and personal products are difficult to reach. The GDP of the country is stable from last
few years which is about few years.
Fig 2. GDP rate in Germany
Source: (GDP in Germany, 2019)
4

 Threat- The fluctuations in the business cycle may bring period of inflation which may
cause adverse effect to entities. This may enhance the costs of labour and other related
elements. Therefore, Equitek Ltd. can hire cheap labours and prevent making investment
at the time of inflation.
Fig. 3- Downfall of German economy
Source: (Economic conditions, 2019)
Social factors- These are the attitude, beliefs and values of people living in a society.
Factors included in this are distribution, age, and similar elements. Germany has seen huge jump
in immigration from all over the world and majority are from England. This can create
favourable market for Equitek Ltd.
 Opportunity- The ratio of young people as compared to aged ones is just double. When a
person starts to getting older, the need for household and personal products arise so as to
make their lives much easier. In this way, Equitek Ltd. can make increased sales. The
employment level in the country is stable even after cutting the jobs by different
organisation.
5

Fig. 4 Age ratio
Source: (Age ratio, 2019)
 Threat- There are huge number of people who still rely on buying goods or services from
the physical outlets which have been existed from a long time. Also, majority of the
population are against using leather products. This can create dilemma for Equitek Ltd.
regarding the success of the plans.
Technological factors- These include advancements, developments of new technology
which can be used in the business operations for achieving goals and objectives. German
government has analysed the potential in switching to digital mode for conducting trade
smoothly. This can increase the attractiveness of the market leading to good infrastructure and
technological facilities.
 Opportunity- Germany is growing very fast which need advance technology to compete
with other economies. Furthermore, there are limited entities are into the business of
production of leather, this can help Equitek Ltd. to fix economical prices and give cut
throat competition to other entities.
6

Fig. 5- Innovation index
Source: (Technology factor in Germany, 2019)
 Threat- German market is entirely new to Equitek Ltd. and this may require huge
investment in order to expand the business. Therefore, it must plan and make decision
effectively for the application of its profits and retained earnings.
7

Fig. 6 – Investment in Germany
Source: (Investment in German, 2019)
Legal factors- The laws in the legal system of a country are included in this factor.
According to statues, there should be fair competition and trade practices along with equal
opportunities. There are different levels before the incorporation of a business for which
permission should be obtained by Equitek Ltd. Opportunity- With the policies for free global trade, the number of formalities and legal
requirements are low and the whole procedure is easy. This is a positive point in
conducting the business in German markets.
 Threat- The main issue for every business is to understand external factors which may
create impact on the operations of the entity. Equitek Ltd. may have to change plans and
policies according to the modifications taking place outside the company.
Environmental factors- These factors are related to nature, environment or ecology of
places where human being are living. Every organization use resources which are extracted from
the nature. With the imbalance in the nature because of industrialisation, the level of pollution
has increased in Germany and other countries as well.
8

 Opportunity- Production of leather products with the use of latest technology can lower
harm on the nature as Equitek Ltd. can deposit the goods at one place from where it can
deliver to the locations from where orders have been received. Therefore, the level of
pollution in the air and other areas are what the government wants.
 Threat- With the increase in environmental issues, the government of Germany has made
strict rules and regulations for controlling such activities. This can cause additional
problems for Equitek Ltd. as it has to abide by the applicable statues in order to avoid any
legal consequences.
Mode of entering the market
A business entity needs a way to enter the new market therefore, different entry modes
are there which can be used. It is a strategic matter for which decision should be made with great
caution. In order to start business in Germany, Equitek Ltd. should opt for a suitable mode by
considering the costs, time, benefits and so on. Some of these have been elaborated below- Merger & acquisition (M&A)- It involves two words viz. Merger which is refers to
combination of two companies into one and acquisition is done when one company is
taken over by the other. It is done to attain synergy for creating increased revenue and
profit. By using this M&A, Equitek Ltd. can become stronger and competitive within the
German market. It is believed that, combination of two companies can create more value
as compared to one. However, the disadvantage for Equitek Ltd. can be that growth may
be affected adversely. This strategy can be used to enter the market of China because of
growing competition it would be tough for it to buy a place for incorporating the
business. Strategic alliance- It refers to an agreement executed between two individual businesses
for achieving some common goals. There is no creation of new entity such as joint
ventures or partnerships. However, the resources are shared with each other leading to
greater efficiency. If Equitek Ltd. use this mode, then it can select any local company for
using the resources in an optimal manner. On the contrary, it is difficult to find a
company of German origin who can share the resources with Equitek Ltd. Franchising- In this mode, there are two parties viz. Franchisor and franchisee in which
the former prepare some guidelines which are required to be follow by the latter in order
to carry the business. There is a fee which is to be paid for the continuation of this.
9

