Strategic Marketing Report

This report examines HopeTech's strategic marketing plan for expanding into the Romanian market. It analyzes the external environment using a PESTLE analysis, explores market entry modes, and examines market segmentation strategies. The report also discusses Porter's generic strategies and recommends a focus strategy for HopeTech's hybrid bike product.

Strategic Marketing

EXECUTIVE SUMMARY
Expansion is the latest trend in the business environment. The Romanian market is full of
business opportunities and possess a significant potential for growth. This report focuses on
HopeTech and its strategies and approaches undertaken to venturing in the market of Romania.
The bicycle spare part manufacturer is developing its own cycle which is to be offered
specifically in the latest market. The purpose of developing this report is to consider viability of
venturing in the market of Romania through consideration of the external environment factors
such as political stability, economic circumstances and technological advancements. The stable
political environment along with growth rate of 8.8% are one of the tempting features
encouraging to expand operations in the Romanian market. The merger of operations of
HopeTech with Pegas will be able to serve markets in an improved manner and definitely results
in achieving higher profits. Large section of the people are employed with mega organisation and
possess decent disposable income to avail the latest developed offerings of the company in the
form of Hybrid bikes. The selection of niche market of office going population will be beneficial
for enterprise when accompanied with right marketing strategy and definitely result in higher
profitability and market share for organisation.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
PESTLE Analysis........................................................................................................................1
Market Entry Modes...................................................................................................................3
Market Segmentation..................................................................................................................5
Porter's generic strategy..............................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Strategic Marketing is defined as an approach through which a business differentiates its
products and services from its competitors (Proctor, 2014). The organisation in this context
attempt to make ideal use of its strengths to ensure that better value is being offered to
consumers which ultimately results in availing improved economic outcomes. This assignment
focuses on HopeTech, it is an organisation which is known to be a paramount engineer and
manufacturer of bicycle parts. This organisation is planning to venture in the market of Romania
with its latest advance hybrid cycles which can be utilise by the masses. The reason for which
Romania has been chosen as a next business destination is mainly due to growth rate in the
country along with their preferences for technology. This report will be carrying out an external
market analysis through undertaking PESTEL in order to identify major opportunities for growth
and expansion can be determined.
MAIN BODY
PESTLE Analysis
It is referred to a macro environmental framework which is been employed by
organisations to ascertain impact of external environmental factors (Makos, 2015). It is very
crucial for HopeTech to undertake this framework as it will be helpful in identifying
opportunities and threats which lies in the targeted market ascertained through appropriate
scanning of business environment of Romania. A brief description of the crucial element of
PESTLE analysis are as follows:
Political Factors: The political factors emphasize upon the stability, tax policy and
restrictions which are formulated by the government (Banfield, 2017). The consideration in this
segment is provided to the action of government and political condition on the chosen location
for business.
Threat
It can be said that there is a lack of political stability in the country as people has been
seen protesting against the government due to weak anti-corruption investigations (Romania:
The Limits of Corruption, 2017). Therefore, it can be said that it is a major threat which is to be
considered by the organisation before venturing into Romanian market. Recently adopted
presidential system have been emerged which can counter existing threat of the company.
Opportunity
1

The opportunity in this segment is that Romania is being a part of EU, which has been
known to provide an appropriate business environment for companies so that innovative products
can be launched. Therefore, this organisation can easily carry out trade practices within Romania
with its latest product of office going hybrid bicycle.
Economic Factors: It can be said that economic factors are most crucial as they can
influence business operations in the most significant manner. The various segments which are
covered in this report such as economic growth, interest rates and inflation in the country.
(Source: World Bank, 2016)
It can be interpreted from the above graphical illustration that Romanian GDP is growing
at a steady rate when compared with Bulgaria and Croatia. Therefore can be considered as one of
crucial destination for a business to expand their operations.
Opportunity
Romania is known to be one of the fastest growing economy out of members in the EU.
The growth rate which has been achieved last year stands at 8.8% and this country have become
a hub for foreign investments which aggregated to a staggering 3% of the annual GDP of
Romania (Romania: The Fastest Growing Economy in the EU, 2018). The provided evidence is
sufficient to state that Romania is an ideal destination to carry out expansion program for the
company.
Threat
2
Illustration 1: Romania GDP

