The most decisive phase of reform in the Polish economy was initiated in 1990. Foreign investment is being actively encouraged and the number of foreign investors coming into the country increases quickly. As a result many consulting organization had to meet up with high consulting demand with effective strategies.
This research aims to point out an approach to effective marketing strategies of a consulting organization towards foreign investors in Poland. And also, Strengths Weakness Opportunities and Threat (SWOT) analysis will be conducted in the selected consulting organization in order to design the marketing strategy, which will focus on market segmentation, marketing mix, competitive strategy, strategic client-consultant partnership and organizational strategy. And also the role and tasks of consulting organizations towards their clients are also discussed in the research.
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Finally, the recommendations in both macro and micro environment of consulting Organization for foreign investors in Poland will be made and this can make the firms to operate their business effectively.
Economy reform in Poland was inplemented in 1989 to remove price controls and several subsidies to industry. The Polish government also wanted to open their market to the foreign investors in every sector, so the economic reform was adopted. In the early nineties, Poland was the first central European country who returned to growth after recession. In recent years there are lots of foreign investors who are attracted to Polish market, they came to investigate, explore new market.
The first place foreign investors come to seek for the useful advice is Polish information and foreign investment Agency (PAIiIZ). To meet the high demand a lot of Polish consulting organizations have been established lately. However, consultancy is a fresh field and newly-established firms are facing abundant difficulties such as lack of experiences, do not understand market economy system, cross-cultural problems, etc.
The number of consulting organizations has been increased quickly accordingly to the supply-demand economics law. Actually, it is a promising market for the consulting firms. Yet, customer satisfaction remain as a complicated problem. What kind of services should be offered in which specific industry? And how to provide excellent services to meet the needs of customers? There are current questions facing by every consulting oganization that is offering services to foreign investors. Clearly, an approach to the effective marketing strategies is very important for any consulting organization.
In order to improve business activities in any consulting organization, marketing strategies and activities are vitac, the following are the fundamental objectives of the study:
In order to point out the really effectual marketing strategies, the external analysis will be narrowed into several industries, to analyze what would best be described as the power force behind consulting organization to give best advice and consulting to foreigners who are willing to invest in the country.
Limitation in timing and geography causes direct interviews was conducted in a consulting firm in Bydgoszcz. One consulting firm was selected in kujawsko-pomorskie region to discuss in the research based on their organization structure size. The questions covers the marketing activities in the consulting firm especially services for foreign investors.
Literature review will present manager at any consulting organization an insight with fundamental knowledge about strategy, marketing service strategy and concept of effective marketing strategy. This chapter aims to change the attitude of managers at any consulting organization that operates with foreign investors towards marketing, shows them the importance and effectiveness of marketing strategy, makes them think marketing strategy should be considered as an essential component of the organization.
According to Steiner and Miner (1986), strategy derives from the Greek strageos, which means “general”. The word strategy, therefore, literally meant “the art of the general”. It refers to that which is of major concern to top management of organizations. Specifically, strategy is forging of company’s mission, setting objectives for the organization in light of external and internal forces, formulating specific policies and strategies to achieve objectives, and assuring their proper implementation so that the basic purpose and objectives of the organization will be achieved.
Steiner and Miner (1986) also classified strategies in some groups as the following:
Hofer and Schendel (1978) demonstrated a successful strategy is usually not a single decision but a web of interrelated strategies, substrategies, sub-substrategies, policies and tactics.
Ginter and White (1982) noted that strategy is the central and unique core of strategic management. Strategic management is the phrase currently in use to identify top corporate policy/strategy formulation and its implementation in organizations. The process of implementation involves the entire process of management, including operational management.
One other aspect is worthy of note. Strategic management emphasizes strategic thinking but at the same time links it with operations at all levels and across functional lines of authority in an organization (Gluck, Kaufman and Walleck, 1980).
Quite a number of writers has described the development of the concept of strategic management (e.g; Ansoff, 1984; Bracker, 1980; and Ansoff, Declerck, and Hayes, 1976).
The concept is still evolving and will continue to undergo change. These theories can be embraced as appropriate within the concept of strategic management. The concept of strategic management is simply a way of giving needed emphasis to a major function of management of organization.
Strategy and Strategic management concept helps managers in any consulting organization understand the important role of strategy in an organization. Strategy guides the future direction for the company in order to gain both long-term and short-term objectives. Marketing strategy is one part of the general strategy of a company as a functional strategy. Next part will discuss about marketing strategy in a business service firm since Consulting organization for foreign investors are operating in consulting field and they are involving in service industry.
Kerin and Peterson, (1993) reckoned that marketing has become recognized as a basic motivation force in most organizations. Firms participating the marketing concept strive to satisfy customer’s needs and want while, at the same time, achieving their organizational objectives. Marketing planning and strategy development, therefore is one of the major responsibilities of business marketing managers. Determining target markets and then developing and implementing marketing mix to address those markets is the essence of marketing management.
Mahin, (1991) noted, to meet the need of customer wants effectively, an integrated marketing strategy is required for an business service firm. Firstly, target segment must be selected, and the a marketing mix (including service packages, promotion, pricing, delivery strategies) must be tailored to the expectation of each segment. A consulting organization is also a business service firm, hence theory of marketing strategy in a service firm is helpful for it to design its own marketing strategy including segmentation and marketing mix.
Dickson (1993) demostrated, segmentation is one of the core concept of marketing. In essence, it suggests that a firm’s marketing efficiency can be improved by targeting marketing activity that discrete groups of customers who behave differently in some ways towards the firm.
Certo and Peter, (1990) explained, the logic of marketing segmentation is quite simple; it is based on the idea that a single product or service does not usually appeal to all customers. Customers’ purchasing goals, service knowledge and purchasing behaviours varies, for this reason, marketing strategists typically focus their marketing effort on specific groups of customers than on the whole population
According to Webster (1987) a market can be segmentated on a variety of dimensions or bases such as industry. Customer’s expertise, customer’s location e.t.c.
