As one effect of the global economic crisis beginning in 2007, many companies suffered from strong decreases of incoming orders. At the same time, banks went over to a reserved willingness to grant credits, out of concerns about bankruptcies of debtors. This led to the result that companies were not able to meet liabilities that were incurred during the prior phase of economic upswing.
For some companies, this chain of events led to a massive decrease of solvency, possibly resulting in a bankruptcy. But concerning other companies, the worsening of their economic situation was just accelerated by the economic crisis. The main reason for their company crisis was the fact that severe mismanagement had occurred in the past.
Mismanagement often is the cause of a so-called strategic crisis. This means that the general market orientation of a company is inadequate. However the problem with this is that it cannot be detected at first sight, and therefore often no countermeasures are taken in order to avoid a negative development. The strategic crisis can then develop into an earnings crisis. In this stage, the indicators that certain things are going wrong within the company are more significant and measurable within the company’s figures. If countermeasures are not taken, this will finally lead to a liquidity crisis, in which the company faces massive problems. It is not able to pay liabilities, loan capital cannot be acquired and the company faces the danger of illiquidity or bankruptcy.
This is where turnaround management gets involved. The main objective of turnaround management is to reverse negative trends that have are likely to become or already have become an existential threat to the company and to ensure its long-term success.
One factor which has a massive influence on a company’s success is its marketing. Marketing, however, is a complex term, which can be discussed under various aspects and covers several areas and activities of a company.
One possibility to assess the term marketing by a practical approach is the concept of marketing mix. Hereby, the marketing of a company is made visible by dividing the application of marketing activities to the market into the four elements product, price, place and promotion.
This leads to the possible question of how the marketing mix and its single elements can be adjusted to the challenges of the turnaround process, in order to contribute to the overcoming of a crisis.
Table of Contents
1 Introduction
1.1 Statement of the problem
1.2 Objective of the assignment
1.3 Structure of the assignment
2 Turnaround management
2.1 Corporate crisis as basis for the necessity of turnaround management
2.1.1 Strategic crisis
2.1.2 Earnings crisis
2.1.3 Liquidity crisis
2.2 Turnaround process
2.2.1 Crash phase
2.2.1.1 Securing liquidity
2.2.1.2 Short-term measures
2.2.1.3 Coordination of stakeholder’s interests and confidence-building
2.2.1.4 Nomination of persons responsible
2.2.2 Initialization of the turnaround
2.2.3 Realization of the concept
2.2.4 Consolidating the company
2.3 Critical remarks
3 Marketing as a corporate process
3.1 Marketing analysis
3.2 Marketing objectives
3.3 Marketing strategy
3.3.1 Market area strategy
3.3.2 Market stimulation strategy
3.3.3 Market parceling strategy
3.3.4 Market areal strategy
3.4 The Marketing Mix
3.4.1 Product
3.4.1.1 Product quality
3.4.1.2 Product design
3.4.1.3 Branding
3.4.1.4 Services
3.4.1.5 Program policy
3.5 Price
3.5.1 Defining the list price
3.5.1.1 Cost-oriented pricing
3.5.1.2 Demand-oriented pricing
3.5.1.3 Competition-oriented pricing
3.5.2 Price policy strategies
3.5.3 Price discrimination
3.5.4 Discount policy
3.5.5 Payment and delivery terms
3.5.6 Credit policy
3.6 Place
3.6.1 Acquisitive distribution
3.6.1.1 Direct distribution
3.6.1.2 Indirect distribution
3.6.2 Marketing-logistics
3.6.2.1 Delivery service
3.6.2.2 Order processing
3.6.2.3 Stock keeping
3.7 Promotion
3.7.1 Advertising
3.7.2 Public relations
3.7.3 Personal selling
3.7.4 Sales promotion
3.8 Controlling
3.9 Critical remarks
4 Adjusting the marketing mix to the challenges of turnaround management
4.1 Adjusting the product
4.1.1 Adjusting the product quality
4.1.2 Adjusting the product design
4.1.3 Adjusting the branding
4.1.4 Adjusting the services
4.1.5 Adjusting the program policy
4.2 Adjusting the price
4.2.1 Adjusting the list price
4.2.2 Adjusting the discount policy
4.2.3 Adjusting the payment and delivery terms
4.2.4 Adjusting the credit policy
4.3 Adjusting the place
4.3.1 Adjusting the acquisitive distribution
4.3.2 Adjusting the marketing logistics
4.4 Adjusting the promotion
4.4.1 Adjusting the advertising
4.4.2 Adjusting public relations
4.4.3 Adjusting personal selling
4.4.4 Adjusting sales promotion
5 Conclusion
5.1 Achievement of objectives
5.2 Outlook
Objectives and Research Themes
The primary objective of this work is to examine how the marketing mix and its individual elements can be strategically adjusted to address the specific challenges of a corporate turnaround process. The analysis explores how marketing measures can contribute to overcoming a crisis and securing the long-term success of an enterprise.