The threat on such grounds is that inflation in the country is rising which makes it
difficult for a business to spend. This threat could be countered effectively by business through
reducing cost of goods production.
Social Factors: These factor emphasize upon cultural and demographic aspect of the
population of the country. Romania is known to be a small country which encompasses
approximately 19.57 billion people in the year 2018, out of which 84.1million are Ethnic
Romanians (Romania Population, 2018).
Opportunity
The working population lies in the age group of 15-64 years which is a major opportunity
for HopeTech to launch their hybrid bikes, further utilised by office going individuals. The
median age in the country is 41.6 and people are becoming more conscious of their health which
provide wide scope of business success in the market.
Threat
There is a significant decline in the population rate which can be countered effectively
with attaining healthy lifestyle by opting for hybrid bicycle for commuting.
Technological Factors: It can be ascertained that technology is highly favoured in the
market of Romania and have emerged to be a leading destination for IT outsourcing in the
Europe (How Romania became a popular tech destination, 2017).
Opportunity
The economy has been largely focusing on innovative tech oriented organisations which arise a
great opportunity to HopeTech to venture into Romanian market. HopeTech can launch their
technology based hybrid bicycle for the mass population to achieve economic gains. Population
skills and abilities on technical grounds can be utilised for advancement of products.
Threat
The threat on such grounds is that rapid advancement in technology have reduced life-
cycle of the product which can be countered effectively by delivering products which are more
sustainable and does not become outdated for a while.
Legal Factors: The legislation which has been formed by the government tend to carry a
greater influence on the operations of the company. The employment law in Romania stands
most crucial as it defines the obligation which are to be fulfilled by the employer. The purpose
3

behind formation of the Romanian labour law is to protect the rights of employees through
maintenance of mandatory standards (Employment & labour law in Romania, 2018).
Opportunity
It is essential for HopeTech to consider Romanian labour law so that operations could be
carried out without any disruption. The adherence to laws and regulations will make sure that
right work culture is developed within organisation leading to achieve better results (Banfield,
2017).
Threat
The challenge in this segment is that there is a limitation on the extensive use of
contingent workforce which is availed to overcome fluctuation in demand. The company in this
segment can make use of right projections measures so that such sudden rise or fall in the
demand could be countered.
Environmental Factors: This factor emphasizes on ecological aspects such as climate
change and depletion of resources. In context of Romania, Air and water pollution have become
major challenges for the government (Romania: Environmental Issues, Policies and Clean
Technology, 2018).
Opportunity
It has become indispensable for organisation such as HopeTech to restructure their
operations so that sustainability of external environment is being fulfilled. The organisation has
been known to promote environmental sustainability through encouraging people to take up
hybrid bicycle to work. Hence,it is healthier and less harmful to environment. Therefore, it can
be said that, this organisation is contributing effectively and efficiently to forming an ecological
balance and fulfil their responsibility towards society (Epstein, 2018).
Threat
The threat on environmental grounds is that customers might not avail products and
services which are not produced in an environment friendly manner (Morgan, 2013). The
solution to this challenge is that an organisation must undertake production of hybrid cycles in an
environment friendly manner.
Market Entry Modes
Market entry modes can be referred to manner through which new products and services
will be delivered to latest discovered market. It is very important to evaluate number of market
4