Davidow and utal, (1993) suggested that customer service segments differ from usual market segments in significant ways. Service segments are often narrower. This situation reflects the fact that many service customers expect services to be customized. Expectations may not be met if the service received is standardized and routine. Secondly, service segmentation focuses on what the business customers expect as opposed to what they need. The assessment of customer expectations will play a very large role in selecting a targeted market and developing the appropriate service package. This assessment is critical because so many studies have showned large differences between the way the customers define and rank different service activities and the way suppliers define and rank them.
Mahin, (1991) stated that the key elements of the service marketing mix include the development of service packages, pricing, promotion and distribution. The followings summarize major activities of marketing mix for a business service firm like consulting organizations.
Lovelock, (1992) states that the key elements of the marketing mix include the development of service packages, pricing, promotion and distribution. The followings summarize major activities of marketing mix for a business service firm.
Customer-Benefit Concept: Services are purchased because of the benefits they offer, and a first step in either creating a service or evaluating and existing one is to define the customer-benefit concept; that is, evaluate the core benefit that the customer will derive from the service. An understanding of the customer-benefit concept focus the business marketer’s attention on those attributes-functional, effectual and psychological that must not only be offered but also tightly monitored from a quality-control standpoint.
Service Concept: once the customer-benefit concept is understood, the next step is to articulate the service concept, which defines the general benefits the service company will provide in terms of the bundle of serive sold to the customer. The service concept takes the customer-benefit concept and translates it into the range of benefits the service marketer will provide.
Service Offer: Intimately linked with service concept is the service offer, which spells out in more details those services to be provided. When they will be provided and how they will be offered, where they will be offered and to whom. The service elements that make up the total service package, including both tangibles and intangibles, must be determined.
Service Delivery System: The final dimensions of the service product is the service delivery system-how the service is provided to the customer. The delivery system includes carefully conceived jobs for people: personnel with capabilities and attitudes necessary for successful performance; equipment, facilities, and layouts for effective customer work flow: and carefully developed procedures aimed at a common set of objectives. Thus, the service delivery system should provide a carefully designed blueprint which describes how the service is rendered for the customer.
Service Personnel: A first step in creating an effective service package is to ensure that the customer-benefit concept is known, understood, and accepted by all personnel. As Donald Cowell states “So important are people and their quality to organization and…service that “Internal marketing’ is considered to be an important management role to ensure that all staff are customer conscious”. In short, the attitude, skills, knowledge, and behavior of service personnel have a critical impact on the levels of satisfaction that the user derives from the service.
Perishability and Managing Demand/Capacity: The demand for services is rarely steady or predictable enough to avoid service perishability. An extremely difficult decision for the business service marketer is to determine the capacity(investory) of the system-should it meet peek demand, average demand, or somewhere in between? Pricing can be used to manage the timing of demand and align it with capacity levels.
Service Bundling: Many business service include a core service (perhaps several) as well as peripheral services. How should the services be priced-as an entry, as a Service bundly, or individually? Bundling is the practice of marketing two or more service in a package for a special process. A key decision for the service provider is whether to pure or mixed bundling. In pure bundling , the service are only available in bundled form-they can not be purchased separately. In mixed bundling, the customer can purchased one or more service individually or purchase the bundle.
Attracting New Business: Various bundling strategies can be used to expand sales by cross-selling – Selling a new service to customer who buy an existing service -or by attracting entirely new customers. Clearly, the service, how the service are combined, and how the bundle is priced have critical effect on the service firm’s success. Many opportunities are available in the business service sector to improve the pricing of the services.
The promotional strategies for services follow many of the same prescription as do those for products. However, the unique characteristic of business services pose special challenges for the business marketer.
Communication with Employees: Personnel are vital to many people-based service businesses, and they can have a profound effect on the customer’s satisfaction with the service. Internal advertising to employees accomplishes the following:
Word-of-Mouth: Service purchases are frequently considered to be riskier than produce purchases because it is more difficult to customers to evaluate quality and value. As a result, customers are more apt to be influenced by colleagues, peer and other professionals who have had experiences in purchasing and using the service. Promotion must concentrate on the dominant role of personal influence in the buying process and build on world-of-mouth communication. Donald Cowell suggests that this can be done by
Service marketer can capitalizing on satisfaction of current customers and word-of-mouth promotion by featuring customers (and their comments) in non-personal advertising. The promotion brochures for many management development seminars feacture pictures of customers and statement of satisfactory by these prior attendees.
Distribution decisions in service industry are focused on how to make the service package available and accessible to the user. Speed is often competitive advantage when building a service network.
How does a service firm manager choose among all the possible distribution strategies? The short answer is: It all depends. It all depends on the internal resources of his firm and the external constraints impose on it. Some channel strategies may require substantial capital investments. Others like many of the multimarketing strategies will require specific management skills.
Mahin, (1991) noted, service in business-to-business market can be categorized into two distinct groups: product supported by service and pure services. Consultancy belongs to the pure services group, those that are marketed on their own right without neccessarily being associated with a physical product.
Schein, (1987) wrote, process consultation is defined as a set of activities on the part of the consultant that help the client to precieve, understand and act upon the process events that occurs in the client’s environment.
Consultancy industry consists of many kind of consultant companies such as accountant, management consultant, foreign investment consultant, lawyers e.t.c. in the particular situation in Poland, the most popular types of consultant is foreign investment consultant and lawyers.
Webster, (1987) stated that marketig strategy begins with the analysis of the changing environment, expecially the part of the environment consists of potential customers and competitors, seletion of customers to be dealt with and market to be served is the most important decision made by any business firm or other economy organization and is a major determinant of the nature of the business.
He also emphasized that the central calculus in the development of marketing strategy in an assessment of the organization strengths and weaknesses and a matching of those strengths with unsatisfied customers needs in the market place. Effective marketing strategy, therefore, depends up on both an honest assessment of strengths and weaknesses are good information about customers needs and wants and the extent to which they are being served by current supplier.
Dahringer, (1991) demonstrated, an effective service marketing strategy consist of substrategies for service, price, promotion and distribution that are consistent with one another and have synergy- that is, the impact of the whole is greater that the sum of the parts. For example, pricing policy and strategy are consistent with the firm’s service quality and image, providing margins adequate to cover the necessary costs. Promotional strategy should reflect the true level of service quality and should be consistent with the capabilities of the organization. Each element of the marketing strategy depends for its effectiveness on the co-ordination and support of all other elements of marketing strategy.
