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Marketing Dissertation Topics

1. Introduction to Marketing Dissertations

This guide gives you some ideas for dissertation titles. Marketing is a broad area, with many different ideas to explore, so there should be plenty to whet your appetite here.Marketing dissertations typically take one of two forms, focusing either upon collecting and analyzing primary data or upon appraising secondary data only. Either type can be appropriate to your area of study. You will also find an overview of how to structure your dissertation in section three below.

2. Categories and List of Dissertation Titles

2.1 Theories of Marketing

2.1.1To what extent does Borden’s ‘Marketing Mix’ provide an adequate tool for marketing in the 21st centuryA review of the literature from the UK and USA.

2.1.2The management of marketing: is empowerment a useful concept to inform the contemporary marketing departmentA case study in a UK advertising agency.

2.1.3 Can the Jetstar marketing science model, developed to assess profitability in the low-cost airline market, be used successfully for other budget marketsA case study of a new dental practice chain.

2.1.4 Is there one best marketing decision model, or should models be selected on a contingency basisA review of recent literature.

2.1.5 The relationship between theory and practice. Do the most successful marketers have an in-depth theoretical knowledge of their fieldA qualitative study amongst marketing professionals.

2.1.6 Is the PEST analysis sufficient to interrogate environmental factors pertinent to marketing, or are subsequent developments (SLEPT, PESTEL, PESTLE) also necessaryA literature review.

2.1.7 Which approach to market segmentation is able to offer the best characterization of, and way to market to, the over 80’s A quantitative study of residents in a sheltered accommodation facility.

2.1.8 Can marketing principles developed for commercial interests be appropriate for promoting ethical issues A case study of the use of marketing techniques by the Stop the War Coalition.

2.2 Global Marketing

2.2.1How do consumer expectations of continuity in relationship with a brand differ from country to countryA qualitative study amongst experts around the world, using models of cultural differences.

2.2.2Aspirational purchases: the added value of luxury brands. How do consumers in developing countries view traditional British brands A quantitative study amongst affluent Chinese consumers aged 18-35.

2.2.3 Is political activity associated with rejection of global brandsA quantitative study of young European consumers’ attitudes to products from the USA.

2.2.4 The speed of convergence and globalization: to what extent are consumer behaviours becoming more alike around the worldA review of the literature.

2.2.5 What are the best theoretical tools for coping with rapid change in consumer preferences in the global marketplaceA review of recent literature.

2.2.6 How can global marketing campaigns best address culturally-specific ethical differences between nations A qualitative study amongst marketing managers involved in promoting alcohol and cigarette products.

2.2.7The impact of body language and gestures on global communication: to what extent can misunderstandings arise, and how does this impact on salesA quantitative study amongst sales people entering new global territories.

2.2.8 Can a managerial cognition perspective offer a good approach to global marketingA review of the literature.

2.3 Market Research, Advertising, Branding

2.3.1 The irritation factor: can ‘annoying’ television advertisements be more successful in securing consumer recall of products than ‘pleasing’ ones A review of the literature.

2.3.2 The resistant consumer: what is the best way to advertise and promote products to people who hold anti-capitalist viewsAn action research study amongst radical activists.

2.3.3 Can game theory contribute to successful brandingA critical analysis of three branding strategies using game dynamics.

2.3.4 Can successful branding approaches be used within politicsA review of the most recent UK election campaigns in terms of models of branding and advertising

2.3.5 Can ethics be used to develop effective brands A case study and historical analysis of branding by the Co-Operative Bank in the UK.

2.3.6 Is there a solid academic case for using hip hop, and its emphasis upon shared ownership and questioning of authenticity, as marketing tool A literature review.

2.3.7 Can brand association and cause-related marketing be used to build awareness of less-familiar brandsA quantitative study amongst European consumers of ‘green’ products.

2.3.8 Is it possible to enhance brand-building by training customer-facing staffAn intervention-based quantitative study amongst staff in an independent hotel in London.

2.4 Market Trends and Consumer Behaviour

2.4.1 To what extent does education level influence reading of food product labels for nutritional informationA quantitative study amongst Tesco customers.

2.4.2 Is commitment to buying ‘green’ and sustainable supermarket products mediated by level of household incomeA quantitative study amongst consumers across Europe.

2.4.3 A signifier of sophistication and desirable life-styleHow do UK women consumers view wine brands readily available in the UK high streetA qualitative study amongst women shoppers aged 18-65.

2.4.4 Can theories of semiotics be used to explore the meanings that products have for consumersA literature review examining the use of theories by de Saussure, Pierce and others.

2.4.5 Is there any evidence that car use will decrease over the next 10 years as a result of changing awareness of green issues, rising fuel costs or changing consumer attitudesA literature review.

2.4.6Compulsive shopping: are neurological models more adequate to explain the phenomena of compulsive buying than social or psychological models A review of recent literature.

2.4.7 The functional food phenomenon: good for body, soul or imageA qualitative investigation into the motivating factors influencing purchasers of functional foods.

2.4.8Is there a relationship between rural living and type of foods purchasedA quantitative study of shopping habits amongst residents in rural Wales.

2.5 New Media and New Trends in Marketing

2.5.1Pop-up Paradise: to what extent can the ‘pop-up’ shop be an effective marking toolA qualitative study of young consumers in London.

2.5.2 Caring and sharing: to what extent does the advent of new media technologies allow a newly collaborative approach to marketingA review of recent literature.

2.5.3 Can social media offer new approaches to marketing for theatre managementA case study of an independent theatre in Manchester.

2.5.4 ‘A nice idea, but …’ For small businesses, does the reality of using social and new media in marketing live up to the promiseA qualitative study amongst business owners in the UK.

2.5.5 Are new media channels for marketing as effective as old methods A quantitative study amongst consumers and marketing professionals looking at a range of attributes related to effectiveness.

2.5.6 New media: effective only when targeting young consumersA literature review looking at the use of new media and marketing effectiveness for the over 55s.

2.5.7 To what extent has control over the internet impacted upon the use of new media for marketing activities in ChinaA literature review.

2.5.8The need for a social media strategy: emerging best practice in marketing. A comparative and analytic case study looking at 5 UK brands using social media.

3. How to Structure a Marketing Dissertation, Tips

For details on how to structure a marketing dissertation, kindly check out the following post:

How to Structure a dissertation (chapters)
How to structure a dissertation (chapters and subchapters)
How to structure a dissertation research proposal

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What are the Marketing Strategies

What is Marketing?

The supply of products and services of high quality is the relationship between the company and its customers to use management as a marketing tool. Consumer products and services of the Organization of force and focus on quality and a different style depending on product type and product promotion and marketing of products / services for visitors and a strategic plan based on planning.

Segmentation of Market:

Retail marketing strategy for each of the areas, and create an organization based on the quality it provides. This requires an understanding of customer needs in each region, so the product quality improvement and service sector development needs to be able to deal with the organization. Strategies of marketing of various techniques and strategies to overcome the competitors planning.

Balance Scorecard:

Balance scorecard has a huge used of management to assess the overall performance and to check the three key areas; the first one is customer retention rate, on the other hand, satisfaction of user and finally profitability share.

Marketing Mix:

The marketing mix indicates that most of the focus on the promotion of education and distribution of products, promotion, however. Thus, can the relative influence of these studies do not provide insight into mouth marketing and risk of suffering a variableThe variable bias firm cannot be linked to strategy matter. At the level of relevant personal interview with Iran Research on various consumer packaged goods managers Companies focus on the coverage of similar relax in the field of research and advertising industry. The director on whether the interest in trust, this means that the product is the original error distribution performance played a big brand. Accordingly to the question, “How can impact of brand marketing mix fairly for long timeIt was a high priority to research Marketing Science 1988 (for example, marketing in the company after Science Institute, 2008). One reason of this question was around for a long time. There is a need to respond to this combination extensive data and method that can be measuring the effects on long-term deal with the ordinary experimental modelling challenges.

Marketing Strategies:

Marketing strategies work as the mainstay of the market to fill the needs of the market and marketing plans designed to reach the goals. Plans and objectives are usually measured by test results Overall, the plan multi-year marketing strategy as a strategy based on specific steps to complete the current year plan with the details. Time horizon, according to a marketing plan vary from one company, by industry, and the United Nations, however, the time horizon over climate change and the speed is small Marketing strategies and a dynamic and modern. Bush plans to partially random and partially.

Marketing strategy of internal and external environment shows the summary of SWOT analysis survey. Internal environmental factors are use in the marketing mix, as well as performance analysis and include reduction strategy. Environmental externalities and analysis of customers, competition, and target market analysis with the analysis of technological, economic, cultural or political / legal environment impact is likely to succeed, including a set of elements. An important part of marketing strategy in many cases is the company’s mission statement to keep in line with the mass marketing.

Once you have an integrated environment, and develop a strategic action plan to identify options, the aim of the challenge, the maximum of the marketing mix to achieve these goals, and are evaluated in detail the construction process can scan. To develop a strategy for marketing and development, the final step in a series of contingency plans in case of problems that arise in this process to monitor the project.

Marketing can develop a strategy unique work and one disagrees about. However, a common strategy aimed at a number of ways. Schemes listed below and a brief description of the most common classification.

Strategy always based on market position – in the chart, and classified companies in market share, or the basis of the dominance of the industry. There are usually four types of strategy to dominate the market.

?Leader

?Challenger

?Follower

Porter, a simple strategy:

It is use as the strategic capabilities and strategic dimension of strategic power. Scope of the strategy refers to the market penetration while strategic strength refers to a strong competitive advantage sustainable. Common strategic framework (Porter 1984) with two ranges of alternative includes two alternatives. This is the difference between the low-cost leadership focus and dimension and wide or narrow is with all of them.

?Product differentiation:

?Cost leadership:

?Market segmentation:

Innovation strategy:

New product development and innovation business model that deals with the rate of the company. Ask that whether of the company was on the cutting edge of technology and business innovation.

Strategic Models:

Most of the participant’s arkytng models marketing strategy and the tools necessary to analyze the employee’s decision. Begins with strategic analysis, strategic environment can be used to achieve a comprehensive understanding. As off Matrix and the one often mix the marketing strategy used to identify sites of expression. It can be used to explain the marketing strategy 4ps for planning ahead.

Many companies, particularly in the area of consumer goods package (CPG) market that the buyer business customers and retailer focused on the need to adopt principles of operation. The marketing departments of these download time consumer spending in the targeted categories, buyers and retail partners and relevant ideas (both thinking and behaviour) identified by the search for growth opportunities. The development of opportunities and changes in market trends, and emerging the changing, dynamics of the region challenges. The 4ps can be used to check the defined strategy of the company. Internal team is also marketing the brand or operational business development opportunities and strategies so that the potential for new products or by request can include services and the beneficiaries to start preparing for the same priority can be changed 7Ps.

The managers always use the method of perception and experience to handle and exclusive situations in their day to day business. A consumer who uses the osmosis knowledge can easily judge the marketing employed. The main purpose of the marketing budget is to focus to enhance the value of the firm, but on the other side of this concept is the stock price usually fluctuates. This stock price fluctuation is the result of increase in financial revenue. Due to the above measurements marketing expenditure can affect the marketing investment in a long term. The market base asset depends upon the market action to market place outcomes, which can attain from the exploring relationships.

To explore and define these issues, a small group introduce a five key elements areas.

1-Market Drivers:

It defines that to get information regarding stock price of main customers, brand and marketing assessmentHow can you define the relationship of short-range versus long-run group performance?

The market based elements should be on the both sides.

2. Awareness of brand valuation:

There is different methodologies use for the valuation of brand but still it’s questionable that wither the brand has ability to capture the market share or it faces the negative response. The brand directly affects the level of each activity such as cash flows, risk elements, growth and cost of risk capital.

3. Dare the efficient market hypothesis:

It is being observe that the market base on the assumptions and strategies which focus mainly on the segmentation and differentiation which all cause the market imperfect. The results of all the above activities can be judge through the positive results inform of retention of customers and positive stock returns etc.

4. The investor sector treats as customer:

While communicate the investor community it’s important to evaluate that the right community is being address. The major focus should be on the activities that the companies present themselves in a way so that they can get the major share of the investor’s market.

5. Analyzing the analysts:

The recommendation of an analyst will be suitable for the business organisation in order to brand equity and the most important that the analyst closely observe the market events or not because it directly effects the prices of a products. A firm worth can be measured by analysis of its cash flows as well as growth and risk link with the future cash flows.

The market performance could be examined through the following relationship:

Market based assets:

It consists of brand, customers, innovations and channels.

It seems that they have not value but they have a sound impact over the market.

Marketing capabilities:

Market orientation and expertise places a major role in perfect utilised use of resources.

Marketing actions:

Market action based on strategy development and extension of business models that leverage marketing assets and capabilities.

MODES OF ENGAGEMENT FOR CRITICAL MARKETING AND THE MAINSTREAM:

There are three possible types of engagement the oppositional mode, the revivalist mode and the therapeutic mode.

1- Oppositional:

This situation against key marketing and acting dialectically with the mainstream a separate alternative and present themselves – discipline approach and marketing. This Reference is to submit their methods distinct from the development of critical infrastructure, awareness base, vocabulary, etc., and the various major networks, conferences, Magazines, in opposition to the dominant people, and so on. The goal is to establish Alternative agenda, marketing, and the prevailing philosophy is based on strength and attacks her Institutions and more than willing to take. The network marketing will separate the principal and other educational institutions as a focal, Development of the theory and methods, research and education centre for programs, Anti attract scientists and ideas that have proven effective are ready to attack and change Prevailing.

2- Revivalist:

This important project is busy with the mainstream and to encourage his methods of investigating the original and important educational values and the return of a doubt. Evidence of the time on the basis of marketing power lost the original harmonies and creativity, this was counterbalanced by a healthy suspicion and criticism fixed ideas. Instead of, in these days, through the knowledge of the Supreme transmission, the recipient is limited to receive texts become ossified in Philosophy of Kotler is to managerial skills to take, as set out below as status the direction of the search method.

3- Therapeutic:

This approach as a sign of mainstream marketing ideas, the philosophy of group and marketing power of knowledge in education, social and economic relations (System (1999 Wilmot). Demystify and democratize the importance of the role of marketing. Marketing knowledge and wean direction away from the mainstream to help fetishism marketing techniques and texts.

Conclusion:

According to our global environment business it is not tough to makes a very popular to your business and to enhance it according to your desire over the world. Today a firm cannot get success without develop a progressive business strategy that can provide a strategic fit between its resources and to change the business strategy. In this case study, you can get the ideas regarding to Literature review by using a long range of strategies based on the market mix and market drivers to achieve organizational goals. The strategies should be build as customer friendly and to help the customer through continuing the services to Independent business owners, members and Clients.

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Hospitality and Tourism Marketing Strategies

1.0 Introduction

The original Travel Lodge brand was first established by its founder Scott King, in 1939 by opening the first motels in southern California. During its starting phase, it highlighted itself as a budget motel chain offering functional accommodation at lower rate than other lower chain by providing comfortable beds, free TV and room phones, carpeted floors, in-room coffee pots and pools.

Travel Lodge is fastest growing and most recognized budget Hotel Company in the United Kingdom. Travelodge currently has 466 hotels and 32,477 rooms in the UK, Ireland and Spain. The budget hotel chain has one goal is to have 1,100 hotels in Europe with more than 100,000 rooms in 2025. With 5,714 rooms and 40 hotels in the capital, Travelodge, the fastest growing hotel chain, has taken the title of being the largest brand from the Hilton hotel in London. This company was first lunched as first budget hotel brand in the UK in 1985 and is today one of the major branded hotel companies in the united kingdom with nearly 460 hotels. This chain is employing around six thousands staffs and more than seven million people stayed there in 2010 and more than eight seven booking are being made through online. Room rated start at ?19 per night, which is attracting the huge amount of customers. Travelodge is a brand champion of consumers; focus on driving prices in the hotel industry to encourage more people to use the hotels. Low prices of the chain budget delivered by commitment to operational efficiency and low cost business model. Only this year, Travelodge will offer over ? 2,000,000 rooms at ? 29 or less.

Travelodge Heathrow Central 3 star hotel is situated on the Bath Road where most big Heathrow hotels are located. It’s actually in the far east of the airport perimeter which is about 2 miles from terminals 1, 2 and 3 in the central area and terminal 4 in the southeast corner of the airport. This situation is actually quite convenient for the West London / Central London as the right side of the A4 London airport. A normal journey by car / taxi in west London takes about 20 minutes and 30-40 minutes to central areas. This location travel lodge was established in 2008 with the aim of providing budget priced accommodation in the Heathrow area. There is licensed bar cafe where breakfast, lunch, snack, dinner and drinks can be purchased within the hotel.

1.1 Porter 5 forces analysis of Travelodge

Michael E. Porter of Harvard Business School developed a five forces framework for industry analysis and business marketing strategy development in 1979, which was aimed to increase the overall industry profitability.

As stated by porter (1980) “there are five forces that determine industry attractiveness and long-run industry profitability”. These five competitive forces are:

The threat of entry of new competitors (new entrants)
The threat of substitutes
The bargaining power of buyers
The bargaining power of suppliers
The degree of rivalry between existing competitors

This forces and their rivalry can be best understood by the following diagram:

Source: Porter (1980)

Force 1: The degree of rivalry

The intensity of the rivalry, which is the most obvious of the five forces in an industry, helps determine the extent to which the value created by an industry that is dissipated through the head to head competition. The most valuable contribution of Porter’s five forces in the context of this problem may be its suggestion that rivalry, while important, is just one of several forces that determine industry attractiveness.

The degree of rivalry is very high because Heathrow area is the busiest area where around 50 star hotels are operating among them 16 hotels are 3 stars so, but Travelodge is competing with them with its cheapest budget 3 star hotel with high standard infrastructure and service. Premier inn is the one of the largest competitor having more rooms and facilities more than but Travelodge low price strategy and global largest chain playing the great role.

Force2: The threat of entry

Potential and existing competitors influence average industry profitability. Unless the entry of new firm is barred, the rate of profit will fall towards its competitive level. The threat of entry rather than actual entry might be sufficient to make sure that established firm constrains their price to the competitive level. By contrast, existing entry barriers whenever difficult or not economical feasible for an outsider to replicate the position of incumbents (Porter, 1980; Sanderson, 1998).

Threat of new entry is low as brands are very important in the hospitality industry. Travelodge use its name from a strong brand to attract new customers and retain old ones. Moreover, an economy of scale is also a very important factor inthis industry. The profitability of Travelodge is higher than the individual operations. A new entrant cannot compete with established players in terms of quality and price if they can achieve economies of scale. Being Travelodge, a capital intensive industry with a lot of it, tied in fixed costs, makes entry to most difficult. Protection of the Government for the tourism sector is very high and this in turn blends into the hotel industry and it is thus attractive industry in general.

Force3: The threat of substitutes

A threat of substitutes exists if there are alternative products with lower prices of better performance parameters for the same purpose. They could potentially attract a significant proportion of market volume and hence reduce the potential sales volume for existing industries. This category also relates to complementary products.

The main substitutes for the hotel industry are camping and recreational vehicles for tourists, corporate guest houses for business travellers and other informal means of accommodation with family and friends. Compared to the hospitality industry, these are much cheaper alternatives, so their prices very high values and switching costs very low. This makes the attractiveness of the industry in terms of substitutes, low. But, Travelodge is the one who is offering the high standard service at cheap price so the threat of substitutes is low.

Force4: Buyer’s power

The most important factors affecting the purchasing power are the size and concentration of customers. Other factors, the extent to which buyers are informed and concentration or diversity of competitors. Kippenberger (1998) states that “it is often useful to distinguish the potential buyer in the purchasing power of desire or incentive to use that power, readiness, which comes mainly from the risk of failure, associated with its use.

As far as the cheap price accommodation, there is low buyer’s power in case of Travelodge. Travelodge has numerous customers who are relatively very small in size. Loss of a single customer has little impact on it and finally this drives down the buyers bargaining power. Likewise buyer’s threat of backward integration is almost impossible and so is the company threat is forward integration.

Force5: suppliers’ power

The term suppliers include all the sources for inputs that are needed in order to provide goods or services. Basically the key suppliers of the hotel industries are; labour suppliers and real estate suppliers. All the suppliers in the market are defined as customers’ suppliers those who supply customers like travel agents, airlines companies, and other organisations where as property owners, infrastructure suppliers and housing and decoration are real state suppliers. Beside that labour suppliers have also key role to the company.

Overall, supplier power is low as customers suppliers is low as it is the budget chain hotel and get customers from its chain hotels along that its cheap accommodation is also the main customer attractiveness. About the labour suppliers they have also moderate power because of the huge number of labour suppliers so they is big competition between the suppliers, on the other hand due to the national legal policy, minimum wages has to be paid so unlike other countries, this company can’t hire the labour less than minimum wages.

The number of suppliers for the hotel industry is quite large and each supplier is very small compared to the leading players in the industry. Few powerful players are essential to the suppliers. Substitutability suppliers are also quite possible and affordable. Switching between estate agents is not going to affect significantly the company’s hotel. However, in terms of quality, training centres for workers and producers who provide ICT systems that for property management are relatively difficult to replace. Therefore, in terms of attractiveness of alternative suppliers of the industry is moderately high.

1.2 Porter 3 generic strategies

Porter’s generic strategy matrix, which emphasise the costs leadership, differentiation and focus based on three options for businesses, has dominated competitive firms strategy since Generic strategies were first presented in two books by Professor Michael Porter of the Harvard Business School (Porter, 1980, 1985). According to this model, a company can choose how to compete on the basis of match between the type of competitive advantage and objective market as the main determinants of choice. Porter, generic strategy typology remains a most notably in the strategic management literature. A business can maximize performance either by striving to be the low cost producer in an industry or by differentiating their line of products or services from other companies; either of these two approaches can be accompanied by a focus of organizing efforts in a particular segment market.

Travelodge business purpose is to provide its service for everyone by delivering low cost and maximum value for money accommodation to all customers and highly attractive, efficient and convenient stop-overs or stay-overs. Its overall strategy is cost leadership, this can be realised by its offer room starting from ?19, where as its more than 80% internet booking playing a key role to minimise its operational cost, as a result it has been possible to become cost leadership.

1.3 Value chain analysis of Travelodge

The value chain is a systematic approach to examining the development of competitive advantage. It was created by M. E. Porter in his book, Competitive Advantage (1980). The chain consists of a series of activities that create and build value. They culminate in the total value delivered by an organisation. The ‘margin’ depicted in the diagram is the same as added value. The organisation is split into ‘primary activities’ and ‘support activities.

Primary Activities

Inbound Logistics

Activities related to receiving the materials from the supplier, storing them externally sourced materials and handling them within the firm where goods are received from a company’s suppliers and are stored until they are needed on the production/assembly line is called inbound logistics. Travelodge ensures the right components are delivered to the right manufacturing point at the right time and they appoint their right supplier in time with certain terms and conditions, therefore the inbound logistics is good.

Operations

This section includes all the activities concern with the production of products and services. In case of Travelodge, it has been divided into three sections as reception, room service and food service. Its food service is delivered thorough its restaurant, it has its own business, there is no connection with residence and food like others star hotel. As far as the customers complaints found in blog, most of them are related to cleaning and security, so Travelodge is operation is not so good it’s just moderate.

Outbound Logistics

The goods are now finished, and they need to be sent along the supply chain to wholesalers, retailers or the final consumer. These are all the activities related to distributing the final product or service to the customers. Travelodge has its unique outbound logistic system where they get customer from its travel agents, its own branches and its cheapest budget hotel policy. Because of its good outbound logistics system, travel is the one of the hotel chain, which didn’t suffer of last economic downturn.

Marketing and Sales

In true customer orientated fashion, at this stage the organisation prepares the offering to meet the needs of targeted customers. This area focuses strongly upon marketing communications and the promotions mix. In Travelodge, this area essentially analyses the needs and desires of customers and its responsible for creating awareness among the target group about the company products and services. Travelodge is using the marketing communication like advertising, sales promotion and cheapest budget hotel strategy to attract the customers to their products. By analysis its marketing and sales, it seem to be at good position, their e-marketing is excellent because of that Travelodge is saving its huge amount of money in advertising.

Travelodge subsidiaries are in throughout the world so it marketing of any part of the world to some extent affects company popularity. Recently, Travelodge has an advertising agreement with Google which is expected to enhance the sales. The new strategy has been created to differentiate Travelodge from competitors in hotel sector and to move its marketing focus beyond its cheap price.

New campaign the Sleep Tight will be a collection of cuddly toy animals going under the name Mr Sleep and the Z Squad. The marketing team is doing whatever is necessary to ensure a good night’s sleep and the first advertisement lunched on first may 2010. Travelodge launched a new TV advert in February 2011, featuring its famous Mr Sleep and his pal Big Ted. The 30 second TV ad featured the two teddy bears travelling around the UK, staying at various Travelodge hotels.

Service

This includes all areas of service such as installation, after-sales service, complaints handling, training and so on. There is often required to provide services like pre-installation or after-sales service before or after the sale of the products or service. Travelodge is mostly focusing on its pre-installation service and less effort on after sales service so they are not handling their customer complaints.

Support Activities

Procurement

This function is responsible for all purchasing of goods, services and materials. The aim is to secure the lowest possible price for purchases of the highest possible quality. They will be responsible for outsourcing and purchasing using IT and web-based technologies to achieve procurement aims. Procurement activities are running through a system, like purchasing goods is being done by the competition between the suppliers and IT infrastructure contact with big IT companies.

Technology Development

Technology is an important source of competitive advantage in Travelodge by using them to innovate to reduce costs and to protect and sustain competitive advantage. This could include production technology, Internet marketing activities, lean manufacturing, Customer Relationship Management (CRM), and many other technological developments. Travelodge is very good for using latest and modern mainly internet technology.

Human Resource Management (HRM)

Employees are an expensive and vital resource. An organisation would manage recruitment and s election, training and development, and rewards and remuneration. The mission and objectives of the organisation would be driving force behind the HRM strategy. Travelodge has its own HR department where all recruitment selection, training and rewarding system are being done. For cleaning service, Travelodge has a contract with other outside cleaning companies with certain terms and conditions and is supervising their works.

Firm Infrastructure

This activity includes and is driven by corporate or strategic planning. Travelodge uses the Management Information System (MIS) and other mechanisms for planning and control such as the accounting department, finance and corporate strategy which make Travelodge’s better company infrastructure.

2.1 Boston Box Matrix analysis

The Boston box is a classic tool of strategic planning and was developed in the early 1970s by Bruce Henderson. Matrix provides a useful tool for analysing an organisation’s portfolio of business units, product lines, offerings or activities. It helps businesses to identify which products to invest in and which not to invest in depending on their relative market share and the growth rate of the markets they serve.

Using the BCG Box, a company classifies all its strategic business units according to two dimensions as horizontal axis; relative market share this serves as measure strength in the market this provides a measure of market attractiveness. Residential rooms are the product of Travelodge, by selling them it has been running its business and now it steps to the stage where company is getting a good profit and investing to expand its service.

By dividing the matrix into four areas, four types of units can be distinguished:

Stars – Stars are high growth businesses or products competing in markets where they are relatively strong compared with the competition. Often they need heavy investment to sustain their growth. Eventually their growth will slow and, assuming they maintain their relative market share, will become cash cows.

Cash Cows – Cash cows are low-growth businesses or products with a relatively high market share. These are mature, successful businesses with relatively little need for investment. They need to be managed for continued profit – so that they continue to generate the strong cash flows that the company needs for its Stars.

Question marks – Question marks are businesses or products with low market share but which operate in higher growth markets. This suggests that they have potential, but may require substantial investment in order to grow market share at the expense of more powerful competitors. Management have to think hard about “question marks” – which ones should they invest inWhich ones should they allow to fail or shrink?

Dogs – Unsurprisingly, the term dogs refers to businesses or products that have low relative share in unattractive, low-growth markets. Dogs may generate enough cash to break-even, but they are rarely, if ever, worth investing in.

As Travelodge has high market share with a slow-growing industry and these units typically generating cash in excess of the amount of cash needed to maintain the business therefore falls on cash cow business strategic units. This company is running more than 30 years and successful business in UK hotel industry with relatively little need for investment.

2.3 Product life cycle

The life of a product is the period over which it appeals to customers. The sales performance of any product rises from nothing when the product is introduced to the market reaches a peak and then declines to nothing again. With respect to the revenues generated by a product over a period of time, there are various stages that are achieved by any product. This is called a product’s life cycle. A product life cycle mainly consists of below mentioned four stages.

Product life cycle

Source: Graham R. Massey, (1999)

Introduction Stage

At the Introduction Stage market size and growth is slight. It is possible that substantial research and development costs have been incurred in getting the product to this stage. In addition, marketing costs may be high in order to test the market, undergo launch promotion and set up distribution channels. It is highly unlikely that companies will make profits on products at the Introduction Stage. Products at this stage have to be carefully monitored to ensure that they start to grow. Otherwise, the best option may be to withdraw or end the product. Travelodge created product awareness & develop a market for the product. No profits were made when it was at introduction stage as development costs have not yet been covered. It took a substantial amount of time to catch on in the market before they enter their growth phases.

Growth Stage

The Growth Stage is characterised by rapid growth in sales and profits. Profits arise due to an increase in output economies of scale and possibly better prices. At this stage, it is cheaper for businesses to invest in increasing their market share as well as enjoying the overall growth of the market. Accordingly, significant promotional resources are traditionally invested in products that are firmly in the Growth Stage. After the year of 2000, Travelodge is considered in growth stage, when it was expanding throughout UK and they were investing their profit to open new hotels.

Maturity Stage

Currently Travelodge is in maturity stage, maturity Stage is, perhaps, the most common stage for all markets. It is in this stage that competition is most intense as companies fight to maintain their market share. Here, both marketing and finance become key activities. Marketing spend has to be monitored carefully, since any significant moves are likely to be copied by competitors. The Maturity Stage is the time when most profit is earned by the market as a whole. Any expenditure on research and development is likely to be restricted to product modification and improvement and perhaps to improve production efficiency and quality.

Decline Stage

Travelodge is expected to be in maturity stage after some decades when its market is shrinking, reducing the overall amount of profit that can be shared amongst the remaining competitors. At this stage, great care has to be taken to manage the product carefully. It may be possible to take out some production cost, to transfer production to a cheaper facility, sell the product into other, cheaper markets. Care should be taken to control the amount of stocks of the product. Ultimately, depending on whether the product remains profitable, a company may decide to end the product.

As travel was established before more than 25 years and it has more than 460 hotels in United Kingdom, it is making a good profit and one of the established budget hotel therefore it is in the maturity stage in the life cycle.

2.3 Market segmentation

Segmentation is the term given to the grouping of customers with similar needs by a number of different variables. Once this has been done, segments can be targeted by a number of targeting strategies. Based on Travelodge business goal, competition and customers, they have divided their market into four segments business, leisure, group, and other as described below:

Business Travellers

Business travellers represent a large portion of lodging demand in many market areas. Travelodge include people travelling on business representing commercial, industrial and governmental organizations. It is important to understand why business travellers are visiting the market area and how many room nights they generate. Reasons for visiting a particular area might include conducting business with a company recruiting, training, management meetings calling on multiple businesses and stopping over between destinations.

Leisure Travellers

Leisure travellers may visit an area for a vacation, to attend sporting or social events, to shop, or to visit friends and relatives. They might be staying over simply because they are travelling to other destinations. Leisure travellers may be individuals, couples, families, or small groups. Travellers visiting hospitals and universities are typically included in this market segment. Leisure room demand is often seasonal. In larger, Travelodge more urban market areas, leisure room demand may be limited to weekends, summer months and holiday periods.

Group Meeting Travellers

For Travelodge, group market consists of both leisure and business travellers but due to the size of meeting or gathering hall they limited this segment as small group meeting travellers. Leisure groups include bus tours, school activities, athletic events, etc. Tour groups are often brought to an area for sightseeing and attending special events. Local attractions that appeal to leisure tour groups may have records of the numbers and names of tour operators who have visited their attractions. Business group meetings are typically associated with board meetings, training programs, seminars, trade shows, and other gatherings. Often the sponsoring organization will be from the local area. Out-of-town organizations may use logical meeting facilities because they often rotate the sites of their regional meetings. Information on the group meeting market can be obtained through state chapters

Other Travellers

Various lodging customers cannot be classified under the categories of business, leisure, or group. These travellers may include construction workers, truckers, utility crews and others. Activity at local truck stops, distribution centres, long term construction projects and other sources of demand could help you estimate the significance of this market segment.

3.1 Creating and Developing Customer loyalty

Generally, customer loyalty can be defined making customers feel that they are the company’s number one priority. Competitive advantage can be achieved through customer loyalty. This is the way to gain the best kind of customers, repeat customers. Repeat customers tend to spend more money and provide the best personal advertising. Customers feel customer loyalty when they consistently purchase a certain product or brand over an extended period of time. As an example, many customers stick to a certain travel operator due to the positive experiences they have had with their products and services.

In Travelodge, customer loyalty is the key objective of customer relationship management and describes the loyalty which is established between a customer and companies, persons, products or brands. This company believes that the individual market segments should be targeted in terms of developing customer loyalty.

The Customer Loyalty Grid is helpful to understand customer loyalty better. This grid is divided into four zones, as shown in the diagram below:

Zone 1: The Zone of Indifference

Zone of indifference includes those services which are unstated but expected. Literally, this includes all those customer needs and wants that are basic to fulfilling the contract between you and them. For example, customers expect to be treated with courtesy and respect, and would probably be puzzled and maybe even insulted if customer asked them if this was a need. It of course is, and if don’t meet this need; it will cause dissatisfaction for example sometimes travel lodge cleaning service and infrastructure are criticised by the customer. If you meet this basic and obvious need, the best you can hope for is indifference.

Zone 2: The Zone of Satisfaction

This is where your customer actually tells what is important to them. Meeting a customer’s needs here will cause satisfaction, whereas not meeting them will cause huge dissatisfaction. For example, Travelodge advertise that it has offer room for ?19 per night, customer think that if even they don’t book before, it not going to hogh price for the room but sometime it is, this cause a customer dissatisfaction. It is an expectation, simply because other organizations that the customer deals with provide this benefit.

Zone 3: The Zone of Delight

This is where your customer hopes for something, asks for it, but really does not expect to provide it. This is opportunity to provide something beyond their expectations and by so doing will create delight. For example, a customer might ask for something that is usually available only in a premium priced product. Not providing it will unlikely cause dissatisfaction. Therefore this is an area for particular attention in building a loyal customer base. This area is not seem to be good at Travelodge.

Zone 4: The Zone of Loyalty

This is an area where hotel expertise in whatever product or service you provide and the customer’s lack of knowledge can really give back. Providing benefits above and beyond what the customer is even aware of can create a loyal customer. This requires you to be really proactive in suggesting to customers new innovations that they can really benefit from. Many customers will be even willing to pay extra for this. In case of Travelodge, it is very careful about the hidden cost of hotel so tries to offer like welcome drinks, some gift for celebrating birthday customer.

At Travelodge, Customer loyalty is the key objective of customer relationship management and describes the loyalty which is established between a customer and companies, persons, products or brands. If this company be careful about all the zone of matrix then of it will create and develop best customer loyalty than currently.

3.2 Network and relationship marketing

Network and Relationship Marketing has evolved as a strategic marketing approach which is oriented towards attaining long-term profitability and value creation by interactions and mutual exchange among customers, suppliers and other stakeholders. It is also can be adopted to enhance the competitiveness and profitability of a value delivery network (supply chain). Better integration and shared mutual values can be developed through relationship marketing across value delivery network. Network marketing is commonly known as multi-level marketing. It is part of the direct selling industry and is run as a business-distribution model that allows a parent company to market its products directly to consumers through a large network of distributors and consumers, thereby bypassing the middleman. Travelodge is mainly focus on relationship marketing, they have a customer record keeping system so they treat regular customer specially. They are promoting relationship marketing by developing the good relationship.

3.3 Viral and Guerrilla marketing

Guerrilla Marketing is an unconventional system of promotions on a very low budget, by relying on time, energy and imagination instead of big marketing budgets. The term has since entered the popular vocabulary to also describe aggressive, unconventional marketing methods generically.

Viral marketing and viral advertising refer to marketing techniques that use pre-existing social networks to produce increases in brand awareness, through self-replicating viral processes, analogous to the spread of pathological and computer viruses. It can be word-of-mouth delivered or enhanced by the network effects of the Internet. Viral marketing is a marketing phenomenon that facilitates and encourages people to pass along a marketing message voluntarily. Viral promotions may take the form of video clips, interactive Flash games, images, or even text messages.

As travel is considered itself as a largest budget hotel in UK and investing millions of pound on marketing so Travelodge don’t think about adopting Guerrilla marketing. But talking about viral marketing Travelodge is to some extent using if we see internet we can see many images and video clips about the service and infrastructures. Viral marketing is the Travelodge authorised company strategy as well but guerrilla marketing is not Travelodge policy.

References

Porter, M.E. (1980) Competitive Strategy: Techniques for Analyzing Industries and Competitors , Free Press, New York, 1980.

Sanderson, S. (1998) New approaches to strategy: new ways of thinking for the millennium, Management Decision, Vol. 36 issue 1, pp.9-13.

Graham R. Massey, (1999) “Product evolution: a Darwinian or Lamarckian phenomenon?”, Journal of Product & Brand Management, Vol. 8 Iss: 4, pp.301 – 318

Howard, Theresa (2005). “USAToday: Viral advertising spreads through marketing plans”. USA Today.

Fornell, C. and Wernerfet, B. (1987) “Defensive marketing strategy by customer complaint management : a theoretical analysis”, Journal of Marketing

Moloney, Chris X. (2006) “Winning Your Customer’s Loyalty: The Best Tools, Techniques and Practices” AMA Workshop Event(s). Misc. materials distributed related to event(s).

Kotler, Philip, Armstrong, Gary, Saunders, John and Wong, Veronica. (1999). “Principles of Marketing” 2nd ed. Prentice Hall Europe

McKenna, R. (1991) “Marketing is Everything”, Harvard Business Review, Jan-Feb, 1991, pp 65–70

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Free Essays

Marketing Strategy Analysis for Emirates airline

Introduction

As the airline industry is especially increasing and highly competitors so, there are many market share in the industry. Moreover, the airline industry is affected by the environmental (e.g. political, economics and etc.) that decreasing the number of passengers. At this point, there are many reasons, which have an affect on the airline industry to competitive among industry, so many airline companies need have developed their strategies to be more effectively in order to lead the market area.

Emirates airline is one of the big company in the airline industry, but today there are large number of Airline companies are still growing in the market, which are looking for stealing a market share. In this point, with in the growing industry there are more and more choices for the customer to be able to chose the airline who they wanted to traveling with and yet still looking for the one which can serve their need also. Due to the hitting of economic slump, it’s sent the effect to the large commercial airline shrinks them and may not be able to expand the company. Therefore, the switching cost to the low cost airline has also created an impact on the Emirates airline.

In order to maintain the business success and obtain customer to flying with, the airline also need to modify their strategies and service which could give to customer feels the different and added value after purchasing the products. The aim of this report, the author is trend to analyze and evaluate the strategic issues, which can be able to give and effectiveness for the airline to develop their strategic use to be more effectively.

In this report will consist of two major parts: part one will analyze which strategic formulation and lead to implement strategic approach as gaining ahead competitive advantages from resolving the switching cost of consumer leak to the budget airline. In the following part, the author will recommend and conclude at the end of the section.

Methodology

In this research, the author trends to use a secondary data sources to seek and conduct this research. This is because of the use of the secondary, it’s also give the reader to gather information a wider range from the different sources which can justify and analyze in order to achieve the tasks. In addition, the use of the secondary data will also give an efficiency in term of saving time to conduct this research from the available sources e.g. The Internet, Books and journals are also an important in term of apply and develop with their own report.

Target Market and Positioning

In terms of performing the business, the marketer should be identifying who is the customers and understand the customer action for a product or service in order to providing the satisfy goods or service for them.

Emirates airline is one of the air carrier, which have hardly felt the economic and airline down turn. There are three major categories of passengers: tourism and business, expatriates and transit passengers.

UAE’s Tourism and Business segment Customers.

Dubai’s emergence as a regional business and tourism hub that has provided Emirates airline plenty of room for increasing and has fueled regional air passenger traffic. Dubai aims to attract 15 million visitors by the next year. Therefore, Emirates airline should plan to take advantage from this situation that can make more passengers to the airline.

Expatriates in UAE

Because of Dubai economic is rapidly increasing, it has created huge demand of workface and the highly paid labor market is a major attraction for the various workface around the world. The diversity of population enables Emirates to plan their route; they have reached mutual agreement with almost all the national authorities around the world to operate in. Dubai operate in an “open sky” policy, which allow any carrier to compete with Emirates airline.

Transit passengers

Due to Dubai is the operational hub for Emirates airline; it is the best position to connect between Europe, Asia and Australia that can be support to the airline. Emirates has been using “connecting point” in the promotional of their marketing especially transit passengers, the well established and marketed wide range network enables their to prosper in particular segment.