- Analysis of corporate crisis stages and the necessity of turnaround management.
- Examination of the marketing mix as a practical tool within the turnaround framework.
- Investigation of adjustments for the four key elements: product, price, place, and promotion.
- Evaluation of risks and effects associated with marketing-based turnaround measures.
Excerpt from the Book
4.1.2 Adjusting the product design
The design of a product is highly relevant concerning its success in the market and gaining the company a competitive edge and market share. Consequently, investing into the improvement of the product’s design can have a positive effect on turnover and profit. Also through a value analysis, it can be examined whether parts or materials of the product can be changed without negatively affecting the product’s function. These adjustments of the product design can then contribute to reducing costs through material cost reduction. Through standardization, modular design or simplification costs can also be lowered in areas like for example work preparation, production and storage.
Adjusted product design played a role in the turnaround of the German sportswear company Puma. Puma suffered among other things from negative annual results eight years in a row since 1986, failed product lines and company image damage. In 1993, the newly appointed chief executive officer initialized a radical restructuring of the company in order to regain competitiveness. Subsequently in 1998 the company aimed at extending its customer portfolio. Puma’s products were originally designed with a focus on functionality as sporting goods. Fashion designers like for example Jil Sander were then consulted in order to change the design of Puma products towards-fashion oriented customers. As an effect of these measures, Puma already showed positive results in 1994 and earnings started to increase.
Summary of Chapters
1 Introduction: Discusses the impact of the global economic crisis on companies and introduces the relevance of turnaround management and marketing in navigating these challenges.
2 Turnaround management: Outlines the stages of a corporate crisis (strategic, earnings, liquidity) and the consecutive phases of a turnaround process, including the "crash phase."
3 Marketing as a corporate process: Details the conceptual framework of marketing, exploring marketing strategy, the four Ps (product, price, place, promotion), and the importance of coordination.
4 Adjusting the marketing mix to the challenges of turnaround management: Examines specific, practical adjustments to product, price, distribution, and promotion strategies that companies can undertake to support a successful turnaround.
5 Conclusion: Summarizes the findings on how marketing mix adjustments serve as effective, though risk-laden, tools in a turnaround, and provides an outlook on future research needs.
Keywords
Turnaround Management, Corporate Crisis, Marketing Mix, Product Policy, Price Policy, Distribution, Promotion, Strategic Crisis, Earnings Crisis, Liquidity Crisis, Market Stimulation, Rebranding, Customer Satisfaction, Crisis Management, Organizational Restructuring.
Frequently Asked Questions
What is the core focus of this research?
The research examines the relationship between marketing activities and turnaround management, specifically how adjustments to the marketing mix can help stabilize and recover a company in crisis.
What are the central thematic fields?
The work covers corporate crisis theory, the phases of the turnaround process, and the detailed application of the marketing mix (product, price, place, promotion) as a strategic instrument for business recovery.
What is the primary research question?
The assignment seeks to determine how the four elements of the marketing mix can be subdivided and adjusted to reveal starting points for concrete, effective measures within the framework of a company's turnaround process.
Which scientific methodology is employed?
The study uses a conceptual analysis approach, drawing upon existing academic literature to define crises and marketing strategies, supplemented by real-world case studies to demonstrate practical applications.
What topics are discussed in the main part of the work?
The main part analyzes the stages of corporate crises, the components of the marketing mix (product, price, place, promotion), and provides specific examples of how these elements were adjusted by companies like Puma, Marks & Spencer, and Philips.
Which keywords best characterize the work?
Key terms include Turnaround Management, Corporate Crisis, Marketing Mix, Product Policy, Price Policy, Distribution, Promotion, Strategic Crisis, Earnings Crisis, and Liquidity Crisis.
How does a strategic crisis differ from a liquidity crisis in this context?
A strategic crisis involves an inadequate market alignment, whereas a liquidity crisis is the final, most dangerous stage where a company can no longer meet financial liabilities and faces the threat of bankruptcy.
Why are real-world examples like Ford or Puma included?
These examples illustrate the practical relevance of theoretical concepts, showing how specific marketing adjustments—such as rebranding or changing product design—contributed to the real-world success of a turnaround.
- Quote paper
- Sven Adrian (Author), 2011, Turnaround Management. Adjusting the Marketing Mix to the Challenges of the Turnaround Process, Munich, GRIN Verlag, https://www.grin.com/document/215285