entry strategies available so that most suitable one could be selected (Kunz and Warren, 2011).
HopeTech is a bicycle parts manufacturer which is aiming to enter into Romanian market with
its latest developed hybrid bike for the masses. Therefore, a critical consideration to all the
strategies will be helpful in determination of the ideal approach for market entry. Some of crucial
market entry approaches are as follows:
Strategic Alliances: It is referred to the situation in which two or more organisations
cooperate their efforts for purpose of achieving a strategic goal. It is essential for organisation to
possess similar goals so that they can enter into alliances without any disruptions (Ramamurti,
2012). The alliance can be formed by an organisation with its suppliers, customers and
competitors for a certain period of time. The major advantage which can be facilitated by this
organisation while opting strategic alliance is that costs are shared and strength of all the
involved parties can be utilised to achieve improved economic outcomes. For instance:
HopeTech can enter in Romanian market through using strategic alliance with Pegas, one of the
most renowned cycle brand operating in the Romania. This approach will be helpful in
establishing a base in targeted nation with minimal risks. The sharing of technology and
resources along with iconic brand name can result in attaining substantially good economic
returns for both enterprises (IšoraItė, 2014). But on the other side, there are chances of conflicts
between partners which can result in disruption of activities. The culture possesses a strong
influence on the ways of working which may hinder formation of right strategic alliance between
both the organisations.
Franchising: Franchising is referred to be a situation in which owner grants right to
market and distribute franchise's products to an individual for a chosen market. The individual or
business assigned will be able to make use of business for a specified time in order to avail
financial gains (Sherman, 2011). For instance: HopeTech can grant right of distributors and
market to prospects in Romanian market so that local talent can be best utilised for the benefit of
business. The investment in this market entry strategy is limited as the next person have to pay
royalty for using the brand name of the company. It can be considered as one of the least risk
oriented approach of venturing into a targeted market. The usage of culture knowledge can be
best utilised so that more and more customers can be persuade for availing the Bike offered by
the company. But the business loses control lies over the managers which are responsible for
5

selling products and services. They may undertake unethical approach for the purpose of selling
the products and services of the company.
Mergers & Acquisitions: It can be considered as one of the most common approach for
organisations looking to expand their operations in the international markets. This approach can
be referred to as one of the best approach which can employed to acquire new technology and
compete effectively with the rival organisations. For instance: HopeTech is left with a choice to
either procure operations and resources of other enterprise (acquisition) or to merge operations
with enterprise performing in the similar domain. It can be considered as one of the most critical
approach through which resource and talents in international business environment could be
procured. Synergies can be considered as one of the great source of attaining competitive
advantage in the international market which can be achieved on the cost and revenue grounds
(Bena and Li, 2014). There are limitations to this approach as well as cultural clashes are
considered most evident. The approach to working, education and incentive schemes are some of
features which are known to incorporate cultural clashes in this market entry strategy. Therefore,
it is essential for an organisation to take into consideration all the limitation so that suitable
decision can be taken.
In this present scenario, Mergers & Alliance can be considered as one of the most
suitable approach with which this business can venture into Romanian market. HopeTech can
merge their operations with organisation which are performing in the similar segment. It is
recommended to this organisation to merge their efforts with Pegas. It is a renowned bicycle
brand operating in the market of Romania since 1972. This merger will result as formation of
new brand, named as PegasTech. The company has been seen modifying their physical structure
and ergonomic designs which can further be supported with technology which is being offered
by the company in the form of lithium-ion batteries, electronic displays and flash-lights. The
synergies will lead to development of a new product which will be able to enhance reputation
and financial outcomes for both the organisations.
Market Segmentation
Market segmentation is a concept which focus on dividing a large market into smaller
segment based on similarity of the characteristics and features (Cross, Belich and Rudelius,
2015). The concept of market segmentation has been largely undertaken by the organisation as it
results in targeting potential segment and designing personalised marketing campaigns for the
6