Strategic formulation

Marketing Plan

In order to identify Emirates airline strategic options, ANSOFF directional matrix can be used as a starting point to identify the options that are available. According to Aaker and Mcloughlin (2007), there are four possible alternative growth strategies that can be developed. It consists of market penetration, market development, product development, and diversification.

(see appendix 1)

– Marketing Penetration (Improving In-fight Service)

Business focuses on selling existing products to existing markets drives growth strategy for Market Penetration.

1) Retain and boost market share of Emirate airlines product and services.

2) Protect market dominance of Emirates airlines existing markets.

3) Driving out competitors by restructuring mature market.

4) Enhance usage of existing passengers.

Tele-communication is essential element in everyone daily life, in order to enabling passengers to make voice and data call over aircraft’s telecom system, Emirates would like to add communication while on the airplane, it would be very good service for the business passengers. Currently, Emirates have an expensive telecommunications method to make voice call and Internet, passenger’s mobile phone should be beam signal to the ground satellite system and from Immarsat, which is already installed on most of the Emirate airplanes.

– Marketing Development (Extending New Routes)

Due to the number of services is increasing into new markets where company seeks to sell their product to new areas so, the launching existing services to new area or new market segments is a possible way to achieve this strategy.

The objective of Emirates airline is building up Dubai into a popular aviation centre that will finally serve as an important universal long haul hub. It provides an alternative to the traditional European airline hubs as Heathrow Airport (London), Charles De Gaulle (Paris) and Schiphol (Amsterdam). The airline heavily promotes Dubai as a destination, offering reduced hotel rates as well as insight to event like the Dubai shopping Festival that hope to attract more travelers to the city. In order to improving the number of tourism, Emirates airline add new route and destination especially in UAE tourism.

Due to the airline managed road shows and press convention to announce its entry to new city, these event allow travel agents, tour operators and local airline personnel in contact and gain information about Emirates’ new routes, holiday packages and other promotion that can give a advantage for the airline.

After performing a new route to the country’s economic hub – Shanghai – the airline offers passengers a chance to visit the epicenter of China’s political and cultural activities. Because of China’s richest city in terms of historical value and has a heritage that dates back over 3000 years and houses marvels as the Forbidden City, the Great Wall of China and the Ming Tombs.

The success of Dubai as an intercontinental hub, it has been facilitated by airline such as Emirates. The centre point of Dubai has become extremely important; because of it hardly two points on the globe where it is not logical or possible to use Dubai and connecting point, and it usually a good direct route.

– Product Development (Private Suite)

Introducing new services into existing markets implies product development is strategy, which involves the development of skill and requires business to expand customized services that can apply to current markets.

As Dubai is a hub for international business travelers, this is time to improve new product to provide for top-level business executives. The CEO’ imagine of multi-national company makes lengthy overseas journey to attend a board meeting that could have a main impact on the company financials. The fact, company would like CEO to be on top for the rested, refreshed and relaxed so, the cost of CEO’s air travel is doesn’t seem so expensive when comparing to service for them.

Emirates airline has more services for business travelers that is reason why Emirates airline introduce high quality first class private lounges to attract business travelers. The premium class private suit would be fully outfitted with personal storage, coat cabinet and desk and individual mini bar. Long seat reclines to become fully horizontal couch and TV wide screen. Exceptional level of personal services including a gourmet and wines provided by specially trained multi-lingual cabin crews are the other value addition for this product.

– Related Diversification (Low-cost carrier)

The last strategic option allows Emirates airline to exploit its competitive advantages in airline service qualities. Diversification is a strategy, where business sells new services to new market segment. It is more precarious strategy because of limited experience on particular new market areas (Lee and Carter, 2009).

After the European low cost carriers are a successful, Middle East operator also started expression to explore new marketing concepts of “Frills-free” fly. The low cost airline is increasing at more times in the average industry.

The low cost airline offers lower prices than traditional airline by fascinate promotion. The low cost has flexibility fare that is one reason why some people is switching cost to them.

Air Arabia dominates exclusively to this low cost carrier service in UAE. Therefore, Emirates Airlines must decide how to respond this threat posed to the large expatriate market in UAE. Among the options considered there is scope to introduce low-cost subsidiary of Emirates Airlines.

Emirates Airlines be supposed to slightly spread from current marketing objectives to obtain the low cost airline market share and to retain its customer base of UAE expatriate market. This can be done launching new subsidiary to cater budget airline market. The key routes should be high demand and large number of expatriate’s home country like Egypt, India and Pakistan.

In terms of Emirates Airline system, new budget airline is help to introduce new Al-Makthoum International Airport in Jebel Ail that is located on Dubai border. This will provide residents of Dubai and Northern emirates enhanced travel option to neighboring destinations. Emirates Airlines is placing lease order of for 200 aircrafts. The carrier is expected to use Airbus A320 or a Boeing 737 on lease basis for the first few years prior to acquiring ownership status.

Implement Strategic

As Mintzberg, Ahlstrand and Lampel (1998) the implement strategic is going to using after the marketing plan, it should be evaluated. The evaluation is necessary for extent the marketing objectives, it have been achieved during the specified time period.

Improving In-Flight Service:

Success criteria of deploying a system to allow passenger to use their mobile phones for communication, it is increasing market penetration. It can be measured in terms of voice and data usage and expansion of market penetration. There is not corrective action plan if it fails to respond.

Extending new routes

New destinations are implemented to achieve market development. Flight market occupancy is showed the result of this strategy. It needs to re-discover new destination if the flight occupancy level is lower than expected.

First Class Private Suites

The first class private suites is a new product of Emirate airline, it can be measured the success of the product. Quantitative measurement of this product would be number of booking or occupancy. If it fails, the corrective plan is reducing the tickets price.

Budget Airlines

Success criteria would be capturing new customer base for the airline. Since its separate operating entity we can estimate financial results of operating profit would be good measure to evaluate the success of budget airline subsidiary.

Conclusion

To conclusion, the related diversification options were suggested as the firm strategic business solution. The overall analytical approaches primarily from the positioning operational hub as a Dubai. However, the firm has high capability to expand its competencies and capabilities into other market areas that the resource based view approach is estimated as the most suitable one.

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Free Essays

Marketing Analysis of Apple Inc

Introduction

523 Apple Inc. is known for its innovative ability to gain competitive advantage since 3rd Jan 1977. It was called Apple Computers Inc. and as they have started their penetration in the consumer electronics, they have removed Computers from their name. With a workforce of 46600 FT employees and 2800 temp staff all over the world and the made the sales of $65 billion in 2010. (Annual Reports, 2010)

The famous brands offered by the company to the world have been Mac computers, iPod, iPad, and now the hot selling iPhone. Apart from hardware, the company has been very successful in software with the introduction of Mac OS X operating system, and other media software’s like iTunes, iLife and now iWork along with iOS (operating system for mobile phones). (Apple Annual reports, 2010)

This report will cover their most talked about brand called iPhone, which has been termed as “Jesus Phone”, “Work like magic” or “your life in your pocket”

The hype on the internet has made this product a technological savior and the company is still adding innovative features not to mention the technical issues and challenges, which come with every product in the market. (Campbell & LaPastina, 2010)

Market Environment

There is expectation that iPhone users will be 100 million by 2013 and as in the fig the number is going to be around 450 million in 2013. (Churchill, 2009) The company is facing huge competition from Microsoft and Google from software point of view and from LG, Samsung, Sony , Blackberry are already challenging with their innovative brands. Appendix B helps to understand the market forces as well. The company has gained by the first mover advantage and their 317 stores with more than 10,000 partner stores are supporting the sales of the product. The company is highly dependent on Cingular for their success in USA but the company has made strategic partners all around the world to grow like T-Mobile, China Unicom etc. The company is targeting non corporates unlike competitors, although the company has leverage of Apple’s brand image. The company is able to secure first position in the consumer satisfaction survey done by J.D. Power and associates. (Refer Appendix C) (Tews, 2009)

Figure 1 Smartphone sales (Churchill, 2009)

The company is targeting professionals, students between the age of 18 and 35 basically. The company is conscious of its brand and so focusing on fulfilling the corporate social responsibilities as in Fig 2. (Apple Annual Reports, 2010)

The company has trained nearly 133k workers on human rights and responsibility of the managers. The company also paid $ 2.2 M in recruitment fee overcharges. (Apple Annual reports, 2010)

i) Conducting cross industry focus groups for suppliers.

ii) They have launched SEED program to teach english and other professional courses for the workers. By 2009, nearly 14800 workers joined this program, with the help of 500 iMac PC’s.

iii) The company has made strict principles regarding Human Rights (no discrimination, proper age, holiday, respect); Health and Safety of the staff (Ergonomics, cleanliness, emergency evacuation, injury prevention), Environment Safety (Air and water waste management, waste mgt), Ethics (non disclosure agreement) & Management commitment to train the staff, workers feedback.

(Apple Annual Reports, 2010)

Marketing Approach of Apple

McCarthy has presented the marketing mix (4P’s) model to help the managers device a good marketing strategy where the benefits can be exchanged between the pillars of marketing, this was later modified by Booms and Bitner in 1982 (he added 3more P’s ) to cater the requirements of the service industry. (Brassington & Pettitt, 2007; Kotler, et al, 2005) The next section will discuss 7p’s of Apple as in figure 3.

Figure 3. 7P’s of iPhone (Adapted by researcher)

1. Product:

The product would be found in more in 60million pages on internet, with the broadest screen display in all the mobile phones so there is touchscreen keypad as opposed to dialoging keypad in just 2 months after launch. The company decided to use OS X operating system with the same usage as of iPod or Mac although with lot of shortcomings like no expandable memory or replaceable battery or difficult to disable users. (O’Grady, 2007) The initial version was not with 3G network support and was later integrated. SWOT analysis of iPhone (figure 4) helps to know the strengths & opportunities of the product. The company should develop core competencies on the basis of its strength and should focus on the opportunities which might arise in due time, which the analysis of threats help to safe guard the product development and develop contingency plans. Gradual innovative methods can be adopted by the firm to convert the weakness into strength apart from best use of financial resources. (Brassington & Pettitt, 2007) The locked iPhone with one network Cingular in US and by other network in Europe is not appreciated by the consumers. Also the cost of unlocked iPhone is quite high in compared to US market, which might have caused reduced sale. The users can’t install their software’s which is another software leverage strategy of Apple, so they have to use only Apple software’s (iTunes, Mobile Me) or QuickTime players. The company is utilizing the iPod ecosystem to leverage the iPhone thereby supporting its online music revenue system. The display of PC based websites with same display made this product different from others. (O’grady, 2007)

Fig. 4 iPhone SWOT Analysis

Use of FaceTime with 2 cameras is a new innovative idea like in 3G phones, Retina display, but the new iOS is slow than expected by the compass and GPS is helpful when lost. Uses of App Store help the users to get application on their phone and Apple takes 30% of that revenue. (Marshal, 2010)

2. Price: Apple in this case adopted the “best fit segment” pricing strategy (skimming), where the early adopters were targeted who are less price sensitive and want to receive the benefits of new technology. It allows more cash flow for the company and also conveys benefit perception to other target segments. The company started off with selling the product at $599 (8GB) and $499 (4GB) and later reduced the price of 8GB to $399 and discontinued 4GB model significantly. The company wants to target the mainstream users and can’t reply on early adopters (young techno savvy, professionals) for future growth. They tried skimming and versioning strategy. (Apple Annual Reports, 2010)

1. Skimming: This is high pricing strategy but can attract risk of low sales and piracy (Kotler et al, 2005) but Apple has safeguarded itself by marketing before it actually emerged in market by enhancing its brand value under top 20. (Sliwinska et al, 2008)

2. Versioning: This strategy involves charging different prices for same products from different target segments. So the company implemented “temporal price discrimination” where it charged the prices depending on the desire of the customers to pay for the iPhone. Probably due to good profit on each unit from willing customers and they want to gain high volume sale from the larger customer base they had developed. They have structured this in different countries and adding more features. As they reduced the prices by $200 in just 60 days, after consumer complaints, they issued some $100 store credit to early buyers. (Sliwinska et al, 2008)

With the market domination of Symbian phones to 35 Million in H2 2007 and success of N95 and E series boosted the sales by $172 Million against Apple products. Microsoft, RIM has a strong hold in the N.American market, while Nokia is having a larger share in EU. The company started charging $72 to $130for 18-24 months contract in Britain and Germany; in addition they have to pay ?269 for iPhone in Britain. So the customers had paid $566 compared to $399 in USA. In France, the company tied up with Orange and charged $590 for 8GB along with a monthly package of ˆ50 to ˆ120 or they can buy iPhone over $900. (Sliwinska, 2008)

Figure5. Price Comparison (2007&2010) (www.apple.com, 2010)

But the company should understand that European market has 60% of pay-as-you-go customer that is why the company failed to meet their target of 10 Million units but sold nearly 400,000. The company has already launched iPhone3G ($99 for 8GB in USA & ?419 in UK) and iPhone4 ($199 for 16GB, $299 for 32GB in US & ?499 for 16GB, ?599 for 32GB) as shown in figure 5. The company is still adopting the vertical building strategy, as in iPod’s which is related to iTunes and help the company to control the digital music and video market. Total 73.73 Million units were sold and only 1.3 million were the original iPhones, it has been a huge success but not as anticipated. They are expecting 82 Million units by 2012 as in figure 6. (Oliver, 2009)

Figure 6 Predicted Sales (Oliver, 2009)

3. Promotion: Apple has been most aggressive in terms of promotion as seen in figure 7, some examples are:

Fig 7. Strategy of promotions (Kiprin, 2009; Apple Annual Reports, 2010))

1. The company started with 4 TV commercials during the launch to flaunt the innovative gadget (original iPhone) which can fulfill all needs of entertainment and information sharing device. The company is focusing now to advertise their Face Time feature and recently launched 4 more TV ads. in July 2010. (Chris, 2010)

2. The press releases and blogs were posted and iPhone was in 60 million web pages across web. The news created rumors and the Advertising Age’s Marketer award winner (2003) company was again ready to offer new generation product after iPod. The company made successful relations with media firms and Steve (CEO) shares new ideas with public during occasions as suggested in fig 7. (Williams, Mullin., 2008)

3. With the support of 317 stores across the world (233 in USA, 84 outside USA) which contributed around 17% of profits. The company has done strategic partnership with Starbucks to offer free iTunes Wi-Fi music at 600 locations, which can later be downloaded from computers. Even the new iPhones 5 reveal the easiness to find people around the city, location of friends and other features which reflect the social integration aspect of the device. (Apple Annual Reports, 2010)

Fig 8. Apple Online marketing (Kiprin, 2009; Apple Annual Reports, 2010)

The company is already spent $5.5 billion (increase of 33% compared to 2009) due to expansion in the retail segment. (Apple Annual Report, 2010)

1. The company uses all forms of advertising to gain attention, they appear on a regular basis on newspapers, TV, billboards etc. Like Macworld Expo (conventions to launch products), coverage of major channels like Fox, MTV and Rolling Stones, Maxim etc. In-store promotion and awareness helps in personal selling where the users can touch and test. The company site is quite impressive with promotion codes issues to consumers from time to time.

2. Cross Promotions: the channel partners like Sprint, Orange, Vodaphone etc. promote iPhone packages on their websites and from printed booklets.

3. Search Engine promotions; the company spend money on Adwords (Google marketing), Pay Per Click campaigns. The company purchases the keywords like iPhones, mp3phones etc. Banners and promotions on other sites is a regular from Apple. (Sliwinska et al, 2008)

4. The company sends email to iPod users, carrier consumers, and uses RSS feed of their promotions and events and blogs are done regularly. (Williams and Mullins, 2008)

4. Place: The company is using the locations as shown in fig 9 for selling the product.

Fig 9. Distribution locations ((Kiprin, 2009; Apple Annual Reports, 2010)

The company followed the hybrid distribution strategy and engaged the telecommunication service provider’s stores along with their online and own stores. So the customers are forced to enter into a contract for 18-24 months. The company is using two level channel for distribution of their product. (Jobber & Fahy, 2009) The company has done tie-ups with Cingular as they have a customer base of 58Million and out of which around18million are already with iPod. So it’s good strategy to benefit both companies of exclusivity in USA. Although AT &T never wanted to spend much money on advertising but they end up spending $18 billion in 2009. As seen in the figure 10, the products are assembled in China (due to cheap labor) and then supplied to warehouses and regional stores. The company is clever to use the use the touch points of established networks (Vodaphone, O2, Orange, T-Mobile etc.) (Jobber & Fahy, 2009)

5. People:

The company wants to be in direct touch with the consumers and “when they feel it, they will buy it” strategy. With only $99, 1hour/week for 1yr help the users to meet the experts at Genius bars for technical support and information, conducting over 50000 sessions / week. The sales assistant is available on appointments to find the right product for right needs at the “new gather place”. This helps the company generate word of mouth marketing and product awareness and brand building. The sales team is trained to give awareness, rather than giving a sales pitch. Also the CEO has impressive presence in front of media to market the brand. (Ireland et al, 2009)

6. Process:

Alain (2008) has given some insight about the process of Apple. He says CEO, Steve Jobs is working closely with the design and development team during the whole development process. The meeting of board management is done every month, where the marketing proposal and other problems are discussed.

10-3-1: The designers follow the pixel perfect approach where there are no fillers and 3 designs are selected out of 10 and perfected until they arrive at 1 out of total 10.

The company conducts different type of meetings:

1. Paired design: this is done 2 times a week to discuss the features and technical specs of the product.

2. Brainstorming: This involves discussion on any and every idea that comes in your mind and put in the table for discussion. There are no rules to free thinking. (Alain, 2008)

3. Production: This involves giving a proper structure to the innovative ideas and arranging deadlines for the same. (Alain, 2008)

The CEO doesn’t frown to discard a product at the last minute. and there are Pony Meetings every 2 weeks, where the client discuss the requirements with designers, so they can work according to the needs of the consumers. The sales are handled in stores (Apple and partners) by the professional team and training sessions also help with sales promotion activities.

(Alain, 2008)

7. Physical Evidence: The Company has a good packaging strategy which makes the product look attractive and stylish on the shelf. The company has Apple Care service to resolve the problems and services offered by the company, geniuses’ bars to meet the direct customers and teaching them to make better users. (William, Mullin, 2008)

Discussion

Cladbun (2007) has pointed out the application development by 3rd party is not allowed is a drawback. But the company has been successful in allowing the third party developers to develop innovative software’s like making the iPhone work as a remote and the car can be fully operated by sitting outside the car and similar applications help the company to share profits from other developers and are unique business model implementers. This is also adopted by Amazon recently. (Marshal, 2010)The utopian vision to create the convergence device from Apple is under serious controversy, even though they have filed 200 patents but LG claimed that they copied their design & Apple Inc. lost claim for IPHONE trademark against Infogear. The company has reduced their marketing expenses by using the retailer outlets all around the world and invested that money to open their own 317 stores all around the world, this has helped the company to get the sales revenue similar to the maturity stage of the product life cycle even though the product is at the introduction phase. The company might be planning to have more strategic partnerships as they have done for iPods with Nike, Volkswagen etc. where the iPods was given free with each unit purchased. (Williams and Mullin, 2008) The company with China Unicom is doing excellent with 100,000 sales in first 3 days and 200,000 pre orders for iPhone 4 as compared to 5000 order for original iPhone, even there is a restriction of wi-fi feature due to government rules. The company is giving iPhone for free with the $43, 2 months contract, which they haven’t done before (Ong, 2010); this shows that the management is conscious of the social and economic factors of the target market. They have to do similar during their launch or other high populated countries. The process used by the firm is towards perfection which should be implemented by every firm to gain competitive advantage. (Gosnay & Richardson, 2008)

Conclusion

It has been observed that the company has maintained strong sales and developing new markets and also adding the value of the brand with more features and third party software’s available for the users. Although with lot of technical limitations the company has experienced good sales with the help of strategic partners and intensive advertising. The company is spending lot of money on all the channels of promotional mix, however the company should give more emphasis on website advertising to reduce the costs. The company is well known for innovative ideas and thereby inspiring others to develop innovative ideas along with their service to the society by following CSR approaches. The last section of the report present the recommendations which can be utilized by the managers for effective marketing of iPhone.

Recommendations
This strategy must have lost early adopters and loyal customers and reducing the price by 66% in 1yr is not good way to treat customers and forcing them to sign contract with AT & T, O2, Vodaphone or T-Mobile, which resulted in slowing down of sales and even though 3.3 million iPhones were sold in 8months but only 2million contracts were signed with AT&T. (Adapted by researcher)
Another mistake is the launch of iPhone after 7 months in UK, Germany and France; almost after 1yr in other Western Europe like Sweden, Austria even in Canada, Brazil etc. So a good product has adopted a bad strategy. They could have delayed the product launch or decreased the prices only after 1yr or should have started with $399 only. (Vertygoteam, 2010)
The company should find ways to differentiate the product in China but as cheap players and mobile phones even pirated iPhone is available so its difficult to maintain the brand image. Also Wi-Fi is disabled due to government restrictions but the Chinese love colors so the back side of the iPhone should be available in trendy colors. There is enough scope for people in China with 470 Million users. (Research and Markets, 2010)
India is also a good market with population reaching 1.3Billion, and company can earn if they sell at similar price offerings due to economy of scale. But they are offering at $800, which is expensive even for Americans. The company has to be find ways to challenge dual and triple sim phones available in India and cost around $100. Even on $50 phone from Nokia, the company is investing heavily on marketing but iPhone wants to establish with poor marketing requires careful planning. (Rhiain, 2010)
The company is offering unlimited bank width to the subscribers which will overload the network, so company should also invest in expanding the bandwidth along with aggressive marketing investment, especially in growing markets with poor infrastructure like India as 44% of revenue comes from non-US market. (Annual Reports, 2010)
Olive (2009) views that company will sustain the market forces with the help of media integration, games and sophisticated software. However, company could include Mobile commerce, user generated print media production and 3D games to attract more customers.
The company should understand the social forces and use it to target the customers. Rising prices, decrease income, world financial crisis affect the buyer’s purchasing power. Old age customers are free and can be the target market, so they can be connected with their grandchildren. The company can create advertisements devoted to elders in this case. Another target market can be singles who can utilize their free time for entertainment purposes when they feel lonely, as they don’t have family obligations and enough financials. With the increasing migration of citizens from one country to other, even American and Britishers are moving to developing countries due to lost cost living. So this can be another target market for Apple, where they are away from their country but feel connected with the product from their country. (Gosnay & Richardson, 2008)
The users can’t forward any contact or use blue-tooth with other phones, ringtones needs to be purchased and difficult to use the speakerphone in cars. (Squarejp, 2010) The company should find ways to rectify it to make it more suitable for customers.


REFERENCES

Alain, 2008, You can’t Innovate like Apple [Available at] http://www.pragmaticmarketing.com/publications/magazine/6/4/you_cant_innovate_like_apple [Accessed on 24 Nov 2010]

Apple Annual Reports, 2010, Annual Report [Available at] http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9Njc1MzN8Q2hpbGRJRD0tMXxUeXBlPTM=&t=1 [Accessed on 24 Nov 2010]

Brassington & Pettitt (2007) ‘Essentials of Marketing, 2nd edition, Prentice Hall

Campbell,H.A. & LaPastina,A.C., 2010,How the iPhone became divine [Available at] www.agendainc.com/media/ipho0710.pdf [Accessed on 25 Nov 2010]

Churchill,S., 2009, 100M by 2013[Available at] http://www.dailywireless.org/2009/03/24/smartphone-users-100m-by-2013/[Accessed on 20 Nov 2010]

CSR Report, 2010, Supplier Responsibility [Available at] http://images.apple.com/supplierresponsibility/pdf/SR_2010_Progress_Report.pdf [Accessed on 20 Nov 2010]

Gosnay & Richardson (2008) ‘Develop your Marketing Skills,’ KP

Jobber & Fahy (2009) ‘Foundations of Marketing, McGraw Hill

Kiprin, B., 2009, Apple iPhone Strategy [Available at] http://www.slideshare.net/bkiprin/apples-iphone-launch-marketing-strategy-analysis-2858373 [Accessed on 28 Nov 2010]

Kotler, Wong, Saunders & Armstrong, (2005) ‘Principles of Marketing’, Prentice Hall

Marshal,K., 2010, As Apple tablet looms, Amazon Kindle adopts App Store revenue split [Available at]http://www.appleinsider.com/articles/10/01/20/as_apple_tablet_looms_amazon_kindle_adopts_app_store_revenue_split.html [Accessed on 24 Nov 2010]

Oliver,S., 2009, iPhone sales predicted to top 80 million by 2012 [Available at] http://www.appleinsider.com/articles/09/08/19/iphone_sales_predicted_to_top_80_million_by_2012.html [Accessed on 23 Nov 2010]

O’grady,J.D., 2007, Appropriability, Proximity, Routines, [Availanle at http://www2.druid.dk/conferences/viewpaper.php?id=1675&cf=9%20{^ [Accessed on 20 Nov 2010]

Ong,J., 2010, China Unicom iPHone4 sales hit 100k [Available at] http://www.appleinsider.com/articles/10/09/30/china_unicom_iphone_4_sales_hit_100k_in_first_four_days.html [Accessed on 25 Nov 2010]

Research and Markets, 2010, Chinese Mobile Market [Available at] http://www.researchandmarkets.com/reportinfo.asp?report_id=542976 [Accessed on 20 Nov 2010]

Rhiain, 2010, Nokia C2 unleashed with Doubnle Sim [Available at]

http://conversations.nokia.com/2010/06/03/nokia-c1-unleashed-with-double-sim-functionality-photo-gallery/ [Accessed on 29 Nov 2010]

Sliwinska,D., anasinghe,J., Kardava,I., 2008, Apple Pricing Strategy [Available at] http://christophe.benavent.free.fr/IMG/pdf/AINI_2008_Apple_s_Pricing_Strategy.pdf [Accessed on 20 Nov, 2010]

Squarejp, 2010,iPhone problems

http://discussions.apple.com/thread.jspa?threadID=2489656 [Accessed on 29 Nov 2010]

Tews,J., 2009, Smartphone Customer Satisfaction survey [Available at] http://businesscenter.jdpower.com/news/pressrelease.aspx?ID=2009224 [Accessed on 26 Nov 2010]

Vertygoteam, 2010, iPHone Strategy Mistakes, http://www.vertygoteam.com/iphone_marketing_strategy.php [Accessed on 2 Dec 2010]

Williams,A., Mullin,R., 2008, The handbook of field marketing, Kogan Page Publishers

Appendix A. Marketing Mix

Appendix B Porter 5 Forces

5 Forces Model (Adapted from Kotler et al, 2005 & Apple Annual Reports, 2010)

Porter 5 forces model helps to understand the marketing forces which affect any company brand. According to the above model:

i) The Supplier power is quite strong as it has support of big companies like AT & T, Orange, Vodaphone which are helping in the sales and also using their touch points to give products to the customers. They have enough financial capability to support the company. The low cost assembly unit in China is also helping to keeps the cost low. (Williams and Mullins, 2008)

ii) New Entrants: The threat is quite high due to other big brands competing at the hardware, design and software level. Google and Microsoft want to capture the mobile software market. (Twes, 2009)

iii) Substitutes: Everyday there are more products coming in the market from communication medium like SKYPE, VOIP etc and smartphones, PDA and Chinese mobile are common everywhere, unless the company is innovative, they can’t stand in the market. (Kiprin, 2009)

iv)Rivalry: it is quite intense as all the mobile phones have dominance in their region and it will be difficult for iPhone to take over the market. All big brands like Sony, Nokia, LG etc. have enough funds to fight for the target market. (Williams and Mullins, 2008)

v) Buyers position is little week as the smartphones are made by manufacturers and the consumers have choices but there is no good replacement for iPhone which comes with its unique features. (O’grady, 2007)

Appendix C. Consumer Satisfaction survey (Tews, 2009)

Categories
Free Essays

Most consumers marketing communications involve digital now, should they be digital-centric?

Introduction

Marketing is an expansive topic that covers a range of aspects, including advertising, public relations, sales, and promotions. The former involves getting a product or service into the market, promoting it, prompting behavior, and encouraging sales. Communicating to consumers is very important and Communication is easily unnoticed, but capability to communicate effectively is compulsory to carry out the opinions and visions of an association to the people. In today’s world everywhere we see is a digital world now. Without communication, there is no mode to express thoughts, ideas and feelings and to advertise products to the consumers. The marketing communications should be digital centric because it is much faster and easier to communicate, attract consumers and the messages can be stored in the device for longer period of time, without being damaged, unlike paper files that easily get damaged. As well as, digital can be targeted over a larger markets and distances. Digital communication is pouring social transformation and this has effects for the future of advertising. It is very importance in the field of advertising when promoting products to consumers through digital devices like television, electronic billboards, internet etc. which makes it very eye-catching towards the consumers. This form of advertising and communications has become very profitable over the past few years and many consumers are adapting to it and also prefer it. With the help of technology, digital advertising has grown a lot. Digital Advertising via plasma display panels, liquid crystal displays, computer monitors, and televisions are used to enhance advertising. Using computer-generated images for print advertising and large format graphics can be a unique way of showcasing your products, with all this Digital advertising and communications has made the market a better place.

Digital advertising has been widely accepted because of its countless advantages such as dynamic creative elements and interactivity, guaranteed delivery and organized display, multiple advertisers with no clutter, co-op revenue opportunities, instant digital changes for season, price, or promotion, rapid ability to update content, timely insertion of trailer loops with advertising content, instant digital programming with informative and entertaining content, and the ability to deliver specific messages to specific audiences in specific locations. It also helps to combine the industries of advertising networks and point of purchase display merchandising.

(Source: http://www.webpronews.com/digital-advertising-2004-12) The impact of digital advertising is sensational; whether the presentation is on a single separate floor display or a giant multi-screen format the messages can be conveyed with energy, focus and entertainment and special images to fascinate the consumers. With the help of digital products and devices the marketer is provided with many options and facilitates to promote and convey the message to the consumers which more than one images and option to choose the large format displays of their choice for the ultimate impact in their venue. Technology drives media, media drives social growth, and marketers track societal growth in an attempt to take benefit of the advertising openings that new media presents.

Digital marketing through television is one the most vital and effective means of promoting a brand. The visuals gives the image of the brand and the vocals gives the product/services a voice to speak for itself. Beverage organization like Pepsi, coca cola will surely operate for television or internet as they require the customer to see the soft drink and what it can offer by quenching the thirst. Digital marketing for beverage companies, airline industries, sportswear and technology-based companies result more effective in quality results as they use star-studded personalities to make their marketing strategy more effective and applicable as humans are bound to have idol personalities and easily get attracted if they promote such brands. How-ever on the other hand, the same organization might fail if the market radio lacks visual ability. Vocal marketing is useful for delivering any message, promoting institutional brand, academics, technical brands and many others.

Digital marketing through mobile phones are very popular and effective these days. Mobile phones are now a need of every individual and can be found in the hands of every individual. Devices like i-phone and blackberry have stormed the digital market and the mobile technologies has advice to a new level.Organisations,since around 4-5 years, are considering reaching their employees on mobiles through phone calls, video calls, short message services, multimedia messages etc. This digital marketing allows the organization to make the use of technology and reach to its main final consumer directly avoiding the in between agents or channels and deliver the message or promote the brand. For e.g.; retails brands prefer to send an SMS directly to the mobiles instead of advertising in the newspaper or magazines. Not only it the message is clearly delivered, but it helps the organization to save thousands of pounds in terms of finance and the most important, gives them the right number in identifying and analyzing their true market potentials or true buyers.

With digital marketing communications it helps companies increase their exposure towards consumers who are actively seeking products and devices. Communications involves online advertising, digital advertising and social media. Beginning with online advertising is a form of advertising which uses internet and World Wide Web for the communicated purpose of delivering marketing messages to interest customers. Online advertising is an effective form of advertising and communication, because it offers various kinds of animations, banner advertisement, email advertisement, and also on platforms like Facebook, Twitter etc. Web related advertising has a selection of sites to publicize and reach a niche audience to focus its devotion to a specific group. Research has proven that online advertising has given results and is growing business revenue. Online advertising also provides one major benefit of privacy towards the companies when advertising unlike other forms of advertising. Social media is the use of web-based and itinerant technologies to turn communication into collaborative dialogue. Social media also leads to many advantages such as relationships and discussion, creativity and re-mix culture; embrace your passion and identity, community, sharing, and connecting and increase clearness in government and organizations. By using social is increases reliability and builds an effective image, but also successfully increase revenues and the number of consumers. With the help of digital media marketing, companies and organizations can use data or their message in digital format which can be released to the targeted audiences anywhere in a short period of time.

The message can be conveyed very effectively by the use of graphics, figures, audio, video, text data according to one’s own marketing convenience, and can direct them to the looked-for area, even globally through the internet. The digital media marketing has enormously benefited from the internet. While sitting at the ease of your own office, one can now market the product to the other corner of the world. This is the unlimited benefit of digital marketing through internet. Digital marketing communications has become a part of the world and is an essential part of every business today and a fast means of transferring and reaching consumers. The creation of internet-based news communication is directly impacting upon traditional forms of media, and the method in which this is consumed. “In the UK, the availability of internet-based media has led to a reduction of radio, newspapers and TV engagement. More than 25% of 15-24 year olds read fewer newspapers since using the Internet.”

(Source: http://shura.shu.ac.uk/518/1/fulltext.pdf )

Moreover, digital advertising and communications can be found private and public environments. Most of the message are conveyed through LEDs and LCDs and projected images too. Thus, the message is conveyed is targeted and focused. Another advantage of using the digital signage is the probability of updating information from anyplace. When working on a digital media, the requirement is to update data in a flash card. Digital system has the facility to connect with the mobile also. This technology allows updating the signage data through Bluetooth or SMS. The ad can be displayed all day long like 24 hours a day and can be repeated frequent number of times, so that your customers can observed it at their convenience rather than any specific time


DIGITAL TRENDS AND ITS DEVELOPING:-

There is a wide range of categories on which these type of web sites offer a wide range of information which include different types of accessible like games,pcs,mobiles,laptops,mp3,cameras etc. These electronics also cover home connections like TV in digital entertainment and other service areas. With these technologies at a round and round rate, there are some companies that fear that they are lacking behind in these latest types of centuries and in developments in digital marketing. On the other hand digital trend is no longer said to be confined to a computer monitor or mobile phones in the world of 2011.

RFID TAGS (radio frequency identification technology):-.RFID has been there for a long period of time towards the opportunities in many sectors. Towards these the marketers are now starting to begin a technology in such a way which automatically captures the real time data automatically. The most usable way of these digital trends RFID is using are the leveraging technology to create more efficient oppurtunities.The RFID has mostly increased in parks and other outdoor places that integrate quickly are on Facebook and twitter and they immediately update their status. While all these products include different types of enhancements like locations and social networking the RFID has integrally created a user’s history and getting valuable data to advantages on both sides.

TECHNOLOGIES AND ITS ORGANIZATIONS:-

Marketing and technology are now considered as the main vital weapons for organizations in terms of success. They have to be upgraded according to the time and as per the requirements of the market conditions. Any organizations with consisting of outdated marketing strategies and outdated technologies will often find it.it will often find it hard to co-op up with the success market has both the technologies and the marketing strategy has to be upgraded and customized with time and the requirements of the organization.

There is no doubt that the organizations are more digitalized and have already adopted more digital based strategies in approaching there target market. Media has been playing a vital improvement role promoting organizations and its product and services to a local market. Catering to over billions of people around the globe, no one denies the role of televisions when it comes to promoting brands as every individual and every organization understand its importance for e.g. :- a one minute of advertisement of Pepsi on the television is viewed by millions of people around the globe and they recall the brand as a source of satisfying the thirst and entertainment.

WHY TO ADOPT A MARKETING-CENTRIC APPROACH?

These are the companies that make good consumers, and as a result they have their own style of focusing in our mindset around launches from where all these systems are made at the starting of the products life cycle. Towards this our job is just to make more people educate about there needs of goals and assets through the whole cycle of a product. On the other side there is not much of budget for more giving tv ads as there are many new ideas that come out every minute so there should be an easy way of knowledge and knowing which way can be engaged. It is said that there should be a customer’s marketing centric approach in the digital marketing ways as it gives a wide range of opportunities of segmentations and integrations. Towards a better customers experience and marketing department the demand of their prices and budget increases.it is worthy while they acknowledge the different ways in the organizations that can improve towards their customer’s centric marketing?

BY STARTING IN A SMALL WAY ON THERE PROGRESS:-By looking and beginning towards the customers demand and starting with a small programmed, channels etc. and by continuing the track and to communicate overall.

THE DIGITAL MARKETING MIX:

It is always said that a digital marketing always focuses on a 2 core principles. Developing websites and how is the marketing in it.During this situation people on the other hand will think that social media is not present in the digital marketing. However in other ways social media does form an integral part of digital marketing mix. In terms of this social media lies towards the digital marketing mix, it is only necessary when the following have become as the elements considered:

A very highly brand name.

The b2c communication and combination of the management.

The succeed in their websites.

GRAPH OF USAGE OR EXPENDITURE OF DIGITAL MEDIA ADVERTISING:-

Most of the companies have adopted towards this kind of advertising strategy which is digital. This is much less expensive and more reliable and only digitized information can be conveyed through a strident channel without degradation. One of the widely available and successful marketing strategies is also viral marketing. The advantages of viral marketing service are high reliability, low costs, large audiences, high efficiency and the chance to unremitting promotion adjustments. Viral marketing is one of the cost-free techniques for promoting a business operation. Time and resources are simply available in this type of marketing and also inexpensive to setup. Viral marketing is built to link to the website. For instance over the medium or over the email, one recommends the product. Using viral marketing thrill about good products is created. Hence, people get hold of the right product. Viral marketing campaigns are popular for both online and offline media. Therefore it is another cost effective way of reaching out to several customers. Viral marketing contains the use of all the media formats available on the internet such as video clips, interactive flash games, e-books, text messages, etc. Widespread channels that drive circulation include social bookmarking sites, forums, blogs, newsletters, emails, etc. Viral marketing is generally word-of-mouth and that makes it all the more convincing since it is carried out by people that readers can connect to. Article marketing and video are some of the viral marketing techniques. Article marketing provides a good stage to present a product or service in a unbiased tone. This technique of article marketing comprises, writing several articles unfolding about the product or service and submitting them in article directories or in the website’s article section. http://www.teqtonic.com/blog/2010/01/effects-of-online-advertising-beyond-the-click/

VIRAL MARKETING:-

In the recent years and times, a new marketing process known as viral marketing has come into the effect. Arguably, many consider it similar to the word-of-mouth promotion, but viral marketing process has proved itself to be more efficient especially to technology based and medical organizations. Viral marketing is more like a networking process where people promote brands or products to their colleagues or friends who are in need of such a product convincing them to purchase the product and asking them to carry on the process by selling the similar product to their peers or contact(potential customers),thus creating a network of real customers.

This viral marketing helps the brand or the product to get more popularity and awareness in short span of time and reaching its true buyers. Not only the sales of the product increases by double but this helps the organization to study its true market of its customers by segmenting them according to their needs and wants. Medical organizations have benefited a lot from such marketing process where their products such as massagers, vitamin tablets, fitness machines are sold as it attract many people who are health conscious and their lives are affected by health issues on regular basis. Viral marketing may vary from text messages to images, magazines to eBook, from software to guides, and from video clips to phone calls.

THE BENEFITS OF VIRAL MARKETING CAN BE LISTED AS BELOW:-

The awareness of the product increases by double as the people promoting the brand grows.

Helps people to create a proper PR amongst their colleagues.

Helps in identifying and reaching the right consumer who is surely a true potential buyer of the product.

The sale is the product increases as the network of people grows.

Helps individuals to carve their own skills and polishing their selling techniques in selling a product

Customer segmentation gets easier for the organization.

ON THE OTHER SIDE VIRAL MARKETING DO HAVE DRAWBACKS SUCH AS :-

Often the products sold in viral marketing are expensive which makes it harder to sell the product.

The network gets affected if people do not have strong PR or contacts.

People fail to convince other to join the network due to lack of complete information of the product or poor communication skills.

One bad customer can easily kill the efficiency of the network by quitting it or selling the product to another bad customer as one bad customer can influence at least other 15 people for a negative action.

INTEGRATED MARKETING COMMUNICATION:-

The marketing world and process is incomplete without the integrated marketing communication and the marketing mix process which involves the products, the cost of the product, the placement from where it can be available for its customer, how can the product be promoted and advertised to reach its targeted audience, who are the people who matter the most to the product, the overall process involved to make the process executed properly and the partnership and policy to keep the process effective.

Integrated marketing communication can be defined as an injection communication package of coordination and integration of all marketing communication features, tools, functions and sources into a process to aim the maximum productive output with the least financial minimal cost. The process involves in creating, managing and improving customer relationship that helps in promoting the brand and creating awareness and identifying the brand value through effective communication process. The integrated marketing communication (IMC) affects all kinds of communication such as:-

Business to consumer communication.