Hass, (1986) wrote, firms are successful because they manage the difficult aspects of their business better than the their competitors. To be successful, service firms should look for ways to manage the particular consequences of being a service firm better than competitors. The success strategies which we define here are based on this principle.
Successful service firm know exactly what they sell and how everybody and everything in the service system contributes to it. They also transfer this knowledge to both employees and customers. In order words, the first success strategy refer to the need for a precise defination of the service concept. It is only logical that customer needs constituted the point of departure. That is to say, not only his substantive, but also his peripheral needs. A second successful strategy involves segmentation and focusing. To what customer group do firm direct themselves and are the needs of that group sufficiently homogeneous?. What service package do the firm offer? These are the main questions in considering segmentation and focusing. Communication is also essential to sustain the focus. It is assume that personnel behave in more or less the same way in similar situations and that they also understand what this is necessary. In the best service firm, personnel sense the situation state of mind and needs of customer perfectly.
Dickson, (1993) the ultimate test of service marketing strategy is whelther it leads to a valuable differentiation for the service marketer, whether it leads to a unique competitive advantage giving potential customers a solid reason for dealing with the service marketer rather than with its competitors. That uniqueness can come from any of the individual element of marketing strategy-market segmentation, service policy and strategy, pricing policy and strategy or promotion. Market segmentation is usually a key element of the strategy of differentiation. Without a true uniqueness in some area, a true “reason for being”, the service marketer is not likely to realize major success in the competitive market place.
This Chapter will base on the marketing strategies issues for a service firm discussed in the previous chapter and secondary data regarding to Polish market to design conceptual framework facilitating Pailzs in formulating and implementing marketing strategies.
Certo and Peter (1990) showed that the basic steps of the strategic management process including (1) Performing an environmental analysis (2) Establish organizational direction (vision, mission and objectives), (3) formulating organizational strategy, (4) implementing organization strategy, and (5) exerting strategic control. (see Figure 3.1)
Following the about basic steps, the conceptual framework to design the marketing strategies for Consulting organization for foreign investors has been outlined in the figure 3.2 conceptual framework
Certo and Peter, (1990) noted that environmental analysis is the process of monitoring organizational environment to identify both persent and future threats and opportunities that may influence the firm’s abilitiy to reach it goals. The organizational environment is the set of all factos both internally and externally of the organization that can affect its process toward attaining those goals. Properly used environmental analysis can help ensure organizational success.
Therefore, to design the marketing strategies, consulting firms should start at the environmental analysis.
The external environment of an organization is generally divided into two distinct levels: the general environment and the operating environment.
According to Certo and Peter, (1990) the general environment made up of components that are normally broad in scope and have little immediate application for managing an organization. They are economic, social, political and legal components.
Consequently, for a consulting organization that is operating under polish law, it’s general environment is the situation of economic, social, political, legal and technological components in Poland.
Certo and Peter, (1990) defined the operation environment as the level of the organizations’ external environment made up of components that normally have relatively specific and more immediate implications for managing the organization, the major component of the operating environment are customers, competition, labour and suppliers.
For a Consulting organization, the operation environment consists of it customers, its components in consulting field, its substitute staff and suppliers. The following summarized major components of the Consulting organization operation environment.
The external environmental analysis aim to identify both present and future opportunities and threats for a consulting organization that are basic factors to design marketing strategies.
Certo and Peter, (1990) defined the internal environment as the level of an organization and normally has immediate and specific implication for managing the organization. Table 3.1 listed a number of factors that are considered important components of the internal environment of a service firm.
A consulting organization that is a service firm must analyze its environment accordingly to the above principal aspects in order to identify the strengths and weaknesses of a consulting organization.
Johnson and Scholes, (1988) demonstrated that vision refers to a clear, measurable and challenging description of a desired future goal which when achieved will give the organization a significant advantages over it’s competitors. Without a clearly articulated vision of its competitive future, an organization is effectively setting out on a journey without knowing its destination. This “mystery tour” approach risks producing strategies and behaviour that are determined largely as a reaction to the firm’s past and present circumstances than by where it would ideally like to be.
Davies, (2006) defined mission as a broad, inclusive concept. It encompasses a statement of purpose, a specific performance related vision, a set of strategic guidelines about how and where the firm will compete and set of corporate values.
The mission statement will address questions such as :
In his research study of 2006, Davies concluded that best practiced firm were distinguished by the process they adopted in generating the vision or mission, as well as by what they expressed and the way they chose to express it. Their visions were measurable, memorable and expressed in language that was meaningful to all levels of the organization.
Johnson and Scholes, (1988) noted, the organizational vision and mission establishes the general direction of the firm, organizational objectives narrow the focus to more specific targets. An organizational objectives is a target toward which the organization directs it’s efforts. Objectives provides the foundation for planning, organizing, motivating and controlling. Without objectives and their effective communication, behaviour in organization can stray in almost any direction. There are two different types of objectives, short-run objectives are targets that the organization is attempting to reach within one or two years and long-run objectives are targets that the organization is trying to reach within about three to five years.
The following is the proposed basic model for any consulting firm to develop it vision, mission and objectives.
The Vision can be expressed in very specific and concrete terms such as:
In priciple, vision should describe in short the future goals of the company in order to be easily and clearly understood firstly by managers and staff, then the customers. The above suggested visions try to cover core business of a consulting firm in a particular term.
Mission of a Consulting firm has to clarify major tasks and cover all main aspects of the company interms of services, market, ability and skills, company philosophy. Therefore, the above proposed mission strives to define tasks in each aspect of a consulting firms.
Objectives are precise targets that a consulting firm aim to achieve in both short-term and long-term. There are three aspects, a consulting firm should consider as designing its objectives. They are customer service, community service and employee-management obligation.
