Transcript Mauritius - Bournemouth University

WHSmith PLC
Strategic Marketing in Practice
Case Study
June 2006
C A M B R I D G E M A R K E T I N G C O L L E G ES
© CMC 2005
Scenario
• You are Gary Ross marketing consultant.
• TASK:
– Re – establish authority in the High Street
– Establish presence online in its natural sectors
– Develop new and creative approaches to
retailing
– Devise strategies to drive profitable business
year on year
C A M B R I D G E M A R K E T I N G C O L L E G ES
© CMC 2005
Where are we now ?
Audit of current situation
C A M B R I D G E M A R K E T I N G C O L L E G ES
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WHS today
• High Street Retailer, household name, new CEO has revived
fortunes recently, faces intense competition from all sides,
both traditional and online retailers
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Established 212 years
70% of U.K. population visit each year
438m visits pa
Sells 78m magazines pa
Sells 1.1bn pads of A4 paper pa
542 High Street shops
200 Travel shops
Like for like sales dropped 2% in 2004-2005
What does the future hold for WHS ?
C A M B R I D G E M A R K E T I N G C O L L E G ES
© CMC 2005
SUPPORT ACTIVITIES
FIRMS INFRASTRUCTURE - Customer focused, Marketing taken on and understood
at every level, core function - strong internal communications .Staff.reward scheme- V.I.P.
HR MANAGEMENT - Retain technical and knowledge based employees and recruit
marketing and sales experts - Project/consulting expertise. 360degree feedback
TECHNOLOGY DEVELOPMENT – Partnership with Fujitsu has saved money and
freed up staff to concentrate on core retail issues
PROCUREMENT - Combined buying power, U.K and Far East
MARGIN
SERVICE
MARKETING
• Customer
OPERATIONS
AND SALES
MARGIN
INBOUND
OUTBOUND
service
• JIT
• Investment in
LOGISTICS
LOGISTICS
paramount
•Efficient ethical
CSR
• Intranet
•E- Order
•Online
Product sourcing
•Relationship
• JIT for
handling
services
(closely
marketing
suppliers
•JIT
•Partnerships
monitored)
Key Account
•Alliances
management
PRIMARY FUN CTIONS
C A M B R I D G E M A R K E T I N G C O L L E G ES
© CMC 2005
Brand issues
• BRAND DOMAIN
(brand’s target market)
• BRAND HERITAGE (how it has achieved success)
• BRAND VALUES
(core values and characteristics)
• BRAND ASSETS
(what makes brand distinctive)
• BRAND PERSONALITY (character of brand)
C A M B R I D G E M A R K E T I N G C O L L E G ES
© CMC 2005
WHS SWOT
Strengths
•
Established over 200 years ago
•
Household name
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Has presence in 399 out of top 400 High
Streets in the U.K.
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Brand is well known
•
Staff are experienced
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Large customer base
•
Has an online presence www.bookshop
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Strong ethical trading stance
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Highly regarded for social responsibility
•
Generous giver to Charity (Children in Need)
•
Strong Environmental strategy
Weaknesses
•
Less than 50% of customers recommend
them
•
Less than 50% of customers are satisfied
•
No Online Director
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No co-ordinated marketing for all Stores
•
Lack of presence on air
(T.V. and Radio)
•
Smaller stores have insufficient range and
depth (SKU’s)
•
Brand indistinct
•
No discernible USP
Opportunities
•
To drive more business within the U.K.
especially online
•
To target potentially lucrative markets
elsewhere in Europe where retail competition
is less intense
•
Educational issues – national literacy
initiatives
•
Environmental issues
•
To rationalise store portfolio
•
To forge strong strategic alliances (Post
Office)
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To develop better services for customers
(e.g ATM machines)
•
To position WHS in the mind of the consumer
•
To be first choice retailer in several key
categories.
Threats
•
Growth of free newspapers
•
Growth of online new and G3 phone
news/podcasts of books
•
Online stores – Amazon etc.
•
Supermarkets
•
Spiralling costs
•
Specialist stationery stores – Staples
•
Specialist book chains – Borders Ottakers
•
Specialist music retailers – HMV , Virgin
•
Specialist card retailer - Clinton
•
Barriers to entry for core products is low
C A M B R I D G E M A R K E T I N G C O L L E G ES
© CMC 2005
Map of competition
Online
Amazon
Most retailers
Specialist
HMV, Virgin,
Borders,
Ottakers
Waterstone
Clinton cards
High Street
Category
killers
Newsagents
Independents
Woolworths
Tesco Express
Staples, Tesco,
Asda/Walmart
C A M B R I D G E M A R K E T I N G C O L L E G ES
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The Business Environment
More than
SLEPT!
