Strategic Marketing Report: Smyth Toys' New Product in Romania

This report analyzes Smyth Toys' strategic marketing plan for entering the Romanian market with a new, app-integrated toy. It begins with an executive summary and an introduction to strategic marketing, emphasizing differentiation and competitive advantage. The report then applies a PESTLE analysis to assess the political, economic, social, technological, legal, and environmental factors influencing the Romanian market. It explores various market entry modes, including direct exporting, licensing, franchising, mergers and acquisitions, joint ventures, and strategic alliances, recommending strategic alliances as the most suitable approach for Smyth Toys. The report also details market segmentation and targeting strategies, focusing on demographic segmentation (children aged 5-15). Finally, it examines Porter's generic strategies to determine the best competitive approach for Smyth Toys in Romania. The report concludes with a summary of findings and recommendations, supported by relevant references.

STRATEGIC MARKETING

Table of Contents
Executive summary....................................................................................................................3
INTRODUCTION......................................................................................................................3
TASK 1......................................................................................................................................3
1.1 PESTLE analysis..............................................................................................................3
TASK 2......................................................................................................................................5
2.1 Market entry mode strategy.............................................................................................5
TASK 3......................................................................................................................................6
3) Concept of Market segmentation and targeting.................................................................6
TASK 4......................................................................................................................................8
4) Porter’s generic strategy....................................................................................................8
CONCLUSION..........................................................................................................................9
REFERENCES.........................................................................................................................10

Executive summary
The research project report is based on the Smyth toys develop a new product that are
deliver in Romania market. Therefore, it done various marketing activities perform by
organisation are the market segmentation, targeting and identify the best porter’s generic
strategy. It also understand the external environment of target market through PESTLE
Analysis that help them to know the new entry modes that assist them to attain their market
objectives in effective manner.
INTRODUCTION
The strategic marketing is a way through which an organisation attempts to present
itself better by making differentiation in its products. With the help of strategic marketing, the
companies use to make a product and service differentiated from competitors so as to achieve
competitive advantage. In the present report, Smyth toys is taken as a chosen country for
discussion on strategic marketing. The mentioned country has already its toy stores with a
number of varieties in different countries. Now the firm is looking for expanding business in
Romania with a new product (Kashmiri and Mahajan, 2014). The report will discuss about
different models and approaches like PESTLE analysis, Porter’s five force model etc. which
will help in identifying better opportunities for company to develop business in said country.
Apart from this, market segmentation will help in determination of target market.
TASK 1
1.1 PESTLE analysis
As per the present scenario, Smyth toys which is a well known brand in the toys
industry has made a plan to enter into a new market by offering a fresh product. According to
this scenario, consultancy firm has been approached which has suggested to establish the new
business venture in Romania (Meissner, 2012). Thus, the cited enterprise is making a plan to
enter in market with a new product. The fresh product is based on innovation in which a new
technology has been devised in toys. These toys will be integrated with apps of Smartphone
from which it can be controlled as well. The product has made with an objective of making
use of enhanced technology in market along with an essence of innovation in it.
Political- The political condition of Romania is not much stable and has high corruption level
in the country (Rossi, Vrontis and Thrassou, 2014). However, it has been noticed that EU has

released a new report according to which the country has made a lot of improvements in both
issues because of which, it can be a good place for establishing and expanding new business.
Apart from this, the government of said country is continuously making efforts for providing
better laws and financial assistance that can help in attainment of better growth. Thus, the
cited business can bet set up in this country in a better way.
Economical: With the recovery of EU after recessions, Romania has also showed its better
growth and development in GDP rates since 2007-2008(Jüttner, Christopher and Godsell,
2010). This condition makes the country most optimistic place for expanding the business.
On other hand, there are some issues regarding the inflation because of which the country is
facing difficulties. The job opportunities in market are labour market is underdeveloped.
However, the mentioned business can expand business in Romania and create job
opportunities to capture the growth and development rates of the country(Sunkada, 2010). In
addition to this, the FDI flows has also enhanced which has attracted a large number if
business organisations. Thus, the quality of business environment has improved a lot.
Social factors: The social factors of Romania can be studied under the demographic head
where the people of Romania have a good lifestyle and high standard of living. The birth
rates in country are estimated to be increased and also have an estimation of improved life
expectancy rates. Besides this, the country’s people have a better expenditure pattern on
various food, clothing, home ware and technical products (Percy, 2014). Thus, it offers a
good place for doing business. The new idea of toy having an integrated app controlled by
Smartphone can have a greater exposure and better opportunity to be developed among
customers of Romania.
Technological factors: The present time is full of modern gadgets and instruments that have a
great capacity of providing various facilities. In such scenario, it is evident that Romania has
less access of internet and knowledge of computer skills. But, the country is rapidly moving
towards the developmental phase and in adopting new technologies, Smartphone etc. which
gives a great opportunity to the new business for making a good expansion with the help of
its innovative product (McDonald and Wilson, 2011 ). Further, the research and development
system in country is well developed because of which it can perform well strategies of
research in market.
Legal factors: The legal factors are rapidly becoming tight after the end of communist regime
in country. But after this, the government has made many laws and regulations according to