Business to business communication.

Customer-focused communication.

Brand-centric communication.

Marketing strategies and procedures.

Both externally and internally directed communication within the organization.

The overall process of integrated marketing communications involves how an organization can brain storm ideas, plan and implement digital marketing and make it the main focus of attention while making strategies and procedures how to deliver the product and make the right product reach its targeted market at the right time, in the right place. With time and experience, marketing organizations and experts have been forced to revise the theory of integrated marketing communications and implement it with better logical aspect.

Introducing multiple forms of communication process to communicate with the targeted customers knowing the audiences in better terms of what are their demographic information and what are their needs and wants. By having such information, organizations find it easy in delivering the brand or product information through the right and appropriate means of making way. For e.g.-if Toyota has information of the main family head knowing his demographic information and his buying power ability, they will reach to him on a more personal and customized level by inviting him to the new sales offer through an SMS.If busy they can MMS him the visuals of the car or email the features which will make the car making it easier for him during the decision making process.

DIGITAL ADVERTISING:-

A large number of people connected to the internet rise every day because of its convenience. There are a large number of investment done by the telephone companies has showed up with a big result in a large range of broadband width which is available towards any interested subscriber. Internet has gone so forward in such a way that the need not to be connected anymore through wires as they have invented new systems like Wi-Fi or wireless and it has also made it affordable.

Digital advertising has made such technologies in an improved way with web services. On the other hand in previous days many web services were in different limit speeds and receiving or sending data and whereas now a large number of data can be received or sent and in different varieties e.g.:- music or videos. This has changed the trend in the World Wide Web. Digital advertising on the internet has till now not made any issues in slowing down as compared to other medias such as televisions, magazines, newspapers advertising etc.

BREIF ADVANTAGES:-

Tracking.

International audience.

Upscale audience.

Low cost.

Blog.

Interactivity.

OTHER HAND THE DISADVANTAGES:-

Clutter.

Potential for deception.

Measurement problems.

Web snarl.

Poor reach.

ISSUES TO BE DISCUSSED ON:-

How will the distribution channels and consumers affect the publishing industry
Which ones are the most powered for monetizing digital content
How should the companies of media and advertising deal with online private issues
The key values and platforms affecting media
Will the mobile affect media
How are the large and small varieties of business contributed to go inside the online spending
Will there be any location based advertising
Will the digital be death of advertising at some point
The recession is demonstrating that sports and arts sponsorships was always more about corporate ego than about driving sales
Is cinema fighting a losing battle for share of advertising when the future for its audience is digital media

A DIGITAL CENTRIC MARKETING MODEL:-

The digital market involves the marketing model in different ways it includes the customer centric marketing excellent in which it build the customer centric marketing strategy to enhance the customer experience and identified your customer base and engages with them to understand their sophisticated needs.it also connect with your customer through their most relevant marketing channel’s.

THE DIGITAL MARKETING INVOLVES MANY OF THE SEGMENTS SUCH AS:-

Banner Ad – An advertisement on a Web page may appear at the any of four arms (top, bottom, left and right) of the page. Designed to have the user click on it for more information or opening of a new web page / URL

Blog – Shortened from “web log” a blog is a user-generated Web site where entries are made in journal style and displayed in a reverse chronological order.

Bookmarking – Bookmarking is a way to store, classify, share and search links that are combined into a single site (or folder) for easy access.

Search engine marketing – Is mode of Internet marketing & contextual advertising through the use of search engine, generally paid placement or paid inclusion, by increasing their visibility in search engine result pages.

Cost Per Click – The amount of money payable to search engines and other Internet publishers for a single click on its advertisement that brings one visitor to its website.

Digital Brand Engagement – Brand and consumer interaction through Internet. It includes all aspects of social web and the brands own website.

Instant Messaging – Instant messaging (IM) is a type of communications service that creates a virtual private chat room with another individual to facilitate the communication in real time over the Internet.

Open Rate – The number of times the email is opened/viewed compared to the total number of times the email sent. Generally this number will be low for large campaigns and higher for more focused campaigns.

Opt-In List – or Solicited emails. Email marketers have databases of subscribers (email account holders containing names & their email addresses) to their newsletters or websites. Such a list is known as an opt-in list (a potential candidate for SPAM).

RSS – Real Simple Syndication allow users to subscribe to a specific content feed and get alerted automatically when new updates are available.

RSS Reader – Application used to subscribe & read selected RSS content feeds.

Social Media Optimization – A practice or strategy of social media activity with the purpose of attracting unique visitors to website and its content.

Spam – Unsolicited emails, an email message unwanted by the recipient.

Streaming Technologies – Communication channel such as video and audio that is accessed online. It can be a pre-recorded clip or a live feed.

Subscriber – A person who signs up and agrees to receive messages from a particular company or entity.

Targeting – Sending message to people who agreed to receive message or based on specific criteria from your subscriber database.

Voice Broadcast – Sending pre-recorded voice messages to a large set of phone numbers at the time same. Can either be a voice call (answering the call for the message to play) or voice mail (message will play at its own if not answered or receiver choose to play).

Widget – A small graphical device or application, highly focused and often for single/specific task. Web widgets can be embedded in web pages or run on a PC or mobiles/PDA’s.

Web Video – Short video clip, designed to be displayed on a website or released openly to be displayed on many websites such as youtube.

CONTENT:-Text, image and interactive assets are dealing with social context integration.

LICENSES AND TRANSACTIONS:-There should be the positions to optimize the feeds amongst the double sources and distribution channels.

APPLICATIONS:-There should be a straight strong cement floor for the entertainment in their lifestyles and news.

Above all the advantages, the major drawbacks in digital advertising and communications are they are unreliable as the messages cannot be recognized by initials. Though software can be established for this, yet the soft wares can be certainly hacked and is very time consuming. Usually it is very confusing for the consumer when too much information is given on the ad as it is difficult to focus on one concept during the ad. It is text-based which means mostly relies on entering text which can be challenging for those who don’t prefer to write or have poor keyboard skills, but with the advance of broadband connectivity and voice and video conference technology. Reduced social skills and false impression are likely to happen.

TO THE ARGUMENT, it is much accepted statement that the digital world should really be practiced now at a more professional and practical level in order to have more larger productive results. Organizations should be more digital-marketing oriented to cater and reaching to its mass consumer market with the right approach and right message to make sure that the consumers are clear enough to understand what exact message is delivered to them. Digital market varies from radio to television, from internet to mobiles from smart phone to gadgets. Moreover, one can argue that the cost of digital marketing is high and the budget setting can vary from thousands to millions. For brands like Pepsi, coca cola or emirates airlines, the budget may also result in billions. Despite catering to the trillion customers market, they have the customized strategies reaching them through digital marketing in forms of television,radio,internet,mobiles,word of mouth,billboards,screening,which makes sure the brand name and the product is remembered by the customers for a longer period of time.

However, internet marketing is arguably more effective as compared to television, radio and mobiles. Organization needs to be customized there strategies for internet marketing while reaching their audiences. They need to target or create websites to promote their brand either by advertising on the website, creating inter-links to their personal websites, pop-ups, banners and etc. Also organizations can attract its customers by streaming media (including both audios and videos)to promote the brand. A true example of digital marketing is a concept from emirates airlines promoting the airlines inner services, the atmosphere of travelling, the environment and the high quality staff service through a streaming video online. This not only gives a clear message to the targeted audience about emirates airline services but also gives a pure picture of a real-life travelling experience one can have.
Carrying on with this internet marketing, and the search engines have promoted the organizations marketing team on to the next level by making them visible on just a matter of a click. Organizations are now more closer to its targeted consumers as well as and other potential markets through yahoo, Google and other search engines by listing their names over the world wide web. Search engines have not yet only promoted brands but also products to the extreme detail level. For example; nokia mobile phone lovers can view their favorite cell and its features through search engines over the internet making the customers a more potential buyer for the product. Also a future potential market is also created by such organizations by publishing and listing future mobile phones over the internet. This helps in marketing the product and creates a valid potential market for the product. Search engines keeps the digital marketing world in the continuous process by keep on adding products and the brands through which products are not only advertised to the main final consumer but also it helps the organizations to grow on the success scale and create better products and services for its present and future customers.

CONCLUSION:-

Advertising online is now one of the necessary aspects of media and marketing policy. Digital advertising is very versatile, capable both of building brand awareness and engagement and driving response and purchase behavior. Today advertising online and digital media is one of the greatest strategies ever invented. With the help of digital advertising consumers can be targeted at any point during the purchase.

Builds new levels of brand meeting and activism. Digital has quickly changed the way consumers re-count to brands. The digital media can create many benefits like east editing , easy sharing and streaming , easy copy and backup and free up spaces and playable across multiple media. Another benefit to selling Digital Media products is that you are dealing with bodily materials that will help avoid fraudulent performance on the customer’s part. The main benefits to using integrated marketing communications or IMC is that it is critical and cost effective to an organization. Most of the advertising companies are now adopting this strategy and it is becoming very common and useful. And it is stored in an electronic way, so there is a lot of digital content on the internet which includes text content, images, audio content, as well as video content. The ability to confidently procedure, participate in and comprehend digital media and services is becoming a significant prerequisite to effective and the participation in the digital economy.

References:

http://en.wikipedia.org/wiki/Online_advertising

http://marketingdeviant.com/the-importance-of-communication/

http://ezinearticles.com/?The-Importance-of-Digital-Media-MarketingHYPERLINK “http://ezinearticles.com/?The-Importance-of-Digital-Media-Marketing&id=4744412?&HYPERLINK “http://ezinearticles.com/?The-Importance-of-Digital-Media-Marketing&id=4744412?id=4744412

http://www.articlealley.com/article_1493426_64.html

http://in.answers.yahoo.com/question/index?qid=20071224070526AAztBBc

Advantages and Disadvantages of Viral Marketing

http://www.webdesign.org/site-maintenance/web-promotion/measuring-the-pros-and-cons-of-online-advertising.15332.html

http://ezinearticles.com/?Importance-of-Viral-MarketingHYPERLINK “http://ezinearticles.com/?Importance-of-Viral-Marketing&id=1858181?&HYPERLINK “http://ezinearticles.com/?Importance-of-Viral-Marketing&id=1858181?id=1858181

http://advertising.microsoft.com/canada/en/why-digital-advertising

www.mama.com/digitaladvert.co.uk

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Free Essays

Developing a Global Marketing Plan for Triumph Motorcycles

Introduction

Triumph motorcycles is a privately- owned British company. Triumph has always had its own distinctive character and a history of creating motorcycles. The company plans to enter Chinese market, they prepared a detailed marketing plan, which is including 7 main parts: marketing objectives, product adaptation, promotion mix, distribution, price determination, term of sale, and methods of payment.

Marketing objectives

a). Establish retail stores in Shanghai, Beijing and Hongkong b). plan to add 5 to 15 dealers through 2013 c). Increase retail unit sales to more than 28 percent d). Triumph for the planning years above 3,000,000, take 0.9% market share e). target markets- buy for leisure, buy for competition, and buy for collection.

Market segment:

a) geographic segmentation- population growth rate around 5.28‰, male to female ratio was 119:100, target population is around 50 000, East Sea and South Sea biggest part of Chinese GDP, China GNP in 2009 was $437 billion, in 2008 was $422 billion, growth rate 9.65% b). Demographic segmentation- between 25 and 45 occupied 70%. Buy for competition aged between 25-30, for collection aged over 38, buy it for leisure aged 30-40, aged 25 years above, 80% of target audience Bachelor degree or above. c). psychographic segmentation-(SRIC-BI) and (VALS)

2. Product adaptation

a). core product benefits- features, image, technology, and perceived value b). product attributes-brand name, quality, packaging, design, size and color variants, country of origin, price c).support service-livery, installation, guarantees, after-sales service and spare parts

3. Promotion mix

a), 1.advertising objective- increase among 200,000 people who personal annual income above $100,000, from 22 percent to 31percent in one year. 2. Media mix- television, magazines, outdoor, brochures and internet 3. Massage- Is not only a motorcycle, but also a lifestyle; go your own way

b). 1.Sales promotions objective- carry new items, encouraging stocking, building brand loyalty, encouraging support of a new product or model, and searching more potential customers. 2. coupons-10% discount 3. Specialty advertising- low-cost items bearing the company’s name and address

c). Personal selling- hired 10-15 sellers, AIDA method, FABV method

d). Other promotional methods- Catalog marketing, Telemarketing

5. Distribution: from origin to destination

a). Port selection-Tianjin port, Hongkong port,Shanghai port

b). Mode selection

C). Packing- wooden case, label attached on the container

d). Document required- transportation documents, banking documents, commercial documents and government documents.

e). Insurance- cover loss and damage to the product

f). Freight forwarder- 1.advantages concentrated core business, reduce investment fee, decrease the risk, reduce the cost, save the expenditure, and decrease inventory; improve level of transportation service, improved; finally 2. reduce control in the supply chain, bring risk of relationship management, cause leakage of business secrets

g). Channels of distribution- two-level channel: a wholesaler and a retailer. Type: department store and franchise organization.

h). Wholesale middlemen- full-service wholesaler, mark-up the cost of 20 percent

i). Import and export agent- negotiates exchange transaction, commission of 2 to 6 percent of the selling price

j). Warehousing- distribution and automated warehouses, locate suburb of Shanghai

6. Price determination- Total retail price in China of $24,763, is a 206 percent of the British price

7. Term of sale-Ex-work,FOB, FAS,CIF

8. Methods of payment- cash in advance (unfair), letter of credit, open account (later)

Conclusion

The Chinese market is potential market for the company to entry. Triumph will find huge power of purchasing in China. Moreover, it has increasing demand of Chinese consumers for luxury products. Triumph motorcycle before enter Chinese market, they prepared a detailed marketing plan. Triumph already entry Chinese market.

Introduction

Triumph motorcycles is a privately- owned British company and that their motorcycle are designed, developed. Triumph has always had its own distinctive character and a history of creating motorcycles. Triumph’s aim is to craft motorcycles that deliver a great riding experience through the fusion of well- balanced, easy to handle chassis and strong, flexible engines. The company currently has market in many major counties like the UK, America, and Japan (Triumphmotorcycles.co.uk, 2011). As the development of emerging marketing, the company plans to enter Chinese market. In the face of globalization many firms attempt to expand their sales into Chinese market. However, internationalization is unlikely to be successful unless the firm prepares in advance. Just like Triumph motorcycle before enter Chinese market, they prepared a detailed marketing plan, which is including 7 main parts: marketing objectives, product adaptation, promotion mix, distribution, price determination, term of sale, and methods of payment.

Marketing objectives

In Chinese market Triumph continue developing truly existing motorcycles product that are distinctive in looks, design and performance to this new market. Triumph’s aim is to craft motorcycles that deliver a great riding experience through the fusion of well- balanced, easy to handle chassis and strong, flexible engines. The result is an inspiring range of motorcycles delivering intelligent, usable performance (Triumphmotorcycles.co.uk, 2011). In addition, in Chinese market Triumph group will pay more attention on after-sale service, such as, provide assembling and fitting service for customer convenience, also provide accessory. The long-term development projects and the solid business base Triumph have to start their new business relationship. Triumph already have retail store in Taiwan, according to this situation before enter Chinese main market they will sell product in internet first. This model we called “DELL direct selling model”. This model not only can bring more profit for the company, but also make the user close to the company. Then supply of goods and service available to meet market demand. Next step will to establish retail stores in Shanghai, Beijing and Hongkong. Triumph strategy is multi-generational and multi-cultural. It calls to grow sales to their core customers, while growing sales to outreach customers at a faster rate. In Chinese markets Triumph plan to add 5 to 15 dealers through 2013, and in the same period increase retail unit sales to more than 28 percent (figure 2). From (figure 1) we can see that the whole industry sales for the 2009 about 25,427,700, industry sales for the 2010/1-7 mouths around 16,839,900, estimate industry sales for the planning year around 40,000,000, estimate sales for Triumph for the planning years above 3,000,000, take 0.9% market share of whole market (stats.gov.cn, 2009).

Triumph has a great number of Chinese market information. These are information will help company good to know who is the potential customer, what they need, and how to communicate with customer. The target markets are followed: buy for leisure, buy for competition, and buy for collection.

Triumph will use E-commerce which is the selling or buying of goods and information over the internet, and through transport. So they will spare no effort to serve their customer with high quality products and best service, no territory restriction. From geographic segmentation, China has a vast territory and a large population, despite the implementation of birth control, still sees a yearly net increase of 17 million peoples, a number equal to the population of a medium-sized country. The population growth rate is keep around 5.28‰, male to female ratio was 119:100(baidu.com, 2009). So Triumph total amount of target population is around 50 000. According to geographical region China is divided into three ladders. The most population focus mainly on ladder 1 and ladder 2.China from south to north is Bo Hai Sea, Yellow Sea, East Sea and South Sea. These four main areas boast a developed economy, well- grounded infrastructure and abundant human resources. Especially, areas of East Sea and South Sea, these two areas contribute a biggest part of Chinese GDP. China GNP in 2009 was $437 billion, and in 2008 was $422 billion, growth rate about 9.65% (baidu.com, 2009). So Triumph’s new market will focus on Shanghai, Beijing and Hongkong. From demographic segmentation, the sex ratio of male customer is higher than the female customer. The age of the patients was mainly between 25 and 45 which occupied 70%. Customer buy product for competition aged between 25-30, for collection aged over 38, buy it for leisure will be a biggest part of sales, usually, aged 30-40. Aged 25 years above, 80% of target audience have Bachelor degree or above. Personal annual income above $100,000 will be target group. In China, around 200,000 people personal annual income above $100,000(stats.gov.cn, 2011). In psychographic segmentation, customer divided into different groups on the basis of lifestyle or personality and values (Kotler P, 2000). According to the consulting business intelligence’s (SRIC-BI) value and lifestyles (VALS), the target audience trend to followed kinds of people: innovators who successful, sophisticated, with high self-esteem, also are very active consumers, purchases tastes for upscale product and service; Achievers who have goal-oriented lifestyles and a deep commitment career and family, image is important to achievers, they favor established, prestige product and services that demonstrate success to their peers; Strivers who are trendy and fun loving, favor stylish product, they are active consumers because shopping is both a social activity and an opportunity to demonstrate to peers their ability to buy(strategicbusinessinsights.com, 2011). In behavioral segmentation, the target group will be who trend to spending too much money on luxuries; who enjoys going to competition, like something exciting; who favor collection, a way to demonstrate success.

Product adaptation

“In creating an acceptable product offer for international market it is necessary to examine first what contributes to the ‘total’ product offer (Hollensen S, 2004).” In order to the product can be adapted for the Chinese market, it is necessary to examine what the product offer, which is called to the three levels of a product. First level, core product benefits which is include functional features, image, technology, and perceived value (Hollensen S, 2004). A product can also be adapted to function under Chinese political conditions. Development new technology and it’s for reducing motorcycle emissions in whole motorcycle industry. In Chinese market, Triumph still will keep have a distinctive three-cylinder layout, which makes them more powerful than the two-cylinder bikes, and more relaxing than the high revving four-cylinder bikes. In product image area, try to make customer feel comfortable, classical, fashion and luxurious. Motorcycles were also classified by types of use, generally separated into four groups: standard, which emphasized simplicity and cost; performance, which focused on racing and speed; touring, which focused on comfort and amenities for long-distance travel; and custom, which featured styling and individual owner customization (source: Case?.4 Triumph Motorcycles Ltd). Second level, generally we called product attributes, include brand name, quality, packaging, design, size and color variants, country of origin, price and staff behavior (Hollensen S, 2004). In Chinese market, the brand name better to change, because of different language system. For instance, in Taiwan market they change the brand name to Kaixuan which mean victory in Chinese. Chinese name will be better and easy for customer to pronounce, recognize and remember, so the company better to continue use Kaixuan in Chinese new market, also Triumph available too. In order to reduce the cost, product assembly in China, but supplier from around the world, keep product quality in the first level. The packaging, design, and color, which featured individual owner customization, depend on customer different demand, if customers willing to pay more for the convenience, appearance, dependability, and prestige of better packages, design, and color, the price of a product also will be difference and charge extra money; in a other hand, if customer do not want individual owner customization, the packaging, design, and color will be fixed and free, which already included in a product; in generally speaking, pricing strategy will follow Taiwan’s market. The size of Triumph’s motorcycles are in the middleweight and heavyweight category only, these two categories satisfy Chinese market demand. Third level, which include delivery, installation, guarantees, after-sales service and spare parts (Hollensen,S, 2004). Triumph will set up after-sales service in Chinese market, offer prompt and reliable after sale service, promise timely delivery, and guaranteed quality. Customer do not need to worried about repair, maintenance, and spare parts, all the service will be offered by Chinese after-sales service department.

Promotion Mix

a. Adverting objective

“The advertising objective must flow from prior decisions on target market, market positioning, marketing mix (Kotler P, 2000).” Triumph’s advertising objective: to increase among 200,000 people who personal annual income above $100,000 the number who identify brand Triumph as a good quality, performance and worth to buy – from 22 percent to 31percent in one year. Persuasive advertising will be the best choice for Triumph. Triumph attempts to persuade consumers that delivers special taste and status than other brands of motorcycle. Try to make an explicit comparison of the attributes of another brand, such as, compare with Harley-Davidson. In media mix area, Triumph attempts to use television, magazines, outdoor, brochures and internet. Television advertising combines sight, sound and motion, also appealing to the sense, and with high attention and reach (Kotler P, 2000). For a new band in Chinese market, the first step should let costumer recognize the brand, so need keep exposal. Triumph attempts to advertise at peak viewing time at the CCTV (is a biggest TV station in China), especially during economic news time. Magazines might be a good choice. It is with high geographic and demographic selectivity, credibility and prestige, high- quality reproduction, long life and good pass-along readership (Kotler P, 2000). There are several magazines on the list, such as, For Him Magazine, which is best choice for man to read; Hurui Magnate Magazine, it is popular in rich people; or Auto Magazine. There are several reasons for choice outdoor advertising, because of high repeat exposure, flexibility, low cost and low competition (Kotler P, 2000). The poster announces in extra- large print in the commercial center and shopping center of a city. Brochures is a convenient media, it is more flexibility, full control and can dramatize messages. Triumph attempt to production a brochures, which include company history, product information, big event, contact information so on, then send to different kind of place, such as, golf club, polo club, yacht club, luxurious hotel, owner retail store and auction house. The most popular approach is the internet advertising, which include high selectivity, interactive possibilities, and relatively low cost. For example, Triumph can use facebook build close relationship with customers, also advertising on facebook. “Is not only a motorcycle, but also a lifestyle; go your own way”, it is a main advertising massage and product value Triumph deliver to customer.

b. Sales promotions

For Triumph, sales promotion objectives include persuading retailers to carry new items, encouraging stocking of related item, building brand loyalty, encouraging support of a new product or model, and encouraging searching more potential customers (Kotler P, 2000). In order to achieve the objectives, there are many sales promotion tools can be use. For instance, free trials, which inviting purchasers to try the product without cost, after that they may will buy the product. Triumph encourage free test-drives to stimulate purchase interest. Moreover, use coupons, which saving on the purchase of a specific product. Such as, buy Triumph’s coat with its T-shirt by a 10% discount coupon. Specialty advertising, which consists of useful, low-cost items bearing the company’s name and address, give to prospects and customers. Such as, pens, calendars. Join trade shows and conventions, which display to demonstrate Triumph’s product. Usually, trade show attracted thousand and thousand people attendance.

c. Personal selling

Personal selling is person-to person communication between a company and a buyer. The seller’s communication effort is focused on persuading, marking a sale and building a relationship with buyer (Keegan W. & Green M. 2008). Every Triumph seller must be well trained, providing training in a specific trade with aim of gaining employment. Every Triumph retail store hired 10-15 sellers. Triumph’s seller will use two main methods to desire customer purchase behavior. First one is AIDA method- get attention?interest?desire?action (Kotler P, 2000), seller mouth to mouth introduce brand or product story to customers. Second one is FABV method-features?advantages?benefits and value (Kotler P, 2000), seller focus on describe product’s physical characteristics, and what the advantage. In order to better satisfy the clients, in Triumph, one seller completely follow one order, include guide after-sales service.

d. Other promotional methods

Catalog marketing: Triumph send full-line merchandise catalogs, specialty consumer catalogs, and business catalogs, usually in print form but also sometimes as CDs, videos, or on-line to customer (Kotler P, 2000). Make customer good to know Triumph and their product and service.

Telemarketing: Triumph use telephone to attract new customer, to take order. Telemarketing will increase company’s income, reduce cost, improve customer satisfaction, and offer customer service and technical support.

Distribution: from origin to destination

a. Port selection

In order to reduce the cost, Triumph plan to joint venture one Chinese motorcycle company, so most product assembly in China, some new and special case assembly in UK, and supplier from around the world. For example, a batch of products from British port deliver to Shanghai port by ocean carry, then distribute to Shanghai’s retail store. Beijing close with Tianjin port, Hongkong close with Hongkong port, so transportation is very convenient of all three markets.

b. Mode selection

Transportation usually constitutes 10-15 percent of the retail costs of imported goods (Hollensen S, 2004). There are four main modes of transport: rail, air, ocean and road.

According to above comparison, Triumph will choice ocean carrier to be main vehicle; special use for international business to business mode; for national B to B, or B to C mode use motor carrier will be economical. If customer have extra requirement, air carriers also will be available, but need pay extra deliver fee.

c. Packing

A packing that catches the eye will help us push the sales. Triumph attempt to use wooden case to package motorcycle, use existing label make it to be an elaborately designed graphic that is part of the package. This label might describe the product: who produce this product, where it was made, and what kind of product it is (Kotler P, 2000). Finally, the label might promote the Triumph through its attractive graphics. Triumph will use container to deliver product, the label may be attached on the container, the label will identifies the product or brand, also will increase ratio of brand exposure.

d. Document required

Triumph require following four most common export documents: transportation documents, banking documents, commercial documents and government documents. Transportation document include bill of lading, dock receipt and insurance certificate (Hollensen S, 2004). More specific, now Triumph had a batch of product should transport from UK to Shanghai by ocean carrier. Ocean carrier will issue of dock receipt to Triumph to prove carrier received the product and start take responsibility of these products. Then will received bill of lading, may be used as an instrument of ownership. “Banking documents letter of credit is a financial document issued by a bank at the request of the Chinese Triumph, guaranteeing payment to the UK Triumph if certain term and a transaction are met” (Hollensen S, 2004). Commercial invoice is the bill for the products from the exporter to buyer, also as a basis of taxation to British government. Government documents included export declaration, consular invoice and certificate of origin (Hollensen S, 2004). If British Triumph want to export their product to China, they have to complete fill the export declaration, include transportation information; also need consular invoice from Chinese consul that is used to control goods shipped there; certificate of origin is a document that is make Chinese buyer to know the origin of motorcycle.

e. Insurance

On the other hand, Triumph need to buy insurance certificate, that is provided to cover loss and damage to the product during the transport process.

f. Freight forwarder

Hiring a freight forwarder for Triumph Motorcycles transportation, will have distinct advantages and disadvantages. Analysis of pros and cons of hiring a freight forwarder, there are several advantages to hiring a freight forwarder with the goal to concentrated on all effort to developing core business; also can reduce investment fee, and decrease the risk; Triumph will reduce the cost, save the expenditure, and decrease inventory; improve level of transportation service, be more professional, the enterprise image is greatly improved; finally, take advantage of an in-place network complete with resources and experience. Unfortunately, freight forwarder might cause Triumph reduce the firm’s control in the supply chain; may bring risk of consumer relationship management; and might cause leakage of business secrets (etest8.com, 2011).

g. Channels of distribution

Triumph attempt to select a two-level channel to enter Chinese market. A two-level channel contains two selling intermediaries, such as a wholesaler and a retailer. There are two types of retailers satisfy Triumph motorcycle: department store and franchise organization. Department store operation several product lines, each line operated as a separate department, such as Shanghai Isetan which is located commercial center, only sell luxury goods. Business format franchising is mutually beneficial to both franchiser and franchisee. The franchisees familiarity with Chinese current surrounding, and they will bring the huge purchasing power of the franchisor (Kotler P, 2000). Chinese Triumph attempt to develop a brick-and-click model we called E-business. Customer available to make order through on-line, but need choice a specific retailer before you buy, then you order will send to this retailer. In first year, Triumph plans to open 6 shops in China, one department store and one franchised in Shanghai, and the same strategy in Beijing and Hongkong. Retail will markup for product of in each type of retail. For instance, suppose a Triumph motorcycle has the following costs and sales expectation: variable cost per unit is $1,000; fixed cost is $1, 000, 000; expected unit sales about 200. The manufacture’s unit cost is given by $6,000; the manufacturer’s markup price {markup price= unit cost / (1-desired return on sales 25%)} is given by $8,000. Triumph would charge Chinese retail $8,000 per motorcycle and make a profit of $2,000 per unit (Kotler P, 2000).

h. Wholesale middlemen

There are major wholesaler types: merchant wholesalers, full-service wholesalers, limited-service wholesalers, brokers and agents, manufacturers’ and retailers’ branches and offices, and miscellaneous wholesalers (Kotler P, 2000). According to Triumph’s situation, better to choice full-service wholesaler who only carry one merchandise line; also carry stock, maintain a sales force, offer credit, make deliveries, and provide management assistance to Triumph’s retail (Kotler P, 2000). Wholesalers usually mark-up the cost of the goods by conventional percentage, say 20 percent, to cover their expenses. Expenses may take 17 percent of the gross margin, leaving a profit margin of 3 percent (Kotler P, 2000).

i. Import and export agent

“Main function is to facilitate buying and selling, for which they earn a commission of 2 to 6 percent of the selling price (Kotler P, 2000).” Triumph hire a Chinese import agent who negotiates exchange transaction between British Triumph to Chinese wholesalers, but does not take power to the goods being purchased or sold. In China, current most import agent will charge 10 to 20 percent guarantee deposit, then import agent open a letter of credit to export part, that kind of work was import and export agent do.

j. Warehousing

Triumph in order to reduce warehousing costs, build a distribution and automated warehouses. This warehouses not only with advanced materials-handling system under the control of central computer, but also will as soon as possible to move out receiving goods (Kotler P, 2000). These warehouses will reduce worker injuries, labor costs, pilferage, and breakage and improved inventory control; benefit for consumer too, such as deliver on time. The warehouse will locate suburb of Shanghai, Because Shanghai between Beijing and Hongkong, also near the port.

Price determination

Triumph motorcycles shipped from Britain to China

In this example, Triumph motorcycles shipped from Britain to China. A shipment of product that costs ex-works $12,000 in Britain, and total retail price approximately $25,000 in China. First, there is the total shipping charge of $5,485, which is 46% of the ex-works price. A currency adjustment factor is to protect the seller from disadvantageous shifts in the Dollar to RMB exchange rate. Finally, a dealer markup of 25 percent adds up to $4,952 of the British price. Total retail price in China of $24,763, is a 206 percent of the British price (Keegan W. & Green M. 2008).

Term of sale

Ex-work means that the price quoted by the British Triumph applies at a certain point, and the buyer bears all risks and expenses from that point on. This term affords Chinese buyer maximum control over the cost of transporting the goods (Keegan W. & Green M. 2008). With free on board (FOB) named port, the British Triumph will take the responsibility until the goods have cleared the ship’s rail, then the Chinese buyer take all responsibility of the goods the moment they pass over the ship’s rail. The price quote includes all charge up to the point when goods have been loaded (Hollensen S, 2004). Free alongside ship (FAS) named port is for a transaction in which seller places the shipment alongside, the goods will be transported out of the Britain by ocean vessel. The seller pays all charges up to the point; the buyer has to pay for loading the goods on the shipment. When goods are shipped cost, insurance, freight (CIF) named port, the risk of loss or damage to goods is transferred to the buyer once the goods have passed the ship’s rail. However, the British Triumph has to pay the expense of transportation, must also provide the necessary insurance (Keegan W. & Green M. 2008).

Methods of payment

The most common payment methods are including: cash in advance, letter of credit, documents against payment and acceptance, open account, and consignment. The favorable term to the exporter is cash advance because it with low risk and financial risk, also allows for immediate use of the money. However, this method of payment unfair for importer, if they pay the money and the goods may not received. So such methods are not available for Triumph. Worldwide letters of credit are very popularly and very important. “Banking documents letter of credit is a financial document issued by a bank at the request of the Chinese Triumph, guaranteeing payment to the UK Triumph if certain term and a transaction are met” (Hollensen S, 2004). Open account is quite simplicity to Chinese buyer, they does not have to pay credit charge to banks. The Chinese buyer can pick up the goods without payment first. A disadvantage of the method is that there are no safeguards for payment. Consequently, for the first cooperation using letter of credit benefit for both side. However, if later British Triumph feel Chinese buyers are very trustworthy and excellent credit rating, there is another option for payment which is consignment (Hollensen S, 2004).

Conclusion

The Chinese market is potential market for the company to entry. Triumph will find huge power of purchasing in China. Moreover, it has increasing demand of Chinese consumers for luxury products. Chinese attempt to improvement of life quality and the change of consumption view. On the other side, the brand is new and young for Chinese market, it means low brand awareness; also strong competition its threats. Fortunately, Triumph motorcycle before enter Chinese market, they prepared a detailed marketing plan. Triumph already entry Chinese market.

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Zeji Z, (2008) Motorcycle industry urged to upgrade.http://en.ce.cn/Insight/200801/02/t20080102_14090054.shtml [Viewed 3 Mar. 2011]

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Implication of Integrated Marketing Communications

CHAPTER 1: – INTRODUCTION

1.1 Introduction

Today, every enterprise looks forward to grow and expand in terms of size, profits, infrastructure, products, market share and customers. Co-ordination and integration among different units such as production, operational activities, finances and marketing are the main requisite in order to achieve overall corporate aim and objectives. It is very necessary for the organisation to be recognized for its products and services in the business and consumer market. Hence, marketing can be regarded as one of the important aspect in every organisation. Marketing can be defined as a process which involves identification, anticipation and satisfaction of customer needs in best possible and profitable way by the management (Smith and Taylor, 2004). However, it can be stated that it is very essential to communicate with the customer in order to acknowledge about company’s products and services. This can be achieved through integration of different channels such as advertisement, internet, exhibitions and direct marketing. These channels are termed as marketing communication tools. These different tools of marketing communication comprise different features, benefits and limitations. This research study will help in assessing the implication of integrated marketing communication tools in the Indian retail sector. Hence, it will help in evaluating different marketing communication tools available for the enterprise in order to influence the customer for the products and services available in the retail industry of India. This research study will provide a detailed explanation about the marketing communication process, models such as single, two step or linear; and tools such as internet, direct marketing and so on. It will help the reader to understand different characteristics, advantages and disadvantages of various communication tools available for the enterprise in order to correspond with changing consumer behaviour and market. This study will also describe about research methodology process and approach adopted by the researcher such as qualitative, quantitative or mixed for collection of data. Findings and analysis would be done by collecting data and information in retail sector, business and consumer market of India in order to draw a conclusion regarding implication of such concept and the most effective marketing communication model or set of different tools. This analysis will help the reader, retailer and researcher in understanding the best possible way of integrating different communication tools in the Indian consumer market.

1.2 Research Aim and Objectives: –

Research aim can be defined as a general statement which describes the reason for selecting a particular subject matter of the research (Collins, 2010). The main aim of this research study is to evaluate the implication of integrated marketing communication by the practitioners. According to Collins (2010), research objective can be defined as a definite statement related to the defined aim of the research. Hence, in order to achieve the above stated aim, certain objectives are formulated by the researcher which can be described as follow: –

To identify different marketing communication models and tools available to the enterprises.
To describe various features, benefits and limitations associated with every marketing communication tool.
To analyse the theoretical aspect on effective implication of integrated marketing communication.
To examine the retail sector, business and consumer market of India for the evaluation of implication of integrated marketing communication by the practitioners and to evaluate the most effective marketing communication model or set of different tools.
To recommend a justification about the different aspects that assist in choosing an appropriate set of marketing communication tools.

1.3 Significance of the Research

This research study would be beneficial for the reader in understanding the subject on marketing communication more rationally. It will describe the concept of implication of marketing communications in the real business environment, particularly in Indian retail sector. Use of required research methodology approaches and tools will help in collecting information and data for better analysis and study. Hence, this research study would be of valuable assistance to marketing department and overall management in the business to understand the significance and purpose of implying marketing communication tools in order to persuade a customer. It will help the reader, corporate management, marketing executives, and retailers in making a decision about the implication of marketing communication tools in the most effective way in the enterprise. This study will also recommend about the explanation about different aspects affecting in choosing the appropriate set of tools.

1.4 Structure of the Research

It is easier for the reader to understand a well designed and structured report study. A concise picture about the various contents of the research study is very necessary. For the above reason, the researcher has presented the following short outlook of each chapter in this research study. The above figure describes all the chapters categorized by the researcher in this research study to facilitate the conduct of this study in an improved manner.

CHAPTER 2: – LITERATURE REVIEW

2.1 Introduction

2.2 Marketing Communication

In the present business scenario, it is very essential for every enterprise to communicate with the customers, consumers or as a whole to the target market for the products and services provided by the company. Target market can be referred to the group of individuals to which an enterprise is intended to attract for its products and services. A set of four principles of marketing mix generally referred as four P’s – product, price, place and promotion is used to persuade the target market. Among these four elements, promotion includes set of various modes such as advertisement, direct marketing, internet and merchandising and so on. These modes of promotion assist the management in communicating to the customers regarding the products and services of the enterprise. The process of communicating with the customers in order to deliver message and receive feedback is termed as marketing communication (Koekemoer and Bird, 2004). It has become a very vital concept in the marketing field due to changes, growth and development in the business and consumer market.

2.3 Integrated Marketing Communication

Today, changes and development in political, social, economical and technological environment has lead to the emergence of new concept integrated marketing communication. According to Masterman and Wood (2006, p.14) “An integrated marketing communication can be defined as a programme which includes written, spoken and electronic interactions with stakeholder audiences.” This type of systematic planning through integrated communication facilitates the management in generating responsiveness, interest and participation in the enterprise, its activities, plans, personnel, products and services. It is very essential to integrate different marketing communication tools as it can be stated that today consumer is becoming more rational towards the products offered. Consumer market can be classified on the basis of different aspects such as class, religion, gender or locality. Communication through single database may create problems in delivering the accurate message to the customer (Smith and Zook, 2011). Hence, it can be stated that integration of different marketing communication tools has become very essential as every tool comprises its own benefits and limitations. Moreover, changes in consumer market and technological advancement has made it necessary for the enterprise to adopt integrated marketing communication tools in order to survive in such competitive business market.

2.4 Marketing Communication Process

Market communication process comprises marketer – who sends the message to the customer regarding products and services being offered by the company with the help of different tools such as advertisement, internet, promotions, direct marketing and so on. However, it can be stated that feedback is most important element for accurate and complete communication process as every individual has its own values, beliefs and perceptions. This communicating process can be illustrated with the help of the following figure: – Source: – Smith et. al. (1999, p. 27) From the above figure, it can be stated that appropriate analysis in terms of increase in sales and customer interest activities will help the marketer in analysing the effect of communication tool adopted by the company. 2.4 Marketing Communication Mix With the changes in the corporate sector, there is a tremendous growth and development in the marketing field in terms of communicating tools and techniques. Earlier, advertisement and promotions were considered as the only effective tools for communicating with the target market. Over the recent years, technological advancement and changes in consumer behaviour has led to the increased usage of other tools such as internet, e-marketing, exhibitions and so on. These tools are termed as marketing communication mix which can be well represented in the following figure: –

Source: – Smith and Taylor (2004)

Every element of above stated marketing communication mix comprises its own features, benefits and limitations. Decision regarding adoption of a tool or integration of communicating tools is affected by different aspects present within and outside of the enterprise.

2.5 Factors Affecting the Decision regarding Adoption of Marketing Communication Tool

There are different factors which affect the decision regarding adoption of marketing communication tools such as organisational structure, management policies, financial restraints, market research, competitors, technology requirements, changes and trends in the consumer behaviour and market. These aspects must be considered while deciding about the adoption of communication strategies by the enterprise.

2.6 Theoretical Aspect on Integrated Marketing Communications

There is a remarkable growth in the marketing communication sector due to the development of information technological and other communication sectors. There is a massive development and innovation in communication tools in the form of event marketing, text messaging and so on (Kitchen et. al., 2006). There are different theories regarding use of integrated marketing communication in practice by the companies. According to Eagle et. al. (2007) practical implication of integrated marketing communication concept is undertaken during specific needs and conditions. Companies generally rely on old rigid rules of advertisement and promotions in order to communicate with the customers. On the contrary, Schultz (1995) states that this particular useful concept of integrated marketing communication is being widely used by the companies on regular basis along with the concept of advertisement. According to McArthur and Griffin (1997), advertisement and public relations are two most important communicating tools in the corporate sectors. Yarbrough (1996) states that integrated marketing communication tools are regarded as an option for improving the sales of an enterprise. It is not considered as advancement in the promotional activities of the marketing mix. Use of combination of communicating tools increases the overall cost of the marketing operations. Therefore, companies generally do not prefer such concepts (McLaughlin, 1997). On the other hand, research by Schneider (1998) shows that agencies are developing themselves in integrated marketing communication practitioners and also trying to minimize the overall budgeted expenditure in using a set of communication tools. Hence, it can be stated that there are different theories by the researchers regarding implication of integrated marketing communication concept in the business world. This research study will help to examine the implication of such concept in Indian retail market.