Economy
Politics
Porter’s 5
Suppliers
Labour
Capital
Organisation
Legal
Pollution
Product
Wages
Profit
Materials
Society
MICRO
Technology
MACRO
PHYSICAL
C A M B R I D G E M A R K E T I N G C O L L E G ES
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PESTLE
Political
Concern over decline of the High Street
Economic
Healthy economy/low unemployment
Social
Growth of in-home entertainment
Growth of education concerns
Geographic changes – new housing
Time shift – longer active hours
Social - aging and cultural diversity
Technology
Growth of internet access
Growth of mobile presence
Change to 3G
Legal
Deregulation of Postal market – greater supply of cheap couriers
Distribution of magazines/Newspapers by OFT – favours Independents
Environment
Concern over ethical trading and environmental impacts
C A M B R I D G E M A R K E T I N G C O L L E G ES
© CMC 2005
Consider WHS’s positioning
• Use either BCG or PLC
C A M B R I D G E M A R K E T I N G C O L L E G ES
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Brand Equity
• Bonding –----How does it retain itself with me
• Advantage – --Does it offer something different
• Performance- -Can it deliver
• Relevance – Does it offer something I want
• Presence- Do people know it
C A M B R I D G E M A R K E T I N G C O L L E G ES
© CMC 2005
Where do we Want to be?
C A M B R I D G E M A R K E T I N G C O L L E G ES
© CMC 2005
Objectives
• Decide
• Objectives
– For U.K. and International
• Deliver
• Outcomes
C A M B R I D G E M A R K E T I N G C O L L E G ES
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Segmentation
• Described and Profiled for each sector
C A M B R I D G E M A R K E T I N G C O L L E G ES
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Targeting
• Specific and Justified for each sector
C A M B R I D G E M A R K E T I N G C O L L E G ES
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Positioning
• Clear and defensible
– Set out USP and Positioning for each sector.
– Are there any commonalities or Single Brand
options
• Vision
• Values
C A M B R I D G E M A R K E T I N G C O L L E G ES
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How do we get there?
C A M B R I D G E M A R K E T I N G C O L L E G ES
© CMC 2005
Action
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Decide
Objective
Deliver
Outcomes
C A M B R I D G E M A R K E T I N G C O L L E G ES
© CMC 2005
Strategic Development
• Product
– Sector Selection
– Core/ Physical/Augmented Proposition
– Branding
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Pricing
Distribution
Promotion
People
Process
C A M B R I D G E M A R K E T I N G C O L L E G ES
© CMC 2005
Implementation and Control
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Budgeting Areas
Metrics
Balanced Scorecard
McKinsey 7S
C A M B R I D G E M A R K E T I N G C O L L E G ES
© CMC 2005
Comms Strategy for WHS
• Audiences –Internal and External, domestic and
international, Consumers and Corporate, private
and public
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Media
Messages
Timing/Budget
Stakeholders
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Investors
Suppliers
Partners
Customers
Media
Who else ?
C A M B R I D G E M A R K E T I N G C O L L E G ES
© CMC 2005
Internationalisation
• Where, when and how
– GE/ Harrel and Keiffer
C A M B R I D G E M A R K E T I N G C O L L E G ES
© CMC 2005
Implementation and Control
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Budgeting Areas
Metrics
BS
McKinsey 7S
C A M B R I D G E M A R K E T I N G C O L L E G ES
© CMC 2005
Critical success factors
• Create a sustainable brand image and
position amongst competitors
• Change management (PLC,BCG)
• Internal marketing (stakeholder
management, CRM)
• Funding (Borrowing/J.V/Debt)
• Constraints – Overstretching
- Competitive landscape
- Attempted takeover by
larger company
C A M B R I D G E M A R K E T I N G C O L L E G ES
© CMC 2005
Vision
For WHS to be the first destination for any
customer who is seeking a value
for money, ethical, environmentally
proactive retailer with a broad product
range and friendly, informative staff.
C A M B R I D G E M A R K E T I N G C O L L E G ES
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Mission statement
To become first choice for any customer
who demands high quality standards and
exceptional customer service from
convenient locations on the High Street
across the U.K. and a comparable service
online.
C A M B R I D G E M A R K E T I N G C O L L E G ES
© CMC 2005
Critical Questions
• What is WHS’s USP when targeting the vast
majority of customers in the U.K. and
competing with many other retailers who
are offering the same products, often in a
more specialised way?
• Why should customers shop at WHS?
C A M B R I D G E M A R K E T I N G C O L L E G ES
© CMC 2005
Values
• Committed to providing a wide range of
products in convenient locations across
the U.K.
• Committed to developing staff to give
superb customer service to all customers.
• Committed to sourcing products ethically
and maintaining a strong environmental
approach in all its activities.
