The marketing case study regarding the development of the Cisco company explains how they first started as a small business founded by a husband and wife team in 1984. The company specialized in internet products such as routers, modems, and software programs. Just four years later, the small business developed into a publically traded company with a new president and CEO. Over the next ten years, Cisco’s stock price and net worth would continue to sky rocket where at one point they became the most lucrative company on the globe capping their market value at $582 billion with a stock price of $82 per share. (Kotler, 2012)
Cisco began to acquire new companies under their name and really started to get into the television advertising scene in order to further develop their marketing strategies. At this point, Cisco wanted put more of an emphasis on their marketing strategies because their product line was being over shadowed by their capital. Investors were more interested in Cisco’s money and stock prices rather than the products that the company actually produced and sold. It was likely that Cisco put more focus on developing the marketing status of their product line because they knew that without a continued emphasis on selling products, their stock price would eventually decline over time and they had to be ready. (Bannan, 2010)
Having an outstanding capital and stock price is a significant part of being a successful business, but it is not the only factor. If Cisco had focused simply on their stock price and generating investors, while at the same time ignoring the actually products that got them there, then the company would most likely have collapsed. Even is the stock price is high, a company cannot rely solely on investors for capital because they eventually have to pay those investors their money back. Whether the stock holders liquidated their assets, or Cisco filed for bankruptcy and was forced to pay back lenders, the money would have had to been paid back and this could only be done in the form of sales revenue in their case. (Kotler, 2012)
Their decision to go into the consumer market was a wise one because it expanded their business beyond that of the business to business market where other businesses were mostly just interested in their stock prices. The business to business market is without a doubt lucrative given the right product or services, along with a profound marketing strategy. However, like in the case of Cisco, most of the businesses are compelled to be more interested in investments rather than products. The quick money may seem great at first, but without any sales revenue being generated, the company may not be able to keep that stock price up. (Llopis, 2014)
Going into the consumer market was not only viable for Cisco, but it was necessary to keep their company moving forward. With a company that sky rocketed in value as fast as Cisco without first being engaged in the consumer market, it only seemed logical that they would eventually have to do so. Reaching out towards the consumer market showed to be beneficial because the case study indicated that after the integration of this business strategy, Cisco was able to increase their sales revenues by 41% from 2006 through 2008, topping off $39.5 billion at the close of 2008. Businesses of all sizes may want to consider putting an emphasis on the consumer market, especially if their products or services prove to be in demand. (Leigh Richards, 2015) (Kotler, 2012)
Bannan, K. (2010, July 20). How Cisco used consumer-based marketing strategies to reach b-to-b clients. Retrieved from Advertising Age: http://adage.com/article/btob/cisco-consumer-based-marketing-strategies-reach-b-b-clients/279840/
Kotler, P. &. (2012). Marketing management.(14th ed) Upper Saddle River, NJ: Prentice Hall.
Leigh Richards, D. M. (2015). What Are the Basis of Segmenting Consumer Markets? Retrieved from Chron Business: http://smallbusiness.chron.com/basis-segmenting-consumer-markets-1417.html
Llopis, G. (2014, March 10). 6 Brand Strategies Most CMOs Fail To Execute. Retrieved from Forbes: http://www.forbes.com/sites/glennllopis/2014/03/10/6-brand-strategies-that-most-cmos-fail-to-execute/
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