2.7 Indian Retail Sector and Consumer Behaviour

Indian retail sector comprises both national and international retail giants such as Reliance fresh, Big Bazaar, Pantaloons, Shopper’s Stop, Subhiksha, Allen Solly, Bharti-Walmart and so on. With the increase in competition in the retail sector, it has become very necessary for the retailers to influence more and more customers and also to retain old consumers with them. In the present modern world, consumers are becoming more demanding in terms of quality of commodities. This attentiveness has made the Indian customers to search for more reliable sources for buying such as well structured retail chains that possess an appropriate commercial settings and where the responsibility is well-defined. Indian consumer varies in terms of psychological, economical, social and certain traditional factors. There is a momentous growth and development in the country due to increased rate of literacy and other changes in the economic, political and social environment. Today, people prefer those marketing communication tools which provide them complete knowledge and understanding about the products offered and their feedback is valued. Previously, only advertisement and promotions were considered as prominent communication tools. But now in the present modern scenario, with the overall development in technology and education rate, other communication tools such as internet, exhibitions, merchandising, and direct marketing, e-marketing possess more and more significance among the consumers. Hence, this research study will help the retailers and readers in taking decisions regarding adoption of appropriate marketing communication mix according to the changing consumer behaviour, technological development, competition and overall economic and social changes in the Indian retail market.

References

Collins, H. (2010). Creative research: The theory and practice of research for the creative industries. Switzerland: AVA Publishing. Collis, J. and Hussey, R. (2003). Business research: A practical guide for undergraduate and postgraduate students. 2nd Ed. Palgrave Macmillian. Cooper, D. R. and Schindler, P. S. (2006). Business research methods. 9th Ed. McGraw-Hill. Eagle, L., Kitchen, P. J. and Bulmer, S. (2007). ‘Insights into interpreting integrated marketing communications: A two-nation qualitative comparison’, European Journal of marketing. 41(7/8): 956-970. Koekemoer, L. and Bird, S. (2004). Marketing communications. South Africa: Juta and Company Limited. Kitchen, P. J., Pelsmacker, P. D., Eagle, L. and Schultz, D. E. (2006). A reader in marketing communications. Oxon: Routledge. Masterman, G. and Wood, E. H. (2006). Innovative marketing communications: Strategies for the events industry. Oxford: Butterworth-Heinemann. McArthur, D. N. and Griffin, T. (1997). ‘A market management view of integrated marketing communication’, Journal of advertisement research. 37(5): 19-26. McLaughlin, J. P. (1997). ‘Why is IMC taking so longBlame it on the clients’. Marketing news. 31(19): 27-30. Saunders, M., Lewis, P. and Thornhill, A. (2003). Research methods for business students. 4th Ed. England: Pearson. Schneider, L. (1998). ‘Agencies show that IMC can be good for bottom line’, Marketing news. 27(6): 12. Schultz, D. E. (1995). ‘Traditional advertising has role to play in IMC’, Marketing news. 29(18): 18. Smith P. R., Berry, C. and Pulford, A. (1999). Strategic marketing communications: New ways to build and integrated communications. 2nd Ed. London: Kogan. Smith, P. R. and Taylor, J. (2004). Marketing communications: An integrated approach. 4th Ed. London: Kogan. Smith, P. R. and Zook, Z. (2011). Marketing communications: An integrated approach. 5th Ed. London: Kogan. Yarbrough, J. F. (1996). ‘Putting the pieces together’. Sales and marketing management. 148(9): 68. Dissertation on

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Strategic and Marketing Analysis of Citroen

Background

We will be discussing on the various techniques involved in the marketing plan for an organization in order to make reach the product to the customers. The report given here summarizes the various activities involved in marketing the end product named “CE 13” of Citroen which is an eco-friendly as well as helps in maintaining our greener environment.

1. Executive Summary

Citroen was founded in 1919 by Andre-Gustave, which was the first car company to mass produce outside the United States of America. Almost within eight years after it had started, it became one of the largest car manufacturers in Europe.

Citroen is all set to launch its hybrid plug-in car named “CE 13” in the UK market. As hybrid cars are already available in the UK market the competition is also the toughest. The strengths in the proposal of CE 13 is its small, economic and fuel-efficiency. CE 13 will be a challenge to the current version of both gasoline and the electric one now available in the market. Their target is specifically based on a specific proportion of consumers who needs a vehicle for commuting in their daily life. As it is compact in size it is very easy to commute between the congested traffics so helps in evading the congestion charge in the UK.

The marketing objective of CE 13 is limited to 10 to 15 percent in the UK with the unit sales of about 10000-12000 units in the next two years. Financial objective of CE 13 at the time of introduction is to achieve the sales of GBP 20 to 30 million.

2. Situation Analysis

Citroen which was established in 1919 is all set to manufacture the plug in hybrid car for the UK market which is a developed nation has a good economical growth rate. Though during recession it had seen number of problems the country has still maintained their economy stable compared to other nations. Citroen has considered the fact of the increase in fuel prices and has come up with the solution to meet this with their plan of CE 13 which will help its consumers overcome their problem of fuel prices.

As soon as CE 13 hits the market, the consumers will be overwhelmed to buy the plug in hybrid as it has an enhanced product portfolio and covers the overall worries of the car customers in terms of money as well as the performance.

GDP of UK was 0.5 percent in the latest quarter which was revised from a fall of 0.6 percent published earlier. GDP estimated during 2010 fourth quarter is now 1.5 percent higher than the fourth quarter of 2009 (National Statistics, 2011).

Also the output in the latest quarter was up 0.8 percent for the manufacturing industries. Manufacturing output has increases 1.1 percent and 4.3 percent of increase was seen in utilities output and the mining and quarrying output has fell by 4.1 percent.

2.1 Market Summary

CE 13 market comprises of customers who prefer to use sustainable energy to compensate the spending on petrol or diesel. The major segment being targeted during the initial period includes the professionals and senior citizens, who have annual personal disposable income above GBP 7000. Table 1 shows how CE 13 addresses the needs of targeted customers.

TARGETED SEGMENTCUSTOMER NEED RESPECTIVE FEATURE
ProfessionalsTo acquire modern technology at reasonable price; reasonable mileage.A smooth drive for 45 miles per charge and an automatic change to fuel after 45.
Senior citizenHave a safe mode of transport in traffic; savings in fuel expenditure.Compact structure providing ease in traffic with dual air bags

Table 1: Segmented customers (Jeroldin, 2011)

CE 13 will be available in one basic model with carbon dioxide emission below 40 g/km. The CE 13 operates entirely as an electric car for its first 25 miles, drawing energy from a 450-pound lithium ion battery and then uses the gasoline for the 1.6 liter engine that provides another 360 added miles. Thus the design of the car along with its price and technology will strengthen its presence in the UK PHEV market.

2.2 SWOT Analysis

Strengths

Advanced technology from C- zero, C3 picasso, Berlingo multispace are used in building this plug in hybrid electric vehicle.
CE 13 has better fuel effiency of about of 45 miles for a single charge and covers and average range of 15 miles per liter of petrol. So this adds the strength to the CE 13 as usual vehicles have a mileage of below 13 per liter of petrol.
Towards the initiative to a greener environment the CE 13 holds the key as it emits less than 40g/km which is helps our environment for its sustainability.

Weakness

Consumers are not much aware of the Plug in hybrid technology as because there are less fuel station for charging the electrically and people has less idea of these high end technological factors in mind.
As newer technology is used in the development of CE 13 the price band is as well on the higher and only the customer who have wages above GBP 2000 are able to buy the vehicle and also to be on the safer side we are providing finance option for the vehicle by having tie with the HSBC bank which will lower the tensions between the customers who are less affordable to buy which again acts as a strength for us.
Considering maintenance of CE 13, as it is a hybrid plug-in the maintenance is slightly higher than the usual ones.

Opportunities

As towards the step to sustainable and greener environment, UK government supports in the development of CE 13 as it is eco friendly as well as fuel efficient in compared to other vehicles on road. Due to step to greener environment, government had decided to lessen the tax and import duties of batteries being waived.

Threats

One of the major threat being faced by CE 13 is the extending of the product life cycle. As this is a newer step in the technology and offers only one single model in the market extending the life cycle of CE13 is currently not possible as it is in the growth stage of the. Later after the maturity of the product the extension will be made within next two years on a average estimation.

2.3 Competition

There are considerable amounts of rivals seen in the plug-in hybrid industries and one of the major rivals is the Volvo and another major rival is the Toyota who plays a major role in the technological development in the UK market.

Toyota prius is currently the market leader in the UK market for the plug-in hybrid version of the vehicle. So the competition is tougher and our new technology used in the development of the same is higher than usual which will support in the battle of survival in the UK market with Toyota prius.

Another rival is the BMW which is planning to introduce their plug-in hybrid car in the UK market with by launching their “i-series”. Another major rival is the Honda with their newer version of plug-in hybrid technology as they have introduced in the Japan. Though there are different rivals in the market with higher competition, we believe to withstand all the rivals in the market with our leading edge technology we have used in the development of our CE 13.

2.4 Product Offer

CE 13 is going to be introduced in a single variant as it is a newer version, currently only single variant is available and has the following features included in it:

Rechargeable lithium ion battery that can be charged connecting to an ordinary 240V socket. The battery comes along with a one year replacement warranty.
Extended cable alongside the electric inverter.
1.6 liter petrol engine
Air condition
Heater
DVD player
Central locking
Power steering
Anti theft alarm
Dual air-bags.

These are the basic features included in CE 13 and with the gradual maturity of the product we have decided to enhance the features further based on the development of CE 13 later after two years based on the customer requirements.

2.5 Distribution

Citroen cars are normally made available to the customers through the following retail channels such as:

Citroen motors showrooms.
Dealership with private showrooms.
Events such as Auto expo conducted in the various parts UK.
Through online booking.

3. Marketing Strategy

3.1 Objectives:

Citroen has currently set a realistic and achievable objective for the first and second years of the market entry.

First-year objectives: Citroen is aiming for 10-15 percent share in UK market through the establishment of CE 13 with a unit sales volume of Indian PHEV market through a unit sales volume of 10,000 to 12,000 by summer 2012.

Second-year objectives: Second year objective is set to introduce new variants with added features during the fiscal year of 2013 with a diesel variant plug-in.

Contingency Planning: In unforeseen situation of the product not satisfying the objectives, Citroen will postpone the launch of the succeeding model till the break-even is attained. The target market share will remain the same and new marketing process may be acquired (Jeroldin, 2011).

3.2 Target markets

Citroen’s targeted customers are segmented demographically and geographically. Our primary customer target for the CE 13 is upper working professionals who need to commute on daily basis, who opt to charge than fill fuel, and be entertained on the go. Our secondary customer target is senior citizens who want a simple car with savings in fuel spending. The segmented audience is between the age of 25-65 and having a personal disposable income more than GBP 7000 (Jeroldin, 2011).

3.3 Positioning

Using product differentiation and comparing with other brands of the PHEV segment, we position Electra as a high quality car with comparatively low price in the Indian market. Our marketing will highlight on the affordable price, trusted brand, and environmental friendly with the quantity of carbon dioxide emission differentiating the Citroen CE 13.

3.4 Strategies:

Product

The CE 13 comprises of all the normal features available in the normal market earlier during the introduction of the vehicle. Later it will include custom developed features based on the customer requirements which include spare parts warranty of one year and also offer the onsite road assistance support made available 24/7 to the customers. CE 13 will inherit the normal logo with an added eco-friendly logo to its normal logo.

Pricing

Citroen has planned to price the vehicle at GBP 33,000 for the single variant which will be made available to the customers including all the necessary taxation. The price of the product is developed using the market-penetration pricing concept to acquire higher long-run profits for the company (Kohtler, 2009). We expect to lower the price of this model when we upgrade the product by launching our new model later during 2012, to be priced around GBP 42, 000.The low-priced high quality cultural requirement of the customers is fulfilled to gain shares of the plug-in hybrid electric vehicle market in the UK.

Distribution

Around 70 per cent of the manufactured cars will reach its destined owners through various Citroen motor showrooms in various parts of UK, and the remaining production via private agents and showrooms. Detailed specification handouts will be provided to support our distribution partners. The company also plans to consider special payment terms for agents that place consistent orders.

Marketing Communication

Though the plug-in hybrid electric vehicle technology is relevantly is old in the UK market, creating awareness in the public will be the initial step in the promotion of the product. The primary action is to successfully launch the CE 13 in the upcoming Auto Expo to be conducted in UK later this year. A combination of “Above the line” (ATL) and “Below the line” (BTL) activities will be used in Electra’s marketing process. ATL will include the print media, mostly magazines like the Overdrive, television adverts and the internet. The latter will use automobile fairs organized in various parts of the country to pull customers and also movie theaters, which is often visited by professionals (Jeroldin, 2011).

3.5 Marketing Time Line

The CE 13 will be introduced in during June as the testing of the car is current being taking place. Here are the summarized lists of action programmes we will implement to achieve our stated objectives.

May: We will launch a GBP 0.3 million trade sales marketing campaign and take part in various Auto Expo or Fairs to support and educate dealers. This will also function as foundation by developing support for product launch in June. Key production staff with the help of marketing team will work with retail sales personnel to explain the features of the CE 13.

June: Citroen will be starting the detailed print campaign via auto magazines and also adverts in the Internet and television. The sales team will play a critical role in explaining the car to the interested customers.

July: As the multimedia promotions continue, we will organize contest in which users will post to the organization’s blog as ‘which is the best methodology to spend least on gasoline‘(an average of 40 miles/day covered)’. This private user sales promotion will act as direct feedback from the customers.

August: Citroen will organize a ‘Green home’ rally to spread awareness about the main feature of Hybrid technology and its effect on the environment.

3.6 Market Research

‘Using the research, we will identify specific features and benefits of our target market segments value’ (Kohtler, 2009). The feedback obtained from the customers through blogs, vehicle rating and review by ‘Autocar’ will set up the perfect CE 13. We are also tracking and analyzing customer’s thinking over competing brands in the PHEV market (Jeroldin, 2011).

4. Financial matters

Total first-year sales revenue for the Citroen CE 13 is projected at GBP $20 million, with an average whole sale price of GBP 32000 per unit and variable cost of GBP 21000 per unit for unit sales volume of 4000 in the first year. A first year loss of GBP 12 million is anticipated. The break-even calculations indicate that CE 13 will attain profit after the sales of 4773 units, mid way in the product’s second year. The analysis also estimates first-year fixed costs of GBP 52.5 million. Based on the assumptions, break-even calculation is

GBP $52,500,000/ ($32000-$21000) = 4773 units

5. Controls

The control of the marketing procedure of CE 13 will help the management to measure performance and provide an opportunity to improve in the required segments. ‘Controls are being established to cover implementation and the organization of our marketing activities’ (Kohtler et al 2009).

5.1 Implementation

We have implemented the Annual-plan control in our marketing activities (Kotler et al 2009). The senior management will set quarterly goals to monitor the performance of CE 13 in the UK market and later in the European market. The management will then trace the deviation, if any, and take required action to make the performance co-inside with the goals (Jeroldin, 2011).

5.2 Marketing Organization

The marketing director of Citroen takes the overall responsibility to get all the marketing activities done in the respective allocated time. The new product manager/marketing manager is utilized to identify the opportunities of CE 13 UK market and anticipate the customer needs. They should have strong knowledge of advertising and merchandizing agencies to promote via campaigns and programs. It’s the honored responsibility of Citroen to satisfy the needs of the customer through CE 13.

Conclusion

Thus, the marketing plan for CE 13 of Citroen is achieved based on the various techniques given in order make reach the final product to the customers. The marketing planning helps in increasing the sales, growth and monitors these reports in order to successfully maintain the development of the Citroen in the Hybrid plug-in market. Following a structured marketing plan helps in the development of the organization and positions the market perfectly according to the needs of the customers.

References

Kohtler, P., Keller, K.L., Bradley, M., Goodman, M., Hansen, T. (2009) Marketing Management. England: Pearson Education Limited.

Alphone Seon Jeroldin (2011) ‘Marketing Planning’. Marketing in a Global Age 1 1-9

Citroen (2011) the list of reference illustrated [online] available from [17 April 2011].

National stastistics (2011) the list of reference illustrated [online] available from [17 April 2011].

business-standard (2011) the list of reference illustrated [online] available from [17 April 2011].

hybridcars (2011) the list of reference illustrated [online] available from [17 April 2011].

emic-bg (2011) the list of reference illustrated [online] available from [17 April 2011].

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Significance of marketing strategies and public relations of hotel Burj Al-Arab Dubai.

Abstract:

The twenty first century has been the age of advance technology, information and communication systems. So, in this age of travel and tourism has been simplified due to the advances in communication technology. The trends related to travel and tourism has increased significantly. Change in attitudes, lifestyle, more holidays taken, appeal of popular destinations and the development in hospitality industry influence people in travel and tourism. Travel and tourism is a leisure activity served by the tourism and hospitality organizations. By encompassing travel and tourism there has been an evolution in the increase in tourism and hospitality organizations in the market. Tourism and hospitality market is getting popularity day by day for its potential. This is why this market is becoming competitive. To survive and prosper in competitive business environment marketers require developing marketing strategies by which they can compete in the market. Tourism and hospitality marketing is becoming dynamic and challenging all around the world because of its competition (Briggs, 2001). The tourism and hospitality marketers are moving from traditional marketing practices to innovative marketing practices because of its market demand. Meeting the customer’s increasing needs and demands require marketers to develop innovative marketing strategies. Marketing people are continuously trying to improve their tourism and hospitality product and services for the customers. Today customers are very much service oriented because they have variety of options to chose the brand. To develop the brand marketers are continuously trying to improve their brand by providing extended services to the customers. The significance of public relation in tourism and hospitality organizations is increasing because of its effectiveness. By building public relations the organizations are moving to the varied approaches of marketing where the marketers are having its benefits. Our research will investigate how Burj al Arab a seven star hotel is performing their varied marketing strategy approaches to the competitive business environment. Our research will find out what marketing strategies are effective for the Burj Al Arab as a tourism and hospitality organization. We will analyze the different marketing strategies in tourism and hospitality organization. How Burj Al-Arab is operating their public relation tactics in this market.

Chapter 1.1: Introduction:

Tourism and hospitality marketers have tended to expand their market share worldwide by approaching their marketing strategies and efficiency (Tepeci, 2009). Marketing is the process of creating value for the customers. Survival in the market requires brand recognition in the particular market. Burj AL-Arab is a seven star hotel in Dubai (UAE). The very fact is that they have gained brand recognition owing to effective public relation strategy. Tourism and hospitality market is a dynamic market. Because the customers needs and wants are changing. To meet with the changing customer’s needs and wants development of goods and services is an essential requirement. Tourism and hospitality sectors are service oriented market. Customer expects better service as well as satisfaction. But the word ‘satisfaction’ is difficult to perform. The first requirements of customer satisfaction are developing quality products and services. Burj al Arab being a luxury hotel in Dubai has target customers in tourism and hospitality market and hence satisfaction of this target segment is vital. Normally tourism and hospitality marketers require relationship marketing rather than transactional marketing. Transactional marketing is only buying and selling approach and there is no tendency to build up relationship with the customers. But for sustainable marketing it requires relationship marketing. Relationship marketing creates long-term relationship with the customers. But building relationship with customers is not easy task. When a brand tends to build relationship with its various markets requires some strategic marketing approaches. Brand development or branding is very important for developing relationship with the customers. Different company develops their brand in different way. Burj al-Arab has developed their brand in tourism and hospitality industry as world’s first seven star hotel that provides exquisite service. The product and service quality add the additional value to this brand. Successful branding is important in this market as a successful brand acts as a statement for the company to the customer segment. How can a company can develop their brand in this competitive age?. Delivering quality products and service continuously to the market can give brand recognition to the company. Market is always competitive in nature for its rivals. By differentiating the product from the market or form the competitors a marketer can develop their brand. Then brand positioning is significant to get response from the market. Brand positioning is very much effective for the company to harvest form the market. Burj al-Arab has brand positioning in the market. Tourism and hospitality organization target customers are tourists, business people, traveler, event management, sports team and so forth. All of these are customers are the single time customers. They buy products and services again and again. So, organization can build relationship marketing with this customer so that they buy the product and services from this brand customer loyalty is an important asset for the brand (Kapferer, 2008).Customer loyalty provides the brand loyal customers. Loyal customers are asset for the company because these customers can create many more customers for the company. It is not easy to create loyal customers. It requires reliability and creditability in the market. Why people will buy products and services from the same brandWhy customer will remain loyal to the brandIs it the ability to trust.Customers expect guarantee of their sacrifice (Price). Customer is the king in the market it should provide value to the customers needs and wants. Customer’s expectation is more now in the market. Marketers will have to meet with customer’s expectation. A strong brand is a promise to the customers. Burj al-Arab is a brand that promises to deliver high quality product and services to its target market. By doing this continuously they can develop a brand. Brand creates a faith to the mind of customers than the brand is providing a solution to the problem positively. To have a positive image over the market marketers can provide more than customer’s expectation. A delighted customer will act as the brand ambassador to the brand. Marketers can target the customer’s heart and mind to win over them and will provide positive emotional bonding which will develop a mutual beneficial relationship focusing on trust, good understanding and support. These marketers can develop a strong brand in the competitive market environment. To perform these activities marketers may require sufficient market research activities to know what customer wants. Why they want when they wantAnd how they wantA good solution of this question will provide marketers to reach the customer’s emerging demand to provide satisfaction.

Public relation (PR) revolves around this world, people act based on their perception of facts (Wilcox, 2003). Public relation is one of the promotional strategies. It is not like advertisement. Public relation is very strong tools of communication in the competitive market especially in tourism and hospitality firm. Our organization Burj al-Arab is a big organization in hospitality market. Such an organization has huge opportunity of performing public relations activities by which they can enhance their marketing network and public image in the market. Normally public relation creates awareness to the mass market to the brand. Today customers face so many brands in the market. This is why they can forget any brand. So, public relation is very much effective tool to create special awareness to the customers by focusing positive side of the organization. Public relation is more effective in terms of its cost and benefits (Raja, 2004). Public relations provide an improved understanding in the market between marketers and customers. Competition is increasing day by day. To face the increased competition public relation provides the awareness to the company’s actual and potential market.

Today marketers are also focusing on network and relationship marketing strategy. Relationship marketing strategy is very much significant in tourism and hospitality market because the customers of this market are repeated. A business man frequently comes to London for his business purpose. So, the relationship marketing is effective in this market. Relationship marketing can create a customer network.. Better product and better service will keep remain customer loyal to the brand. Then a satisfied customer can create more customers through the network. Only marketers require maintaining regular communication with the customers. Due to increased competition, marketers are shifting to strategic customer relations. Strategic customer relation increases customer’s loyalty to the brand. To meet with customers unlimited needs and demands marketers develop various products and services while marketers launch any new product or services than marketer conduct viral and guerilla marketing activities. Viral marketing is done to generate huge amount of buzz and brand awareness to the customers. For example launching a new package tour product or introducing any new service Burj al-Arab can conduct viral marketing campaign for high public awareness in the market. On the other hand guerilla marketing is an unconventional marketing promotion activity. These marketing activities are not for any target customers. Guerilla marketing may be any public space, where people have crowded to spread the information. Marketing activities have become more speedy and effective since last decades because of internet availability and accessibility. E-marketing has solved various marketing problems. Now tourism and hospitality operators can invite guests through e-marketing or electronic marketing technology.

Chapter 1.2: Statement of the problem:

Significance of marketing activities and public relations of hotel Burj Al-Arab.

Chapter 1.3: Significance of the problem:

Any products or services can’t move to its customers without marketing activities. Burj al-Arab is renowned brand in hospitality market around the world. They have a target customer and market segmentation strategy. But it is also important to inform the target customers about their offerings in the market. In previous time marketers would think that advertising and other marketing activities are waste of money. However times have changed. Now we are living in global village where information is very important to reach the customer’s door. In this global age tourism and hospitality market is very much competitive because of free market economy, information super high way, faster communication. Tourism and hospitality is becoming growth factor of economy in many countries. Different countries are developing their tourism and hospitality product and services. So, the competition is increasing among the continent. In these circumstances customers are also facing variety of brands. Customer’s expectations have increased due to brand overcrowding. So, to develop the brand in the market, marketers are developing their strategy to capture their customers. To have the loyal customer’s marketers need to improve their service. The relationship marketing and public relations have become significant to the both marketers and to the customers. So, our study will verify to learn marketing strategy and to understand the significance of marketing strategy in tourism and hospitality market.

Chapter 1.4: Purpose:

The main purpose to study of this research is

To investigate the significance of marketing strategies and public relations in tourism and hospitality market.
To evaluate the effectiveness of marketing strategies in competitive tourism and hospitality market.
To determine how Burj al-Arab is conducting their marketing strategies and public relations in their business development.

Chapter 1.5: Statement of hypothesis:

Marketing strategies and public relation (PR) has significant role in promoting tourism and hospitality product and service.

Chapter 1.6: Limitations:

Our research may face some limitation in conduction this study. As we will use secondary data to conduct this research so, that data may be invalid. The collected data and information may be expired to get the effective outcomes from the study. The unavailability of data may be another limitation of our research.

Chapter 2.0: Review of related literature:

Tourism and hospitality management organizations are facing competition in the market due to customers growing needs and demands (Deuschl, 2006). So, marketers are developing their marketing strategy to manage tourism and hospitality in the competitive market. Due to increased competition in the tourism and hospitality market, marketers are developing package tours and travels to attract variety of customers in the market. But they need to communicate this to their customers. In travel and tourism industry marketers target both local and international customers. Hence the target market is global. Each and every organization needs to have market sustainability. Brand image and brand loyalty provides the marketers sustainability in the market. Both of these marketing management activities provide the brand good positioning in the market. So when customers are dissatisfied with the product or services then they switch off towards another brand. Marketers require customer retention in the market. Customer retention provides the marketers good sustainability in the competition. Customer retention is more important than gaining new customers. In tourism and hospitality market organization can develop their strategic relationship with customers. To retain the customer tourism and hospitality organization launch strategic marketing campaigns such as VIP membership card, special loyalty card, life time customer club card. Tourism and hospitality marketers can move from transactional to relationship marketing approach. Hence successful relationship marketing is more effective than transactional marketing. Transactional marketing emphasis only on single transaction but relationship marketing provides emphasis on to the customer’s retention and customer loyalty. All of these marketing activities are focusing the customer loyalty. Burj-Al-Arab can launch customer loyalty program to have loyal customer in the market. Public relation (PR) activities are involved with management of reputation of the brand. Brand reputation is very important for the company’s market image (Oliver, 2004). Public relation activities provide customers positive attitude to the organization and its brand. Such type of promotional activities influence customer to stick to the brand. Thus marketers gain competitive advantage over the market. Burj Al-Arab has huge opportunity as a 7 star hotel to conduct public relation activities which give them good market reputation in the market. So, it’s an easy and effective way to conduct public relation activities by which they can gain market recognition in the highly competitive market. They also can have third party endorsement of opinion from any political or celebrities. In today’s marketing management a good public relation is important than ever before. Now customers are very much informed and intelligence with knowledge. It is also true that public is bothered with the exaggeration of advertisement for products or services. The difference between advertising and public relation is the public relation provides more important information to the public. It provides valuable information for customer’s awareness. Credibility is very important in public relation. An organization is to maintain high level of credibility in public relation. An organization is to maintain high level of credibility in public relation campaign (Andrew, 2009). In this case marketers can make a good relation with a local news paper who will write a good relation with a local news paper who will write a good article regarding the brand and their activities. To make effective public relation the organization can do extraordinary activities in the society. The public relation provides trust worthy news to the society which creates brand image in the market.

Hospitality marketers develop new product and services for customer attraction. Very common marketing strategies by tourism and hospitality organization they create joint marketing promotional activities with travel and tourism organization. In this situation the organization can develop a package product for the customers. Their new product may be a new destination tours and travel; they can arrange an event, entertainment and recreational arrangements to attract customers. A brand loyal customer can create many more new customers. By performing word of mouth (WOM) company can have good market recognition. Market recognition is important for building and developing relationship marketing. At present marketers is laying emphasis on relationship marketing. Relationship marketing is performed for attracting and retaining customers for long time. To attract and retain customers organization requires quality product and service delivery. A brand’s responsibility is to make customer happy with their product and services. To gain loyal customers a marketer’s responsibility is to provide customized service for individual customers. A market oriented organization delivers customer oriented service or customized service by which they can make happy the customers and can keep then loyal to the brand. Marketers require to be continuously monitoring customer satisfaction. Customer’s needs and wants are continuously changing. So, to meet these changing requirements of customer it requires satisfaction monitoring. Customer satisfaction monitoring provides marketer efficiency to provide market oriented product and service. Burj Al-Arab is a hospitality organization. They must monitor customer satisfaction to keep the customer’s needs and demands update. By motivating this marketers develop their new product or can improve the existing product. Network and relationship marketing is a new requirements for the marketers point of view (Shafi, 2008). Network and relationship marketing provides strong network connection with company’s various customers. Thus network and relationship marketing benefits marketer in two ways one being connected to customer’s remaining loyal to the brand. The other importance is customer can provide their reaction to the brand. Customers can provide their ideas, need and demand to the marketers. In tourism and hospitality organization can build network and relationship marketing strategies. By building and maintaining network and relationship marketing strategy company can increase their market share. Strategic relationship provides company market survival and growth. To survive and significant prosper in the market strategic relationship is very important. Hospitality organization can build strategic relationship with other organization which is involved with travel and tourism service. For example Burj Al-Arab makes a strategic relation with British Air ways. Strategic relation is a contract between two parties. In this case the hospitality organization can contract that are passengers in British air ways will get special benefit from Burj AL –Arab to take hospitality service. Thus this hotel can increase their customers and market share. Viral and guerilla marketing is effective for new product launch in tourism and hospitality organization. E-marketing or electronic marketing is very significant for tourism and hospitality organization. Now customer can do everything being at their home. Internet and e-marketing has made it easy. Tourists can buy their travel ticket, hotel booking and spot renting everything they can perform without any effort. So, e-marketing is very much effective for travel and tourism.

Chapter 3.0: Description of the research design:

Research design is very important to conduct a quality research. Our research will be qualitative and quantitative. Both qualitative and quantitative research will provide us effective outcome. Qualitative research h will provide us in depth understanding of research problem statement. On the other hand collected data will be analyzed in quantitative form with numerical presentation. Both of this will provide us good result our study.

Chapter 3.1: Sources of data:

Our data will be collected from the secondary sources. The secondary data will be available in the previous research paper, journal of articles, newspaper, book, trade magazine and in the internet.

Chapter 3.2: Sampling Procedures:

Conduct this research will take selective sample. The selective sample will provide our research significant result.

Chapter 3.3: Data gathering instruments:

Our will collect our field research representative. They will collect necessary data from various sources. To collect data they will contact the responsible organization earlier.

Chapter 3.4: Statistical treatment:

To get significant result from our study we will conduct statistical treatments. We will cluster analysis, regression analysis.

Chapter 4.0: Data analysis:

analysis is very significant part of the research. Our analysis data will be presented with appropriate text, necessary tables and figures and chart.

Chapter 5.0: Major findings:

Major findings of our research are:

Marketing strategies are significant for Burj Al-Arab as a tourism and hospitality organization.
Brand image is important for customer’s loyalty.
Brand loyalty provides customer retention.
Public relation provides good customer management and reputation for the brand.
Public relation tactic provide customer retention in the market to specific brand.

Chapter 5.1: Conclusion:

Marketing is creative and dynamic. There are various customers in the market with different needs and wants. Marketer’s responsibility is to meet that customers needs and wants by providing quality products and services. There are different hotel are operating in tourism and hospitality market. Burj Al-Arab is one of them. To attract tourist customers they have different marketing strategies. In this way they differentiate from their nearest competitors in the uniqueness of services provided through innovative public relation campaigns they have good customer relations to provide them satisfaction. Strategic marketing is providing them market efficiency to complete in the market. Thus they are developing their market day by day and are force to reckon with in the luxury hospitality market segment

Chapter 5.2: Recommendation for the further investigation:

Further investigation my be on impact of brand image in customer retention.
Significance of relationship marketing in tourism and hospitality organization.
E-marketing to manage customer relation.
Reference:

Dennis L. Wilcox, Public Relations Strategies and Tactics, 2003, ISBN-0205360734

Hasim Raja, significance of public relation in tourism market, 2004

Harper Deuschl, Development study of tourism and hospitality organization, 2006

Jean Noel Kapjerer, The new strategic brand management, 2008, ISBN-13:978074945085-4

Mustafa Repeci, Increasing brand loyalty in the hospitality industry, A journal of article, July 2009

Sandra Oliver, Public relation strategies, 2004, ISBN-0749435410

Susan Briggs, Successful Tourism Marketing, 2nd edition, 2001, ISBN-0749434694

http://www.flightmapping.com/airlines/QatarAirways/,Access date: 16/01/2011

http://directrooms.com/uae/hotels/burj-al-arab-hotel-dubai-731.htm, Access date: 17/01/2011

http://www.onecaribbean.org/content/files/UNWTOTOURISMOUTLOOK2010.pdf, Access date: 17/01/2011

Categories
Free Essays

Marketing in the different sectors of tourism

Introduction

Virgin Atlantic is the second largest long haul airline in the UK and it is a popular and well known airline all around the world. It is also the third largest European carrier over the North Atlantic and over the years has rapidly grown and includes destinations in the US, Caribbean, Far East, India and Africa. http://www.virgin-atlantic.com

Virgin Atlantic flew its first flight in 1984 after Richard Branson who is the owner announced to the world that a high quality, value for money airline would begin operating within three months. After 10 years from its launch the airline had flown over 1 million passengers and started bringing up services onboard. It became the first airline to offer individual TVs to their business class passengers. Then In 1992 Richard Branson made a huge investment. He sold his Virgin music store and invested the profits into Virgin Atlantic, improving on an already great service. Within the same year the first super economy service was launched and it then went on to become an award winning Premium Economy.

http://www.virgin-atlantic.com/en/gb/allaboutus/ourstory/history.jspaccessed 01/08/2011 at 17:17

In 2003 the Virgin Atlantic’s revolutionary Upper Class Suite was launched; it was the longest and most comfortable flat bed and seat in business class. Then in 2007 Virgin Atlantic went on to launch brand new check in facilities at Heathrow Terminal Three. For the Economy and Premium Economy passengers Zone A became wider and more spacious, enabling passengers to check-in at kiosks in a faster and more stress-free way. For the Upper Class passengers, an Upper Class Wing which offers private security corridor so passengers can speed through the terminal to the Clubhouse quicker than before.http://www.virgin-atlantic.com/en/gb/allaboutus/ourstory/history.jspaccessed 01/08/2011 at 17:17

In 2008 virgin Atlantic went on to operate a pioneering bio fuel demonstration with Boeing and engine manufacturer GE Aviation on a 747 between London and Amsterdam. This became the world’s first flight using bio fuel by a commercial airline. Then In June 2009, Virgin Atlantic celebrated its 25th anniversary with a series of special fares, campaigns and events in the run-up to its birthday, as well as promoting red hot fares to red hot destinations.

http://www.virgin-atlantic.com/en/gb/allaboutus/ourstory/forstudents.jspaccessed 01/08/2011 at 17:10

I chose virgin Atlantic because I personally have travelled with them on many occasions and I receive the best service any other airline could offer. Due to its good reputation it appeals to a much wider market as it is a reliable and trusted airline and has a lot to offer its customers.

Market it faces today

Virgin Atlantic uses a wide range of marketing techniques. It promotes its products and services through a wide range of sources which include direct mail, Television, press, magazines, outdoor posters and taxi sides, all featuring their distinctive logo.

http://www.nyama.org/mhf98.htm

Virgin Atlantic targets specific customers by advertising the comfort and quality of the airline. Their tickets are sold through various sources such as the Internet, travel agents, and direct communication with customers to suit different customer needs.

Virgin Atlantic Customer Service Representative, Quick Reference Guide, 2001.

Keegan, Warren J & Green, Mark S., Global Marketing, 2nd Edition, New Jersey: Prentice Hall, Page 40,

2001.

To attract more customers Virgin Atlantic has differentiated their product by taking the customers’ expectations one step further through communication with the customer. A prime example can be seen in providing in flight ice cream, something other airlines do not offer.

Keegan, Warren J & Green, Mark S., Global Marketing, 2nd Edition, New Jersey: Prentice Hall, Page 40,

2001.

On the aircraft passengers experience spacious setting arrangements, state of the art in-flight entertainment system, and most importantly a high level of customer service. In addition, Virgin Atlantic offers a distinctive upper class service at business class prices.

PR News Wire, London, Virgin Atlantic Implements Galileo International, 5 September, 2001.

The Virgin Atlantic market is segmented into classes. There is the economy class where passengers are a much broader group, travelling mainly for leisure and are evenly spread across most socio-economic groups, and age ranges. Then there is the

Premium economy class where there passengers are split evenly between travelling for business or leisure and most are male, average age 41. Those travelling for business purpose in this class are often doing so because their company operates an economy travel policy. Lastly there is the upper and business class which is the virgin atlantics major target market as they bring in more money. They are predominately travelling on business and are usually male, 35 to 45 years old and earning ?50K plus per annum.

http://www.safarigraphics.com/salterquest/portfolioPDFs/ws_Virgin_Atlantic_Marketing_Case_Study.pdf

accessed 01/08/2011 at 18:20

A virgin Atlantic s criterion for segmenting is:

Who buys their product
Who does not buy their product
What need or function does their product serve
What problem does their product solve
What are customers currently buying to satisfy the need or solve the problem for which their product is targeting
What price are they paying for the product they are currently buying
When is their product purchased
Where is their product purchased
Why is their product purchased

Keegan, Warren J & Green, Mark S., Global Marketing, 2nd Edition, New Jersey: Prentice Hall, Page 40,

2001.

http://www.safarigraphics.com/salterquest/portfolioPDFs/ws_Virgin_Atlantic_Marketing_Case_Study.pdf

With virgin Atlantic there is something for everyone .Examples of how virgin Atlantic markets its segments is by offering value for money products and services to bring in the customers. For upper class passenger, In-flight beauty therapy – massages and manicures, Onboard stand-up bar, Personal 10.4 inch video screen, A dedicated sleeping area ,Fast track-priority service through immigration, Sleep service – pyjamas, full size pillows, feather duvets and fleece blanket and a Drive Thru check in from the limo etc are al offered within the price.

For the premium economy class a Dedicated check-in desk, Priority baggage handling, Flexible ticket – no penalty for last minute changes, Comfortable wider seats with up to 6 inches of extra leg room, Seatback video screen, Fast track-priority service through immigration etc is all offered to them.

For the premium economy class a Seatback video screen with up to 43 channels of movies, music, and video games, Free amenity kit, Children’s services including K-iD backpacks, TV channels and special meals, Choice of three entrees, including a vegetarian option, Ice cream during movies etc is available to them whilst onboard.

Keegan, Warren J & Green, Mark S., Global Marketing, 2nd Edition, New Jersey: Prentice Hall, Page 40,

2001.

Virgin Atlantic Customer Service Representative, Quick Reference Guide, 2001.

References

http://www.virgin-atlantic.com accessed 01/08/2011 at 17:30

http://www.virgin-atlantic.com/en/gb/allaboutus/ourstory/history.jspaccessed 01/08/2011 at 17:17

http://www.virgin-atlantic.com/en/gb/allaboutus/ourstory/history.jspaccessed 01/08/2011 at 17:17

http://www.virgin-atlantic.com/en/gb/allaboutus/ourstory/forstudents.jspaccessed 01/08/2011 at 17:10

http://www.nyama.org/mhf98.htm accessed 01/08/2011 at 17:10

http://www.safarigraphics.com/salterquest/portfolioPDFs/ws_Virgin_Atlantic_Marketing_Case_Study.pdf accessed 01/08/2011 at 17:10

http://www.safarigraphics.com/salterquest/portfolioPDFs/ws_Virgin_Atlantic_Marketing_Case_Study.pdf accessed 01/08/2011 at 17:10

Keegan, Warren J & Green, Mark S., Global Marketing, 2nd Edition, New Jersey: Prentice Hall, Page 40,2001.

PR News Wire, London, Virgin Atlantic Implements Galileo International, 5 September, 2001.

Virgin Atlantic Customer Service Representative, Quick Reference Guide, 2001.