same. The segmentation of the market can be carried out on numerous grounds such as
demographics, buying behaviour, lifestyle and geographical locations etc. A brief description of
the market segmentation strategies are as follows:
Demographic Segmentation: This division of people takes place on the basis of income,
age, gender and occupation of the population (Cleveland, Papadopoulos and Laroche, 2011).
This approach is mostly employed in the auto-mobile segment in which BMW caters
requirements of high end buyers whereas Toyota focuses on fulfilling requirement of masses that
possess relatively lower disposable income and carry a rational choice when to comes to cars.
Behavioural Segmentation: As the name suggest, behaviour and decision making are
considered as major grounds on which segmentation is being carried out. The marketing
activities are carried out specifically on the basis of behaviour of target segment. The example
for this approach can be seen in the smartphone segment in which Apple targets people who wish
to be part of niche segment whereas Samsung focuses on rational segment who looks to avail
services for free of cost.
Psycho-graphic Segmentation: This division of population takes into consideration
lifestyle, interest and activities which are being carried out by people (Gunter and Furnham,
2014). This segmentation is mostly carried out by fashion brands who differentiate from each
other on the basis of lifestyle which is being led by prospective customers.
Geographic Segmentation: The categorisation in this approach is carried out on the basis
of geographical location of the prospects. The geography stands crucial in determining need of
the prospective customers as well. It can be considered as one of the easiest form of division of
prospective customers on the basis of their location (Yu and et. al., 2016). For instance: the
people residing in mountain region will be looking to avail products which will be different from
that of individual living on plains. This difference arises mainly due to geographical reasons.
The demographic segmentation is to considered in this report as it undertakes division on
the basis of age, gender, occupation and income of the target segment. This approach has been
largely applied in the bike market and been successful in fulfilling requirement of the people.
The population study of target market can help in determination of requirement and
simultaneously targeting them promotional campaigns so that demand could be increased. For
the undertaken product i.e. Hybrid Bikes, working class of the country have been targeted as they
carry appropriate resources and requirements for this product. The promotional campaigns must
7

be aimed to persuade people into taking up Hybrid Bikes rather than other approaches to
commute. The justification for undertaking this approach to segmentation is that it is helpful in
ascertaining clearly requirements of the customers on the basis of their age and gender
(Steenkamp and Ter Hofstede, 2002). Another reason is that variables which has been offered by
this segmentation are much easier to measure and compare. An organisation when successfully
able to fulfil requirement of prospective customers, becomes able to retain more customers along
with achieving their loyalty.
Target Market
The target market which is undertaken in this report is working class people who are
working with this institution. The primary operations of this merger will be initiated in the
Bucharest, it is capital of Romania and one of the most developed city in the country. The large
segment of population is involved in service and manufacturing industry due to presence of
approximately 186,000 firms. Therefore, it can be ascertained that maximum section of
population is working as a salaried employees and possess adequate disposable income. The
employable workforce ranging from the age group of 15-35 years of age is being targeted with
Hybrid Bikes which they can use as a replacement of their current vehicles. The justification is
that such people does not posse ideal time to work out and exercises, under such circumstances
This bike will be helpful to them in changing their lifestyle along with countering problems of air
and water pollution in the country. Further, health conscious segment can be targeted through
incorporation of numerous features such as distance travelled, calorie burnt and speedometer
(Cross, Belich and Rudelius, 2015).
Porter's generic strategy
The strategy derived by Michael E. Porter define the manner through which an
organisation will be able to achieve competitive advantage in the operating market. This is
attempted to achieve access to talent and resources which is inimitable by the rival organisations
and assists in attaining a superior position in the market (Porter, 2011). A brief description of the
options presented by the Porter's generic strategies are as follows:
Cost leadership: The primary approach to competitive advantage is to achieve cost
leadership in the market. This strategy states that a business should be able to achieve lowest cost
of production so that competitive advantage could be facilitated (Balsam, Fernando and Tripathy,
2011). But the condition in this strategy is that a business needs to posse relatively higher market
8

share so that they are able to achieve economies of scale. HopeTech possess a strong relation
with the suppliers which will be helpful simultaneously in reducing cost of production of Hybrid
Bikes along with their spare parts.
Differentiation: This strategy of achieving competitive advantage focus on creating of
unmatchable products and services in the market (Tanwar, 2013). The company attempt to this
strategy aims to provide highest value to the customers so that a distinct position in the market is
achieved. The positioning in the minds of customers helps a business in attaining improved
profitability in the market. HopeTech can differentiate its products through incorporation of
technology so that Hybrid Bikes would be formed which will be helpful in enhancing
profitability of the company.
Focus: This approach focuses on targeting a specific market niche for selling of products
of organisation. The firm with this approach have to identify a target and aim successfully fulfil
their requirement so that superior in the market could be achieved. The focus strategy does not
concentrate on achieving cost leadership and differentiation in the market.
The best strategy which can be adopted by this organisation is to focus on niche market
segment and to fulfil their requirement in the exclusive manner. HopeTech with its products is
targetting working class people who are being associated with an organisation. The Hybrid Bikes
which are offered to people in Bucharest will be equipped with lithium-ion batteries, flash-lights
and digital odometer so that they commute to work through modifying their lifestyle.
CONCLUSION
It can be concluded from the above report that environment scanning plays crucial role in
the organisation as it helps in identification of opportunities and threats which are persistent in
the business ecosystem. The business organisation can take advantage of economic and
technological potential to venture into Romanian market so to achieve improved profitability for
the company. The organisation is merging their resources and technologies with Romania based
enterprise so that growth could be availed. The division of people on the basis of income,
occupation and age helps in identification of niche target market which is to be targeted with
latest products and services of the company.
9