which it provides various types of assistance to new businesses so that they can be set up in a
better way (Huang, Binney and Hede, 2010). This will help the stated organisation to develop
in market with its full potential and ability. Besides this the laws made by government will be
helpful in having fair competition between various rival firms in the market.
Environmental: The environment al issues like global warming, pollution etc. are te issues
which are prevailing in each country. The cited nation has also such kind of issues which
necessitates to have a product which are based on better interfaces and system in it so that
their can be less harm to environment. In such condition, the packing of toys can be done in
some recyclable materials that are less harmful for environment (Kashmiri and Mahajan,
2014). Besides this, the cited firm can also make use of some technology that emits less
harmful rays.
TASK 2
2.1 Market entry mode strategy
The entry into market can be done through various ways with a proper planning so
that the company can be set up in a better way. For entering in a new market, it is necessary
that the organisation adopts a strategy according to the market conditions of that country.
Thus, for each country, market entry mode must be different. Different factors have to be
focussed while making entry strategies like tax rates, marketing cost and degrees of flexibility
the product can have (Meissner, 2012). In present scenario, firm is intending to enter in
Romania with a new product of app integrated toys. In such scenario, the market entry mode
can be done through following ways:
Direct Exporting: The direct exporting method involves the method through which the
company can directly sell their product into market with the help of its own resources. In
many instances, the organisations make contact with the selling agents or distributors, who
can give a better exposure to their products. Thus, they act as a face of enterprise because of
which it is necessary to select the agent and distributors carefully (Rossi, Vrontis and
Thrassou, 2014).
Licensing: The licensing is a commonly used method for entering into a new market where
the main organisation transfers its right to other firm so that they can sell company’s products
legally. This type of entry strategy is most useful if the market share held by purchaser of

license is large. Thus, with the help of well established licensee the company can establish a
good set up in country.
Franchising: The franchising is a good model of setting up market in a new place as it helps
in rapid expansion of the company (Rossi, Vrontis and Thrassou, 2014). For a franchising
business, it is necessary that the organisation have strong brand value and recognition ion
market which can help it in setting up the market easily.
Mergers and acquisitions: In mergers, two companies are joined together to form into a new
business. Thus, they take on completely new form of business with a new name and policies.
While on other hand, acquisition is a process in which a big business organisation takes over
a smaller firm to take on all the control and responsibilities of the smaller or acquired
business enterprise (Sunkada, 2010).
Joint ventures: The joint venture is a form of partnership in which two different firms make a
consent to work together in market. In this type of entry mode, the organisations agree to
share all profits, losses and risks in equal proportion. Thus, it helps in establishment of an
entity in a better way.
Strategic alliance: Another mode of entry strategy include the way of strategic alliance in
which the two or more than two parties share a common goal to achieve without losing their
independent identity (Percy, 2014). Through this alliance, the firms can achieve a win win
situation where organisations are based on doing innovations for expansion activity.
From the above discussed section, for Smyth toys, strategic alliance will be a better
option to enter in Romania. This method will help in taking aid of well established business
in Romania without losing the control and identity of organisation. In addition to this, the
franchising is also a good alternative where enterprise can give permission to sell its products
to the franchisee as it has a good brand value in market.
TASK 3
3) Concept of Market segmentation and targeting
Market segmentation is that type of procedure in which company’s marketing manager
divide the larger market into various similar type of segmentation. It is based upon the similar
characteristics, lifestyle and desire so they can easily identify customer needs effectively. It
facilitate firm to deliver goods or service as per their needs in the potential target market that

leads enhance satisfaction level. It can be categorized into various form are the
Psychographic, Demographic segmentation and geographic segmentation. Therefore, in the
demographic market it has been categorized by marketing manager on the basis of gender,
income, age and education level. Thus, the other segmentation is a psychographic in which it
is divided into customer’s attitude, beliefs, perception, emotions, lifestyle and interests.
Further, the most common form of segmentation is a geographic in that company offers the
product on countries weather condition.
SMYTH TOYS launch a new product that is app integrated toy that are control through
Smartphone in the Romania country. The senior marketing manager wants to deliver its new
toy in that particular country for this purpose they divide the large market into single market
segmentation (Roger, 2010). Nowadays, children are always looking for new digital
technology game who are under age group 5- 15 year older. For this, the Smyth toys finding
out the needs of these children and establish a toy that operated through Smartphone. Thus,
the senior marketing manager choose the demographic market segmentation as they can
easily identify their potential consumer is children are under 5-15 age group in Romania
market.
Targeting can be said that the company selects one market segmentation among
various through company can match the consumer needs with the products offerings. It can
able them to easily capture that market area where they identify that product’s sales increase
at the optimum level. It assures them to focus on that particular area and done all the
marketing activities that attain the marketing objectives of a Company in effective manner
(Drummond, Ensor and Ashford, 2010). In the present case, the SMYTH TOYS target the
demographic market segmentation in which they target children of age group under 5-15.
Thus, in that potential target market the manager of marketing done advertising in which it
place new product information on newspaper and social media on that particular area. It
assists them to easily attract the children customers towards new toys that easily aim its
satisfaction and company objectives in desired manner.
It has been critically evaluating that the senior manager target the potential target
market enable them to easily identify the needs of customers and provide them products
accordingly. Market segmentation and targeting gives benefits to the SMYTH TOYS in that
they save their useful time as it facilitate marketer to put only that particular product. It is
based upon similar characteristics in which they introduce its new product that increase
company’s productivity. The main advantages from this that assists them to design
promotional device that is highly effective according to customer point of view (Moutinho