Naturally, customer service is the most important aspect of every company since it decided the existence of a company. Only if a consulting firm provides suitable services, get customers and profit, it will survive and develop, if not it will not be able to exist in the market. Besides, there is no company that can operate outside it’s own community, as a result, it must have obligations with the community, i.e in the social and environmental issue. For a consulting firm, it’s activities can also promote foreign investors and provide more available jobs to Polish citizens. At the same time, it can introduce Polish traditional culture to foreigners and finally, the relationship between employee and managers also affects to all activities of consulting organization and it is expecting to create a good relationship between employees and managers.
The Objectives in three major aspects of a Consulting firm are described below:
Vision, mission and objectives all are fundamental factors to design marketing strategies. In other words, marketing strategies should be designed and implemented in order for Consulting firm to achieve their vision, mission and objective.
From the environment analysis and set of mission and objectives, the marketing strategies is going to be formulated. Marketing strategies here comprise market segmentation, marketing mix and other strategies supplementing and assisting to implement and improve marketing activities such as competitive strategy, strategic client-consultant partnership and organization strategy. The methodology to design marketing strategies for a consulting firm will be discussed hereafter.
For a Consulting firm, market segmentation can base on the following factors:
Industry: Foreign investors and Polish businessmen in the tourism, construction, food processing, oil and gas, telecommunication, etc. The group of relative industries could be a base of the segmentation. For example, group of investors in the agriculture, aquaculture and food processing; or in the tourism and hotel can be one single segment.
Continent: European, Asian, American, African, Australian, Some similar countries in term of business environment can be grouped in one segment, e.g, European Union, AFTA, ASEAN e.t.c.
Size of the customer’s company or project: Big company such as international corporation like Coca-Cola, Pepsi, P&G, Sony, Toyota e.t.c and medium, small one. Big or small project will be defined on the investment capital.
The logic of those proposed factors is foreign investors or Polish businessmen in the same industry, similar industries, or same continent, size of the company may have homogeneous charateristic. After segment the market, a Consultant firm must answer the following questions: What consulting service?, With what distinguishing characteristics? To what target market segments? It means marketing mix should be tailored to market segmentation.
Marketing mix for a business service firm as indicated in Chapter above includes service, price, promotion and distribution strategies. The followings are some guidelines for forming marketing mix in a Consulting firm.
Marketing mix is the center of marketing strategies. However, only marketing mix is insufficient to run business successfully. There should be a competitive strategy to helps to improve the position of Consulting firm in the market.
Gary Hamel, (1993) stated that companies compete in three ways – Building core competences that give product and service unique funtionality; building a worldwide distribution and brand infrastructure; and innovating product or service. Hamel explore core competence further, pointing out that it provides logic to the firm. The strategy should focus on competition for competence. Core competencies are skills that gives a company access to range of markets and opportunities, they are the basis of inter-corporate competition.
Core competence is embedded in people. This is very important for a consulting firm for foreign investors, it means the firm has to recruit good people, train them well, mentor them and so on. So their people are better than the others. The core competences is this case are selection, training, supervision, etc. And it makes the Consulting firm more competitive in the Consulting industry.
In case of a Consulting firm for foreign investors, institutional relationship between two companies heavily depends on the personal relationship within a particular client and a consultant involving directly to the business affair. Therefore, a Consulting foreign for foreign investor should create and maintain sound relationships by joint problem defination and solving between client and consultant, keep good working relation during the assignment.
In general, the organization strategy is concerned with re-structuring organization, attracting, assessing, motivating, and retaining the number and types of employees, require to run business effectively. Taken collectively, the set of decisions concerning these issues is the organization strategy. Organization strategy in a Consulting firm for foreign investors helps it to recruit qualified staff and motivate present staff to operate consulting service more effectively.
In order for a Consulting firm for foreign investors to achieve its objectives, it must not only formulate but also implement its strategies effectively. If either of these tasks is poorly done, the result is likely to be failure of the overall strategy.
The manager’s task at this stage is to determine an appropriate approach to implementing the strategy. An implementation approach has been selected that does the best job of capitalizing on the firm’s streigths and overcomes, circumvests, or minimizes problem within the organization. The tasks now is to execute the strategy and evaluate the results.
To Implement marketing strategies, there should be some marketing program to plan implementating steps in details. The programs may serve for one for more marketing strategies. For example, marketing program to introduce a new consulting service should consist of designing new service , positioning it, advertising and promotion for it. Accompanying with marketing programs, marketing skills are required to accomplish marketing strategies
Bonoma, (1995) suggested that successful implementation of strategies requires four basic types of execution skill, these are shown in the Figure 3.3 and are discussed below.
For a Consulting firm for foreign investors, marketing skills, especially skills in behavioral and negotiating area are very important. The followings list the major skills that are necessary to a foreign investors consultants.
The necessary marketing action programs and skills for a specific Consulting firm will be described in the following chapter.
There is no perfectly-designed marketing strategy, in the implementing process the unexpecting failures and weakness maybe arise, therefore controlling and evaluating marketing strategies are undeniable in order to change the failure in time as well as learn expriences for next marketing strategies.
Certo and Peter, (1990) noted that strategic control is special type of organizational control that focuses on monitoring and evaluating the strategic management process in order to make sure it is functioning properly. The most fundamental purpose of strategic control is to help top management achieve organizational goals through monitoring and evaluating the strategic management process.
To control and evaluate marketing strategies, three distinct but related steps must be taken to carry out the strategic control process within the Consulting firm.
The 3rd chapter which suggest a conceptual framework for any consulting firm for foreign investor to design its marketing strategies. The next chapter will report marketing activities in Paliz (Polish Agency for foreign investors) and reveal the need of effective marketing strategies in these firm.
The Principal legal acts govering business activities in Poland is the Economic Freedom Act of 2nd July, 2004. It regulates the conduct, running and closure of businesses in Poland, as well as tasks of public administration in its domain. Foreign persons’ from the European Union and the European Free Trade Association zones belonging to the European Econonic Area (EEA) may establish and conduct business under the same rules as those that apply to Polish enterprises.
