Unit 4 – Marketing
1. “She knew that demand for ball bearings was slowing down in Europe, whereas it was
growing substantially in countries such as Brazil, China and India that were going
through a phase of strong industrialization. From her research, she also concluded that
manufacturing in the twenty-first century would be accomplished in smaller, more
flexible factories, instead of the huge modernist structures typical of the late nineteenth
and twentieth centuries”(line 76-82).Analyse the advantages and disadvantages of
RDB targeting overseas markets for future sales growth.[6 marks]
Consider any of the following:
Advantages
Increase customer base
Increased brand awareness
Spread risks – economic downturn in Europe may not be felt in other areas of world
Possible strategic alliance with overseas business to enter foreign market easier
Increased sales and profits
Economies of scale
Extend product life cycle in regions where it has not saturated market – demand for ball
bearings in Europe is slowing down, but demand is growing substantially in China, India,
and Brazil
Disadvantages
Success in one area of world does not guarantee success in another
Entry may be hindered by political/legal issues
Lack of intellectual property legislation to protect patents, etc
Costs involved
Social/cultural issues
There are huge opportunities for RDB to increase brand awareness, customer base, and
revenue by targeting overseas marketing for future sales growth. Demand for ball bearings
in Europe is slowing while it is growing substantially in China, India, and Brazil. RDB can
sell ball bearings overseas to extend the product life cycle of ball bearings and spread the
risk of operations by entering markets that are not facing the economic downturn that is
impacting the European market.
On the other hand, targeting overseas markets does not come without risks. Entering foreign
markets can be hindered by political and legal issues such as trade barriers or lack of
legislation to protect RDB’s intellectual property. It can be very costly to set up a business
overseas and success will be dependent on awareness and understanding of local culture.
Anna states in the case (lines 84-86) that the RDB workforce needed a better cultural
understanding of their customers. Research (most likely costly) must be conducted to
understand international customers so that RDB can respect and appreciate cultural
differences when dealing with foreign governments and potential stakeholders such as
suppliers and potential customers.
Possibly a joint venture or strategic alliance with a local company in the foreign country may
provide an advantage?
This maybe should have been an eight mark Q.
2. Define the term market research.(line 115)[2 marks]
Market research can be defined as marketing activities designed to discover opinions,
beliefs, habits, and feelings of consumers so that wants and needs can be identified
and met. It would help to determine the interest of potential business customers in
RDB’s products. Will they purchase the ball bearings and at what price? What rival
brands are currently purchased and what would be the best way to promote the
brand?
Marketing research must be carried out to determine how well your brand will be
received overseas. Anna felt that the RDB workforce did not have a good cultural
understanding of its customers.
3. “Advertising and promotion were limited to some trade journals and trade shows. Anna
thought that this should change. She believed that RDB should advertise in a wider range
of publications,including e-zines (online magazines) and professional web sites for
industrial design and architectural robotics. She wanted to use information and
communication technology (ICT) to communicate to a wider range of external
stakeholders. That way, RDB would create brand awareness in the design community,
and not just in the manufacturing community. The marketing department should start
carrying out market research, both primary and secondary.”(line 110-115) Analyse the
role that primary and secondary market research could play to create brand
awareness for RDB. [5 marks]
Primary research (field research) is data gathered first-hand for the specific study at
hand. It takes longer to collect and may be more expensive to come by as it does not
currently exist. Secondary research (desk research) is existing data not specifically
created for use in the study. It may be easier and less expensive to collect, but it may
not be completely relevant to the study at hand.
4. H L O N L Y With reference to Porter’s Five Forces model, evaluate the competitive
forces affecting
RDB.[9 marks]
SKIPPED FOR SL
5. “ Rebrand the company, changing its name from “Royal Danish Bearings” to “Green
Bearings, an RDB Company”(line 147-148)Discuss the importance and role of rebranding for RDB [7 marks]
Branding recap
Brand loyalty will help to sustain or increase market share and allow the firm to
charge premium prices (consumer demand is less sensitive to price change).
Successful brand development will help to extend product life cycles and will make it
easier for a firm to introduce new products under the same brand. Brand loyalty
may make it difficult for competitors to enter the market (tablets and the ipad)
Major brands rely on reputation/awareness to succeed internationally
 loyalty leads to increased sales
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others may switch to your brand
well-developed brand can to lead to barriers to market entry
helpful when developing/promoting new products
all involve increasing sales/market share/ability to set prices/profit
Brand development is a long-term marketing strategy used to strengthen and build a
brand image. Successful brand development leads to awareness of and, hopefully,
preference for a given brand. Consumers should be loyal to the brand and purchase
it over rival brands.
RDB is seen as a well-known, well-established, well-respected company that has
maintained brand loyalty over the years. In response to Anna’s RDB 2020 strategic
plan that includes ‘first-mover advantage in terms of brand awareness and “green”
practices,’ Valdemar has suggested that the company be rebranded with a name
change to “Green Bearings, an RDB Company.” Re-branding should be in the hopes
of further differentiating RDB from rival companies and focusing on factors other
than the high quality ball bearings that RDB produces. The name change would be in
line with desired image of the company. Valdemar, however, suggests that “Green
Bearings” (new company name) would be “green” in name only.
It is not well advised to change the name of a well-respected company that benefits
from brand loyalty for Valdemar’s purposes. The new name suggests that RDB has
concern for the environment and practices “green” manufacturing processes. It
appears unethical to use the new name while the factories produce high pollution
levels.
Even if RDB’s production practices were to become more “green,” success depends
on the perception that RDB’s B2B customers that purchase ball bearings on a large
scale are concerned that such a small component of finished product such as a car is
produced using green technology. That is probably not the case in China.
RDB should use its well established brand name as an extension and possible create a
subsidiary (possibly through joint venture or strategic alliance) that could use the
suggested new name.
Marketing thoughts:
Can you product a position map for RDB
How does the proposed strategies fit into Ansoff matrix