Categories
Free Essays

Contemporary marketing issue of how gender affects the decision making and buying behaviour processes.

1. Introduction

1.1 Background

It is quite obvious that, as men and women have different needs and wants they are going to be attracted to different products, however they are going to have a unique gender characteristics approach to the way the make a purchasing decision and embark on the process when deciding how to acquire the product they want.

1.2 Importance of study

I feel the importance of this study is a contemporary marketing issue as the subject of how gender affects the decision making and buying behaviour processes is a key topic area.

They way consumer approach to the buying and decision making process affects how marketing is being perceived in its effectiveness or ineffectiveness; by only appealing to one gender and sending the ‘wrong message’ out.

1.3 Research purpose (including research question and objectives or hypotheses as appropriate)

1.4 Limitations

Time constraint was a major contributor to limitations of this study, however with good organisation and an academic thought process the hypothesis has been proven with some really interesting new facts.

Without sounding patronising, I would assume you would agree that a worldwide collection of data from the questionnaire would bring in some interesting results, but as this study only needs to focus on a small majority, we are happy with the outcome.

1.5 Organisation of study

For the purpose of this study a sample of 100 consumers will be taken. 50 men and 50 women between the ages of 16-40 will be surveyed using an specially designed questionnaire, to be distributed to our sample online using e-mail and social networking site. A ‘snowball effect’ is highly likely in this case and will only add more credibility to the validity of the results recorded in this research study.

2. Literature Review

2.1.1 Chapter introduction

In this literature review the comparison of findings from other researchers on the subject surrounding the differences between male and female purchasing and decision making process. This literature review will show a further understanding of the subject gender affecting consumers approach to their decision making and purchasing process.

The intended outcome of this review of relevant literature will show the findings on whether there are any proven differences between the way male and female consumers make their purchasing and decision making process.

2.2 Overview for review

In this chapter we hope to be able to share with your what we have found from other academic writers on this subject that we feel relevant.

We have researched deeply into the subject, and have found articles from the US interesting.

The chapter is now split into relevant sub sections leading to the summary and methodology where we hope to prove our hypotises.

2.3 Buying Behaviour

It is just not possible to study exactly what happens in the consumers mind when making a purchasing decision because, as we have found, the individuals mind is just so complex and varies dramatically from individual to individual. Instead theories of decision making process can help assess what makes the consumer decide in their buying process they are committed to purchase.

Egan, J (2007) describes how two different types of paradigm called cogitative and behavioural are utilised by individual consumers when entering into a purchasing decision.

Firstly, the cogitative paradigm is controlled by the individuals functioning and rational thought process, these are goal-orientated ways the individual can process information. The functioning and rational thought process linked closely with the cogitative paradigm is determined by the way the individual makes their choice by problem solving and decision making.

The behavioural paradigm followers accept as true that it is not possible to be able to study exactly what goes on in the mind when making a purchasing decision as the mind is just too complex; so instead a black box is used to help measure the flow in and out of the mind representing how behavioural patterns occur.

Egan, J (2007) has also shown that there are many processes in which the average consumer should and can experience when making a purchasing decision, to post purchase but not always in the same order and these are explained here further:

Routinized problem solving: Is when repeated purchasing of the same product takes place, usually of low cost and limited external knowledge.
Problem recognition: Acknowledging that a purchase must be made to accomplish a need or want.
Information search: When the consumer collects information that compares the product before making a purchase decision.
Evaluation: Evaluating the information collected for the purpose of making an informed purchasing decision.
Decision: In terms of buyer behaviour, making the decision to purchase.
Purchase: When the act of exchange takes place.
Post purchase evaluation: When the product is evaluated and the consumer decides if they would re-purchase the product.
Straight re-buy: This is a term widely used by B2B when the consumer decides to re-buy the same product from the same supplier.
Total set: Meaning all the products that are available in the same category.
Awareness set: When the consumer is aware of the available items in the same category.
Evoked set: Are the products in the category that the consumer is aware of and intents to make a purchase choice from as they are at the front of mind.

2.4 How the decision making process works

The process of making a decision can be different for each individual but is largely accessed on the basis of common decision making traits by the decision making process. As the decision making process involves the use of thoughts and feelings, knowledge and past experiences, before the end decision is reached it can be affected by many external factors such as the opinions of others and previous behaviour associated with potential purchase.

Integrated marketing communications looks closer at the way the individuals purchasing and the decision making process is affected by external influences. IMC is described by Pelsmacker as “The idea behind integrated marketing communication is coordination of messages for maximum impact.” Pelsmacker describes this as an impart that is created through the use of synergy. Synergy is the linkages that are created in the indivduals mind as a result of the messages that are received to create an impact, described as an impact “beyond the power of any one message on its own.” (Pelsmacker De, P. 2001).

We have found that the decision making process consists of 5 main stages; the need of recognition and problem awareness, the use of information search, evaluation of any alternatives, purchase and the post purchase evaluation. This model suggests that each individual goes thought the same stages for every purchase; however for more routine purchases, it can be possible for the individual to miss out a stage or complete the decision process in the opposite order.

The need for recognition starts the decision making process, by making the individual recognise a need/problem or simply respond to a marketing based stimulus by thinking about the decision making process.

Problem awareness prompts the individual to consider how much or little information is needed. When the need is strongest to purchase, then the individual could make the purchasing decision to buy straight away; if the need is not strong then the individual will embark on processing information and will conduct an information search as Pelsmacker described.

An information search is the main influence on the individual’s decision making process. The individual may seek to obtain any relevant information from many different sources, including; family, friends, work colleagues and neighbours.

Commercial sources including advertising and sales people can also contribute. Sources considered as public such as newspapers, TV and radio can play a part in contributing. And finally, experiential sources such like physically handling, investigating and using the product will play a part in influencing the individual’s final purchasing decision.

Evaluation of alternatives encourages the individual to assess what else is available to them in the market place, assessing prices, alternative brands and brand credibility and benefits/services.

As every individual is different, the helpfulness and influence any sources of information could be to them will vary by product and individual.

Here the Foote Cone and beldin (FCB) shows how the levels of involvement are ranked in a grid format.

Foote Cone and Beldin (FCB) Involvement Grid

Think Feel

Informative (Thinker)

Learn-feel-do (Economic)Affective (Feeler)

Feel-learn-do (Psychological)

Habit formation (Doer)

Do-learn-feel (Responsive)

Self-satisfaction (Reactor)

Do-feel-learn (Social)

(Fill, C. 2009).

Involvement affects all consumers but in different ways. As different individuals can purchase the same product, their individual levels of involvement will be different as they are purchasing for different reasons and as the levels of involvement range from high to low there are always different expected outcomes as some individual’s levels of involvement could not be described simply as high or low.

Engel and Blackwell (1982) showed their understanding of involvement levels based solely on high involvement routine decision making and repeated purchase behaviour in the low involvement products. Where as in the Foote Cone and Beldin Grid, they have made their understanding on thinking and feeling.

For each factor there are resource implications as the individuals personal self-esteem can make the complex confusing. For example:

“The purchase of a can of tomatoes, or a carton of milk, should be regarded as relatively low involvement because it has little financial or social risk attached to it. By comparison, the purchase of a car or holiday is highly involving. The potential benefits from the success could be very high but the personal costs of failing could also be very high. In addition to the product itself being more or less involving, individuals themselves can have different levels of involvement.”

Pickton, D. Broderick, A. (2005).

The individual uses the information obtained to feel involved with the product they are considering purchasing. So where the involvement is regarded as high, the individual is more likely to carry out an extensive evaluation.

The post purchase evaluation is the final stage in the purchasing decision. If the individual is not entirely happy with the purchase they have made they may think that an alternative would have been better, this is called ‘cognitive dissidence’. When cognitive dissidence has taken place it is common that the individual will not repurchase straight away and will often choose a different brand when making a similar purchase in the future.

2.5 The impact of gender on the decision making process

It is fairly common that, as men and women want different products that they are going to have a unique to their gender characteristics, a process when deciding how to acquire the product they want.

It is also a widely regarded opinion that women do more shopping than men, does this make them more informed when making a purchasing decision perhaps, with all that experience surely women are more informed than men.

In recent research published by the NFWBO (National Federation of Woman Business Owners) it has been found that women are the primary decision makers in 85% of households, women make 75% of the decision when buying a new house and 81% about groceries. The article goes on to reveal that women are the main influencers on spending for the household and women have over taken men in spending online.

(http://www.bright-marketing.com/article-marketing-to-women-what-women-really-want.php)

Firstly there are many factors that point towards the notion that men and women are likely to make purchasing decisions differently. Hennig Thurau, (1998) cited in Mitchell, V. W., Walsh, G. (2006) found that men use more information and communications technology products (eg videos, mobile telephones and computers) than women, and that men show a greater interest in these products (Rudell, 1993) cited in Mitchell, V. W., Walsh, G. (2006) also that men show a increased interest for the latest technical products compared to women (Dialoge 4, 1995) cited in Mitchell, V. W., Walsh, G. (2006) .

It has been found that men are also more likely to engage in variety-seeking purchasing (Helmig, 1997) cited in Mitchell, V. W., Walsh, G. (2006), exhibit weaker brand involvement (Guest,1964) cited in Mitchell, V. W., Walsh, G. (2006), be less environmentally concerned and be less likely to buy environmentally-friendly products (Ozanne et al., 1999).

Having already established that men and women are looking for different outcomes in their purchasing decisions, gender affects consumers approaches to decision making (Mitchell and Walsh, 2004) and the decision difficulty (Walsh and Mitchell, 2005) cited in Mitchell, V. W., Walsh, G. (2006), while gender differences were also found for appearance-related attitudes and behaviour (Burton et al., 1994).

Mitchell and Walsh (2004) found in a study they lead which went further into examining how gender can affect the decision making process, that Sproles and Kendall’s (1986) ‘consumer styles inventory’ (CSI) had found five new male buyig behaviour categories, these discoveries include:

A need for satisfying
Enjoyment and variety seeking
Fashion and scale seeking
Time restricted
Economy seeking

Bakewell, C and Mitchell, V.W (2006) conducted a study on the different decision making styles of women and men, they used a sample of 480 young males and females and identified nine different decision making styles that both sexes used and three decision making styles that just males used which are;

Store loyalty and low price seeking
Confused time restricted
Store promiscuity.

These are interesting results, especially considering that young males have agreed with young females that they consider store loyalty important. Bakewell and Mitchell sum up their findings as this “The findings suggest retailers should focus on loyalty creation programmes, price related appeals and methods of improving shopping related efficiencies when targeting young male shoppers.”

Bakewell, C and Mitchell, V.W. 2006.

Elliott and Speck made an interesting discovery when they researched into how males and females differ when it comes to purchasing decision, they picked up on the fact that advertising affects individuals differently, even though all advertising is meant to make the consumer want that product that is being marketed to them. “Males are reported to perceive less advertisement clutter on television and in magazines” (Elliott and Speck,1998).

Unusually it has been found that at least 9 researchers have found in existing literature and agreed on the following point

“Consumer decision making is likely to be related to a number of consumer traits such as social class, the type of family unit, age, gender, lifestyle and life-stage – all of which can exert an influence.”

(Meyers-Levy and Maheswaran, 1991; Burton et al., 1994; Darley and Smith, 1995; Costa et al., 2001; Mitchell and Walsh, 2004. Cited in Beynon, M.J. et al. (2010)

This point is interesting as it shows that advertising does not affect every consumer the same way. So we know that males and females make purchasing decisions differently, but we are now aware that age, lifestyle and life stage can all contribute to the purchasing decision making process.

It has been found and proven by another group of researchers, that gender type differences are highly evident in the decision making and purchasing behaviour process; as gender characteristics are evaluated differently, depending on the gender of the individual (Gefen and Straub (1997), Venkatesh and Morris (2000) and Sun and Zhang (2006) cited in Hernandez, B. et al (2011).

We can reveal that the genders controlling the process all possess these three points:

Men are more pragmatic
Women experience greater anxiety when faced with new activities
Women are more strongly influenced by their immediate environment

2.6 Key findings from literature review

From investigating any relevant sources we have found that there are many factors, not just sex, that can affect the individuals buying behaviour such as: race, religion, culture which plays a great role in defining who we are from an early age. Family being a primary source and work colleagues being a secondary source are big external factors that can influence the individual’s decision.

Internally there are primary factors that affect how consumers make purchasing decisions, attitude, perceptions and learning styles are significantly great influences. These characteristics like age, gender, income and family style act as further determinants to what the consumer finds interesting and appealing.

Reed and Ewing (2004) describe the ‘Magic bullet’ theory is a stimulus-response concept; also how it was an underlying assumption of communication developed from early models of communication around the time of the evolution mass market (P.Reed and M.Ewing, 2004). The magic bullet theory was initially believed to be able to implant the media message to the audience in a ‘uniform’ fashion so that the audience would then be able to directly respond to the mass advertising message, sounding similar to a subliminal message theory.

The ‘magic bullet’ theory was proposed to work on the belief that consumers were rational decision makers who were actively seeking products information; subsequently allowing this theory to work on the grounds that the consumers could draw stored advertising and marketing information from their memory.

3. Research Methodology

3.1 Chapter introduction

The proposal of this research study is collect data from a sample of participants that will decide if the hypnotises is proven.

For the purpose of this study a sample of 100 consumers will be taken. 50 men and 50 women between the ages of 21-45 will be surveyed using questionnaires that will be distributed online.

The questionnaires will be sent to a small sample of respondents, the respondents will be firstly screened for their age and location, thought the best effort will be made to only contact respondents that meet the studies criteria.

The benefits of using the internet to distribute the questionnaires are that a theory known simply as the ‘snowball effect’ will help our questionnaire reach more respondents. This is because as we send our questionnaire to the selected respondents, they will forward on the link to our questionnaire to their friends, colleagues and family, who will be of similar specification to the respondents we original contacted. The ‘Snowball Effect’ is highly likely in this case and will be welcomed as it will add more credibility to the validity of the results.

A focus group will take place after the results of the online questionnaire are analysed. The researcher has chosen to conduct the research in this manner as they feel it will give the them a good idea of what topics within the research question need to be addressed and investigated further with the member of the focus group.

3.2 Research purpose

The purpose of this research study is to gather information on how and why males and females make their purchasing choices and decision making process when faced with the decision to purchase an item.

The research aim and objective of this research study is to establish and verify if in fact men and do think and act differently when faced with making a purchasing decision.

3.3 Research approach (including justification)

The approach used to conduct the qualitative and quantative research is based on academic methods which are widely recommended thought UK universities. The researcher has chosen to conduct the research for this study purpose in this manner, as it is widely understood and proven tool to collect and analyse research.

However a lot of academic research methods are out dated and long winded. In the case of this study purpose, the time constraint is just a few months so….??

3.4 Research strategy (including justification)

The research strategy is to firstly establish our target audience; once we are aware of them we can word our questionnaire suitably to their level. This is a key starting strategy, as if they do not understand what we are asking them, they cannot be expected to give an honest answer, subsequently making the results un-validable.

By selecting a sample group, it has given the researcher an opportunity to select from a wide range of consumers ie: professionals, students, unemployed and of different race and class. This is make sure every point is considered and analysed.

3.5 Time horizons (including justification)

The amount of time allocated to designing and completing this research task was 3 months.

2 weeks, 4 days and four hours it actually took from researching, to designing, to distributing to finally analysing the questionnaires.

To research into the target market: 1 week
To research into the design on questionnaires: 1 day
To design and create the questionnaire: 2 days
Sourcing contacts suitable for taking part: 3 hours
To distribute the questionnaires: 1 hour
Collecting and analysing results: 1 week

The researcher found time to complete this research around working a full time job, and made it possible in the time horizon stated.

3.6 Research methods (including sampling)

For this study purpose it was found the most effective way of producing a good quality of validable results using quantitative and qualitative research to gain a better understanding, first hand, of what today’s consumers are thinking and experiencing in the consumer market.

As stated in the previous chapter, the questionnaire was designed by our researcher. The questionnaire was reached and created to suit the level of participants who took part.

Using previous professional, academic and work colleagues the questionnaire was distributed thought email and posted on a social networking site. We felt both these avenues would be successful for our study purpose as we could reach a large amount of our sample.

From the link submitted in the email and social network post, we advised out target group follow the link to a survey specialist website, where they could fill in the questionnaire we designed.

We decided to use the survey specialist website for the reason that it was popular amongst other academics, it is trustiest and overall because it is safe. Safety is a big issue for consumers online and this is wanted to assure was fine.

Another option for collecting responses to our questionnaire was by post, we decided against this idea for the reasons, it is slow and costs money; whereas online is free and fast.

After we had reached a suitable number of responses we collected the results. After the results had been verified and sorted, our researched entered the data in a spread sheet. The data was then analysed into percentages and made into graphs.(Please see appendix 3.)

The sampling has been aimed at including consumers between the ages of 21-45 because this guarantees that each individual has had experience in different purchasing scenarios and will be more inclined to be open and honest in their answers.

Sampling is seen to be appropriate for this study purpose as time and money are a constraint meaning that a survey of the whole nation would take far too long and cost far too much money for this study purpose and could ultimately restrict the data collected to a sample between the ages of 16-40 in the UK and Ireland.

The design of the questionnaire will be simple but not basic, with no confusing or ‘trick’ questions. The use of simple language will be used to insure that any questions will not be misinterpreted.

3.7 Data handling

All data received from the participants will be treated confidentially and will not be used for any other purpose or shared with any third parties.

3.8 Data analysis

Questions were sent out via email to a large number of particiapnts, they were specially selected, depending on age range (16-40) and location.

The researcher specifically controlled where the questionnaires were being sent as they did only want to receive replies from UK and Ireland consumers. Keeping the research within in boundaries has prevented the sample on becoming to large or collecting information that could not be used.

Information that couldn’t be used for this study purpose would be from an individual aged under or above the requirements as this wouldn’t be viable from this study. Also individuals from other countries as this study is just testing the hypnotises in the UK and Ireland.

3.9 Data quality

As the sample used to collect the qualitative data for this researched has been kept small, it allows the researcher to pay special attention to the results.

The results will be analysed using excel, excel is a reliable and provides excellent validity to the results.

The results will be calculated into percentages to give a good idea of how many participants answered each question.

Each questions results will be displayed in a range of graphs, these include pie charts, bar charts, line charts and others.

3.9.1 Reliability

It was intended to keep the sample for this research purpose between 80-100 participants, this was to insure that every question answered could be entered into the excel database with ease, ensuring that the researcher did not miss any answers.

To make sure the results reliable, any answers send by participants that did not meet the requirements of age and location were safely disposed of. Special care was taken here so that the main sample was not affected and kept to the guidelines stated by the researcher.

3.9.2 Validity

For collecting the research there has been special attention paid to collecting both forms of qualitative and quantitative data, this is to insure that our results are fair as they will be analysed by a profession.

3.10 Ethical considerations

With a respect to ethics, each individual taking part in this research will be treated with an un-bias, understanding and fair attitude.

To ensure that this project treats all individuals who take part in it and form part of the research, each participant will agree to sign a consent form being signed before taking part in the research.

The consent form will give the participants ‘peace of mind’ that none of the information they share with the researcher will be shared with anybody else. All participants information will be safely stored, where they cannot be tampered with thought-out this study purpose. After this study purpose all information kindly collected from the questionnaire and focus group will be safely disposed of (shredded).

3.11 Chapter summary

In this chapter we have discussed how to the research required for this study purpose would be carried out

4 Results

4.1 Chapter introduction

In this chapter we will be examining the results interpreted from the data collected from our sample.

All results are available in the appendix chapter of this document, they will be referred to thought-out this chapter.

Interpretation – okay – you are going to add the statistics (nice, colourful charts I hope!) in an Appendix. But interpreting and reporting the results of No. 4 needs to be informative but above all, interesting. Feeding the anticipation I mentioned above is important.

So, for example, you found that more 20-year old females bought Nike trainers than 20-year old males after seeing a male-dominated Nike advert – wouldn’t that be a big surprise to the marketeers?

So that kind of stuff – beating the old stereotypes – finding something new is essential to the analysis and conclusion of the thesis.

4.2 (sub-sections reflecting the issues covered in your data, 4.2, 4.3 etc.)

4.3 Chapter summary

5 Discussion

5.1 Chapter introduction

54.2 (sub-sections reflecting your research objectives, 5.2, 5.3 etc.)

5.3 Chapter summary

6 Conclusions

6.1 Chapter introduction

6.2 (Sub-sections reflecting your research objectives, 6.2, 6.3 etc.)

6.3 Implications for research

6.4 Implications for practic

6.5 Revisiting the limitation

6.6 Directions for future research

6.7 Chapter summary

7 Appendices

7.1 Appendix One – Personal reflection on the research process

7.2 Appendix Two – Research ethics form and associated strategy

7.3 Original copy of questionnaire

Categories
Free Essays

An investigation of relationship marketing to gain competitive advantage in the Supply Chain Industry: A case study of Dhillon Dairy Ltd.

1. Introduction

1.1 Introduction and background

This was a case study approach on relationship marketing in the supply chain through Dhillon Dairy Ltd. Dhillon Dairy Ltd is based in the United Kingdom and is involved the dairy industry. As such it provides dairy food which is perishable in nature. Perishable foods have a short term life cycle. This means that the sales of these needs to be constant and be off the shelves as soon as possible. The dairy industry is a very competitive one. Not only does Dhillon Dairy Ltd have to compete with other British producers but also with other producers from the European Union who also have the rights into the British markets. The market has also become more competitive as it has shrunk due to the current global recession. The consumer spending power has shrunk. As such relationship marketing has become a tool for survival and not another marketing term. It has become a tool for survival which Dhillon Dairy Ltd cannot afford to ignore. The very nature of the British Dairy Industry is very competitive and its consumers are sophisticated due to the numerous choices available to them. There is a wide array of consumer dairy products upon which one can choose from. This chapter served to introduce the reader to the research study; it outlined the research question, its aims and objectives. It gave an introductory overview to all the chapters leading to the chapter’s conclusions.

1.2 Relationship marketing-an overview in the context of the research study

Relationship marketing approaches aim to realize that the buying and the selling agreement between a buyer and seller have the meaningfulness by providing a personalized, holistic perspective to develop stronger and long lasting ties. Alvey (1982) cited in Leonard (1983) noted the use of relationship marketing for the products that face high availability of substitutes in the markets. Relationship marketing was the most cost effective way to maintain one’s clients’ loyalty towards the product and achieve strong sales growth. Gordon (1999) noted that the traditional use of “marketing mix approach” has its limitations to provide constructive framework to assess and develop customer relationships in an industry sector and it should be replaced by the alternative approach of relationship marketing that purely focuses on customers and relationships rather than mundane price, products and Markets. Relationship marketing is also widely known as ‘relationship management’, it is connected to all the aspects of an organization such as its structure, culture, training and goals. Relationship marketing mainly focuses on the employee as a key marketer since he/she is the one who is responsible for the building and maintaining the relationships with the customers. There are various approaches towards relationship marketing, as there cannot be one particular way customer relationships could be built. Some of the most widely used and known approaches are discussed below, these approaches are mainly pertaining to the supply chain industry. These are namely satisfaction, retention, application and internal market. Under satisfaction the relationship marketing depends upon the communication and consumer requirement from existing customers. It usually happens by mutually beneficial exchange and authorization for contact by consumer. The amount of sales relative to that competing companies mainly determine or decide on relative price, quality of goods and services produced or sold through a company along with customer service by keeping particular purpose to customer satisfaction in mind. The group targeted through relationship marketing may be large, accuracy of communication and overall relevancy to the customer remains higher than direct marketing, causes low possibilities generating new leads than direct marketing and is limited to viral marketing for gaining further customers (Kotler et al, 2006). Under retention the main principle of relationship marketing is the preservation or maintenance of customers through different ways, resources and practices to keep track on repeated trade by satisfying requirement for those companies by all the way through mutually beneficial relationship. This method is now used by all companies for means of balancing new customers and opportunities with current and existing customers for means of maximizing profit margin and counteracting the leaky bucket theory of business’ in which new customers gained in older direct marketing and their kind if oriented business were at expenses of the loss of older customers.

Under retention relationship marketing and traditional marketing are mutually broad, private so that there is no need for a conflict between them. As situation varies, a relationship-oriented marketer has more choices to go ahead broadly at the level of practices. Most firms mix together the two approaches to match their portfolio of products and services like their range, collection and overall status into the market (Kotler et al, 2006). Under internal marketing, internal marketing refers to using marketing orientation inside the organization itself. Many of relationship marketing attributes determine what internal customers say and do. The attributes may like collaboration, loyalty and trust. Now a question arise who are the internal customersAccording to theory, every employee, team or department in the company is at the same time act as a supplier and a customer of services and products. An employee obtains services at a point in the value chain, which provides to another employee further along the value chain. If internal marketing is useful and get successful, which result that every employee will provide and receive exceptional services from and to other employees. It helps all employees to understand their importance of their roles and how their role relates to other employees. If this gets implemented well, it can encourage every employee to see the process in terms of customer’s opinion of value added and the organization’s strategic mission. It is claimed that an effective internal marketing program is a requirement for effective external marketing efforts (George, 1990).

1.3 Background and rationale

Companies are increasingly adopting a philosophy called the supply chain relationship marketing, in response to maturing markets, globalization and increased competition. The terms of supply chain relationships view customer relationships as key elements of the organization, which allows companies to maintain and increase sales of larger customers and to improve communication and better coordination of the relationship of buyer and supplier (Johnson and Selnes, 2005). This kind of industrial buyers and suppliers, which are characterized by a relatively long time frames, nonmarket forms of governance and a high level of commitment and trust, have received particular attention from researchers in recent years (Verhoef, 2003; Narayandas and Rangan 2004). These relationships are described as “a permanent basis for competitive advantage” (Day, 2000). But not all these conditions will lead to mutually beneficial results, with some firms in buyer-supplier relationship, both opportunistically with higher profits at the expense of the other side. Moreover, there has been relatively little empirical investigation of the effects of these relations in the field of efficiency and success (Kumar 2000; Hunt et al. 2002). Given these facts and events in mind, a research is scheduled for the study of relationship marketing in supply chain industry inUK – Dhillon Dairy Ltd. In light of the preceding the following were the aims and objectives of the research study.

1.4 The aims and objectives

The aims and objectives were as follows:

To investigate the impact of relationship marketing as way of gaining competitive advantage and achieve profitability in the supply chain industry with reference to Dhillon Dairy Ltd.
To carry out a review of literature linking achieving competitive advantage through relationship marketing and challenges faced by supply chain industry inUK.
To evaluate the way forward for relationship marketing for Dhillon Dairy Ltd in light of the finding.

In light of the preceding and in line with the aims and objectives the following was the research study question

Research study question

To what extent does relationship marketing tool has an impact as a tool in gaining competitive advantage in the context of Dhillon Dairy Ltd

1.5 Overview of the chapters

This study was split into the five traditional chapters that normally structure dissertations and theses. Chapter 1 (this chapter) was the introductory chapter explaining the need of the research, its objective and the logic behind choosing this title. The next chapter (Chapter 2) covered the literature review and also referred to previous such studies which were critically analyzed for their relevance to this research. The review was also used to support the data and empirical analysis of chapter four. Chapter 3 was the research methodology employed for conducting this study. It explains the techniques and tools employed for gathering data, its compilation and interpretation. It covered the Interpretivism paradigm of inquiry. Chapter 4, a key chapter, was devoted to analysis and findings of the study data, both primary and secondary. It unearthed the empirical findings which were conclusively discussed under chapter 5. Chapter 5 presented the conclusions and forwards recommendations. The following were the conclusive remarks for the introductory chapter of 1.

1.5 Summary

The introductory chapter served to highlight the importance of relationship marketing in customer retention. Relationship marketing has become more important now as the world in global recession. The research study was in light of Dhillon Dairy Ltd’s role in the supply chain in the British dairy industry. It was inductive in nature using the Interpretivism paradigm and the grounded theory methodology. It sought meaning from the data and as such did not wish to test or de-test a theory but sought interpretation and meaning. Relationship marketing emphasizes on customer retention. The next chapter set forth the literature review in line with the research’s study’s aims and objectives.

2. Literature Review

2.1 Introduction

The literature review began with the introduction of relationship marketing as a concept. Various definitions on crisis were given. This chapter also gave various definitions as to the meaning of relationship marketing. The researcher also posited forward their definitions relationship marketing in light of the various academic definitions and the contextual settings of the literature review. Relationship marketing was used as a means concept and not as a test. It was used as a means to an end and not the very end in itself as the researcher did not intend to test or de-test a theory but sought an understanding thorough the inductive means. In the inductive world of reasoning meaning is drawn from the observed world and that meaning is held as an understanding. The inductive world argues that the world outside and its nature of reality is too complex for the human level of understanding. Thus the inductive seeks to grasp and understand the nature of that reality. The research study used the grounded theory approach to understand the interpretivism’s nature of reality of the world in terms of relationship marketing with direct reference Dhillon Dairy Ltd within the realms of the supply chain. As the grounded theory process began in the literature review. This meant that the selection process of the grounded theory began by splitting the literature review in the following two:

Relationship marketing
Supply chain

This was the beginning of the grounded theory process in the literature review. As the literature review gathered momentum varies patterns and emerging themes formed the coding process that was then realized in the form of questionnaires that were used in the empirical data and analysis of chapter four in light of the research’s study’s aims and objectives. The literature review was set as follows.

Part A

The literature review-relationship marketing

To gain the media attention seems to be the motto of the today`s accelerated world this most frequently tends to overlook the vital ingredient of the marketing such as the use of existing relationships with the customers. This is quite ironic to the fact that marketing is mainly based on the relationships with people and their reactions, views and opinions. In late 20th century direct response marketing campaigns were conducted specifically emphasizing on customer satisfaction and retention rather than conservative sales and revenue generation approach. These marketing campaigns evolved a form of marketing called Relationship Marketing that have customer orientated focus and recognizes importance of creating long term loyal customers for an organization. Relationship marketing targets current set of customers rather than penetrating into different segment or diversifying into various sectors. Relationship marketing is the process of attracting, maintaining, and enhancing relationships with key people in the market (De Young, 1998).

It is easier to build long term relationships with the current customers through developing strong bonding amongst current customers rather than diversifying into a different market segment. Relationship marketing is a cost effective tool in terms that it saves costs of creating public awareness, advertising and acquiring new customers. The old marketing mantra for success, namely to have the right product at the right place at the right time, therefore, the supply chain management has become increasingly popular in marketing and management of marketing channels. At the same time, however, also shows that the interaction between the two disciplines.

In markets with a reduction of life and change the balance of power from suppliers to customers by providing information and what they want, when and why. Recently, the active role of clients in the process of creating value has been emphasized (Vargo and Luscha 2004). Indeed more emphasis has been placed upon the value of the goods or services created by the customer and their use, making their own needs. With the use of products or services, the client continues the process of commercialization, the process of creating value.

Marketing strength lies in understanding the forces that influence how customers perceive the value (and gain knowledge of customers), to detect the needs of different customer groups (market and customers), translate them into packs of products and services to meet different needs (personal development products and services) and marketing packages through customer suggestions (price, brand, communications, marketing). An important element of current conceptualizations of the strategic role of marketing is Customer Relationship Management (Zablah et al. 2004). Relationship Management is a process which means that the macro-economic growth and market “information to build and maintain a portfolio” to maximize the benefits of relationships with customers. De Young (1998) argued that relationship marketing was all about maintaining and retaining the relationship with one’s customers that is one’s client. It is all about customer retention. It is all about building constructive relationships with the selected or target audience. This can be viewed as a selective target marketing strategy. All marketing strategies must be in line with and promote the organization’s mission statement. They must promote the goals, aims and vision of the mission statement. De Young (1998) put forward five ideals which are the key to successful relationship marketing:

Coordinate communications

Effective communication is vital in any business world. As such the right message must be communicated at the right place, at the right time using the appropriate medium.

Know your elected officials.

Here one needs to identify all local municipal and regionally elected officials in one’s area. Collect basic information on their background and interests.

Get organized

An organized marketing department ensures that all is done on time, at the right place. This means that deadlines and targets are duly met

Develop a communication plan.

This ensures that the target audience for customer retention is reached using the most appropriate and effective medium

Conduct effective legislative visits.

Company law recognizes companies as separate legal entity. This means that companies are legal personas bound by law. As such Dhillon Dairy Ltd is bound by the legislative laws ofEnglandandWales. As such it is essential for Dhillon Dairy Ltd to be aware of these laws and the council by-laws as well.

De Young (19980 argued that it was vital to send appropriate newsletters to the target audience Indeed personal visits and written communications must be planned as part of a continuous, year-long dialogue (ibid). He argued that the pictures should be included in these messages as they are more effective. People generally respond more to pictures than endless paragraphs of words and figures. Pictures grab the attention and the imagination of the would-be reader. The mind generally remembers pictures more than words. Visuals are a more effective form of medium. Irani et al (2006) argued that mechanisms for feedback must be built. Specific message stimuli must be taken as a vital ingredient on the consumer perceptions. As such the Dhillon Dairy Ltd must build easier to understand messages and adopt the appropriate medium for the communication means. Indeed focusing on relationships may provide a way to be more effective and efficient with available marketing resources (ibid). They argued that one should use “public value words” that have meaning and strength. As such academic words or phrases that may have been used in the past should be phased out to reach a more urban and needs-focused clientele (ibid). They argued that public relations were important in relationship marketing. They drew this on Grunig’s (2001) that ‘…public relations contributes value to an organization when its communication programs result in quality long-term relationships with its strategic publics–also known as stakeholders” (p 25).

Boldt (1987) argued that relationship marketing was important in the service industry. As such customer retention is vital. Retaining customers is less expensive than acquiring new ones. It can be costly to acquire new ones. It is the profitable customers that need to be retained. Long term relationships are essential and not the short term relationships. Long term relationships are a key asset to any firm. They are part of the assets in the balance sheet. They are part and parcel of goodwill. They increase the value and reputation of a firm or an organizational entity. Boldt (1987) cited De Young by arguing that the process of turning customers into long terms clients involved the following:

Internal Marketing.

This is the most important factor in gaining loyal, long-term clients is PFS (personal, friendly service). Position descriptions and training should place emphasis on the equal importance of technical duties and marketing skills.

Perception Management.

This is practice of actively listening to clients and involves learning what clients’ value and providing need-fulfilling services.

Relationship Pricing.

This is the practice of rewarding client loyalty through publicized financial incentives (ibid). As such the the key to success is by recognizing the nature of the change and helping one’s clients to adjust to the changes in the socio-economic landscape (ibid). This is true for Dhillon Dairy Ltd asBritainwas officially in recession at the time of writing up this research study. The consumer spending patterns have changed due to the shrunk economic spending power. As such Dhillon Dairy Ltd has to adjust and help its customers adjust to the changes in the economy. It is vital especially now for them to retain their existing clients especially the profitable ones if they are to survive the onslaught of the recession. Lee (1988) put forward five steps in targeting the audience:

identify the target audiences according to mission and goals
select geographic areas
prepare demographic profiles
one must include their lifestyle, psychographic, and behavioral profiles and
identify life events and health status of audience.

Boldt (1987 saw marketing and relationship marketing from Fischer’s point of viewed where marketing was seen as ‘…a combination of activities required to direct the flow of educational programs and services from the higher education institution to the consumer in a form, place, and time, and at a price that is best able to satisfy the consumer’s needs’ (p167). Boldt upheld the six Ps of marketing in this view:

Source: Boldt (1987) p 2

Promotion

This includes the creation of the appropriate and consistent message or image to the decision makers and the targeted market

Place

The actual location of the market(s)

People

The targeted market(s) or the end consumers/clients

Price

The competitive price of the product or service

Product

The actual product or service

Pacesetter

The market setter or market leader in terms of the changing trends (ibid).

As such understanding market is everyone’s responsibility. The following three serve to guide organizations in light of the above six Ps in order to develop a sound relationships marketing program and thus ensure customer retention:

Clarify one’s mission and identify one’s constituencies

This entails clarifying the organizations goals and objectives in light of the targeted market

Implement an ongoing exchange process with important stakeholders through dialogue and planning

This acknowledges the important role of the stakeholders and the need for their constant involvement and participation

Communicate, promote, and evaluate success with targeted constituencies (ibid).

Marketing is viewed as strategy for giving consumers information about one’s products or services (Maddy and Kealy; 2001). They were of the view that another way of customer retention was through integrated marketing where one becomes involved in the client’s entire strategic planning process and then provide communication solutions and executions. Indeed an understanding of how consumers get information about products and services and how marketers can manage that information for maximum effectiveness is the heart of integrated marketing (ibid). They also that branding and a good brand help in relationship marketing through customer retention. They argued that a brand is a promise of value. This is largely because the effects of image marketing and therefore branding build over time, consistency is critical. Every piece of communication should support the brand and be consistent over time. They argued that consumers are not homogenous and unique as each and every one of them has different taste, different aspirations, different family structures and different incomes. As a result one marketing model for all will not work (ibid). They further noted that relationship marketing is event driven; it is about using marketing techniques in order to retain the customers.

As such it involves the use of methods and tactics in order to develop long term relationship with customers with the view of retaining the latter. As such an organisation must exceed customer satisfaction with the view of retaining them and develop a healthy relationship with their customers. As such the traditional transactional marketing involved the organisation focusing all of its marketing efforts on attracting the customer for one off sales. However customers who are repeat end up spending more as they are happy with an organisations services or products. Customers’ needs and wants are dynamic and change with the market trends and movements. The following are the methods used to monitor customer satisfaction:

Questionnaires
Focus groups
Personal interviews
Mystery shoppers
Customer complaints
Suggestion boxes
Online surveys
General comments (ibid)

In order to retain customers one must keep up to date with the needs of one’s customers. Customer needs do not always remain static and always change. Adapting and changing along with these needs would indeed help the organization develop the relationship it wants with the customer. The benefit will be increased profit, market share and brand awareness (ibid).

Maddy and Kealy (2001) argued that marketing is shifting from push to pull model as consumers are taking control on what they like and how they like it. As such the probability is likely that consumers are now less likely to respond to media driven and market strategies. As such firms are now turning to relationship marketing in order to develop a personal relationship with their clients in order to develop a long term loyal customer base. This entails creativity on behalf of the firm and cost effective strategies. They put forward a new marketing model called the ‘Learning Relationship’ with each customer. They noted that every interaction with the customer is an opportunity for the business to learn more about the former and their individual motivations. It entails learning more about the customer through every stage of their business life cycle. The motivation would be for the customers to stay loyal and faithful to the company. Maintaining a customer database is the key as one can build an understanding of the customer’s behavior and spending patterns. The Learning Relationship is realized through the following stages:

Understanding the visitors behind the visits
Segment customers by their behavior
Creating specific content to meet one’s customers’ needs
Measuring one’s success (ibid)

They argued that a firm must therefore develop and build brand management and recognize and reward customer loyalty. They argued that the firm must reengage the inactive customers. As such the firm must identify customers who have not paid a visit purchase and try and lure them back with offers of discounts amongst other things. They argued that firms must also aim to increase customer loyalty through improving customer service and the increase in up-sell and cross-sell opportunities. This ensures that Relationship marketing works and is successful in maintaining customer retention through the Learning Relationship. They further argued that the traditional marketing model has become obsolete as they world has shifted towards a commoditized view of the world. As such the marketing advantage has moved from the traditional one where success was measured on one’s ability to reach many customers through mass media to that on which that has high levels of insight about consumers’ preference and behavior. They argued that the business model must move from the traditional transactional model to that one where of learning relationships that see customers into a long term relationship with the firm as the source of the competitive advantage (ibid). Hansen and Thurau (2000) argued that relationships with clients or customers must be viewed as capital assets in the balance sheet. They argued that long term relationships are built on personal and social bonds. As such these personal and social bonds must be strengthened through the integration of the customers in the value production process. Retention is viewed in terms of customer loyalty and repeat purchasing behavior. Customer retention leads to increase in profits and cost reduction. Customer satisfaction is viewed from the customers’ emotional and emphatic needs. The element of trust exists where the customer believes and trusts one’s products or services as reliable. Commitment is viewed as an emotional response by the customer in the view of maintaining a long term relationship. This long term relationship is vital for a firm’s survival and success. The price of the product or the service must be reasonable and be competitive. The distribution methods must ensure that the products or services must be nearer to the end consumers or customers. They argued that relationship marketing is dynamic and not static. They noted five phases under relationship marketing life cycle. These are namely awareness, exploration, expansion, commitment and dissolution. They argued that the relationship marketing life cycle is not a deterministic model of prediction as they vary from practice to practice.