The same rules also apply to foreigners living outside EU and the EEA who:
Unless international agreement stated otherwise, foreigner other than those indicated above have the right to establish and conduct business activities only in the form of
Such foreigners also have the right to enter into the types of partnerships and companies listed above, as well as acquire shares in them. Furthermore, foreign enterpreneurs may conduct business activities in form of a branch office, or they may establish representative offices in Poland.
Up till now, there is significant change in the consulting field. The Consulting Firms both Polish (private and state-owned) and foreign are booming in the Polish market and they are providing various types of services. Only few Consulting firm get license to operate investment consulting services from the government.
The direct and in-depth review was conducted on PalilZ firm and a questionaires was also sent to some consulting firms in Bydgoszcz. Data collected from the interview and mailling questionaires reflect the current marketing activities in most Consulting Firm for foreign investors.
The Polish Information and Foreign Investment Agency (PalilZ) has been serving investors for 14 years. It mission is to increase Foreign Direct Investment (FDI) by encouraging international companies to invest in Poland. It guides investors through all the necessary administrative and legal procedures along the way to setting up their business in Poland.
Palilz have a quick access to comprehensive information about the economic and legal environment, assistance in finding appropriate partners and investment locations and supports at every phase of the investment process.
Another one of PalilZ’s roles is the creation of a positive image of Poland and the promotion of Polish products and services abroad by organizing conferences, visits for foreign journalists and trade missions. PalilZ also promotes Poland’s regions. It has established a network of Regional Investor Assistance Centres thoughout Poland. Their goal is to improve the quality of regional services for investors and to provide access to the most up-to-date information, such as the lastest investment offers and regional microeconomic data. These specialised offices are staffed by Palilz trained employees and financied from local funds.
Pomeranian Consulting Group have been chosen in the sample based on their organization and structure. Pomeranian Consulting Group Joint Stock Company was established in August 1994. Throughout the period of the Company is located in Bydgoszcz. The Company deals with the wider participation in the financial service market.
Summarizing major marketing activities of Pomeranian Consulting Group regarding services, promotion and price aspects. Unfortunately there is not plan and strategy to divide the total market into segments (information about their marketing strategy wasn’t given by the above mentioned consulting firm).
Poland has been in significant changes since 1990, however, the changein the policy does not mean the immediate impact on the economy in general, and in the marketing infrastructure. The marketing concept will remain new and strange to every central and planned economy for a long time. In the following chapter, i discover that marketing activities in some Polish firm and as well as in some consulting firm are poor and this is due to the followings ;-
The activities in most Polish consulting firms show their poor marketing knowledge. The following summarize major failure or missing part in their marketing activities.
There is no segmentation, marketing planning and in particular strategic planning in the consulting firms. There is no distinction if you are European or American, you rent services for long term or short term, or you can co-operate with the company in future, you will be charged the exactly same consulting fee. And it is rarely to find specific service offering for specific customers. In the other words, marketing segmentation has never happened in Polish consulting firms.
The service in consulting firm are so simple. Customers can buy secondary data very easily from any firm, but primary data like market research will be available in only some consulting firms. Most of all consulting firms stop at market research or even field work (customers provide questionaires and consulting firms organize field work, give data back to customers without processing it).
There is no service package in the consulting firm for foreign investors. The consulting service for a construction project for example, will be divided in many stages (bidding, signing, construction contracts, buying materials, supervising the projects e.t.c.) and in each stage customers may buy different services from different firms (administrative services from Consulting firm for foreign investor and technical services from construction firms). And the consulting fee will be collected after every stage, the Consulting firm for foreign investors can not offer a package fee.
If the consulting firm here in Poland do not renew and provide package service, it will not be able to compete with foreign consulting firm coming to Poland.
Promotion for a consulting firm that works with foreign investors simply is advertising sometime in a few local business newpapers. Even their major customers are foreign investors, it is hardly to find ads of a Consulting firm for foreign investors in the popular foreign journals or newpapers like Newsweek, Warsaw voice, which many foreign visitors to Poland usually read.
The other aspect of promotion like public relation, operating personnel, word-of-mouth, communication with employees are usually neglected by consulting firm.
The pricing policy at the consulting firm is merely cost oriented. The real value of consulting services has not evaluated properly.
Through analysis of current marketing in the consulting firm, many failures and missing parts can be revealed. These are listed in Table 4.2 with the role of marketing in order to eliminate such deficiencies considered alongside.
The scheme to develop marketing strategies has been described in previous chapter (Figure 3.1). Following the Scheme, here i am going to analyze business environment, internal environment and missions of Consulting firms, then arrange the marketing strategies along with marketing programs. Techniques and skills for Pomeranian Consulting Group.
The environment analysis consists of two parts, external analysis and internal analysis. It aims to point out the opportunities and threats of the consulting firm.
Poland is located in the very heart of continental europe and has an area of 312,685 kmÂ². It is the fifth-largest country in the European union, comparable in size to Great Britain and indeed the emerging economy offers the foreign investors a range of exciting investment possibilities. However, to succeed in Poland the foreign investors must have patience and be aware of the possible pittfalls that may be encountered at the early stage in any rapid developing economy.
Poland can offer the following advantages:
Potential investors need to be aware of the following difficulties
The advantages and disadvantages to foreign investors in Poland affect directly the number of customer of every consulting firm for foreign investors. Customers will come to Consulting firm only if they find good opportunities to invest in the Country. Not only the investment environment but also the consultancy environment also have strong impact on the Consulting firm operation.
Consultancy is rather a young industry in Poland. It is growing with the development of the whole economy while service sector has been improving and developing. And as more and more foreign investors are coming to Poland, they would require more consulting service.
Customers: Customers of Consulting organization for foreign investors are usually foreign investors in Poland and Polish companies, especially who would be partners of the foreign investors. Foreign investors need the information about the Polish market usually both secondary and primary data. They expect of course high quality consulting service from consulting organizations.
Competitors: Competitors of consulting organization are other Consulting firms, are foreign consulting firms operating in Poland as well as foreign consulting firm located abroad (Like in the UK, USA, Germany, Czech Republic and Ireland). The competition therefore is severa, the number of consulting firm seems to be increasing more rapidly than the volume of foreign investors.