However, there are some issues because of rigid nature of the entity. This can be used by
Equitek Ltd. For expanding the business in the market of America.
 Joint venture- In this, two companies come together with a motive to agree on using the
collective resources for achieving particular tasks. Also, there is a specific time period
given for the accomplishment. In other words, it is established for temporary period and
as soon as the defined purpose is fulfilled the joint venture comes to an end. Equitek Ltd.
can use the technology, expertise etc. But on opting this mode of entry, Equitek Ltd.
would be under an obligation to obtain approval from the other partner. This may
sometimes lead to conflicts. This can be use for the expansion in India because there are
many companies in the same field which may like and consider this proposal. It can be
used for expanding the business India.
The above-mentioned are the entry modes by which entry can be made to the new
market. In the context of Equitek Ltd., it should select that mode which goes with the objectives
and goals i.e. to expand the business. By analysing the above modes, it can choose strategic
alliance wherein it can form an agreement with another entity up to the time it believe to mark its
own position in German market. Furthermore, combined resources can be used which can help it
achieving its goals and objectives.
Market segmentation
It refers to the process by which a market is categorised into different segments or sub
groups. Also, the classification can be done on the basis of interests, demographics, needs etc.
The main advantage of this is that companies can understand the demands of the customers to
fulfil them. In the context of Equitek Ltd., it should conduct a research for analysing the
demands and needs of the target customers. This is going to help it planning in an efficient and
effective way so that cost, time and energy are not wasted. The target audience for Equitek Ltd.
is those people who belongs to the middle and higher income section.
Demographic segmentation is another concept which is used to identify the appropriate
individuals who can be approached for buying the goods through online services. For this
purpose, it can taken into account factors like nationality, religion, family, gender etc. Equitek
Ltd. can use this segmentation for dividing the customers on the basis of their earnings. With
this, it can adjust prices according to willingness of buyers to pay.
Target market-
10

It has been defined as set of individuals who are on the target of the company for selling
them the leather belts in German market. Germany is a big country and it is important to find the
market Equitek Ltd. wish to capture for making the sales. Hence, it has considered target
customers as those who fall in the category of middle and high classes. The products of Equitek
Ltd. are not cheap as they have quality in them. This is the reason that the final prices get
increased. Furthermore, it will be providing delivery services for which additional taxes and
shipping charges are to be added leading to even high prices. Therefore, medium and high class
people who are in the category of millennials are being targetted by it who can afford Equitek
Ltd.' products.
Porter's generic strategy
This model is used by organizations to assess the profitability, sustainability and position
in the market. This helps in formulating strategies which can be used by entities for mitigating
the issues and problems. Equitek Ltd. need to develop policies and strategies to sustain in the
market and become competitive. For this purpose, it can use Porter's generic strategy which are
available in three types for making the organisation get competitive advantage. Some of the
strategies are provided below:
Cost leadership- According to this strategy, the organization comes at the point where it
can fixed the prices low in order to attract huge number of customers in the initial stage or the
price can be according to the demand. The motive is to give lowest possible prices to products or
services. In order to opt for this strategy, there should be adequate capital to make investments,
contact and buy the raw materials having the low costs, and appointing human resource for
delivering the products from one place to another. It Equitek Ltd. go for this strategy, it has to
consider all the costs that are involved in availing the products to the ultimate customer. With
this, the pricing strategies of competitors should be taken into account in order to keep the prices
low. However, with the use of this strategy, it will be difficult for Equitek Ltd. to meet the costs
of production.
Focus strategy- As per this strategy, niche market should be approached first wherein
segmentation must be done on the basis of cost advantage or by creating differentiation. Here,
company in cost advantage target the narrow segment and offer product or services in as low
price as possible. On the other hand, in differentiation company try to sell products or services
which are different from that of competitors i.e. have unique characteristics. But differentiation
11