Hansen and Thurau (2000) argued that relationship marketing is not only concerned with the outside customers but also with the internal part of the firm. They argued that employee satisfaction and well being is a must for relationship marketing with the outsiders to become a success. Thus internal relationship is a must. This is viewed as internal marketing. Internal marketing is of value in cases where customer service is an essential component of the firm’s economics. This is particularly relevant to the service industry where the performance of an employee is evaluated (for example, hairdressers, mechanics, restaurants). Furthermore the stakeholder view holds the firm accountable to all of those in which it has direct or indirect influence through its activities. Hansen and Thurau (2000) noted that there are three kinds of reference objects in relationship marketing. These are namely the employees, branches and companies and lastly products or brands. As already good relationships with employees are the foundation of any good business model. They are of particular importance in the service industry. They argued that corporate identity of a firm is the degree upon which it is able to communicate with its customers through its branches or companies or subsidiaries. They posited that the key to successful international relationship marketing is the recognition of the various forms of culture. As such firms must be ready to learn and appreciate other different forms of culture and must be willing and adapt to those cultures. They must also acknowledge transnational where the customer and the buyer are located in different countries (ibid). They argued that the larger social and physical difference between the buyer and seller may lead to low levels of trust between the two. They noted that the quality of relationships in transnational is lower than that on the domestic level. They noted that relationship marketing has mainly focused on the suppliers’ side and not the customers’. Little attention has been made on the customers’ willingness to stay committed in the relationship. As such the focus must be shifted and emphasis placed from the customers’ perspective. It is after all the customer that the firm needs. Customers are the engine and the source of survival for any commercial firm. It therefore makes more sense for relationship marketing to be customer orientated per se. They also noted and argued that another aspect of relationship marketing that has been ignored is its practical relevance. Implementation means ‘… the adaptation and modification of a company’s value base, strategies, structures, and reward systems in accordance with the fundamental axioms of relationship marketing’ (ibid; p16). They also argued that firms have tended to ignore the lost customers, the ones who were with the firm for a long time and for some apparent reason decided to leave. As such regain management seeks and complements relationship marketing by focusing on these lost customers.

Customer loyalty brings many benefits to the operating firm or business. Firstly it brings certainty in terms of purchase and thus ensures that element of predictability. This signifies stability and can be evidenced by the customers’ habitual purchase or the customers’ immunity to the competitors’ activities (ibid). They also argued that thus certainty can be achieved through customer feedback and can only be realized through the feedback of those customers who are and have been loyal through the long term and instead of the short-term. Thus certainty can only be attained by long term customers who have established a long term relationship with the firm and have that element of trust between the two entities. They argued that is those long term loyal customers who are prepared to complain that provide the true barometer of the marketing conditions. Those long term customers, who are prepared to complain, fill in the questionnaires and the customer satisfaction surveys are the source of customer retention. They in a way help in building customer satisfaction models (ibid). They held the view that increased feedback would indeed the marketer more scope and more in depth into the market analysis. This process also gives more trust between the two and seals the long term relationship. The firm that is willing to listen to its clients and meet its clients’ complaints, needs and wants is the source and foundation of a true relationship marketing model. They argued that close relationships with customers may be a source of disadvantages in the sense that this may lead to complacency on the firm, carelessness and inactivity on the firm. The quality of loyalty is seen through customer satisfaction. Customer satisfaction is realized when the customer’s needs and expectations are met or are met beyond the expectations (ibid). As such loyalty and satisfaction cannot be treated as one and the same. Loyalty may be missing even if there is customer satisfaction as they may be barriers to the whole process. For loyalty can be bought through such incentives as bonuses, coupons, discounts, price discounts and other monetary offers. Indeed this is different from customer commitment which cannot be bought through monetary means but can only be earned through the long term process. They argued that loyalty is no guarantee for future success especially the bought one the relationship and its ongoing process is determined and influenced by the monetary incentives. Genuine loyalty is the one that counts for its stands the test of time as the customer would be willing to stand by the firm even if it makes a mistake. They asserted that customer loyalty is indeed an asset to the business. As evidenced in the literature review, this assertion has been echoed by other authors as well. Customer retention and relationship management reflect the ‘goodwill’ of an organization or firm. This is a worthy asset which can add to the long term value of an organization. This is particularly true for Dhillon Dairy Ltd as the United Kingdomis still in recession and as such every penny of consuming spending counts. The consumers’ spending habits have to a certain degree been altered by the recession and many dairy firms are going under. Kerrin et al (2003) argued that relationship marketing is easier to understand but harder to do. They argued that successive relationship marketing links the organization with its customers, employees, suppliers, and other partners for the mutual long term benefit. In terms of selling the product relationship marketing starts from the purchase of the product right up to the after sales service. It is individualized in its approach. As such a firm’s marketing program needs to connect the firm with its customers through the careful promotion of its products, price, and place (ibid). The next part of the literature review covered the marketing supply chain in the context of this research study. Relationship marketing and the supply chain are linked together as they all seek to promote customer satisfaction by producing and delivering the right goods or services at the right place, the right quantity and at the price. It is all about customer satisfaction. Customer retention is now a key aspect of any business. Businesses can no longer afford to ignore it. It has replaced the traditional marketing model and has become the source of advantage for any business. Customer retention and relationship marketing is all about satisfying and retaining the profitable customers who are also loyal customers. Businesses desire these aforementioned customers who are faithful and committed to the firm with the view of maintaining long term relationships. Long term relationships bring stability to the organization. Long term relationships also bring in stability and predictability on consumer behavior and spending patterns.

Part B

The literature review-the marketing supply chain

Kerrin et al (2003) defined the supply chain as a series of firms that perform activities required to create and deliver a good or service to consumers or the industrial users per se. The supply chain includes the producers, the retailers, and the wholesalers. As such supply chain management refers to ‘…the integration and organization of information and logistics activities across firms in a supply chain for the purpose of creating and delivering goods and services that provide value to consumers’ (p204). They argued that what makes the marketing supply chain unique was its ability to integrate and make full use of the modern day information technology that allows the company to integrate and share information in terms of delivery, price, quality, its specifications, transport scheduling, and inventory and facility management. Indeed this is appropriate for Dhillon Dairy Ltd as it is involved in the perishable foods industry where high turnover is the emphasis as perishables expire if not moved off the shelves on time. Furthermore refrigeration is costly and thus this increases electricity bills. Therefore quick turnover on the perishables is a must in the Dhillon Dairy Ltd as it is in the dairy industry. The Canadian Supply Chain Sector Council (2006) described the role of and the job of a supply chain manager in the following manner:

‘…supply chain, plan, organize, direct, manage, evaluate, and are responsible for the activities of establishments and departments involved in sales and marketing of supply chain services. This includes the identification of opportunities for operational improvements. Management specializations in sales or marketing functions may be present in organizations depending upon the nature, size and complexity of the organization’ (p4).

It can be argued that this definition is multi- national as it encompasses a global reaching definition on the meaning of the supply chain and the role and description of the supply chain manager. It can also fit into the British context. It is an all round definition. This research study took this definition in the light of the study. As seen in the definition supply chain integrates with other department and its role is one that must a strategic fit with the aims and goals of an organization. It must be in line and be aligned to the mission statement. It must be congruent with the mission statement. It then follows that Dhillon Dairy Ltd supply chain must be strategic fit with the organizations’ mission statement, the goals and the objectives. It involves the planning, organization, the evaluation and the evaluation. As seen from the definition it involves working hand in hand with other marketing departments and also the identification of further opportunities in terms of markets, new markets, opportunities and growth. The Council of Supply Chain Management Professionals argued that ‘it encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all Logistic Management activities. Importantly it also includes coordination and collaboration with the channel partners, which can be the suppliers, intermediaries, third party service providers and the customers. In essence Supply Chain Management integrates supply and demand management within and across companies’ (Menzter and Gundlach, 2009; p5).

Market conditions that firms with flexible supply chains are characterized by volatile demand and high demands on the variety (Christopher, 2000). The trend of movement in many industries today pushed lean and flexible supply chain management, in the foreground. In markets where customers perceive little difference between products and the reduction of brand loyalty, time availability is an important factor for success. But the alluring promises of supply chain management, which aims to reduce the overall level of resources required to provide the necessary level of customer service, should not overshadow its limits: the management of the supply chain is an effective balance supply and demand, but not to answer the question from customers as it helps the company to find what the customer perceives as valuable, and how it is perceived customer value can be translated to the value of the proposal for customers. In other words, the effectiveness of the supply chain does not increase the price and customer satisfaction (Rainbird, 2004). Kerrin et al (2003) argued that it is important to link the supply chain with the firm’s marketing strategy. They argued that the modern day supply chain follows the following three steps:

Understand the customer

The firm must understand the customers’ needs and wants according to the segmentation that they belong to. Indeed this can be linked to relationship management and its desire to fulfill its customer retention as a marketing strategy. Understanding these needs and wants as per the market segmentation would enable a firm to have a clear cut and refined view of its customers’ needs and wants. This will help the company in redefining its efficiency in meeting the customers’ needs and wants.

Understand the supply chain

They argued that a company must understand what the supply chain is designed to do well. Supply chains vary as some can emphasize on the delivery and being responsive to the customers’ requirements and some emphasize on the efficiency on supplying the products at the lowest cost.

Harmonize the supply chain with the marketing strategy

The supply chain must work hand in hand with the marketing strategy. They must both complement each. The supply chain could do damage if it does not promote the marketing strategy. As such the supply chain must be redesigned in order to complement the marketing strategy. Another alternative is for the marketing strategy to be redesigned in order to fit into the supply chain. They argued that there is no one best supply chain for the organization. All supply chains are ‘appropriate fit’ for the organizations. They argued that the best supply chain is the one that meets the customers’ needs and wants of the segment being served and thus complements the company’s marketing strategy. They further argued that supply chain managers are often called to make tradeoffs between efficiency and various elements of the supply chain. The logical logistics of a supply chain is to deliver the goods or services on time and efficiently using the minimum costs. Indeed customer service and satisfaction is the central core of any supply chain in terms of time, dependability, communication and convenience (ibid). As such the role of the logistics manager is to balance and meet the aforementioned four and try and minimize the costs at the same time. In the supply chain, time refers the order cycle or replenishment time for a product. The current emphasis on the supply chain is to reduce order cycle time so that the inventory levels of customers may be minimized. Supply chain is the end of it or output which the service is being delivered to the customers (ibid). They argued that every company is a member of one supply chain or another. They viewed the supply chain as ‘…it essentially a series of linked suppliers and customers in which every customer is, in turn, a supplier to another customer until a finished product reaches the ultimate consumer’ (p10). Supply chain managers’ play an important role in the marketing channel and distribution. Their major responsibilities include trucking, airline, shipping, railroad and shipping companies, the freight insurance, the operation of distribution centers, the management of finished goods and inventories and order processing for the sales. In the marketing area there is the ‘push’ and the ‘pull’ strategies. The ‘push’ strategy is a promotional mix that channels the members to encourage them to order and stock a product. The ‘pull’ strategy is directed at the ultimate consumers to encourage them to ask the retailers for the product (ibid). In the former it starts from the manufacturer the consumer. In the latter it starts from the end chain from the end consumer to the manufacturer. McFarland et al (2008) came up with the notion of the supply chain contagion in which they defined it as the spreading or imitation of behaviors from one inter-firm relationship to other inter-firm relationships. They argued that in such cases firms treat other firms in their supply chain as they have been treated themselves. In order words they pass the reflective behavior onto other parties in the supply chain. Sometimes wholesalers or retailers are likely to imitate the behaviors of their suppliers and pass in onto their own customers. They argued that contagion can occur with or without the knowledge of the affected parties. They posited that managers and those on the periphery boundaries of the supply chain should be made aware of the ripple effects that their actions have on the supply chain. They noted that high levels of contagion occur under the conditions of high environmental uncertainty and with higher frequency of contact and greater perceived similarly between the individuals within the realm of the supply chain (ibid). McFarland et al (2008) argued that although contagion may take the form of any number of inter-firm behaviors, one finding they came upon was that the downstream influence strategies used by manufacturers with their dealers were imitated by these same dealers with end customers. They argued that managers and the subsequent boundary-spanning staff who are indeed aware of supply chain contagion effects should be better able to influence the behavior of channel partners strategically and as such realign their own unintended imitation of other organizations within their supply chain.

Kurtz argued that in terms of logistics, a good supply chain needs to be in place. According to Kurtz the supply chain which is also known by the name value chain is defined as ‘…the complete sequence of supplies and activities that contribute to the creation and the delivery of the goods and services…it begins with the raw material inputs for the manufacturing process of a product and then actual proceeds to the actual production activities’ (p12)

As such the final link in the supply chain is held as the movement of the finished products through the marketing channel to consumers (ibid). Kurtz noted that each of the links and the movements along the supply chain are to benefit of the end consumer as the chain enhances the value of the finished product through the various inputs made by the members of the supply chain. Indeed the supply chain seeks to maximize consumer satisfaction as customer satisfaction arises from the perceived value of the finished product by the consumer. As such businesses seek to maximize the customer satisfaction through two ways namely upstream management and through downstream management. The former includes the managing of raw materials, inbound logistics, the warehousing and the storage facilities. The latter involves managing the finished product, outbound logistics, the marketing and sales and customer support and after sales services (ibid). Various methods exist for managing the supply chain. These include high tech radios, frequent meetings. The use of carriers can be used in the supply chain, moving the products or services from the manufacturer right up to the hands of the end consumers. There are two types of carriers namely the private ones and the contract carriers. The former do not as a norm offer their services for hire. They provide transportation services for solely internally generated freight. The latter are the transport for hire and normally do not offer their services to the general public. They offer contractual agreements and operate exclusively for a particular industry, for example for the motor industry, the chemical industry, the furniture and fittings industry. They operate and specialize under their specialist marketing segmentation. They tend to operate under looser regulation when compared to the common carriers (ibid). Indeed the choice of a carrier has a direct effect on the supply chain and the value added towards customer satisfaction and customer retention. Supply managers must evaluate the choice of the carrier in terms of their efficiency and costs and in terms of whether this actually promotes the strategic aims and the objectives of the mission statement.

Menzter and Gundlach (2009) noted that the trend for supply chain and its management gained momentum in the 1980s. Supply chain management involves the logistics, the coordination, the sourcing, the procurement and the conversion. They noted that the principles of the supply chain and the supply chain management share the common disciplines and practices common to the marketing discipline. As such they bridge and form a mutual common of understanding with other marketing disciplines. They noted that the developments in marketing and the growth in new thinking has realized these commonalities and grasped them. Marketing scholars have ingrained the core principles that underlie within the supply chain which holds supply chain and integration as the heart of the management core. Indeed this is two ways as the scholars in supply chain have benefited from the knowledge developed by marketing discipline in general through the recognition that inter-firm and interpersonal relationships can be grown and studied through the study of inter-organizational activities. As such there are indeed mutual benefits for the benefit of both parties. They argued that despite these benefits, the marketing literature and research has not made much progress in the recognition of the interrelationships between marketing and the supply chain management. Brindley (2004) noted that the elements that are apply to relationship marketing can easily be transferred to supply chain management field. Relationship marketing is geared towards customer satisfaction and the market place and is also concerned with other relationships in the supply chain in effort towards the maximization of customer satisfaction (ibid). As such relationship marketing and supply chain management integrate and bind the elements such as quality, customer service and marketing into a brand and also seek to reduce organizational risk.

Brindley (2004) noted that relationship management and the supply chain management share similar attributes and the means and ways of achieving their goals and objectives. They all purse one goal, which is customer satisfaction. A customer who is satisfied can be transformed into a repeat customer and in the long run a retained loyal customer Relationship management entails the knowledge and understanding of other players in the supply chain with the end goal of customer satisfaction. As such both relationship management and the supply chain management seek to alleviate organizational risks and these risks may be alleviated through the supply chain partnerships. Brindley (2004) argued that the supply chain can longer be seen in linear format of input and output model but now takes a variety of shapes and models. The competitive world of the service industry demands customer relationships and ‘emotional’ relationships if an organization has to survive. The supply chain can concentrate on its effectiveness as a whole as the total supply chain or it can concentrate on the attributes along the chain. The following are the dimensions that a supply chain normally operates under:

Customer attitudes
Global competitive environment
Industry structure
Organization
Customer/consumer attitudes (ibid).

As such new strategies need to be constantly developed if the supply chain has to persist in the ever-changing environmental landscape. The above mentioned contextual factors are never constant as they are dynamic and change with the environment. Thus the supply chain and relationship management must be proactive and not reactive to the changes. It must be adaptable and flexible and be abreast with the changes in contextual settings. The changes in the contextual factors can signify uncertainty and organizational risks. As such the key is to develop new relationships in the supply chain, strategic relationships that promote the organization’s mission statement towards its survival. All firms seek to survive. The nature of these relationships is the foundation stone for new companies and an enhancement for the more experienced ones in the industry. Trust plays an important role. Trust is the foundation and engine of all commerce. Without the element of trust the wheels of commerce can grind to a halt. Trust plays an important role in relationship management and indeed in the supply chain. If trust is broken down along the supply chain, the whole chain can come to a grind, a halt as the linkages would have been broken. This is truer in relationship management. Trust is vital in any relationship building process. Once that trust is broken, the relationship can be hard to rebuild. Long term customers may defect if the trust has been broken down. It is hard to regain the trust of a loyal long term customer if that trust has been breached. It can be costly to win these customers. At the worst they can defect to one’s competitors. A lost customer is a lost business. In addition the ‘word of mouth’ of an unhappy customer can be damaging as they will tell their friends, colleagues and partners in the supply chain or the business circles. This can be more damaging if the customer is a dominant corporate client. Openness and trust are vital in relationship marketing and also in the supply chain management. Brindley (2004) drew upon Morgan and Hunt (1994) who laid emphasis relationship marketing as having four domains or partnerships. These are namely:

The buyer
The supplier
The lateral
The internal partnerships

Brindley (2004) argued that markets with few supply chains can cause problems and disruptions. The fewer the members in the supply chain, the more the risks of disruption. This has a negative impact on relationship marketing and also on customer satisfaction and customer retention in the short and long run. Without the role of risk management, the supply chain may fall if it does not take the elements of risks and risk management into focus. Without this awareness, the supply chain may fall and be less efficient as it will not have taken a risk assessment and risk management into account. This may lead to customer dissatisfaction and customers mat defect to the firms’ competitors who may have a stable and sound supply chain in place which takes into account the element of risks and makes appropriate cover for such contingencies per se. As such the supply chain has human elements which need to be taken into account in terms of risks and risk management. The following are the elements are integral part of risks assessment:

Risk perceptiveness and preparedness
Gender and age influences
Group influences

As such accepting risks in the supply chain means the acknowledgement of risks, the element of uncertainty and the ways and means that these risks can or could be eliminated. Risks in the supply must be properly taken into account. An organization that does not take these environmental, societal and financial risks into account is mostly likely to be heading towards an untimely downfall. It is likely to face a corporate demise in the short run or in the near long run.

Harland (1996) argued that the principle of networking can improve and complement the supply chain. Companies are no longer independent entities acting in their own business environment. The traditional model of a company has long since been dispersed with. Companies no longer operate in an insular environment. Globalization has made the world into one sphere which is known as the ‘global village’. As such companies now operate in intricate cobweb environment which is independent on each other for survival. Harland (1996) described the supply network as a set of supply chains describing the flow of goods and services from the manufacturer to the end consumer. As such one important part of this networking is the structure. The components of these networks comprise of the actors, the resources and the activities. Harland (1996) drew this on Nishiguchi’s (1994) research on the Japanese companies who have hierarchal their suppliers, namely the first tier or primary supplier or providers who provide the systems rather than the components. This makes the buying companies to be more dependent on the suppliers. The next passages covered the concluding remarks for the literature review.

Conclusion

The literature review set out to review the contemporary literature that covered relationship marketing and the supply chain and supply chain management. The supply chain is known in some circles as the value. Value is added to a product or service along the supply chain starting from the manufacturer right up to the finished product or service as it finally reaches the consumer. The actors or participants in the value chain or supply chain as it is commonly referred as have a vital role to play in this process. Trust and openness play an integral and essential role. If trust is breached the supply chain may collapse. Trust oils the wheels of commerce. It is one of the very foundations of commerce. The actors in the value chain are inter-dependant on each other for survival. The modern day concept of the business no longer operates in an insular isolated and independent corporate environment. It is dependent on other entities for survival. These entities are part and parcel of its supply chain. Customer satisfaction is the ultimate goal of both the supply chain and relationship management. A satisfied or happy customer can be transformed into a repeat customer in form of repeat sales. This in the long run means customer retention. Relationship management and supply chain management are intrinsically interlinked. They use each other and build upon each other’s strengths and goals. The literature review made a linkage between the two and managed to link them as one in terms of their goals, objectives, themes and attributes in light of Dhillon Dairy Ltd. Dhillon Dairy Ltd, is in the dairy industry as its name entails. It is in the dairy industry supply chain within theUnited Kingdomcontext. The literature review mapped out the perimeters and boundaries for this research study. It is from the literature review that the grounded theory process of collecting data began. This was through the coding of the themes that emerged from the literature review. These coding themes were raised in the form of questions that were raised as questionnaires. The literature review supported the data and empirical analysis of chapter four. This made the research study merge the theory with the practical aspects as raised by the questionnaires. This was the originality and strengths of this research study, the merging of the theoretical aspects with the practical aspects. The research study was inductive in approach seeking meaning from the data. In the inductive logic of reason, meaning is sought from the data. The meaning emerges from the data. Data and interpretation of it go hand in hand until mutual interpretation of it is reached and understood. Mutual meaning and understanding of it is the distillation process in the grounded theory process. Saturation is when the condensation and distillation process has reached its final point such that mutual meaning is arrived at. Critics of the grounded theory argue that it is complicated process which results in theories that do not go anywhere and are grounded in data, hence the grounded theory. However one does not have to follow all the rigid process of the grounded but choose its ‘appropriate fit’. The next chapter set out the methodology and methods.

3. Research methodology and methods

3.1 Introduction

This section began with a brief description of the objectives of the research meant to meet with links made to the literature. This helped in explaining the reasons for the research approach adopted. The research philosophy section explains how knowledge is developed in the study and the nature of that knowledge according to the views and beliefs of the researcher in relation to the business and management studies involving human aspects. The researcher’s research philosophy has a direct bearing on the research approach and strategy as well as the data collection methods that are described therein in the section. The section included an explanation of the time horizon selected to perform the research and the sampling methods used. The section concludes by portraying how the research could be classified in terms of research methods used and the general advantages and disadvantages of belonging to the described paradigm. As mentioned above the topic and the questions of research shape the design by means of influencing the selection of the approaches and techniques. This is stated by Maylor and Blackmon (2005) as “a major influence on your research design will be the topic you are studying and the rules for doing research on that topic in general. These rules deal with the logic of the research, and describe what research questions you can ask and what methods you can use to answer them.”

3.2 Research Philosophy

The two main researches are paradigms or philosophies and these two paradigms can be labeled as Positivist and Phenomenological paradigms.

Positivism is a philosophical concept, and refers to a particular set of assumptions about the world and about appropriate ways of studying it. Positivists see ‘society’ as more important than the ‘individual’. Positivism is an epistemological position that advocates the application of the methods of the natural sciences to the study of social reality and beyond. It relies on the deductive laws of ‘cause and effect’. It applies the laws of deduction as it sets to prove or disprove a theory.

The Interpretivism or phenomenological paradigm is based on qualitative data. This is subjective in nature and follows humanistic and interpretative methods. Interpretivists share a view that the subject matter social sciences ‘people and their institutions’, is fundamentally different from that of natural sciences. The study of the social world therefore requires a different logic of research procedure, one that reflects the distinctiveness of humans as against the natural order (Von Wright, 1971). Interpretivists believe that unique and trusting relationships should be established with those being studied so that a true picture of their lives is constructed. It is aimed at capturing the essence of the phenomena and extracting data, which is rich in explanation and analysis, consequently validity is high under such a paradigm (Collis and Hussey 2003).

Guba and Lincoln (1994) held that:

‘…a paradigm may be viewed as a set of basic beliefs or metaphysics that deals with ultimates or principles. It represents a worldview that defines, for its holder, the nature of the ‘world,’ the individual’s place in it, and the range of possible relationships to that world and its parts. The beliefs are basic in the sense they must be accepted on faith and there is nowhere to establish their ultimate legitimacy. Inquiry paradigms define for the enquirers what they are about and what falls within and outside the limits of legitimate inquiry’ (p200).

Wass and Wells (1994) held that:

‘…for positivism, the etic ‘realist’ ontological assumptions are the real world exists independently of subjective consciousness, this latter is irrelevant to explanation; enquiry can converge on reality. The scientific objective is nomothetic with natural science; abstract from subjective idiosyncrasies to cover general laws; replicability generalizability’ (p9).

Hypotheses are tested against data using statistical techniques. The positivist’s methodology is mainly quantitative (Guba and Lincoln, 1998). According to Riley et al, (2000) ‘positivists argue that there exists a real world of social and physical phenomena and this world analyzed in an objective fashion in order to uncover general explanatory laws in an objective and unbiased, value-free manner’ (p10). For positivists reality and the observer are detached and independent of each other and the knowledge of reality is obtained by the measurement of its properties using objective methods. The researcher’s task is to identify ‘fundamental laws’ (Easterby-Smith et al, 1991).

Positivism (‘received view’) has dominated the formal discourse in the physical and social science for some four hundred years whereas post positivism represents efforts of the past decade in a limited way and essentially has the same set of beliefs of positivism (Guba and Lincoln, 1998). Hussey and Hussey (1997) defined ontology as one’s assumption about the nature of reality and epistemology as ‘the study of knowledge and what we accept as valid’ (p76). For post positivist the ontology is ‘critical realism’. Reality is assumed to exist but to be only imperfectly apprehendable because of basically flawed human intellectual mechanisms and the fundamentally intractable nature of phenomena (ibid). The epistemology is modified dualist and objectivist. Special emphasis is placed on critical traditions, thus the findings are compared with the pre-existing knowledge and the critical community (such as professional peers). However replicated findings are probably true (but are subject to falsification). The methodology is modified experimental and emphasis is placed on ‘critical multiplism’ as a way of falsifying (rather than verifying) the data. The methodology may include qualitative techniques (ibid).

Researchers are guided by their own philosophical beliefs which involve both epistemological and ontological considerations (Benton and Craib, 2001). These considerations in turn shape the research strategy (Bryman, 2004). This is often multistage and typically includes establishing aims and objectives, a literature review and series of methods to collect data, upon with later analysis can take place (Saunders et al., 1997). The epistemological and ontological choices that a research makes are often closely associated. A researcher that chooses to follow as positivist paradigm will likely take an objectivist view towards social phenomena compared with a researcher adopting an interpretivist paradigm, which follows a constructivist stance towards social phenomena.

Researchers have different view on what is considered acceptable as knowledge. This refers to epistemology, of which there are two principal schools: positivism and interpretivist. Ontology describes the view that researchers take towards social phenomena and the role of social entities. It can also be broadly described under two schools of thought: objectivism and constructionism. Positivism adheres to a deductive research approach, which constitutes a process in which the purpose of theory is to generate hypotheses that can be tested and then either accepted or rejected. Like in the nature sciences, it assumes that knowledge is ‘out there’ to be found and described by the facts and causal laws. It is closely associated with an objectivist stance, which infers that social phenomena, such as how an individual reacts to an increase in workload or improvement in wages relative to somebody else, are external facts that social entities (in other words, human beings involved in the process) cannot influence. They can therefore be studied objectively.

On the other hand, Interpretivism adheres to a more inductive research approach, where theory is the result of observations and other findings, not the starting point. It rejects the view that human nature is like the natural sciences and researchers can simply ‘study’ social phenomena, but argued that human nature is highly subjective and that these subjective elements require additional consideration by the researcher when constructing theory. This fits closely with constructionism, which implies the social entities are continually constructing and re-constructing their social realities. As such, the study of social phenomena is a subjective one and can neither be deduced down to laws nor considered definitive (Bryman, 2004).

The choice of epistemology and ontology also guide researchers’ methodology. Whilst researchers can employ both quantitative and qualitative methods, it is more common that quantitative methods are used in a positive, objectivist research paradigm and qualitative methods in an interpretivist, constructionist one. This study is held within a positive, objectivist research paradigm because this fits with the views of the researcher. Saunders et al (2007) described that subjectivist view is that social phenomena are created from the perceptions and consequent actions of social actors and that it is a continual process, in that, through the process of social interaction these social phenomena are in a constant state of revision..

3.3 Research Approach: Inductive Methods

The research could not adopt a deductive approach since the philosophy adopted was not a scientific research philosophy. All of the above reasons made an inductive approach appropriate for the research whereby facts could be discovered and conclusions drawn as a result of analysing the data that was collected. This approach depicts essential characteristic of induction and as described by Saunders et al (2007) theory would follow data rather than vice versa as within deduction. Inductive approach rather concerns humans and the nature of problem they are facing. “Research using an inductive approach is likely to be particularly concerned with the context in which such events were taking place.” “Therefore, the study of a small sample of subjects might be more appropriate than a large number as with the deductive approach.” “In this type of approach, it is more likely to work with qualitative data and to use a variety of methods to collect the data in order to establish different views of phenomena (Easterby-Smith et al. 2008).”

3.4 Research Content Validity Assessment

The content validity of survey instruments is assessed by an overview of the items by individual who is an expert in that field or subject and/or by the individuals from the target population. The individual make their judgments about the relevance of the items and about the assurance of their formulation.

3.5 Research Strategy: Questionnaire

Saunders et al (2007) defined research design as the complete plan of how one goes about answering the research questions. It comprises of the research strategies, data collection and analysis methods and the research project timeline. This research was explanatory in nature. Exploratory research establishes causal relationships between variables (Saunders et al, 2007). The research strategy employed was a questionnaire based approach. This required an in-depth understanding and focus into the research context. As described by Robson (2002) a questionnaire is a strategy for doing research which involves an empirical investigation of a particular contemporary phenomenon within its real life context using multiple sources of evidence. This definition highlighted the fact that a questionnaire is undoubtedly the appropriate approach for the research. At the point of time the research was designed it was anticipated as a situational analysis questionnaire where views of all actors related to the research contexts are examined to gain in-depth understanding of the matter under investigation. Another definition by Walsh (2001) described questionnaire as involving a systematic investigation into a single individual events or situations relating to a single source of interest, that is, the researcher studies multiple effects and perceptions of the respondents to the same subject. All the above explain that the research objectives and situation most certainly lend to this strategy.

Among the strengths of using the questionnaire approach was that it helped gain a rich understanding of the context of the research and the process being enacted (Morris and Wood, 1991). Second, it is suited for objective research as it has a considerable ability to generate quick answers from choices as well as obtain explanatory answers, What and How questions. (Saunders et al, 2007). Finally, questionnaires are a valuable strategy to adopt in research which can also provide further research insights. In conclusion of it abilities, a questionnaire can evaluate, measure, illustrate, and explore the social phenomenon relating to the research. On the down side, questionnaires sometimes make people feel bored as they it doesn’t have any real interaction unless the questionnaire is conducted verbally by the researcher and then responses inked.

The reasons for the other research strategies to be rejected were explained in the following. First, experiment strategy was regarded unsuitable for the research since the purpose was to explore causal links; whether a change in one independent variable produces a change in another dependant variable (Hakim, 2000). Further to its demerits, it is the preferred research strategy for testing hypothesis (Dul and Hak, 2007). This research did not wish to test a hypothesis. Second, the survey strategy was rejected since this is commonly related with the deductive approach to research and is not suitable since this research bears an inductive approach. A deductive approach which does not regard the human thinking process and does not leave much room for alternative explanations and findings is not suitable for the research.

3.6 Sampling method

Non-probability sampling was used to select the subjects to collect data which is termed by Burns (2000) as purposive, purposeful or criterion-based sampling such that a case is selected because it serves the real purpose and objectives of the researcher of discovering, gaining insight and understanding into a particular chosen phenomenon. Probability sampling was rejected since it is not possible to adopt this technique without a sampling frame and also not appropriate in meeting the objectives. Non probability sampling provides an opportunity to select samples using subjective judgement. Therefore, non-probability sampling was selected as best suited for the research strategy used as well as to answer the research questions. According to (Patton, 2002) the sample size when using this technique depends on what is need to find out, what will be useful, what will have credibility and what can be done within available resources. Purposive sampling as described by Saunders et al (2007) enables use of judgement to select cases that will best enable answering the research questions and meet the objectives. As specified above the research is a case study dealing with a small sample size and this enables the researcher to select most informative samples for the study. Based on the requirements of research questions, the selection of cases was based on critical case sampling where a logical generalisation is made from the data collected from the critical cases. In other words, data is collected from the most relevant and important cases.

3.7 Data Collection Methods

3.7.1 Nature of Required Data

The data collected was mainly of qualitative nature and therefore, the data collection techniques and tactics employed was that of a qualitative approach. The research uses more than one technique for collecting data namely questionnaires.

3.7.2 Interviews

As explained by Robson (2002) a commonly made distinction between interviews is based on the degree of structure or standardization of the interview and as elaborated Saunders et al (2007), interviews may be highly formalised and structured, using standardised questions for each respondent or they may be informal and unstructured conversations. Semi-structured, face-to-face interview gives chance to the respondent to give his or her view regarding the topic based on information they have which might not available elsewhere. That is the reason researcher has chosen semi structured interviews as a data gathering method. During the interview the respondent will be asked a series of probing questions regarding their marketing strategies and customer relationship building (Saunders, et al; 2007). Face-to-face interviews can be carried out at work place, home, outdoors etc. and can be used to question members of general public, experts or leaders, specific segments of society. Interview can be used for both specific or/and general subject. In face-to-face interview interviewer is in good position to judge the quality of the responses of the subject to notice if a question has not been properly understood and to reassure and encourage the respondent to answer (Walliman; 2001).

3.7.3 Questionnaires

In Semi-structured interviews, the interviewer has a clear list of issues to be addressed and questions to be answered. The interviewer is prepared and flexible in order to topics to be considered and discussed (Denscombe; 2003). As explained by Robson (2002) questionnaires work well with standardized questions that will be interpreted the same way by all respondents. The researcher did not wish to test a hypothesis. The research was inductive in nature. It used the Interpretivism paradigm. The meaning was drawn from the data. The inductive logic is mainly qualitative in nature. It is not entirely objective and has some elements of subjectivity. Hence great care must taken ensure that the researcher is not and does influence the subject matter. This is to ensure the validity of objectivity of the research is obtained when possible. The deductive approach is mainly quantitative through the laws of cause and effect. In the deductive the element of subjectivity is lessened and the research is assumed to be therefore detached from the subject matter. Qualitative was deemed appropriate for this research for it was quality that was deemed necessary not quantity. In essence the questionnaires were set in line with the aims and objectives of this researched. It was exploratory in nature guided by the realms and perimeters of the aims and objectives. Indeed the empirical data and analysis (chapter five) set out to raise meaning from the data using the Interpretivism paradigm. The interviews also raised the qualitative nature as meaning was directly sought from the source through the means of the interviews.

3.8 Grounded theory

In this method, data collection, analysis, and eventual theory in close relation to one another (Strauss and Corbin; 1998). Grounded theory has become by far the most widely used framework for analyzing qualitative data. Grounded theory is particularly helpful in research to forecast and explain the behavior, to look at and to explain fact which is happening and why, importance is given to developing and building a theory (Goulding, 2002 cited in Saunders et al. 2007). The grounded theory study seeks to generate a theory which relates to the particular situation forming the focus of the study. This theory is grounded in data obtained during the study, particularly in the actions, interactions and processes of the people involved. Grounded theory is both a strategy for doing research and a particular style of analysing the data arising from that research. Each of these aspects has a particular set of procedures and techniques (ibid). It is not a theory in itself, except perhaps in the sense of claiming that the preferred approach to theory development is via the data collected. Grounded theory is normally inductive in nature. The figure below illustrated the cycle of coding, the elementary coding processes:

Source: blindnessandarts.academia.edu/…/Brussels dated 4 July 2009 p10

Grounded theory is anti positivist and believes that theories are man-made and as such evolve. It therefore argues that researchers are not hierarchical and that all researchers’ experiences are valuable (ibid). It is normally used in areas where there is little or no theory in existence. It can use qualitative and quantitative data and in cases where one does not wish to test a hypothesis and in cases where one wants to evolve and take ownership of the theory over the lifetime. Indeed the researcher wished to take further studies after this. This study was the groundwork for future research.

Grounded theory is often presented as appropriate for studies which are exclusively qualitative; there is no reason why some quantitative data should not be included. Glaser and Strauss (1967) made extensive use of quantitative data previously for studies. Thus grounded theory provides explicit procedures for generating theory in research. It also presents a strategy for doing research is systematic and coordinated with flexibility. In this study the grounded theory was used in the literature review. It was raised through the selection of the review in light of the research question and its aims and objectives. The coding was through the set of the questions in the questionnaires in light of the pertinent emerging issues that were raised in the review of the literature. It is not possible to start a research study without some pre-existing theoretical ideas and assumptions. Strauss and Corbin (1998) criticised grounded theory in the sense that difficulties may arise in decided when and what level can the categories be deemed ‘saturated’. They further posited that tensions exist between the evolving and inductive style of a flexible study and the systematic approach of grounded theory (ibid). Its critics argue that it is an intensive process which always leaves the theories grounded in data, hence its name.

3.9 Conclusions

The choice of the research methodology and methods is determined by the nature of the research question, its aims and objectives. The researcher did not intend to build or test a hypothesis but sought a case study understanding of marketing through Dhillon Dairy Ltd in the dairy industry supply chain. It was inductive in nature drawing upon the Interpretivism and the grounded theory in its approach. The next chapter was the empirical data and analysis.

4. The empirical data and analysis

4.1 Introduction

This was the empirical data and analysis. As mentioned the research study used the inductive logic of reason through the means of the Interpretivism paradigm using the grounded theory of research. It was a case a study approach through a sampling of thirty Dhillon Dairy outlets sprawled across Greater London. A homogenous questionnaire was sent to these thirty branches. The researcher worked for Dhillon Dairy Branch in theEssexcatchment. This gave the researcher an added advantage in terms of obtaining the data. Furthermore each of the questionnaires had an accompanying cover letter from the researcher’s branch manager approving the research study and the letter appealed for co-operation from the targeted branches as the former was of the view that the research study would indeed be a benefit to the company as entity in terms of relationship marketing and the strategic positioning as well. Twenty branch managers responded to the questionnaire. This was deemed a healthy response from the sampling.

4.2 Grounded theory revisited

Grounded theory procedures are designed to build an explanation or to generate a theory around the core or central theme that emerges from the data. Grounded theory is used to analyze qualitative data (Strauss and Corbin, 1998). The method of study consists of four steps which are explained in the following passages. The first step is open coding and is defined as disaggregation of data into units where researcher needs to identify and code the key point of each sentence of the collected data. These codes are grouped to form concepts which in return forms category after regrouping related to the phenomenon being studied. The researcher needs to find properties relevant to each category and data that can represent the possibilities of each property (ibid). The next step is known as axial coding. This step tries to make connections between categories and subcategories by examining a phenomenon in terms of its properties, dimensions and causal conditions (see Gray, 2004). It includes identifying the core category and other categories that influence the core category. In addition, the actions or interactions that result from the core category, the conditions which influence these and their outcomes are identified. The fourth step is known as selective coding. It is aimed at developing the abstract, condensed, integrated and grounded picture of the data referred (ibid). Strauss and Corbin (1998) criticized grounded theory in the sense that difficulties may arise in deciding when and what level can the categories be deemed ‘saturated’. They further posited that tensions exist between the evolving and inductive style of a flexible study and the systematic approach of grounded theory (ibid). Critics of grounded theory argue that it is an intensive process which always leaves the theories grounded in data, hence its name. The researcher did not strictly adhere to all the rigid stages of grounded but used those that were deemed the ‘appropriate fit’. These were the selection and the coding process as used in the literature review to raise the questionnaires.

As previously mentioned the selection and coding process of the grounded theory started in the literature review. Grounded theory moves from the general to the particular. It is more of a searchlight process as it searches for pertinent themes from a heap of data that can be likened to rubble of ruins. From these ruins it looks for the themes, searches for them in light of the research question, its aims and objectives. It is from this hubris of ruins that the theories are raised. As such from the literature review the following patterns emerged that were selected and coded into questions. Grounded does not have to be followed rigidly as per the stages identified by Glaser and Strauss (1967) or by Strauss and Corbin (1991). It can be argued that grounded can be applied loosely depending on the research, meaning it can be applied in the sense of its appropriate fit in light of the data. The following patterns emerged from the literature review and were formed into questionnaires:

Do you understand what is meant by the term relationship marketing
Do you understand the importance of relationship marketing
Is relationship marketing short or long term strategy
What relationship marketing techniques do you use
Do you view relationship marketing as an expenditure or an asset
Do you view relationship marketing within your branch is in line with the mission statement
Which is important customer retention or the acquisition of new customers
What do you understand by the term the supply chain
Do you understand the importance of the supply chain
Do you understand the linkage between relationship marketing and the supply chain
Where is Dhillon Dairy Ltd’s position in the supply chain

The questionnaires were semi-structured. Depending on the nature of the question some solicited for either a ‘yes’ or ‘no’ response. They all solicited for additional responses from the branch managers as this was qualitative research study in nature.