Labor: Polish are not a experienced and well-trained as foreigners in the same field. They are now learning more English and they are computer genius, however, this is not enough for a person in the moving market of Poland today.
Supplier: In the consulting organization(s) environment we find different organizations from government to local organizations, from voivodeship own to private firms, from one industry to another industry, etc. These organizations can provide consulting organization for foreign investors with secondary data, up-date regulations. Therefore, keeping the relationship between consulting organization and those organizations are essential to every consulting agencies.
As mentioned earlier in the first Chapter, the major customer of consulting organization for foreign investors are foreign investors in the tourism and construction industries. Consequently, the development of the tourism and construction industries influence constantly on the field.
Tourism: Poland is a part of global tourism market with constantly increasing number of visitors, particularly after joining the European Union. Tourism in Poland contributes to the country’s overall economy. The most popular cities ar Warsaw, Krakow, Wroclaw, Poznan, Lublin, Torun, including the historic site of Auschwitz concentraction camp near Oswiecim.
The development of tourism industry will attract more foreign investors to invest in this industry. The expansion of the tourism industry links closely with construction industry because hotels, entertainment centers, transportation network, etc. Are the result of the construction process
Construction: The Construction industry in Poland suffered great damages during the World War II, the Polish economy in general and the construction industry in particular have faced many difficulties. However, in the last few years some changes have been noticeable due to the renovation policy of the government. The number of foreign investment projects in construction is increasing significantly.
The changes in the Polish construction industry are visible by the development of its physical infrastructure (housing, road, ports, railway are improved). Yet there are lots of problems facing the construction industry nowadays.
It is hopeful that in the near future, the construction industry will grow quickly and become more attractive to foreign investors. At present, there are some constraints in the land law, leasing land price is high in comparison to other countries in the region. Normally, expenses for buying or leasing land occupies a major part of a construction project. Expensive land and unskilled labor may make investor hesitate to invest in Poland.
Managers of Consulting firm should clarify the inter-relationship between tourism, construction and consultancy in order to arrange suitable services for investors in these industries.
Demand on the consulting service in foreign investment tends to increase, actually, the open door policy and the investment incentives of Polish Government are interesting factors to foreign investors. The number of foreign investors entering into Polish market is growing annually. In addition, the potential of the tourism industry in terms of nice landscapes, location, history of the country, traditional culture etc. And the potential of construction projects attracts foreign investors.
The consulting organizations are in close contact with the Polish Authorities and also from the president of each region and the Planning committee etc. who decide the foreign investment policy as well as grant licenses. This is a strongly comparative advantage of consulting organizations in Poland against foreign consulting firms since the consulting organization can get information as well as investment licenses from these organizations much more faster that foreign consulting firms.
Regarding the Polish laws, expecially regulations under the law that changing fast have not translated properly into English, there is another opportunity of consulting organizations to understand and up-date the regulations on foreign investors more quickly than foreign competitors.
Besides, Poland is locates in more adavantagious location that makes it a point of interest for foreign investors and it helps for consulting organizations learn experiences from their neighbour either at higher or lower level of growth and development. At the same time, the co-operation between consulting orgnization in Poland and consulting firms in neighouring countries is feasible while a lot of customers of those firms invest also in Poland. In consulting organizations, they call those foreign investor – ”following customers” or ”customers” e.g foreign investors will buy package service from one consulting firm in Prague and then this consulting firm will buy consulting service from consulting organization here in Poland.
Usually, the consulting organizations have gained any previous experiences in the international business and in the consulting services. As a result, this makes Consulting organizations must use more effort in getting into the marketing economy and marketing is one helpful tool as indicated in Table 4.2. as long as the consulting organizations are not experts in consulting field, it is impossible for them to compete with foreign firm.
Unskilled staff with poor foreign language and consulting skill is also a threat to consulting organizations while competing in the market.
The competition is very tough in consulting industry in Poland. The foreign consulting firm located in Chicago, Washington, London, Prague, Hannover and China are partners as notice in the opportunities part. Yet, they can open their own agent at any time and become strong competitors to consulting organizations. Besides, there are around 3 million Poles living abroad mostly in western countries and in the United States, and of course many of them can invest in Poland.
One more threat is as pessimistists say, the foreign investment in Poland, will slow down in the next few years and then it may recover. The reasons are the regulations on foreign investment which are changing and make it hard for foreign investors to keep up with the changes, bureaucracy and corruption in Poland. These are rather negative aspects causing waste expenses for Polish licenses. Poland is one of the most expensive countries to establish a business and invest in the region.
Some foreign investors in Dublin said that they are going to settle their business in Ireland, an already developed country, they are planning to invest in Poland but not in the near future. They are interested in the Polish market, however, they do not intend to invest any sooner. And a lot of chief of foreign representatives offices in Warsaw said, they will not develop their operation till 2012 when the Polish government will adopted the new schengen law by changing their local currency into the EU currency (Euros), they are operating only as liaison office.
The foreign investment reduction can cause a crisis to the consulting organization because almost all their customers are foreign investors. However, other experts say, the crisis will not be long due to the attractiveness of the Polish market and the strategic location where is the country is located. The foreign investment in Poland is expected to recover quickly with the recovering of the financial crisis all around the world.
The opportunities and threats from external analysis accompanying with strenghts and weakness from internal analysis are the basic factors to stimulate marketing strategies for consulting firm for foreign investors.
The purpose of the internal analysis is to provide primary data to design marketing strategies, therefore, organizational aspects and marketing aspects of selected firm will be analyzed in order to identify their strengths and weaknesses.
According to the current organizational chart of PCG the Decision-Making Authority is centralized at the top management level. The company is structured on the basis of functions and combination with local and foreign branches. In general, this structure is not simple but still be clearly understood by everyone in the organization. Employees are managed under their direct manager. In other words, each manager is a person in charge of his department’s activities, keeps it run in the right way as the oragnization’s targets.
Main marketing activies of Pomeranian Consulting Group are analyzed in Table 4.1. the table below points out the strengths and weaknesses of PCG.
Pomeranian Consulting Group joint stock company was established in August 1994. And it is one of the Consulting firm to foreign investors in the region and it’s reputation is good, therefore, the number of customers of Pomeranian Consulting Group is enlarging continuosly.