REFERENCES
Books and Journal
Balsam, S., Fernando, G.D. and Tripathy, A., 2011. The impact of firm strategy on performance
measures used in executive compensation. Journal of Business Research, 64 (2),
pp.187-193.
Banfield, E., 2017. Political influence. Routledge.
Bena, J. and Li, K., 2014. Corporate innovations and mergers and acquisitions. The Journal of
Finance, 69 (5), pp.1923-1960.
Cleveland, M., Papadopoulos, N. and Laroche, M., 2011. Identity, demographics, and consumer
behaviors: International market segmentation across product categories. International
Marketing Review, 28 (3), pp.244-266.
Cross, J. C., Belich, T. J. and Rudelius, W., 2015. How marketing managers use market
segmentation: An exploratory study. In Proceedings of the 1990 Academy of Marketing
Science (AMS) Annual Conference (pp. 531-536). Springer, Cham.
Epstein, M. J., 2018. Making sustainability work: Best practices in managing and measuring
corporate social, environmental and economic impacts. Routledge.
Gunter, B. and Furnham, A., 2014. Consumer Profiles (RLE Consumer Behaviour): An
Introduction to Psychographics. Routledge.
IšoraItė, M., 2014. Importance of strategic alliances in company’s activity.
Kunz, V.D. and Warren, L., 2011. From innovation to market entry: a strategic management
model for new technologies. Technology Analysis & Strategic Management, 23 (4),
pp.345-366.
Makos, J., 2015. What is pest analysis and why it's useful. PESTLE Analysis.
Morgan, G., 2013. Riding the waves of change. Imaginization Inc.
Porter, M.E., 2011. Competitive advantage of nations: creating and sustaining superior
performance (Vol. 2). Simon and Schuster.
Proctor, T., 2014. Strategic marketing: an introduction. Routledge.
Ramamurti, R., 2012. What is really different about emerging market multinationals?. Global
Strategy Journal, 2 (1), pp.41-47.
Sherman, A. J., 2011. Franchising & licensing: two powerful ways to grow your business in any
economy. AMACOM Div American Mgmt Assn.
Steenkamp, J .B. E. and Ter Hofstede, F., 2002. International market segmentation: issues and
perspectives. International journal of research in marketing. 19 (3), pp.185-213.
Tanwar, R., 2013. Porter’s generic competitive strategies. Journal of business and
management, 15(1), pp.11-17.
Yu, R. and et. al., 2016, February. Geographic segmentation via latent poisson factor model.
In Proceedings of the Ninth ACM International Conference on Web Search and Data
Mining (pp. 357-366). ACM.
Online
Employment & labour law in Romania, 2018. [Online]. Available
Through:<https://www.lexology.com/library/detail.aspx?g=6926e878-c0cd-459d-9771-
2b913acb676b>.
10

How Romania became a popular tech destination, 2017. [Online]. Available Through:
<https://www.ft.com/content/a0652dba-632f-11e7-8814-0ac7eb84e5f1>.
Romania Population, 2018. [Online]. Available through: <http://www.worldometers.info/world-
population/romania-population/>.
Romania: Environmental Issues, Policies and Clean Technology. 2018.[Online]. Available
through:<https://www.azocleantech.com/article.aspx?ArticleID=562>
Romania: The Fastest Growing Economy in the EU. 2018. [Online]. Available through:
<https://themarketmogul.com/romania-economy/>.
Romania: The Limits of Corruption. 2017. [Online]. Available through:
<https://worldview.stratfor.com/article/romania-limits-corruption>.
11