4.3 The empirical data and analysis

The first question as raised in the literature review sought to find out if the branch managers understood the term ‘relationship marketing’:

Question 1: Do you understand the term ‘relationship marketing?

The response to the above was encouraging as the majority of them were of the view that they understood the term. All of the twenty were of the view that they understood it. How they understood was from different dimensions. However they all shared the common view of the customer being the end key for this term. The responses shared some of the following patterns as sourced from the twenty branch managers:

‘Relationship marketing is all about the customer. The customer is the king. We have to please or customers. A happy customer is a good customer’

Another branch said:

‘The reason why we still exist is because we value our customers. Especially the corporate ones who have been with us for years. We try and keep that relationship special and improve it whenever we can’

Indeed the key word for them was the customer and the value of the relationship with customers. Only one branch included employees as part of relationship marketing. He saw employees as an integral part of the definition as he argued that for relationship marketing to work, Dhillon Dairy Ltd must have good relationship with its employees and not just its targeted customers. It is the employees who are in the frontline, who come into contact with the customer. It is therefore vital for the company to keep their employees happy and satisfied and this in turn would indeed be reflected by the way they treated their customers. Good customer service means good relationship management. This in turn could be translated and realized as long term customers.

Question 2: Do you understand the importance of relationship marketing?

All the questions were interlinked and were not entirely divorced from each. They were structured in such a way that the chain of thinking were interlinked and developed a chain of understanding. This was deemed essential as the research study was qualitative in nature as sought to unearth qualitative views and not quantitative. Relationship marketing is after all, all about quality and not quantity. All of the twenty said that they understood the importance of relationship marketing. The research sought to find out any common emerging themes/responses on the questions. This was in line with the use of the grounded theory methodology as it seeks common emerging themes or patterns in its analysis. The most common linkage on the importance of direct marketing was in terms of customer retention as evidenced by some of the responses in the following passages:

‘It is important in targeting and the selection of the markets in terms of market segmentation and retention’

Another one said:

‘It (relationship marketing) is all about customers coming back. The dairy industry is very highly competitive. Due to the opening up of the markets in the 1980s as part of the Thatcher Reforms we have to compete with other dairy industries from the European Union. We are no longer protected from the outside competition. Also other dairies in other countries in the EU have the added advantage that they are heavily subsidized especially the French. As such they offer dairy products in the U.K at a low price. The EU has only one person in mind, which are its citizens meaning the customers and not the dairy industry producers and suppliers. It is all above the customers and not the fate of the dairy industry. As long as the industry is still afloat, that what matters to them.

Question 3: Is relationship marketing short or long term strategy?

This question produced a mixed bag of results. Thirteen of the branch managers were of the view that it was a short term strategy. The remaining seven held it as a long term of view. This mixed bag is indeed worrying. On the good side it revealed a dual mixed bag. Underneath it revealed the ‘short termism’ approach to business by some of the branch managers. They were only concerned with the short run, maximizing sales in the short run so as to realize quick profits and not the long run. As such they sought to maximize short term profits which in turn led to short term rewards in terms of salary increments or bonuses. This was meant to please their superiors as the formers’ performance was measured in terms of sales and target profits. This it can be argued compromised the long term survival of the firm. This is because customers and the nature of the relationship were held in the short and not in the long term benefit of the firm. As such Dhillon has to re-address this view such that the branch managers have a long term view of the customer relationship and indeed this would mean a long term view of the firm as a whole. Long term view means that the branch managers must sacrifice their personal goals and gains for the benefit of the firm and the whole enterprise. Short termism gives the firm a short term life, a short term asset for its survival and not a long run asset which could indeed secure the firm’s long term survival. Long term relationships bring stability to the organization. Long term relationships also bring in stability and predictability on consumer behavior and spending patterns.

Question 4: What relationship marketing techniques do you use?

This question sought on the understanding of the techniques used. What emerged was that the branches were semi-autonomous and thus were not entirely given free rein on some aspects of the business. This made business sense in terms of cost and control. They were in general given some room to maneuver in terms of the day to day running of the business. The branches were in sense viewed as outlets of the business. They were viewed a points of sales. As such in line with the corporate strategy the branches used homogenous techniques which were standardized across the board. This meant to ensure uniformity and consistency across the branches the same techniques were laid as the template for the organization as an entity. This was to ensure that conformity was realized across Dhillon’s sprawling branches to ensure that there is no confusion from the customers as the techniques were to be same irrespective of the branches. This was meant to ensure that the customers found the same incentives irrespective of which branch they normally visited. It was only the corporate that were given specially treatment and as such were given corporate portfolio. The accounts for these corporate clients were handled by the Corporate Department. These corporate clients were deemed essential business for the dairy firm. For a customer to be held as corporate by Dhillon Dairy Ltd, it meant that a customer’s business to the former was well above ?2 million pounds per year. The standard benchmark was ?2 million pounds for a year to be held as corporate. For these the relationship was personalized as they were deemed to be the key accounts. The management made client visits in order to access their view of the level of the service provided by Dhillon Dairy Ltd. These key customers/clients had signed contracts with Dhillon Dairy Ltd. They were mostly corporate firms and were mostly in the service industry. Thus they needed a constant supply of milk and other dairy products for their staff. Dhillon Dairy Ltd delivered the dairy products onto these key clients’ premises. As such the logistics department made sure that the deliveries were made on time in right quantities at the right place. It was important that these key clients never ran short of dairy supplies. Indeed it could be argued that there is nothing more embarrassing than a shortage of milk for teas and coffees during an important board meeting. Image and presentation count in this modern competitive environment. As such Dhillon Dairy Ltd realizes this as it set up a Corporate Department with its own separate supporting logistic department in place. The Corporate Department key corporate account managers who oversaw these corporate clients sought to maximize their satisfaction. Thus for the key accounts Dhillon Dairy Ltd strategically used its Corporate Department with its key accounts managers and its separate supporting logistics department as the chief marketing technique for these key clients. For non key customers the following standard techniques were rolled across its branches;

Coupons
Price discounts for larger orders
Special offers for stocks which is nearing its lifeline

These inter alia are viewed as monetary rewards. This meant bought loyalty. This could in way help Dhillon Dairy Ltd in the short run in terms of sales. However bought loyalty can prove to be an expensive exercise in the long run as bought loyalty needs to be constantly rewarding with more enticing rewards if it is stay loyal. This indeed becomes a business liability in long run. Bought loyalty can be liability unlike true loyalty. True loyalty in the customer sense means customers chose to be loyal because they choose and not because they are enticed by the monetary offers which in the day sense can be viewed as bought loyalty. As such loyalty and satisfaction cannot be treated as one and the same. Loyalty may be missing even if there is customer satisfaction as they may be barriers to the whole process. For loyalty can be bought through such incentives as bonuses, coupons, discounts, price discounts and other monetary offers. Indeed this is different from customer commitment which cannot be bought through monetary means but can only be earned through the long term process. They argued that loyalty is not a guarantee for future success especially the bought one the relationship and its ongoing process is determined and influenced by the monetary incentives. Genuine loyalty is the one that counts for its stands the test of time as the customer would be willing to stand by the firm even if it makes a mistake. Customer loyalty is indeed an asset to the business. T rue loyal customers are the customers who have developed a special bond with company just like customers who become attached to a brand and thus become loyal to it. Dhillon Dairy Ltd also uses the customer surveys in the form of questionnaires. These are carried out on a regular basis in order to measure and access the level of customer satisfaction. These are carried on the ‘shop floor’ meaning to that they are carried out at the branches or outlets when the customers visit. The customer database is also used to mail some of the questionnaires to the customers. These will be searching for feedback on the level of customer service and their satisfaction. A happy and satisfied customer is indeed a profitable customer. They are bound to become repeat customers and may recommend Dhillon Dairy Ltd to their friends and working colleagues or other corporate partners in their supply chain. Good customer relationship can be viewed as a priced asset, goodwill in the balance sheet. Good customer relationship or in the context of this research study, good relationship management could indeed be a source of the competitive advantage for Dhillon Dairy Ltd. This is more of particular importance asBritainis still in recession and businesses are competing for the ever shrinking consumers’’ pockets. The spending patterns of consumers have changed. The boom of the late 1990s up 2006 is gone. It is the bust and consumers have changed their spending habits and have prioritized their needs and wants. Milk could still be regarded as a need but other dairy products such as cheese can be viewed as a want, a luxury in light of the present day recession. As such customer retention has become more vital than before especially the profitable ones. It is the profitable ones that keep Dhillon Dairy Ltd afloat. The non profitable ones can help to make it break even in accounting terms. Breaking even in not enough for Dhillon as it needs to release profits in order to pay its stakeholders in name of its employees, suppliers, creditors and its shareholders. It also needs profits in order to plough them back as investment. It needs to constantly reinvest in machinery especially refrigeration and the refrigeration of trucks. Refrigeration is a major expenditure for Dhillon Dairy Ltd as it is involved in the sale of perishable items which need around the clock refrigeration. This means high electricity billing.

Question 5: Do you view relationship marketing as expenditure or an asset?

This question sought to further explore the question as set by question three which asked the branch managers on whether they saw relationship marketing in a long or a short term. In that question thirteen of the branch managers saw it as short-term and the remaining seven saw it as long. The researcher sought to see if there was any variance or coloration between the views they expressed on question 3 and question 5. To recap the following was the question and the response on 3.

Is relationship marketing short or long term strategy?

The results on this were as:

YesNo
Relationship marketing-short term strategy137
Relationship marketing-long term strategy713

In view of this question and its response the following question was put forward to the respondents:

Do you view relationship marketing as expenditure or an asset?

The results on the question were as follows:

YesNo
Relationship marketing-expenditure137
Relationship marketing-asset713

There was a clear coloration on the answers for question 3 and question 5. Those who viewed relationship marketing as a short term strategy also viewed it as an expenditure, a day to day business expenditure. As such this meant that they did not place much emphasis on relationship marketing and regarded it as an ordinary expenditure. As such it was bound to be ignored and be lost in the maze of other day to day expenditure. However this was in sharp contrast to question 2 where all the managers (20) acknowledged the importance of relationship management. As such the analysis unearthed that whilst all the twenty realized the importance of relationship marketing thirteen treated it as short term expenditure. This is paradox, whilst recognizing its role but at the same time rendering it to a short term day to day expenditure.Those (seven) who viewed it as a long term expenditure made economic and business sense as they also viewed it as a long term asset. This could help in customer retention and this retention could promote and enhance the value of goodwill of Dhillon Dairy Ltd.

Question 6: Do you view relationship marketing within your branch is in line with the mission statement?

In overall Dhillon Dairy Ltd as an entity viewed relationship marketing as a key strategic objective in promoting the mission statement which envisaged Dhillon Dairy Ltd as one of the leading dairy companies in the U.K. This was its long term vision. As such it follows that Dhillon Dairy Ltd saw relationship marketing as a long term process, a long run and not a short run. As such the overall corporate goals and vision were not in line with some of the interviewed branch managers. This was evidenced by the interviewees’ responses as some of the managers viewed it as a marketing expenditure (13) and also viewed it a short term strategy. This view was not in line with the mission statement. As such goal congruence is a must if Dhillon is to survive the long run. The branch managers (13) should realign their views on relationship marketing is viewed as a long term asset and also as a long term strategy in order to enhance and promote and enhance the company’s strategic goals and its strategic fit in the market place. The thirteen branches came to self actualization and self reflection on question 6 when they realized that they were not in line with the organization’s corporate goals, its aims and objectives as far as relationship marketing was concerned. The interviewees were granted anonymity as such and were therefore free to express themselves. This worrying revelation falls upon Dhillon as an entity to readdress. One way might be to send the branch managers on relationship marketing exercise and some short courses on strategic management and organizational awareness. Indeed this is one of the strengths of the interpretivist’s paradigm in the sense that it is dialogic and dialectic enabling the researcher and the researched to become intrinsically interlinked. This dialogue is dual as it seeks interpretation and meaning. Its inductive nature means that meaning is drawn and raised from the data. There is a constant dialogue between the data and its interpretation, the interpretation and the data such that mutual understanding is achieved. This ironically reflects the grounded theory process of the induction. It is the grounded theory in process, in action. The research study was qualitative in nature looking for qualitative answers, qualitative meaning. Relationship marketing is after all qualitative in nature. The aim of relationship marketing is customer satisfaction and customer satisfaction is all about quality service and not quantity.

Question 7: Which is important customer retention or the acquisition of new customers?

The results of this question were as follows:

Customer retention7
Acquisition of new customers13

This results were on this question were predictable as evidenced by the responses from the previous six questions. The previous questions revealed that the thirteen branches managers were of the view that relationship management was expenditure and was viewed in short run terms, a short term strategy. As evidenced by the research study this was a ‘short-termism’ view that disposed of the long run view. It was therefore not surprising that the same thirteen opted for the acquisition of new customers as short terms goals that yielded immediate profits was their ultimate goal. This was in sharp contrast with the other seven who viewed relationship marketing as a long term goal, an asset and a long term strategy which was in line with Dhillon’s overall mission statement, its goals and objectives. As such it was fit that they saw ‘customer retention’ as important as it is the long term goal of relationship marketing and indeed that of Dhillon Dairy Ltd. Some of the comments on those on the favor of customer retention were as follows:

‘The more customers we get the better the business. We worry about gaining new customers, bringing in new business. That is the emphasis. Existing customers are happy and most of them have been with us for years. We need more money in order to get paid. Everybody is getting laid off because of the recession’

Another one said:

‘Off course we need new customers to bring in new business. We need that extra revenue. Dairies are falling under because of the recession. New customers mean we add new business on top of the existing customers. We have mortgages to pay and as such one has to think fast in order to survive. That extra penny brought in from new customers now means a lot. We cannot afford to concentrate on the existing customers as a vehicle for driving the businesses’.

Question 8: What do you understand by the term the supply chain?

This was integral question that sought as it provided the linkage between relationship management and the supply chain in terms of marketing. It sought to analyze in light of the preceding, the branch managers’ awareness of the supply chain and relationship marketing as both sought customer retention and customer satisfaction. Indeed these questions were interlinked and followed a chain of thought on the understanding of relationship management and the supply chain in light of Dhillon Dairy Ltd as these are interlinked in the sense that the former uses the latter as one of its tool in order to maximize customer retention and customer satisfaction. All the twenty branch managers understood the concept of the supply in relation to their jobs as jobs. They mostly linked it to the nature of their jobs. The majority noted that they were more of a depot than a branch. The actual processing of the dairy products was actually undertaken on the farms owned by Dhillon Dairy Ltd. It is from there that they are transported as finished products into the branches. This saved more in processing time and transportation costs. In a sense Dhillon Dairy Ltd was the producer, the wholesaler and in some cases the retailer. The producer was the farms that Dhillon Dairy Ltd owned. The livestock that Dhillon Dairy Ltd owned produce the dairy products which are then processed into finished perishables at source. The branch managers are the wholesalers who then dispatch these dairy products to its corporate clients. They are also the retailers in the sense that they also sold the dairy products to the non-corporate clients as well. It was indeed a good sign that they understood the concept of the supply chain and that they saw it from their work point of view and thus were able to match the theoretical aspects of it with their practical work situation. They clearly understood their position and role within Dhillon Dairy Ltd marketing supply chain

Question 9: Do you understand the importance of the supply chain?

This question was also linked to the other questions. As such it sought to seek whether the twenty branch managers or depot branches understood the concept and importance of the supply chain. The majority in a near sense, all of them said they did understand the concept of the supply chain. They viewed it terms of a relationship. As such as drawn from question 8, Dhillon’s supply chain was not really long. It was short as Dhillon was the producer, the wholesaler and the retailer in its supply chain. As such they noted that their supply chain was unique as it involved mostly the employees and the customers. They argued that it was important to have cordial relationships with other employees in the supply chain as they are also Dhillon employees as well. The customers were regarded as the very end of the supply chain, the chain was acknowledged that it served and was used as a means to an end, the end being the customer satisfaction and customer retention. Some of them linked the importance of the supply chain to the strategic aims and objectives of Dhillon’s mission statement and argued that the supply chain must promote the aims and objectives of the mission statement. It must be strategic fit to the mission statement. The supply chain, if not appropriate fit must readjust and realign itself to the mission statement. The mission statement is the dominant of the two and Dhillon’s supply chain must promote the mission statement.

Question 10: Do you understand the linkage between relationship marketing and the supply chain?

This question produced a mixed bag of results. Thirteen said they did understand the term in the sense that both of them had customer retention in mind. Relationship marketing used the supply chain in its quest for customer retention. The thirteen noted that it the former used the other as another tool to be used for customer satisfaction and customer retention. It became apparent that there was a gap in understanding on the remaining seven in the sense that they understood both terms on their own. They understood their importance but could not manage to link the two together as one in terms of their aims and objectives. Thus Dhillon’s senior management must ensure that this link is made apparent and clear for the overall benefit of the firm, the employees and its stakeholders. In a nutshell, the similarities between the two must be realized and known in order for Dhillon to fully realize its potential through its branch managers within the dairy industry.

Question 11: Where is Dhillon Dairy Ltd’s position in the supply chain?

This question was linked to all other questions on the supply chain. It summarized Dhillon’s chain on the supply chain. It was a continuation of question 8, 9 and 10. The branch managers managed to link their position in the supply chain in relation to their jobs. They were the view that in most cases they were the wholesalers as they catered for the corporate clients who placed their orders in bulk. In some cases they said that they became the retailers when they catered for non corporate clients who did not normally purchase in bulk. It was in a sense a dual role in the supply chain both as the wholesaler and sometimes as the retailer. They noted that the Dhillon supply chain was mostly internal in the sense that Dhillon was the producer (manufacturer), the wholesaler and the retailer. It was an internal supply chain whose externality was through the customers’ purchase of its products. It was worth noting that they linked their position in the supply chain in light of their jobs as branch managers.

4.4 Room for discussion

The data analysis produced a mixed bag of results. Dhillon was unique in the sense that it was the producer, the wholesaler and the retailer. As such it had the key advantage in the sense that it procured and processed everything from within the firm. As such it could operate at a low cost and pass these as low prices to the consumers. As such it had the control of its supply chain. This was a chief advantage in the sense that it could manage and control its own supply chain. It could manipulate its supply chain in line with the market. It could re-align its supply chain in line with the market changes. That was an important advantage as it could alter the supply chain in line with the environment changes. The major disadvantage was that it had no external source to rely upon if one of chains in the supply chain was disrupted or broke down. This meant that if one element in the supply chain was disrupted (say its dairy farms) the whole supply chain would be affected. This was not good news as it had no external links in its supply chain. As noted Dhillon’s supply chain was mostly internal, the external being the end consumers, it customers.

As noted this supply chain was both strong and vulnerable. The majority of the branch managers did display a fair knowledge on the meaning of customer relationship, its importance, supply chain and its importance. They understood the underlying principles beneath these.

What was worrying was the short-termism approach of some of the branch managers as far as relationship marketing was concerned. Some of them viewed relationship marketing as a short term strategy that sought to increase the branch profits. They also viewed it a day to day expenses and not as a long term asset. As such they were after short term gains and sacrificed the long term gains. They were in favor of customer acquisition instead customer retention. As such they were in view of the maximization of short term profits. This was not in line with Dhillon’s corporate objective which sought customer retention and customer satisfaction. As such their goals and objectives were not in line with those of Dhillon. Dhillon viewed customer retention through relationship marketing from a long term prospective and not the short term. Dhillon as an enterprise viewed this as an asset a long term asset and not as a short term. It can be argued that Dhillon viewed this as long term goodwill. Satisfied customers become repeat customers. It enhances and builds on the reputation of the business and this reputation is translated as goodwill in the balance sheet. Dhillon realizes this importance as evidenced by the empirical findings. The following are the conclusions.

4.5 The conclusions

Inasmuch as the empirical data and analysis it made to explore the nature of relationship marketing and the supply chain in light of Dhillon it produced a mixed bag of results. This was natural and expected as the research study used the inductive logic of reason where meaning is inferred from the data. In the Interpretivism paradigm meaning is drawn from the data, it is drawn from the data. This was the nature of this research study is it did not intend to test or detest a hypothesis. It was Interpretivism in nature such that there was constant dialogue between the researcher and the researched. That dialogue consisted of the semi-structured questionnaires filled in by the twenty branch managers. This dialogue was strengthened by the literature review. As such this research study combined the theoretical aspects as found in the literature review of chapter two and the practical findings of this present chapter. The following chapter was the overall conclusions and recommendations for this research study

5. Conclusions & Recommendation

5. 1 Introduction

This was the last chapter of this research study. It presented the overall conclusions and findings of this research study. It presented the conclusions on the chapter one (introduction) which led to the conclusions of chapter two (the literature review), then chapter three (methodology and methods), then chapter four (empirical data and analysis) and finally this one. In a sense all this chapters were interlinked to each other. Chapter one introduced the reader to the research study and its aims and objectives. Chapter two provided the literature review in terms of the aims and objectives under chapter one. It was more of a continuation of chapter one. Chapter three provided the methodology and methods. It was more of continuation of chapter two. This time it was the literature review on the methodology and methods. Chapter four was the empirical data and analysis. It used the elements of chapter three in its analysis. It also used chapter two to support it. All this led to this final chapter. This chapter was structured as follows: the first part was the conclusions. The second part was the recommendations and these were followed by any opportunities for further research.

5.2 The conclusions

In light of the conclusions the research’s three aims and objectives are herby recapped. The first was to investigate the impact of relationship marketing as way of gaining competitive advantage and achieve profitability in the supply chain industry with reference to Dhillon Dairy Ltd. The second was to carry out a review of literature linking achieving competitive advantage through relationship marketing and challenges faced by supply chain industry inUK. Lastly it was to evaluate the way forward for relationship marketing for Dhillon Dairy Ltd in light of the finding. All these aims and objectives have been met in line with the research study question which was in the following manner: to what extent does relationship marketing tool has an impact as a tool in gaining competitive advantage in the context of Dhillon Dairy Ltd?

The research study set semi-structured questionnaires which were directed to the Dhillon Dairy Ltd’s branch managers. Twenty branch managers responded on the condition of anonymity. The researcher worked for the company and this gave the added of inner insight into the company as well as ease of access of data. As such the researcher and the researched were interlinked in the sense that the former worked for the latter. This tied in with Interpretivism paradigm as in it the researcher and the researched are interlinked as the paradigm is dialectic and dialogic. It was a mutual interpretation. The grounded theory was used in the empirical analysis. It set the coding process in the literature review on the emergent themes that arose on the review of relationship marketing and the supply chain. The grounded theory was loosely used in appropriation to the situational context. This is further supported by Denzin and Lincoln (1998) who argued that different strategies make perfect sense. It was a dual inductive process of the Interpretivism paradigm and the grounded theory. The research study revealed that the branch managers did understand the concept and tools of relationship marketing. They did understand it concept as well. The research revealed that whilst they did understand the concept, they were of the view that the company focused its relationship marketing on the corporate clients. The corporate clients were those who brought substantial business to Dhillon Dairy Ltd. As such the company had a dedicated department that dealt with these corporate key accounts and also had its own separate logistics department to support it. Some of the managers were of the view that relationship marketing was a tool for the short run benefit of the company and to be precise, a benefit to their own branch. They were in view of the short run profits of their branches. They sought to maximize their branch’s short term profits. In a sense a short run increase in branch profits can be viewed as good performance for that branch. Good performance comes with rewards, an increase in the reward benefits and incentives. This increase can come through the means of huge end of the financial year bonuses, increase in pay and promotional perks. This is what some of the branch sort for in the short term. As such borrowing Immanuel Kant’s maxim, these branch managers used relationship marketing as a means to an end, the end not being Dhillon as an entity, the end was these branch managers’ short term needs. This was not in line with the company as it saw relationship marketing as a long term process, a long term strategic goal which aimed at customer satisfaction and customer retention in the long run.

The company viewed relationship as the strategy to gain competitive advantage over its competitors in the long run through customer satisfaction and customer retention in the long run. It sought to satisfy these customers through their segmentation and in the form of the key accounts corporate clients. It set up a department dedicated to these key corporate clients and sought to retain them in the long run and ensure their loyalty. In accounting this term long loyalty is viewed as part of the goodwill. It is an asset in balance sheet. The organization also realized this and as such treated relationship marketing as an asset and not as a liability. This was in sharp contrast to some of the branch managers who saw relationship marketing as a short term strategy to increase their branch profits. As such they saw relationship marketing as a day to day expenditure under the operating expenses and not as an asset. They treated it as an ordinary expenditure that was written off against the sales. This was not in line with company’s overall strategy. In fact they were also in favor of customer acquisition and not customer retention. They were the view that the former brought in extra revenue whilst the latter brought in the usual levels of revenue. They were in favor of seeking more and more clients. These clients, they argued brought in more revenue. However these clients, it can be argued were only temporary and did not last long with the company as these managers were not in favor of customer retention. They were only in favor of generating more and more customers for their branches. This meant that the customers were unlikely to have their needs and wants met. This meant that they were unlikely to be satisfied by the level of service they got from these branch managers. As such they would have a short term life with the company. This reflected badly on the company’s corporate image as an entity. An unhappy and unsatisfied customer will not recommend Dhillon Dairy Ltd to their friends or colleagues. That customer is likely to comment to their counterparts with negative reviews on Dhillon Dairy Ltd. This meant that the company lost business and potential future business as a result of this short term view by some of its branches managers. As such this meant that the development and increase in the key corporate accounts clients was hampered as well as some of the lost customers could have had the potential of being one of the key corporate accounts.

The majority of the branch managers knew what the supply chain meant, its importance and Dhillon’s position in the supply chain. However a substantial majority failed to link the relationship between relationship marketing and the supply chain. The former uses the latter as one of its marketing tools used to maximize customer satisfaction and customer retention. Both relationship marketing and the supply chain aim at the maximization of customer satisfaction and customer retention. Thirteen of the branch managers failed to identify this link. It was intriguing as these thirteen understood relationship marketing, its importance, the supply chain and its importance. It can be argued that when one stands to analyze the situation further from the Interpretivism paradigm, these thirteen who failed to provide the linkage were the same who were in favor of customer acquisition and not customer retention. As such they could not provide the link of customer retention and customer satisfaction as they suffered from ‘short termism’. As such they would not see this linkage as they are short term orientated and not the long run. Indeed this displayed that there was a gap of understanding. This gap had to be re-addressed by Dhillon’ Dairy Ltd’s top management in light of these thirteen branch managers. These branch managers’ ‘short-termism’ would cripple the long term strategy of Dhillon as it saw relationship marketing as a tool for competitive advantage through the maximization of the customer satisfaction and customer retention. Dhillon Dairy Ltd held this as a long term strategy and not as a short term strategy as held and viewed by some of these branch/depot managers. This was a worrying revelation that this research study unearthed. As such Dhillon Dairy Ltd has to re-address this situation with the immediacy and emergency it deserves as it is top urgent and concerns the future vital well being of the organization as a corporate entity. The true nature and depth of this short termism across its branches/depots was yet to be fully comprehended as these thirteen branches were a sample presentation of the Dhillon Dairy Ltd branches/depots. It was hoped that this short-termism was confined to the thirteen branch managers but this possibility was statically impossible as the thirteen were a representative of over a hundred branches of Dhillon Dairy Ltd. The numbers were likely to be over and not confined to the thirteen branch/depot managers. It is a matter for Dhillon to urgently re-address it will soon or latter cripple the organization as an operating entity. In light of the preceding the following were the recommendations:

5.3 Recommendations

The following were the subsequent recommendations:

5.3.1 Long term view

The branch managers across all the branches needed to be re-aligned in their way of thinking such that they realize that relationship marketing is a long term objective and not a short term objective to achieve personal goals. As such the branch managers’ goals must in line with the organizational goals and promote the goals of the organization as an operating entity and not the personal goals of the individual. It is vital that Dhillon Dairy Ltd re-addresses this as a matter of urgency if it is survive as an operating and viable commercial entity.

5.3.2 Customer retention versus customer acquisition

Customer acquisition is part and parcel of any ongoing commercial enterprise in order that in remains as healthy ongoing concern customer retention should not be ignored otherwise the efforts of the former would be in vain. Relationship marketing seeks to maximize customer satisfaction and retention and uses the marketing supply as one of its tools in seeking competitive advantage as its leverage. The emphasis should therefore be on customer retention. It was up to Dhillon’s top management to ensure that this view is encompassed across the board and the entity as a whole in line with its corporate strategy

5.3.3 Relationship marketing as an asset/investment

It should be treated as such and not as a day to day expenditure. This would ensure that the branch managers hold it as a long term strategy in the form and part of the goodwill realized through customer retention as its competitive advantage tool. This will be in line with Dhillon’s overall corporate strategy and objectives

5.3.4 Integrate within the supply chain

Dhillon Dairy Ltd’s supply chain is internal and fixated within the organization. The only external part of it is its end customers. As such any breakdown in any elements of its supply chain would cripple the organization. As such it is deemed necessary that it should have a back up plans or have any outsource alternative if one of the chains in the supply chain breaks down.

5.3.5 Strategic supply chain alliance

As such Dhillon could also form a strategic supply chain alliance with another firm in the dairy industry. This alliance would indeed help Dhillon in case its own internal supply chain breaks down. This would serve as a strategic back up plan

5.4 Opportunities for future research

This was a template for future. It is hoped that the future would seek ways and means upon which Dhillon Dairy Ltd could find and source a strategic supply chain alliance as a framework of back up for its own internal supply chain

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Questionnaires

The following is the list of questions on relationship marketing and the supply chain in light of Dhillon Dairy Ltd. You must state your views in the following manner; either a yes or a no. Please include comments as much on your views if you feel it is necessary in order that your opinions and sentiments can be fully understood. This questionnaire will be treated with the utmost confidentiality and names will not be disclosed. They would only be disclosed with your consent and approval (this in line with the Data Protection Act 1998). Thank you for your cooperation.

Question 1: Do you understand the term ‘relationship marketing?

Yes or No

Question 2: Do you understand the importance of relationship marketing?

Yes or No

Question 3: Is relationship marketing short or long term strategy?

relationship marketing-short term: Yes or No
relationship marketing-long term: Yes or No

Question 4: What relationship marketing techniques do you use?

This is an open ended question. Please state the type you use and any give any additional comments:

Question 5: Do you view relationship marketing as expenditure or an asset?

relationship marketing-expenditure: Yes or No
relationship marketing-asset: Yes or No

Question 6: Do you view relationship marketing within your branch is in line with the mission statement?

Yes or No

Question 7: Which is important customer retention or the acquisition of new customer?

Customer retention: Yes or No

Acquisition of new customer: Yes or No

Question 8: What do you understand by the term the supply chain?

This is an open ended question. Please state the type you use and any give any additional comments:

Question 9: Do you understand the importance of the supply chain?

Yes or No

Question 10: Do you understand the linkage between relationship marketing and the supply chain?

Yes or No

Question 11: Where is Dhillon Dairy Ltd’s position in the supply chain?

This is an open ended question. Please state the type you use and any give any additional comments:

Categories
Free Essays

Marketing Management

1. Marketing Plan Outline

1.1 Corporate Mission:

To transform Emaar into a one-stop, global solution provider for lifestyle, including homes, work, play, leisure, retail, health, education, finance, industry and more. (www.emaar.com.ae)

1.2 Corporate Objectives:

To become one of the most valuable lifestyle real estate developers in the world beyond real estate development.
Adopt a strategy of business segmentation to create different business clusters functioning as different growth engines.

(www.emaar.com.ae)

1.3 Market Overview:

1.3.1 Market:

Saudi Arabia’s real estate market is relatively underdeveloped and its expanding population, a lack of affordable housing and few home financing options has seen significant demand build up. The Kingdom faces housing demands of over 1.3mn housing units by 2015 (National Commercial Bank Capital Research Department 2008, p11).

The markets relative infancy has also shielded it from the worst of the global financial crisis leaving it economically stable compared to its neighbors in the Gulf (The PRS Group, Inc. 2010. P4)

In the midst of all the political upheaval in the Arab world; the Kingdom has taken a pre-emptive approach and recently announced further benefits for its people, such as interest free housing loans and a bigger budget for infrastructural development amongst many others (http://www.us-sabc.org). So far the Kingdom has not seen any major uprising from the population; however the situation is unpredictable and can change without warning (www.ft.com).

1.3.2 Product:

Jeddah Gate (JG) project establishes a new and innovative way of thinking about urban cities and living. The layout of the project deviates from the traditional concepts of residential complexes and introduces a community residence aspect for the first time in Saudi Arabia; where people can live, work and play in one location (www.emaarme.com.sa).

Main features of the JG community: 550, 000 sq. m. total area, 6000 residential units, 75000 sq. m of retail space, 230,000sq.m… commercial space and Schools & Public Facilities (www.emaarme.com.sa).

1.3.3 Customer Target:

1.3.4 Competition:

1.4 .Marketing Mission:

In 2011-2012 Jeddah Gate will focus on communicating the USP of work, live and play within the community; to increase customer awareness, increase traffic at sales center and help in generating sales. (Jeddah Gate Marketing Plan 2011)

1.5 Marketing Objectives 2011-2012:

Leverage the concept of live, work and play and growth of Jeddah Gate as a project, as a community and as a symbol of success in all aspects of ATL & BTL communications.
To generate 240+ in target market registered traffic every month and increase sales conversion ratio above 2% (Registered traffic is: sales center walk in, calls to call center, online registration, event attendance).

Coordinate with Sales team to achieve the 2011-2012 sales & revenue targets:

1.6 IMC Campaign 2011-2012:

1.7 Budget 2011:

1.8 Controls:

Closely monitor the effects of the marketing campaigns through keeping track of the rate of traffic at the JG sales center, incoming calls for information in the call center and conduct professional research to evaluate the level of awareness created.

2. Critical Evaluation of the Marketing Plan

2.1Saudi Political Situation:

The political environment in Saudi has been quite stable over the years, being a purely monarchical government no serious political unrest has occurred (The Economist Intelligence Unit Limited 2010 p3).

A stable political environment has helped the country prosper; according to The Global Competitive report (2010-2011 p37) conducted by the World Economic Forum, Saudi Arabia has risen to the second highest place in the MENA (Middle East & Africa) region in terms of global competitive advantage due to several economic initiatives undertaken by the regime such as improvements to the institutional framework, a stronger corporate governance framework, investing in the private sector and reforming legal issues (Mohamed A Ramady 2010 p3) .

The current political upheaval in the MENA region cannot be ignored; so far Saudi Arabia has witnessed very minor protests by a minority of the population, however the risk of serious political unrest in Saudi is not highly probable due to the strict anti-protest laws in place by the government (http://www.ft.com )

Keeping the above in mind it can be assumed that the current Saudi political environment is the optimum situation in which a real estate development company such as Emaar Middle East can grow and be successful. The planned development projects of Emaar such as Jeddah Gate will receive full governmental support and backing making it easier to operate i.e. getting quicker building permits than usual, land deeds and financial backing which will help in generating revenue.

2.2 Saudi Economical Situation:

By virtue of its size and available resources, Saudi Arabia is the largest economy in the GCC that is still relatively untapped. The main source of the Saudi economy is oil, however in the current years, one of the key economic objectives of the government is to diversify the economy and reduce dependency on revenue generated by only oil (Datamonitor 2008 p15).

With the economy going strong; the government has injected the revenues generated by oil back into the country, with public spending focusing on education, housing and social measures (Global Investment House 2011 p1-6).

Keeping in mind the growing population, changing demographics, larger personal disposable income and growing housing demand of over 190,000 units per year (National Commercial Bank Capital Research Department 2008, p11), the funding allocation for housing has been given a higher priority. In August 2010 the government announced a five year $385bn budget to strengthen the country’s infrastructure and real estate projects (www.oxfordbusinessgroup.com).

A new pending mortgage law will enable Saudis to obtain mortgages long term loans with very low interest rates. When this law is passed it is believed that the demand for housing will further increase and open the market to a wider section of the population in the Kingdom (http://arabnews.com).

The Jeddah Gate project will greatly benefit from the current and future demand in housing, the economic boom and the upcoming new mortgage law; especially since it offers a product that is unique to the market and more people will be financially able to purchase a home.

2.3 Saudi Social Environment:

The Saudi society is conservative and very traditional. However, considering that nearly 70% of the Saudi population is below the age of 30, the trend is slowly changing towards a more modern outlook without losing sight of religion and culture (Colliers International 2009 p6)

The Saudi people tend to be very private; because of this they prefer living in villas rather than apartments. Nevertheless, the younger generation is more open to purchasing an apartment to live in than the older generation (Colliers International 2009 p28).

The Jeddah Gate project needs to clearly understand the needs and wants of this young generation and ensure that the marketing strategy undertaken is in line with those needs and wants, because by fulfilling the needs of the consumers, the Jeddah Gate project will be able to create trust and loyalty amongst the Saudi consumers as well as generating revenues.

2.4 Saudi Technological advancements:

Since 2000 the Saudi government has started giving importance to the science and technological advancements in the country. A new science and technology policy has been placed for 2001-2020 which helps in the growth of technology in Saudi. (Datamonitor 2008 p21). The government’s financial position provides it with the advantage to invest in the required technological advancement, a good example would be the King Abdullah University of Science and Technology which was established in 2009 and has the vision of becoming the icon of aiding the advancement of technology not only in Saudi Arabia but in the world. (http://www.kaust.edu.sa)

Real estate sector is also indulging in technological advancements and Emaar is the pioneer of high tech projects such as Jeddah gate. The JG project provides its customers “Smart Homes” which are technologically advanced and allow the residents to use the Building Automation System where they can set the ambience of their residential or business units including curtains, intercom, surrounding sound system and other features, with the click of a remote (http://www.ameinfo.com).

The marketing team needs to incorporate this advanced technological feature in the communication section of their marketing plan to attract potential tech-savvy customers.

2.5 Saudi Legislative Scenario:

The legal system in Saudi is Shair’ah based i.e. Islamic Law. However, in the recent years the Saudi government has taken steps to reform certain aspects of the legal system, especially related to the business world and foreign investment. Even though certain laws are reformed the execution process is slow in comparison to other countries in the GCC, making it hard for companies to obtain the required licenses on time, causing delay and financial loss in some cases (Mohamed A Ramady 2010 p3&4).

The Jeddah Gate project can be affected by some legal delays such as obtaining land deeds and or building permissions. These delays should be preempted by the team working on the strategy and be taken into consideration when communicating with the customer to ensure that all customer expectations are met without creating any dissatisfaction.

2.6 Environmental Awareness in Saudi:

Saudi Arabia started addressing environmental issues seriously after the 1980, when the country’s industry had started to grow. Most of the environmental concerns addressed were related to the conservation of biodiversity and protection of wildlife (Datamonitor 2008 p26).

The proper implementation of environmental plans, along with the proposed education and awareness-raising programs, will encourage the growth of sustainability conciseness in the Kingdom (Datamonitor 2008 p26)

As for the real estate sector, the green building concept is fairly new. The Green Building Council has been set up in 2009 to promote and facilitate the green building practice in Saudi Arabia (http://www.saudigbc). However, currently most of the mega projects in Saudi, including Jeddah Gate are not practicing green building concepts.

2.7 The Jeddah Gate Customer:

2.7.1 Liberal Elite:

Groups of wealthy Saudi families connected through interactive social networks. Western educated and influenced, this group share experiences and follow the same purchasing trends. They are well traveled, cultured and sophisticated and part of the see and be seen crowed (Colliers International 2009 p35). This group can be considered the trend setters, opinion leaders and early adopters (http://www.rogerclarke.com) in the market .This is the primary target for the Jeddah Gate project, since the liberal elite will be able to relate better to the community living concept of freedom and modernity.

2.7.2 Investors:

Groups of wealthy individuals who understand the benefits of investing in Saudi real estate, they would want to be a part of the upward trend of Saudi real estate market. Western educated and influenced, this group is very business savvy (Colliers International 2009 p36). This target audience should be approached for the Jeddah Gate project; however the marketing communication and sales pitch should be business focused with facts and figures explaining the return on investment.

2.8 Competitor Threats:

Ironically, the only direct competition a project like Jeddah Gate faces is from other projects being constructed by Emaar in other cities of Saudi Arabia such as the Khobar Lakes project in the Eastern province of Saudi (Jeddah Gate Marketing Plan). Nevertheless, Emaar should never lose sight of the indirect competitions i.e. singular residential towers etc… and always monitor the growth of these projects so that they are able to counter any decrease in sales due to competition.

As the housing demand grows Emaar has to make themselves aware of any new projects that may come up in the future, in order to able to take preemptive action to remain the first property developer in the mind of the customers.

2.9 Jeddah Gate SWOT:


3. Impact of Technology and New Media

3.1 The rise of technology and new media in Saudi:

Compared to its neighbors in the Gulf, Saudi Arabia accepted the advent of new media much later. Internet was officially introduced in 1999 and had limited usage (http://www.internet.gov.sa). This was mainly due to the overall cultural restrictions of the society where the conservatives in the country felt that the easy access of all sorts of information may be a source of corruption for the young generation (http://opennet.net). Nevertheless, when internet with restrictions i.e. blocked adult websites, online casinos etc… was finally introduced to the Saudi market the usage grew at a very rapid pace (http://www.businessweek.com).