Pomeranian Consulting Group is a big organization with a lot of members so there is a chance for it to expand and improve its operations. The PCG member system connects it with various kind industries, companies, and provides useful data about Polish Partners to foreign investors
Pomeranian Consulting Group is non-government organization and it operates business with many foreign firm and organization, the company is located in a building where the headquaters of Nordea Bank Poland SA Branch in Bydgoszcz because of the scope, it is very desirable environment for customers and convenient for the company, cooperating entities: in the course of the company work with many commerical banks, leasing companies, investment fund among others
The company has a dedicated group of employees and associates who posses the appropriate professional background and experiences to enable the organization to take themes developed by the company.
Promotion activities in Pomeranian Consulting Group are most exciting compared with other Consulting firms. It includes advertising, fairs, exhibitions, annual client and member conference.
Finally, the financial ability of PCG is stronger in comparison with other Consulting firms. It revenue increase year by year and the benefit for the staff also improve alot. Financial capacity is necessary in order to implement marketing activities such as promotion, trainning, offering new service or new pricing policy.
Pomeranian Consulting Group activities are extremely broad, from consulting to organizing fairs from being a patent agent to perform as a liason office, from translating to organize forum. The company is also offering guidance in the commericial, and technical field as well as in other fields. When the company is active in many different fields, it is often difficult to focus and to be a specialist.
The company should develop its core competence instead of it takes time and money to maintain all activities. Moreover, there is no direction for the future of the organization. Large organization causes complicated communication system. If usually managers can make decision quickly, like many Polish firms, the managerial knowledge and skills as well as marketing skills in GCP are poor.
Marketing strategies including vision, mission reflect both long-term and short-term goals of a company and the way to achieve them. In one hand, it should be general in the other hand it must be focused on specific. Therefore, to guarantee the quality of suggested marketing strategies only the consulting company is going to be chosen to design marketing strategies for it. This is PCG, the company is medium size in the consulting field. A medium size company has been selected because the marketing strategies for a medium size company can be justified easily for both large and small ones. The gap between medium sized company and large ones are similar to the gap between small size company and medium size ones. For now on, this analysis will focus on the Pomeranian Consulting Group company.
Both the vision and the mission are very important because they represent the competitive arenas in which the company operates business. For GCP, it vision and mission could be:
“GCP is a progressive growth oriented company, moving up to a local leader in consulting service for foreign investment in Poland. We will continue to strive to improve our responsiveness to the needs and concerns of our customers (foreign investors and Polish companies), employees, suppliers and the communities in which we serve. This will be accomplished through the development of our employees, sustaining a strong spirit of teamwork, an emphasis on quality of consulting services, and profitability. We intend to focus our activities in project management consultancy and patent, intellectual property protection to both preserve and improve our position in Polish market”
Clearly, GCP vision is to become a market leader in foreign investment consultancy in Poland. Mission statements cover major tasks of GCP as follows:
In order to make the vision and mission statements more clearly understood by employees and customers, companys should provide complementary information about the company.
GCP vision and mission are primary factor to build a company’s objectives. The GCP objectives will specify its mission, the followings are deliberate proposal for marketing objectives which are closely related to marketing strategies and aim to improve marketing activities significantly:
Vision, mission and objectives provides the framework and direction for the company. Formulating strategies involves determining appropriate courses of action for achieving vision,mission and objectives.
The major forcus of marketing strategies is on knowing, adapting to and influencing customers in an effort to achieve company’s objectives. As mentioned in previous Chapter, marketing strategies for a consulting firm consist of marketing segmentation, marketing mix, competition strategy, strategic client- consultant partnership and organizational strategy. This is also a guideline to formulate marketing strategies for PCG as well.
We can find three basic factors to segment the market of a consulting firm as indicated in previous Chapters are industry, continent, size of customers. In case of GCP industry may be best choice in order to be able segment the market of its Project Department, where most clients are operating in the construction industry. The second target should be foreign investors in the tourism industry.
The segments have important implications for many aspects of marketing strategies, including the selection of services, advertising methods, promotion and price for each segment.
Marketing mix here includes services, pricing, promotion and distribution strategies. These strategies are going to be formulated focused on each target segment of GCP company.
For foreign investors in construction, GCP will offer package service including providing secondary data about the Polish construction industry, foreign investment environment; conduct market and marketing research (if required); recommending potential Polish partners and available construction sites in the country; feasibility study, arranging necessary procedures to get investment license, construction project management consultancy. It means, GCP will accompany its clients right after they enter Polish till the finish of construction project, facilitate them in Polish market, be available to guide at any time.
For foreign investor in tourism, GCP will offer package service including providing information on Polish tourism market, foreign investment environment; cooperating with Polish tour agents to supply package tours within Poland, combine city tour and beach, train tour guide, prepare information material about Poland tourism both for sale and for free (folders).
For Client of patent department, patent services is supplementing to consulting service, patent attorney sometimes can suggest investment direction for their clients since they understand the market thoroughly, however, consulting service is not function of this department.
As package service is being offered, then package pricing should be charged. Consulting fee for every stage of the whole process should be calculated. For example, these fees should be charged in construction project.
Consulting fee should base on expenses, competitor’s fee and mostly on value of the services. The quality of service will decide its fee. Client of GCP are foreign investors, they rather pay high fee at high quality services than pay less at bad quality.
Payment can be made in cash or cheques to accounting department. And payment period can be negotiated between company and client. It is unnecessary to collect all payment at once, moreover this makes client uncomfortable.
Advertising is still a popular tool, but advertising in local newspaper is not enough. GCP should advertise in foreign newspapers especially business, construction, tourism newspapers and journals that its potential customers may read sometime.
Word-of-mouth, GCP should persuade its satisfied customers to inform other of their satisfaction.