C A M B R I D G E M A R K E T I N G C O L L E G ES
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Corporate objectives
• To develop the online market by targeting
companies and individuals
• To research the European market aiming
to create a niche opportunity in those
countries where retailing is not so well
developed
C A M B R I D G E M A R K E T I N G C O L L E G ES
© CMC 2005
Strategic management of marketing mix
• Product
Core – everyday products that are always needed
– stationery, paper, greetings cards, newspapers,
magazines
Augmented – strong online presence needed
across all product categories
• Price
Favourable price – value for money because of
bulk purchasing power. A sophisticated pricing
strategy could be introduced using micro
marketing techniques
C A M B R I D G E M A R K E T I N G C O L L E G ES
© CMC 2005
Strategic management of marketing mix
• Place
UK based primarily – but needs to drive more sales online.
Also needs to target European markets, especially those
where retail competition is less well developed
• Promotion
B2B - emarketing campaigns to selected companies (use SIC
lists and professional bodies) to supply bulk purchases to
public bodies, large corporates etc.
B2C – use promotional spend wisely and undertake market
research to identify optimum target markets
Web site – continually update the content and promote
heavily.
C A M B R I D G E M A R K E T I N G C O L L E G ES
© CMC 2005
Strategic management of marketing mix
• People
Train and develop the existing staff. Selective
recruitment of key sales/marketing/technical
personnel. Recruit proven staff in overseas
markets
• Processes
Regular internal/external communication. Long
term relationship building. B2C customer
involvement. Relationship marketing. Customer
Lifetime Value. Branding strategy.
C A M B R I D G E M A R K E T I N G C O L L E G ES
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Strategic management of marketing mix
Physical evidence
Corporate web site
WHS logo and brand
ROI analysis across trading sectors
C A M B R I D G E M A R K E T I N G C O L L E G ES
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Implementation and Control
McKinsey 7S
Structure
Single company or J.V.?
U.K. Head Office and overseas subsidiary?
Strategy
Focus differentiated aimed at consumer
and Corporate markets in U.K. and
overseas
C A M B R I D G E M A R K E T I N G C O L L E G ES
© CMC 2005
Implementation and Control
Systems
Develop MKIS and control systems to regularly
review and monitor effectiveness of all strategies
Develop benchmarking system to monitor against
key market indicators
Staff
Continual development of key staff. Advanced
customer service and sales training. CRM
development. Key account relationship building
with suppliers from the U.K and Far East
C A M B R I D G E M A R K E T I N G C O L L E G ES
© CMC 2005
Implementation and Control
Skills
Ensure correct training and development
programmes are established to keep WHS staff at
the leading edge of technology, systems and
processes
Shared values
Ensure company strategy shared by everyone in
the organisation. Growth strategy and
international expansion shared with all staff,
suppliers, stakeholders. Compliance regulations
(Health and Safety, ethical trading,
environmental impacts) understood and accepted
by all staff.
C A M B R I D G E M A R K E T I N G C O L L E G ES
© CMC 2005
Implementation and Control
Style
Commitment top down from CEO and
Board. Creative, dynamic, leading edge,
probity, commitment, ethical trading
stance.
Profit sharing scheme
C A M B R I D G E M A R K E T I N G C O L L E G ES
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Control – Balanced Scorecard
Internal
Employee awareness, staff turnover,
assess staff performance against
benchmarks (KPI’s), participation in
continuous development (training
schemes), develop CRM databases for
collecting consumer feedback and insights
into future needs, wants, industry trends,
(market intelligence)
C A M B R I D G E M A R K E T I N G C O L L E G ES
© CMC 2005
Control – Balanced Scorecard
Innovation and learning
Skills training – advanced B2C selling,
customer ‘champions’, technical, online
systems, training and development,
critical thinking, project management
C A M B R I D G E M A R K E T I N G C O L L E G ES
© CMC 2005
Control – Balanced Scorecard
Financial
Sales vs. targets in each trading category –
Corporate, consumer – U.K., Europe
Profitability metrics, CLV
Customer
Customer satisfaction surveys – customer
feedback. Customer endorsements - web
based
Brand recall/awareness of brand
C A M B R I D G E M A R K E T I N G C O L L E G ES
© CMC 2005
Possible questions
1.
What branding strategy should WHS adopt to
maximise sales and profitability?
2.
Prepare a communications plan which will
increase sales and profitability for WHS across all
its target markets
3.
What branding and positioning strategy should
WHS adopt to improve its appeal to online
customers?
4.
Devise a marketing plan to make WHS a leading
player in the mid sized retail market in Europe.
C A M B R I D G E M A R K E T I N G C O L L E G ES
© CMC 2005
Possible questions
5.
Prepare a relationship marketing campaign
which will effectively increase WHS
customer loyalty and their lifetime value.
6.
WHS is at the crossroads in its
development and growth. Produce a
strategic marketing plan which will ensure
increased revenue from its High Street
and online operations and negate the
marketing strategies of domestic and
European predators.
C A M B R I D G E M A R K E T I N G C O L L E G ES
© CMC 2005
Possible questions
7. Prepare a corporate social responsibility
charter for WHS in the light of changing
legislation regarding the ethical sourcing of
products and environmental impacts.
C A M B R I D G E M A R K E T I N G C O L L E G ES
© CMC 2005