and Southern, 2010). Thereafter, in which they can easily expand its market along with that it
also retain customers as market segmentation give a growth opportunity. Accordingly, they
make strategy of customer retention for the particular target market segmentation. On
contrast to this, the market segmentation is a highly expensive for the cited company as they
have to conduct market research. It requires a huge amount of money to invest on it as they
have to generate a marketing mix for each variety of segmentation. They hire the market
agency for the purpose of market segmentation who charge a high cost of millions to the cited
company. The whole process takes more time as they conduct market survey, obtain
information, summarize them and finding out the customer needs. Apart from this, it may
incur a huge loss if the company’s product not effectively increase sale from the target
market.
TASK 4
4) Porter’s generic strategy
The porter’s generic strategy is a target strategy in which porter suggested that
company have to choose one among leadership, focus and differentiation. It can be used by
any size of organization. The main aim of adopting strategy is that it assist firm to effectively
achieve goals and satisfy customer in desired manner than its competitor. Therefore, there are
three main approaches are known as generic strategies are mainly cost leadership,
differentiation and focus strategy. Thus, it can be categorized into two parts are cost and
differentiation focus it can be described further. The generic strategies used for the purpose of
gaining competitive advantages it means that it assist company to sale products in that
manner that can take away from its competitors. Cost leadership strategy can be used by
organization for two main ways in which they can easily enhance its profits by minimizing
cost through charging industry-average prices. The other way is that company can capture
market share from this strategy by charging low prices as it still make a rational profits on
each product sales through minimize cost. Thus, it cost can be also explained in other way the
company who adopt cost leadership strategy is not good enough becomes a leader in industry.
It can be possible by opening an area through which another low-cost producers attack that
resultant into cut the company’s price which blocks areas to enhance market share. It is only
beneficial for those who have a efficient logistic, low cost base and have a various ways so,
they can cut cost better than its competitor. Therefore, it produce high risk as competitors can
easily copies the way of reducing cost so, there is need to make a continuous improvement. It

can be possible by adopting Kaizen philosophy it can help organization to make improvement
in reduction strategies.
Porter’s have an another strategy is a differentiation in which company can able to
produce its product or service that are unique from its competitor. They can leads success in
its industry only when they have a good research and development, innovation. Along with
that, have a capability to offer a high-quality of goods or service in target market. They have
to present it sales and marketing effective that able the market to know the benefits of product
through differentiated offering. It is mainly suitable for large companies who agile with new
product development process. Further, there is a focus strategy in which it mainly focus on
particular one market segmentation (Moutinho, 2011). Marketer understands the customer’s
dynamic nature as their needs are unique due to which it develop a unique low- cost with
high quality of products. The organization adopts focus strategy can serve better to its
customers in unique manner that will build strong brand loyalty in the minds of consumers. It
has been asserted that it is only enough good to focus on market segmentation as it said that
firm opt either cost differentiation or cost leadership. The man key success from this generic
strategy is that it assures them to add extra something which serves products in that particular
market niche. Therefore, SMYTH TOYS adopt either cost focus or differentiation focus
strategy that helps them to easily capture a large market share in Romania. Whereas,
differentiation is a suitable strategy as they launch a new product is a toy which are integrated
with Smartphone application that controllable through mobile. It is unique toy for the
Romania market in which they highly attract its potential customers is a Children under age
5-15 and it have a depth knowledge about their customer’s needs that directly leads to
increase sales as well as capture market share in effective manner.
CONCLUSION
Summing up the whole report it has been concluded from the research report is that the
SMYTH TOYS launch a new toys is a controllable through Smartphone in Romania target
market. For this purpose, they conduct market research by finding out the customer’s
expectation according to that they able to design its advertising and promotion strategy in one
particular single market segmentation is demographic. The product is very unique and
attractive which are offer by company for small children who are under age group of 5-15 by
targeting demographic market segmentation. It has been also analyzed from the porter’s
generic strategy is that the cited company can adopt differentiation strategy as its products are
unique from its competitors and by focus on single target market through focus strategy. It

able them to capture a high market share in Romania market by minimizing cost of its
product that leads to increase sales and generate more revenues. Thereafter, in the research
project, the new market entry strategy can be develop by focusing on market condition of
country such as tax rate, flexibility in product and cost of marketing etc. It has been analyze
that market entry can be possible through various different ways such as direct exporting,
franchising, licensing, mergers and acquisition and joint venture.
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