Internal Marketing, motivate, encourage, give bonus to employees
Up to now, GCP only provides service in Poland, in the future establish office abroad is a possible alternative should be accounted for because its potential customers are abroad. European countries like Germany, Czech Republic, Ireland could be the first countries GCP should come since they are locating in the Center of Europe and moreover, most GCP clients are operating business there. Yet, financial problem is its constraint as expansion its distribution. The expenses for foreign representative offices abroad
Marketing mix is the heart of marketing strategies, however there are several necessary strategies assisting and improving marketing mix. For a consulting firm as indicated in Chapter above, they are competitive strategy, strategic client-consultant partnership, organization strategy.
Muller, (1991) stated “Customer satisfaction is the only meaningful competitive advantage. The business with the greatest number of satisfied customers wins”. Therefore, GCP should gain competitive advantage through customer satisfaction. To identify the key drivers of customers satisfaction, GCP has to design a set of questionnaire and distribute to its customers. It means a marketing research is expected to organize to measure customer satisfaction. And annual client conference should be held to exchange views about GCP services.
It is not enough merely to measure customer satisfaction. It is also important to formulate and implement satisfaction targets. The uniqueness of GCP is embedded in its Project Department. It can provide package and professional consulting services to foreign investors in construction industry. Develop and improve this department will give GCP comparative advantage against other consulting firms, make customers satisfied with GCP services.
Besides, acquire marketing programs such as training staff, offering new package services, etc. also increase quality of consulting services and naturally make customers happy.
Finally, GCP must pay attention to develop its core competencies on the consulting skills, especially in construction project management.
In the consulting firm, maintaining good relationship between client and consultant is very important. Clients will put confidence in the company only if they trust their consultant. The personal relationship of two persons is the relationship of two firms
Consequently, GCP should educate its consultants to keep sound relationship with clients, to be cheerful, sincere, sympathized, patient, willing to help, etc.
In order to run the company effectively, an organization strategy ought to be designed to attract,motivate, hire staff. For GCP, reconstructuring is necessary to improve its activities in providing information and enhance services to foreign investors in tourism, here is the suggested new structure for GCP.
The Information Department will be organized to conduct market research and marketing research as well as collect secondary data and it should be closed connect with Publication Department in order to exchange information. Most of services in Consulting firm are market research, so marketing research can be new service that can attract more customers both foreigners and Poles
The Project Department should be classified in three groups, architecture specializing in designing and preparing feasibility studies for construction projects, project management team in charge of consultancy in conducting projects or personnel management (recruiting, training staff for foreign offices), tourism team will tighter co- operate with American Tour Agent to offer consulting services for foreign investors in tourism. As the responsibilities and tasks are clearly defined, all departments and teams will run and coordinate well.
In the consulting firm like GCP, operation is the product. Without a successful and effectively run operation, GCP has nothing to offer to customers. It is the task of action programs to run marketing activities. Marketing strategies give the guidelines, implementing programs will transfer its objectives into reality.
Guiltinan and Paul, (1992), stated that one of the unique thing about marketing is the great variety of approaches that different companies use. Even firms in the same industries with competing product or service categories often use different marketing approaches. Marketing programs are the specific marketing decisions and actions that point out the marketing approaches.
To implement the above newly-designed marketing strategies some marketing programs have to arranged for GCP including offering package service to foreign investors in construction and tourism, promotion, restructuring organization and finance programs. At the same time marketing techniques and skills will also be suggested.
The final purpose of this research is to give recommendation to the Consulting organization in order to improve their marketing activities.
The marketing activities in the consulting firm like all other companies influence both the external and internal factors. Changes of the external factors are the motivation to develop Polish market infrastructure which still is somehow poor compare to other western countries, to create a favourable investment environment for foreign investors who are the Consulting firm’s customers. Changes of the internal factors affect directly on every marketing task in the Consulting organization.
As indicated in Table 4.3 there are a few threats to the Consulting organizations, yet consulting organization can not reduce all these, some of them are out of their own-control, e.g. legal framework, bureaucracy and corruption. The Polish Government should identify and solve these problems. The followings are some recommendations at the macro level that the Polish Government should consider to make its investment environment more interesting to foreign investors who are major customers of consulting organization:
The charges of the above external factors will build a more favourable environment to foreign investors in Poland and to Consulting organization as well. However, to improve marketing activities inside the company, the internal factors are more important.
The internal environment is different from company to company, therefore recommendations will be made to Consulting organization in general and then focus on Pomeranian Consulting Group whose internal environment was discuss earlier before.
Since the internal environment differs very much from company to company, the recommending strategies, therefore will be so general if consider all the consulting organizations are similar. Specific recommendations have to be given to certain company at the particular internal environment.
The followings merely summarize proposal marketing strategy and programs that suggested in details in Chapter 3
As a set marketing strategies and programs designed for GCP aims to achieve its final goal to be a market leader in the consulting field in Poland.
The current situation in the Consulting organization shows that marketing and marketing strategy is not considered as an important component of the company. In general, marketing activities and marketing skills in those companies are extremely poor. However, Consulting organization can still survive and develop since their close relationship with Polish authorities especially those are in foreign investment filed like Ministry of foreign affair and Ministry of finance etc. and they are much more cheaper than foreign consulting operating in Poland. Besides, the complicated administrative system and unclear, fast changing regulations in foreign investment have made foreign consultants difficult to find success. In particular, if there is no co-operation with local consultants, they could not access specific information that are vital for the successful operation. However, the Polish consulting organization is coming to the troublesome stage if there is no change in the firms.
Economic situation usually affects the situation on the labor market. The current slowdown is no exception. Before the slowdown, the market was focused on employee demands, however, market headlines changed expectations in many Sectors.
According to the current study about half of Polish companies (48%) have had to reduce their staffing levels because of economics situation. This has curse radical change in employees’ approach and it is also affecting consulting organization.
Consulting Organization usually stress their connections, their knowledges as to how the system works in practice, and their information gathering abilities. As generalist, they can be jacks of all trade and master of none, and may give short shrift to critical legal and tax issues. Since their fee is often in part based on getting a transaction consummated, they may be more concerned with doing the deal, than in doing it properly and in the client’s best interest.
Finally, marketing strategy is necessary in the consulting organizations, it helps to choose right target clients, develop properly new services and effective promotional programs, offer flexible pricing policy and moreover it can improve and expand business activities in the consulting organization significantly.
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