focus required strong brand loyalty among customers. It is very essential for a company to ensure
that its product remain unique to market in order to stay ahead from the competition prevailing in
market. For example Equitek Ltd. can apply this strategy in order to cater the differential need of
customer in Germany. This will help them in achieving the trust within new market place which
in turn will provide the competitive advantage at new marketplace. But as Equitek Ltd. doesn't
want to keep its focus over single segment as it decided to start with segmenting medium and
high income people. Therefore this strategy will not be an appropriate option for Equitek Ltd.
Differentiation leadership:- This strategy suggest a business to target larger market for
achieving competitive advantage by differentiating itself in whole industry. This includes
bringing up a new product or services that having some unique feature whose substitute is not
available to market. For instance, by adopting this strategy Equitek Ltd. will be able to sell its car
at premium prices because of its unique idea and technology that differentiate it from other
players in Germany market (D. Banker, Mashruwala and Tripathy, 2014).
These all are the strategies suggested by Michael Porter which a firm can use in order to
achieve competitive advantage in market. But among all these Differentiation leadership is an
appropriate strategy for Equitek Ltd. As company wants to expand its business in Germany by
bringing new leather products. By adopting this strategy company will be able to cover its all
production and establishment cost from its new car. As these products are new to market hence,
Equitek Ltd. can charge premium prices from its target market.
CONCLUSION
From the above given report it can be concluded that strategic marketing plays an
essential role in development of strategic plans that support a company to achieve sustainability
at marketplace. These strategies can be better formulated by assessing the external factors
present in market with the help of PESTLE framework as it focuses on determining the
opportunities or threat present in market. Apart from this segmentation or targeting also plays a
major role in formulating strategy as it provide a base to focus on certain criteria that must be
meet by the product offered by company. But in order to get succeed in new marketplace it is
very essential for a company to adopt an appropriate entry mode that support them in achieving
new heights in market. In addition to this for achieving sustainability in new market company
must enter with an effective strategy that provide competitive advantage which can be better
formulated by using a model named as “Porter's generic strategy”. As this model focuses on
12

explaining three different strategies that support a company to perform better from its competitor
in market.
13

REFERENCES
Books & Journals:
Proctor, T., 2014. Strategic marketing: an introduction. Routledge.
Yüksel, I., 2012. Developing a multi-criteria decision making model for PESTEL
analysis. International Journal of Business and Management, 7(24), p.52.
Prado-Lorenzo, J.M., García-Sánchez, I.M. and Cuadrado-Ballesteros, B., 2012. Sustainable
cities: do political factors determine the quality of life?. Journal of cleaner production.
21(1). pp.34-44.
Gurr, T.R., 2013. Economic factors. In The roots of terrorism(pp. 97-114). Routledge.
Sozinova, A.A. and Fokina, O.V., 2014. Study of economic and technological factors influencing
development of services market. Life Science Journal. 11(7s). pp.318-321.
Brown, J.M. and Sorensen, J.R., 2014. Legal and extra-legal factors related to the imposition of
blended sentences. Criminal Justice Policy Review. 25(2). pp.227-241.
Sila, I., 2013. Factors affecting the adoption of B2B e-commerce technologies. Electronic
commerce research. 13(2). pp.199-236.
Brouthers, K. D., 2013. A retrospective on: Institutional, cultural and transaction cost influences
on entry mode choice and performance. Journal of International Business Studies.
44(1). pp.14-22.
Banker, R., Mashruwala, R. and Tripathy, A., 2014. Does a differentiation strategy lead to more
sustainable financial performance than a cost leadership strategy?. Management
Decision. 52(5). pp.872-896.
Wilkinson, F. ed., 2013. The dynamics of labour market segmentation. Elsevier.
Wilson, R. M. and Gilligan, C., 2012. Strategic marketing management. Routledge.
Zalengera, C. and et. al., 2014. Overview of the Malawi energy situation and A PESTLE analysis
for sustainable development of renewable energy. Renewable and Sustainable Energy
Reviews. 38. pp.335-347
Online:
GDP in Germany. 2019. [Online]. Available through
:<https://countryeconomy.com/gdp/germany?year=2018>.
Political risks in Germany. 2019. [Online]. Available through
:<https://www.theglobaleconomy.com/Germany/political_risk_long_term/>.
Technology factor in Germany. 2019. [Online]. Available through
:<https://www.weforum.org/agenda/2018/10/germany-is-the-worlds-most-innovative-
economy/>.
Age ratio. 2019. [Online]. Available through :<https://www.indexmundi.com/facts/germany/age-
dependency-ratio>.
Economic conditions. 2019. [Online]. Available through :<https://www.bbc.com/news/business-
49342244>.
Investment in German. 2019. [Online]. Available through
:<https://www.statista.com/chart/10355/investment-capital-berlin/>.
14