3.2 Growth of the internet in Saudi:

The usage of internet is rapidly growing in Saudi Arabia. In 2010 38.1% of the population was using the internet and still growing. (http://www.internetworldstats.com).

Considering the young population of Saudi, it’s no surprise that social communities such as Facebook and Twitter are highly popular. In August 2010 there were 2,575,740 Facebook users in the Kingdom and growing rapidly. (http://www.internetworldstats.com)

Also a new trend of online shopping has been emerging in the recent years. Many Saudis go to websites such as Amazon to fulfill their retail needs; they book hotels, buy their tickets online (http://www.ameinfo.com).

The internet is also used for entertainment purposes i.e. websites such as YouTube, gaming websites, music downloads etc… are quite popular. In addition, Saudis use the internet to seek information through sites such as Google, yahoo etc. … (http://www.ameinfo.com )

3.3 Impact of technology and new media on Emaar’s future marketing plans:

Keeping the above in mind, it can be assumed that the future of internet and social media will be very bright and be one of the primary ways to interact with young Saudi consumers.

Emaar must consider this rising trend in their future marketing strategies. Emaar will have to incorporate on a larger scale the use of web related marketing campaigns, in addition they would need to revamp their website to allow customers to view the product/project online and have the option of booking an apartment or villa online by making an initial web payment.

Since the access of both positive and negative information on the web is easily available, Emaar must also in the future, look into web PR campaigns e.g. set up an Emaar blog which would counter any negative information pertaining to the project or company and promote positive news about the project and company.

Using web related marketing tools will help Emaar in communicating with the customers quicker and to a larger audience. In addition if sales are conducted through web marketing which is much cheaper than above the line marketing campaigns, the return on investment would be significantly higher.

It can be assumed that the internet is the future and if Emaar fails to utilize this growing phenomenon and communicate with the customers through the medium they relate too then Emaar will be losing potential customer and revenue.

4. Sustainability:

Since the 1992 Earth Summit, there has been a rapid growth in awareness towards the need to address issues of sustainability (www.developmenteducationreview.com). In developed countries sustainability consciousness is on a constant growth trend, where more and more companies have to adhere to the demands of the society and be more active when it comes to sustainability (Ali M. Al-Yamiand A.D.F. Price. 2009, p109).

Keeping in mind global sustainability consciousness and the spread of awareness throughout the world, it can be assumed that it is only a matter of time when sustainability will take an important role in the Middle East as a whole and in Saudi Arabia in particular.

In fact, the Saudi government has created a preliminary guide for building standards that they intend to circulate over the next two years. The objective of the proposed standards guide is to reduce the cost of construction, power, and water consumptions and extend the age of current buildings (Jesse Lapierre. 2009, p2). Hence we can gather that the future of green buildings in the Kingdom is promising and should be taken into consideration for all upcoming projects.

In relation to sustainability in real estate sector, throughout the world a number of countries now practice the principles of sustainable construction. The reason for this is that Green Buildings can provide financial benefits such as energy savings, water savings, reduced waste etc… (Gregory H. Kats. 2003, p3). In addition, for the real estate developers Green Buildings can generate revenues through higher selling price/rents and lower operation costs (http://sustainablecitiescollective.com).

Even though Emaar has been a part of some charity related programs and follows very strict ethics standards. However, currently corporate social responsibility (CSR) does not play a significant role in Emaar’s marketing strategies especially for the projects in Saudi. If we look at the current triple bottom line (Andrew W. Savitz, Karl Weber 2006) plan for Emaar in Saudi, it can be noted that, the main focus is on the profit and then the people, whereas the planet is not as seriously considered.

Emaar being the largest real estate developer in the GCC should aim to be the pioneer in creating awareness about CSR and striving towards green building for all future projects in Saudi. Being the first developer to be CSR conscious would provide Emaar with an edge over future competitors, because they can use this opportunity for PR, use it as a unique selling point, and show the Saudi consumer that Emaar is a company that cares about the planet.

Bibliography

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Categories
Free Essays

How has Marketing’s concept of the consumer changed since the emergence of the discipline at the start of the 20th century and how have these changes informed marketing practices?

Marketing’s concept of the consumer has radically changed since the start of the 20th century, presenting a general shift from the passive to active consumer, depicted as complex and knowledgeable. Through the 20th century these changes have informed marketing practises to target and manage the consumer in more innovative and sophisticated ways. However there is much debate as to whether the consumer is still being manipulated and exploited through current marketing practises.

Marketing prior to the start of the 20th century saw the consumer as passive and easily manipulated my marketing techniques and practises. Consumers had no control over production or consumption; they simply sat back, fixed in identity and lifestyle “didn’t select lifestyle, just lived a life, didn’t move around, stayed in same place of birth, had one fixed identity” (Outka 2009: 8). Consumers didn’t explore or experiment with consumption through identity or lifestyle; it simply wasn’t a part of day to day life and was instead something done as a necessity. Williams (1976) suggests the term consumption was that of “to use up, to waste, to exhaust” (Featherstone 1991: 21). Consumption was simply a ‘needs must’ with the consumption of non-durables such as food and clothes. The moment of purchase marked the end of sale. There was no relationship with the consumer or further connection or interaction.

However, marketing’s concept of the consumer changed considerably at the beginning of the 20th Century seeing a shift from the passive to active consumer; marking the emergence of a dominant consumer culture. Consumers were increasingly identified as newly empowered, becoming unmanageable and complex, causing marketers to lose control. Miller’s (1997) understanding of the consumer is “as a psychosocially complex and mutable collection of needs, wants and desires” (Pridmore & Zwick 2009: 269). This is a very different image from the passive consumer of pre 20th century.

Early 20th century saw a large increase in mass production of goods as well as mass consumption, both being characteristic of Fordism. Cole’s (1981) suggests “demand is an essential element in transformation of the economy” (Fine 2002: 161). With the growth of mass production came a large availability of goods ‘available for everyone and anyone’ transforming the economy and forming a consumer culture. The latter part of the 20th century saw innovation in technology, as part of globalization, providing the consumer with different avenues of consumption through shopping online and mail order. The access to credit cards meant less restriction on borrowing money therefore higher levels of consumption. Consumers became tied into brands with discounts, membership and point’s cards. This then led to further consumption with a connection forming the idea that a “relationship of selling being securing, developing and maintaining long term relationships with profitable consumers” (Moncrief & Marshall 2004: 14). This long term relationship being significant to marketing as well as producing brand loyalty. Marketing’s view of the changed consumers’ needs and desires are seen as part of their want to buy products and commodities to form a communicative display of lifestyle. Consumers buy into lifestyles which they can live through brands and products: Kim et al (2002) suggests “products are bought to express consumer personality, social status, or affiliation or to fulfil the need for change or novelty” (Lury 1996: 114). This suggests consumption must fulfil the need of consumers; being that products should express identity, personality and social status.

An opposing view could be argued that although marketing’s concept of the consumer has changed since the start of the 20th century, the consumer could in fact have always been active, but has only been identified recently by theorists. Marketing pre 20th century hadn’t fully evolved though had been around long before. Therefore this could mean marketing during the 20th Century focused far more on the analysis of the consumer and consumer behaviour. Also the increasing innovation in marketing practises could have caused higher consumption, positioning the consumer into a role were they are deemed to be more active than in the past. Also development in marketing practises could have informed a change in consumption rather than marketing adapting to change in consumer behaviour.

Alternatively, theorists such as Zwick (2008) have explored marketing’s notion of a general shift from passive to active which subsequently changed marketing practices. More sophisticated marketing techniques are used to control, manipulate and fulfil a consumer society. Kotler (1999) proposed the marketing communication mix, otherwise known as the four way promotional mix (Pickton & Broderick 2005), which encompasses the four marketing practices: public relations, advertising, sales promotions and personal selling.

Promotional culture is used to target the unpredictable consumer of the 20th century by attempting to draw them into consumption. Promotional culture uses the ‘push and pull’ strategy of taking the product to the consumer (push) and then letting the consumer come to you (pull). This links to the marketing tool ‘hook’, that pulls the audience in, “people hearing the story identify with or support belief” (Lakhani 2008: 52). With the right consumer in place, marketing can play to their emotions and deliver an experience. With regard to the creation of lifestyle through consumption advertising sends a message to the receiver that by buying this product they can gain a desired lifestyle, personality and social status.

With regard to advertising, marketers have to pre-empt choices or encourage the consumer. This links to Kotler’s (1972) view that marketing had to take on the character of ‘applied behavioural science’ (Zwick et al 2008: 170). Marketing has to form a psychological understanding of the consumer in order to pre-empt them. Advertising encourages the consumer by manipulating them into consumption through desire: “Advertising is able to exploit by attaching images of romance, desire and beauty to a mundane day to day goods

” (Featherstone 1991: 14). Products become re-enchanted through advertising with the attachment of imagery. Such is the power of ideological manipulation in perfume advertising. An example is the power of ideological manipulation in perfume advertising. Dior’s celebrity endorsement advertising campaigns, since the 1980’s, have included super models and actresses. The recent ‘Miss Dior ‘ campaign features Natalie Portman, depicting a lifestyle of beauty and sophistication. The ideology of this is used to manipulate the audience into believing the perfume creates a luxurious and romantic lifestyle. This is evidence of a shift from Fordism to post-Fordism, where luxury goods and high-living lifestyle is desired, showing a break away from mass production. Consumers didn’t want the same mass produced products that everyone else had; they wanted something individual and of high standard. “Consumers want the best in terms of quality and value” (Baverstock et al 1996: 12). Advertising uses techniques to plays to these needs. This is evident in Volvo adverts that wrap high prices with a story of safety (Lakhani 2008: 9). Everyone wants to know they are safe so pay premium prices because the ad tells them they will be safe.

However, McCracken (1988) suggests marketing conveys a lifestyle of the consumer which is simply the desires of marketers in order to sell products.“Consumers are presumed to lead a certain life which conforms to the desires of marketers to sell particular constellations of commodities” (Clarke et al 2003: 212). Consumers may not in fact conform to the presumed lifestyle marketing positions them in, causing ineffective advertising messages. Myer (1986) takes a critical view on differing lifestyle conveyed through advertising, suggesting that it causes ageism, sexism and racism. She describes consumption as verging on cannibalism, that women are more vulnerable to men due to social expectations and upbringing (Lury 1996). She suggests when women consume they are subject to the male gaze. Also youth are said be to most highly targeted as they are often known to express personality traits through consumption.

It is debated that marketing practises such as advertising could be seen to position consumers once again as passive through the manipulation of advertising. Marxist criticises promotional culture as they suggest it positions production as active and consumption as passive. Implying advertising creates false needs. Although Arvidsson (2004) suggests that “advertising is assumed to have lost most of its capacity to persuade the consumer” (Lury 2004: 38). This suggests that although marketing’s concept of the consumer has changed, informed marketing practises state that the consumer is still too advanced and complex, causing them to read over advertising messages. Although it can be argued that advertising provides a message for the consumer to interpret and then complete. This ties in with Wilmshurst & Mackay (1999) who reject the idea that the consumers are made passive through advertising. They propose that “advertising is an essential facility to consumer freedom of choice” (Curran & Morley 2006: 152). Advertising enables the consumer to interpret and complete meaning. They can take what they want from the advert and have the freedom of choice as to whether they want the product, as opposed to being manipulated into buying it. This relates to the use and gratification model where consumers take an active role in choosing and interpreting media to meet personal needs to fulfil gratification. Marketing wanted to be able to manage consumers and gain knowledge and understanding, by tapping into their freedom of choice. Marketing’s changed concept of the consumer meant they had to try and keep up with consumers’ ever-changing needs and desires. They recognised a shift from producing goods in order to make consumers want them, to producing goods consumers will want.

Therefore towards the end of the 20th century marketing practises enabled marketers to discover and explore what marketing called the ‘complex’ consumer. Marketing used sophisticated modes of surveillance, database research and monitoring providing expert knowledge of exactly what their audience wanted and using it in all four areas of the marketing mix. There is a debate as to whether marketing responds to consumer needs or aims to shape themKotler (1999) suggests that ‘customer satisfaction’ was the mean aim of modern marketing above maximizing output. Therefore marketing had to channel efforts into identifying and meeting the needs of the consumer (Zwick et al 2008). Surveillance and database marketing provides marketers with knowledge of the consumer which they can use to maximise consumer satisfaction. This shows a shift from marketing’s use of advertising, which could be said to attempt to shape the audience, to surveillance which responds to consumer needs.

Database marketing is used to collect and store information/data about the consumer in response to their ever-changing identity, needs and tastes in a postmodern time. Arvidsson (2004) suggests “how it is possible to capture, store and retrieve physical, social and cultural mobility of social life” (Zwick & Knott 2009: 226). This helps marketing to understand and gain knowledge about the consumers’ needs and behavioural patterns. The rise in surveillance and database research was due to innovation in technology. Previously data was gathered and kept as hard copy, reaching nowhere near the capacity of data which can be collected today. Data provides marketers with expert knowledge, through the recoding of consumers’ characteristics by tapping into their consciousness to produce dematerialized ‘data doubles’ in the form of codes. “Individuals are being reduced to their measurable characteristics” (Clarke et al 2003: 210). The categories of characteristics make it easier for marketers to deal with large amounts of data and provide a ‘score’ of each consumer. Consumers leave digital traces everywhere; converting them into digital assemblages (Zwick & Knott 2009). Digital traces are left all over the internet, leaving a long trail of consumer data for marketers. The scoring process enables marketing to evaluate the consumer’s economic value which is constantly updated and recorded. Marketing is not interested in what the data means, just what they can do with it. The information is presented to the client as a ‘model’ – “the ranking of thousands of individuals according to a model we prepare for the client” (Zwick & Knott 2009: 233). Within the model individual scores capture an overall view and understanding to target the correct audience.

The whole premise of database marketing and surveillance is the collection of information as a means of production, showing more evidence of a post-Fordism economy; “energy intensive to an information intensive operation and production” (Zwick & Knott 2009: 227). Information being the key to marketing knowledge about the consumer. Database marketing and surveillance also shows a shift from Fordism to post-Fordism through social communication of face to face consumer research, and knowledge gained through the gathering of data.

This implies that surveillance is essential as an informed marketing practise with the necessity for marketing to gain information about the consumer. Producing what some might suggest is a closer relationship between producer and consumer. Although Elmer (2004) suggests dataveillance provides a separation: “dataveillance work maintains the conceptual separation between the sphere of consumption and production” (Zwick & Knott 2009: 224). This is due to the fact surveillance is normally done without the consumers knowledge, meaning marketing gains a huge amount of personal information without the consumer even being aware of it. Therefore producer and consumer are not working together.

Many theorists believe power and control operate through the use of surveillance and database marketing. Poster (1990) refers to database marketing as “like a market super-panopticon” (Pridmore & Zwick 2009: 272), demonstrating a panoptic style of control. Rather like the structure of the panoptic model where the audience isn’t aware of when they are being watched. This can be said to exploit the consumer by gaining refined knowledge, producing economic value, while pretending the consumer is ‘free’. On the other hand Arvidsson (2005) would suggest the consumer is ‘free’: “Through the mobility of everyday life into input for the more diffuse and expanded systems of production” (Zwick & Knott 2009: 237). This suggests consumers are mobile and free, therefore not restricted or oppressed by database marketing and surveillance, but are able to enhance and expand production, which will in turn benefit the consumer.

It can be argued that consumers have an input into the product through market research, leading to empowering the consumer and catering to their active role. This is especially evident in face to face market research and promotions which involve two symmetric communications; dialogue between sender and the audience (Pickton & Broderick 2005). This provides a rich form of first-hand information about the consumer, which they offer freely. Marketing gains quantitative and qualitative data to help form a deeper understanding of the consumer in the form of focus groups, ethnography and questionnaires. There are often feedback sheets provided after events, brand experiences or use of products to help marketing gain knowledge about the consumers’ likes and dislikes.

Turow (2006) forms a critical approach suggesting that surveillance and database marketing can be seen to make consumers paranoid, through its control. Paranoia then leads to the audience becoming more aware of giving out details, making them more private. This in turn means an exclusion of data and loss of a broad spectrum of data. Also in relation to face to face market research consumers can lie, providing answers they deem expectable. Or through word of mouth (WOM) products can gain good or bad publicity within a target group, which travels fast.

In the late 20th Century purchasing became a form of achieving social status and prestige, as mentioned above; showing a shift away from Fordism to post-Fordism with high-end goods and living standards becoming more important than mass production. Post-Fordism presented a new era of ‘just in time’ manufacturing, economic knowledge and the ‘flexible’ worker. The growth in consumption and shift to post-Fordism also indicates some concerns. Bauman suggests (1990) consumption is an individual process which provides and relies on a large amount of human satisfaction (Lury 1996). This suggests that exchange and consumption have become the main form of human satisfaction and is an individual activity. Consumers could be seen to become self-absorbed by the creation of prestige and social status.

Although Kozinet (2002) indicates postmodern consumers (known as post consumers) are interested in contextual life experience; they wish to experiment and are not interested in material value (Firat & Dholakia 2006). This is in contrast to the previous view of an emphasis on material value. The sense of consumers wanting to create experience and the ability to experiment through consumption is something that informed marketing practises. Experience is given to consumers through marketing practises such as PR stunts and promotions, which aim to create an impact and experience. Promotion events often present the essence of a brand in which the event creates a real life experience for the consumer. “Public events coincide with private behaviour of consumers to create a shift from a production driven to a consumption driven culture” (Turow & Mcallister 2009: 28). This ties in with the previously mentioned idea that marketing’s main aim is to satisfy the audience, rather than focusing on profit of production. Again evidence of a shift from Fordism to post Fordism – from mass production to a consumer driven culture. Experience being what consumers desire, rather than just mass production of the same readymade goods.

Brands create experiences for the consumer. The American brand Abercrombie and Fitch don’t advertise; instead they create an in store experience using employees to represent the brand. Consumers become ‘brand ambassadors’ who help create and convey the brand image. Not only is this free advertising, it also gets the brand known, creating brand loyalty. This is where the power of brand logos is so effective. “We are living in a phantasmagoria of corporate logos and brand images, logos give a moment of identification, showing commitment to the brand and focusing on own self interest” (Turow & Macallister 2009: 207). People see and recognise the Nike ‘swoosh’ all over the world; the consumer is living the brand. Some theorists would suggest this kind of brand manipulation no longer satisfies the consumer. Within the marketing realm consumers can actively pick and choose what they wish to be immersed in. This is in contrast to early 20th century consumers; depicted as passive with one fixed identity and lifestyle, compared to the current consumer society.

The idea of consumers living through brands, and consumers gaining life experience relates to the idea of co-creation. Marketers believe consumers are smart and sophisticated “no longer media literate but market literate” (Lury 2004: 43); they have gained knowledge and know exactly what they want. The market literate consumer has become more and more active to the point where they are seen to join with the consumer in a partnership and co-creation: “consumers are no longer end users they are producers” (Firat & Dholakia 2006: 138). Marketers need help from the consumer due to their complex and unpredictable nature; they know exactly what they want and demand an active role. “Instead of mundane exchange now a buzzing vibrant communication hive” (Zwick et al 2008: 172). This communication provides expert knowledge for marketers and helps them work side by side with the active consumer. This is again evidence of a shift from Fordism to post Fordism, with the joined of production and consumption and consumers ability to co-produce making new high standard goods as opposed to mass production. Consumers, instead of sitting back, take a more central role, having more control over production, shaping their experiences and lives. Consumers adopt a producer role, empowering them and forming a close relationship between producer and consumer. Consumers are no longer just seen as research objects, but they are seen to join with producers and marketers as part of a postmodern culture “transforming the audience from consumer to post consumer” (Firat & Dholakia 2006: 144). Post consumers know what they want and through co-creation are given the opportunity to transform commodities and put their own personal stamp on purchases.

The Swedish company IKEA is known for its ‘build yourself’ attitude, with furniture bought to build. Their slogan is ‘affordable solutions for better living’. Better living solutions; easy for anyone to create. A brand like IKEA is evidence of Poster’s (1990) view that “postmodernism seeks better balance between the good of economic productivity and the richness of creative consumer literacy and life experience” (Firat & Dholakia 2006: 134). IKEA provides good productivity at a reasonable price and provides the consumer with a creative experience. The active consumer can co-create all household goods leading to empowerment.

BUILD A BEAR workshop shows co-creation but in the form of consumer paying premium prices for a product which they created. The consumer can personalise a bear with a choice of clothing, accessories and shoes. They can shop under ‘latest fashion’ or ‘my occasion’. The goal being to create a personalised Teddy Bear; their mission statement being, “to bring Teddy Bears to life” (website). BUILD A BEAR workshop realizes the “benefit of providing consumers with places for playful production” (Zwick et al 2008: 174).

Another example of this is Dell, producing computers which can be personally designed online; colour, keyboard and size can be chosen. Consumers like to feel special and that they have something no one else has; their own unique design. McAlexander et al (2002) suggests “marketing is no longer a provider but a partner” (Firat & Dholakia 2006: 141). Both can work hand-in-hand to produce the best product.

Co-creation is regarded as a relatively new concept, although McDonalds has long relied on the consumers’ interaction. McDonalds is said to turn consumers into waitresses and cleaners, while ATM allows everyone to work (Zwick et al 2008). Companies are keen to extract unpaid labour from their audience in new and innovate ways.

The use of co-creation online created a huge phenomenon of online interactive sites. Facebook provides consumers with a platform, ‘a webpage’, which they can produce and personalise. Facebook is also a platform for surveillance and targeted marketing. Recently personalised advertising was shown on Facebook, targeting the user. This form of sophisticated marketing practise goes straight to the target consumer. This can also be seen on Amazon where consumer tastes and preferences are stored: ‘you may also like this’. This is the idea of co-training online (Lury 2004). Through consumption online the audience is informing marketers of their desires and needs. This helps marketing build a relationship with consumers.

Ebay is an example of co-creation where the consumer becomes empowered through buying, selling, commenting, watching and bidding. Robinson & Halle (2002) describe the site as “all in the consumers’ hands, the alternative site for empowerment and trusting the consumer” (Firat & Dholakia 2006: 139). The consumer appears to have complete control.

However it is also debated that co-creation exploits the consumer. Some theorists believe co-creation immerses the consumer ‘in surplus labour’, meaning low cost but high profit margins. These activities are then recoded to be enjoyable and pleasurable, hiding the fact that marketing is still in control. Turow & McAllister (2009) suggest “consumer exploitation has replaced labour exploitation as a central problem in modern society” (Turow & McAllister 2009: 340). Even though consumers may volunteer to co-create they are still paying premium prices for their labour. When they are not paying premium prices, such as online networking sites, they are still being exploited as the marketers profit from their labour. On the other hand as Levy (1959) states marketing’s primary challenge is to “respond to consumer changing needs and wants in the market” (Pridmore & Zwick 2009: 269). Therefore through co-creation marketers don’t have to keep up with consumers’ ever changing needs and wants as the consumers have become partners, helping to create the products. This empowers the consumer and makes use of their demand for an active role. This suggests everyone wins, consumers have exactly want they want and marketers gain profit.

In conclusion marketing’s concept of the consumer at the start of the 20th century has radically changed, seeing a general shift from the passive to active consumer. This change has informed marketing practises, Kotler (1972) suggesting marketing has become an ‘applied behavioural science’ (Zwick et al 2008: 170). Though marketing’s concept of the consumer at the start of the 20th century was complex and unmanageable, consumers were said to still be manipulated through advertising and exploited through a panoptic style of surveillance. Although this is debated by theorists who suggest advertising frees the consumer and doesn’t have the same capacity to persuade them. While Arvidsson (2005) implies that surveillance doesn’t restrict or oppress the consumer it simply expands and enhances product, benefiting both marketing and the consumer.

There is evidence of a gradual shift to a more and more active consumer with the relevantly recent idea of co creation, known as relationship marketing, creating a deep relationship with the consumer (Lury 2004: 36). This is evidence of marketing managing consumer relationships, rather than manipulating them. So when does production end and consumption beginRecently due to co-creation the audience is seen to both consume and produce at the same time; evidence that perhaps there is no line between production and consumption. Turow (2009) implies co-creation exploits consumers and immerses them in surplus labour. Although others suggest it empowers them and demonstrates the idea of the postmodernist society with the breaking down of corporation and marketplace; eroding relationship boundaries. Indeed recently consumption and production seem to go hand in hand, showing no end or beginning to either; presenting an even greater shift towards a more and more active consumer; a relationship which will continue to grow, change and shape the way in which marketing is practiced in the future.

Word Count : 4,219

References

Books

Baverstock et al (1996) Change and Innovation in marketing. London: Book House Training Centre.
Ben Fine (2002) The World of Consumption. London: Routledge.
Celia Lury (1996) Consumer Culture. Cambridge: Blackwell Publishers Ltd
Celia Lury (2004) Brands: the logos of the global economy. London: Routledge.
Clarke et al (2003) The Consumption Reader. London: Routledge
Curran & Morley (2006) Media and Cultural Theory. Oxford: Routledge
Dave Lakhani (2008) Subliminal Persuasion. New Jersey: John Wiley & Sons, Inc.
Elizabeth Outka (2009) Consuming Traditions. Oxford: Oxford University Press Inc.
Lee & Carter (2009) Global Marketing Management. Oxford: Oxford University Press.
Mike Featherstone (1991) Consumer Culture & Postmodernism. London: SAGE Publication Ltd.
Pickton & Broderick (2005) Integrated Marketing Communications. England: Pearson Education Limited.
Turow & Mcallister (2009) The Advertising and Consumer Culture Reader. New York: Routledge.

Journals

Firat & Dholakia (2006) Modern Marketing Theoretical and Philosophical Implications of Postmodern Debates: some challenges to Modern Marketing. Marketing Theory 6 (2) pp. 123–162
Moncrief & Marshall (2004) The evolution of the seven steps of selling. Industrial Marketing Management 34, pp 13-22. Science Direct. Available at: www.sciencedirect.com [accessed 12th April 2011]
Pridmore & Zwick (2009) Marketing and Rise of Commercial Consumer Surveillance. Surveillance and society 8 (3) pp .268-277.
Zwick et al (2008) Putting Consumers to Work: Co – Creation’ and new marketing govern-mentality. Journal of Consumer Culture 8 (2) pp.163-96.
Zwick & Knott (2009) Manufactoring Customers: The Database as new means of production. Journal of Consumer Culture 9 (2) pp. 221-47.

Websites

IKEA (2010) IKEA. Available at http://www.ikea.com/ [accessed 21st April 2011]

Build-A-Bear Workshop (2011) BUILD-A-BEAR Workshop. Available at http://www.buildabear.co.uk/default.aspx?sc_hpan=tabs&sc_hpdr=tab_home [accessed 25th April 2011]

You Tube (2011) Miss Dior Cherie directed by Sofia Coppola – Natalie Portman HD. Available at http://www.youtube.com/watch?v=bLCiAo53v3A [accessed 22th April]

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Free Essays

Marketing Theory Case of The Coca Cola Company

Introduction

This report focuses on specific marketing theory, relevant to The Coca Cola Company, marketing theory include Marketing Orientation, Marketing Mix, Marketing environment and SWOT analysis. The author will make analysis of these theories, with an application to the attitudes and marketing decisions of The Soft-Drinks Manufacturer.

Marketing Orientation

This is when a company takes into account its customers’ needs when making decisions concerning their services they offer and items of sale. There are many benefits of doing this, as the product will more likely meet the needs of their targeted audience, therefore consumers will be more willing to by the product, there is more of a guarantee the product will sale. However in previous decades, many businesses have opted for a product-orientation approach, this is when a company is more concerned with the production of the product, and the systems that are used in its production. (The Times 100, n.d)

(The Times 100, n.d) states in the recent decades many companies had preferred to be more product-orientated than customer-orientated, because of the increase in competitiveness within the market, these companies that adopted this orientation were losing out, as a company within a competitive market can only should strive to develop products that suit their audience needs, in failing to do so, they will lose customers fast in the competitive market, this demonstrates the need for products to be more consumer focused especially if a company is operating in a competitive marketing environment, if a company prides itself on the quality of its services and products, through the usage of new expensive technologies for example, then it would be understandable as to why they would continue to be product orientated. (The Times 100, n.d) Some companies are adopting both orientations, taking into account both the expectations and needs of the customer as well as the quality of product for the item of sale.

According to the source, many companies like Coca-Cola are moving towards market (customer) and product orientation, in doing this Coca-Cola conduct marketing research to find out their consumer interests and desires, in finding this they will make amends to the production of their product depending on what the results show the marketing managers. (The Times 100, n.d)

The marketing environment

Social-cultural environment

This is the environment that focuses on the understanding of their target audience; the study of this environment will help Coca-Cola understand what motivate consumers to buy their soft-drinks. Coca-Cola is also influenced by society views, for instance because of the issues surrounding the among of sugars presented in Food and Drink, and the Food Standards Agency, the production of Coca-Cola drinks now contain less sugars, and any other ingredients that are deemed artificial and bad for Health. (Brassington, Petttitt, 2007)

According to sources, the Food Standard Agency had in recent years opted for Drink companies to sell their fizzy drinks in smaller quantities, this was in response to the ongoing obesity crisis in the United Kingdom. ‘Drinks with added sugar such as cans of fizzy pop, should be sold in smaller 250ml cans alongside the standard 330ml, it was recommended.’ (Smith, 2010) a study of the social-cultural environment will also lead to an understanding of the demographics. (Brassington, Petttitt, 2007)

Economic/competitive

This is the environment that allows companies to identify both macroeconomic and microeconomic situations in the market, the influences are different, it can affect the sources of long-term and short-term finances available to Coca-Cola, the influences can also effect the consumer demand from their customers, for instance the credit crunch had decreased the among of expenditure available to consumers. (Brassington, Petttitt, 2007) during 2008 Coca-Cola had suffered from economic influences due to the crunch, in which it was estimated that their Bottled water products were experiencing less demand, in key markets such as the US and Europe. Because of the credit crunch bottled water had experienced a high sales growth in 2007, but ‘middle-classed wallets were squeezed down by the economic downturn’. (Anon, 2008)

How Coca-Cola responded to the influences.

Coca-Cola has what is described as a financial muscle, the business was at the time was predicted to not be effected by the ‘economic storm’ as their international competitors, this was arguably because of their successful approach towards brand positioning, which has allowed them to still obtain promotional support, without being disrupted by the economic downturn. (Anon, 2008)Other influences that can be either positive or negative include government policy, taxation, and interest rates. (Brassington, Petttitt, 2007)

Technological environment/innovation affecting

Coca-Cola and many businesses in general, have had new marketing opportunities, because of the advances of technology, such influences are mostly positive, as the production and manufacturing costs of their drinks are mostly likely to have decreased. (Brassington, Pettitt, 2007)

In regard to product of products, technology has also helped increase the product quality, which is important to a company such as Coca-Cola who may focus on product-orientation. For instance, the soft drink’s company experienced new technological advances which allowed them to preserve the fuzziness’ and ice-coldness each of their bottled drinks on sale, ‘By packing new technology into each bottle, so when the cap is twisted off, a mechanism inside will create ice made from the drink itself’. (Hannaford, 2007)

Technology has also helped the advancement of more opportunities for promoting the Coca-Cola brand; the company has opened an online website and has been able to advertise on internet websites which would help increase brand awareness. (Brassington, Petttitt, 2007)

Political regulatory influences

These influences relate to the outside governmental regulatory bodies that have jurisdiction under our national and European parliament to impose restrictions and rules relating to trade and other business operations, such influences include the Advertising Standards Agency, for instance Coca-Cola had to an advertisement banned for ‘claiming it to be nutritious while it contained up to five teaspoons of sugar.’ (Sinclair, 2011)”Because Vitamin Water contained about a quarter of a consumer’s GDA (guideline daily amount) for sugar as well as the added vitamins, we considered that the description of Vitamin Water as ‘nutritious’ was misleading.” (Sinclair, 2011) this demonstrates the impact, as the company had to recall their advertising campaign. To conclude most of these regulations that have jurisdiction over Coca-Colas operates are enforced by law to act as regulators, other regulatory bodies include, trade associations, the EU and the local and national parliament. (Brassington, Petttitt, 2007)

Marketing Mix

The marketing mix strategy is a marketing tool used by many businesses, it helps managers develop their product to suit their customer needs, the tool helps the business set pricing strategies and promotional strategies which are variable, meaning that the company can make changes to their mix to match the external influences such as the economic downturn, the marketing mix is controllable itself, it allows Coca-Cola to adapt more efficiently to environmental influences of the market. (Palmer, 2009, 2004)

Why is it needed?

The marketing mix is needed to match the mix elements to the consumer needs; they are the ‘ingredients to achieve the desired outcome of the consumers.’ (Palmer, 2009, 2004)

Each of the elements relate to one another, for instance pricing (considered the most important mix element), would largely concern the product it self, the quality of the product determines the pricing, if it is a product of high quality then the company may adopt a premium pricing strategy for example, this would also determine the promotion mix element, audiences are different, the premium pricing strategy may influence the business to target wealthy customers, who value high quality premium products or services.

As well as pros, which highlight the positive things a marketing mix strategy can do for The Coca Cola Company, there are also negative aspects of it, issues which put the customer first, such as with the developments of quality services can become lost, to combat this disadvantage it is suggested that there should be an ‘adoption of a more holistic approach by marketing managers to respond to their customer needs’(Palmer, 2009), it would be recommended that managers focus on a product-led approach to marketing. (Palmer, 2009)

Product

For Coca-cola, their main product on offer is soft drinks. With regard to the production of the soft drink itself, the main element to their products on offer is Coca-Cola. The Coca-Cola company is an international global business, and has more than just one product within the soft-drinks market, other products include Fanta and Sprite all owned by the Coca-Cola Company. (n.d, Sharma, Kumar)

Their Products on offer help the company, to motivate the consumer in purchasing the drink. It can be intangible (a service) or tangible, in this case Coca-Cola are providing tangible products. This mix will allow the Soft drinks company to moderate the quality, packaging, quantity of size, all to satisfy their consumers. The moderation is important, it allows Coca-Cola to design for instance their Packaging for different seasons, such as the Christmas season in which they make changing to the style in order to get people into the Christmas spirit, this encourage sells, it demonstrates the changes in the mix allows the company to keep up with marketing opportunities in the marketing environment, it also helps develop their brand image. (Palmer, 2009)

Place (Distribution)

This mix, allows The Coca Cola Company to make sure their products are available in convenient places, wherever the consumer prefers to purchase the items, it allows the company to make new distributions, if their marketing research suggest their target audience prefer to purchase their items in new places. (Palmer, 2009) This mix allows Coca Cola to amend their distributional strategies in place, depending their target audience preference. A good distributional strategy is crucial as an ineffective strategy will impact negatively on the companies’ turnover figures. In marketing distributional decisions, markets must focus on whether the costs of such distribution is affordable and how close the customers are to receiving the product. Marketing managers have an option to adopt strategies such as direct and selective distribution, Coca-Cola products are available in large supermarkets and vending machines, this indicates an intensive distribution, as it is available anywhere at any time (24hr petrol shops) anyplace.

Recommendation for efficient distributional channel

Coca Cola distributes their products to a wide variety of retailers; therefore this would indicate a need for an efficient management of distribution. (Brassington, Petttitt, 2007) The company as a manufacturer would need to deal with stock controlling, transporting their soft drinks products, and finding warehouse facilities for their products.

Pricing

This is the most important mix of all, it is important as adopting the wrong pricing strategy would lead to a loss of profits, however a good pricing strategy, which is affordable to target customers would lead to higher turnover for The Coca Cola Company. The Pricing mix varies from other Ps, as the other mainly evolves around company expenditure decisions.

The Coca-Cola Companies’ Competitive Pricing Strategy

According to sources, the Coca-Cola Company currently adopts a competitive pricing strategy. (Sharma, Kumar, n.d,) this is when companies set their prices according to the current market price,

The marketing had become more competitive with operating companies such as Pepsi entering the market; this forced the company to adopt a competitive pricing strategy in order to stay the cheapest in the market. In this current period, along with their competitive strategy the firm has also had to make les expenditure on their manufacturing process, and more expenditure on their advertising to keep consumer interest from rivals. (Sharma, Kumar, n.d,)

Cost-Based Pricing strategy

Originally they were operating within a niche market, before other competitors such a Pepsi had emerged, because of the new market for Soft drinks, the company did not have to adopt a competitive pricing strategy, instead adopting a cost-based pricing strategy, in which ‘a fixed sum or a percentage of the total cost is added (as income or profit) to the cost of the product to arrive at its selling price’. (Business Dictionary, n.d)

Recommendation on Good Pricing Strategies

‘If the selling price of a product is set too high, a company may mot achieve its sales volume targets. If it is set too low, volume targets may be by achieved, but no profit earned.’

(Palmer, 2009) In order to adopt good pricing strategies, there will need to be some evidence such from marketing research as to what consumers will expect to pay.

Many companies face hard pricing decisions, as pricing cannot be determined alone with the consideration of target audiences, it would be recommended that firms consider the marketing environment, as consumers’ needs changes depending on the current external environment, and the ‘interaction of market forces’. (Palmer, 2009) the pricing strategy is also variable, the company can make on-going changes to their pricing strategy, however such a minor difference can cause a significant change to revenue, e.g. Lower or higher profits. (Brassington, Petttitt, 2007)

Promotion

This mix is used to help with the communication of the companies brand to the customers, through sale promotional strategies, sponsorship and through (PR) Public Relations. This mix helps Coca-Cola decide on their advertising expenditure. (Palmer, 2009)

Promotional Decisions

The promotional strategies along with product and distributional strategy all need to be considered together in order for the company to make better decisions in their mix, it all lies down to evidence, which should give good estimations on their customers likely spending habits and where to target these customers.

Coca-Cola through promotional campaigns want to demonstrate how good their brand is, this can be done through various strategies, such as personal selling (Coca-Cola Stalls at public events) , sales discounts (in shopping centres) Research has shown that, Coca-Cola tends to spend large sums on advertising, for instance in 1987 the company made an expenditure of around ?140 million, in television, radio and Printing publications. (Boy, JR, Walker, JR, 1990) This kind of mass media advertising is essential, as most of their customers are likely targeted this way, it helps keep up their brand image, and in attracting new potential customers. Free tasters are also a good strategy as the company brings out new versions of its drinks; this will lead to a new consumer base, and will help generate more loyalty.

SWOT Analysis

This is the study of strengths, weaknesses and threats (SWOT) This is analysis is needed so that Managers can understand the main threats and opportunities, it helps to get an overall view as to whether the business is profitable or not. It helps with the anticipation of future developments for the company. The SWOT doesn’t include assets of the business; it highlights opportunities for success and potential failure (Kotler, Wong, Saunders, Armstrong, 2005)

Strengths

The Coca-cola has been operating within the market for decades, it was once a niche market for the company, this indicates power-over competitors in relation to its brand image, it has been in the ‘game’ for years, and therefore, there is a high public awareness of their products. ‘Coke is the world’s largest non-alcoholic beverage company. Coke sells more than 500 brands of beverages. The company operates five geographic segments: Eurasia & Africa, Europe, Latin America, North America, and Pacific.’ (Seeking Alpha, 2011) The company is still experiencing a higher profit margin, for these reasons the company has ambitions to ‘double revenue by 2020. They believe that volume will be by the fast-growing markets and improvement in North America.’ (Seeking Alpha, 2011)

Weaknesses:

In order for a business to survive weaknesses need to be identified and then appropriate cautions will need to be put in place so that, any weaknesses are reduced significantly so that they no longer pose a disadvantage to the company. (Kotler, Wong, Saunders, Armstrong, 2005)

The Coca-Cola Company has been able to remain profitable in their many years of operating as a company. As identified before, the Advertising Standards Agency and Food Standards Agency had imposed restrictions on their advertising campaign because of the among of sugar used in their products, this demonstrates a disadvantage for the company, these restrictions could lead to lesser profits, their soft-drinks generally aren’t good for their consumers. For these reasons the company may experience negative publicity which would be a disadvantage.

Opportunities:

New markets:

The Coca Cola had begun operating in the bottled water market, because of the growth, in which the UK market for bottled water alone has an estimation of near to ?1.4 billion. (British Bottled Water, 2009) this is an opportunity because it opens the company to new audiences increasing their brand image.

Threats:

There are many threats that are imposed upon organisations, such as the ability of Pepsi, (Coca-Cola’s closet rival), to take over the Soft-Drinks industry. The fact that Coca-Cola has to adopt a competitive pricing strategy shows that there is major competition within the market. Other substituting non-alcoholic beverages also pose a threat to the company; such products sold by Starbucks can threaten the profitability of the soft-drinks company. With the ongoing regulations imposed by the Food Standards Agency and (ASA) consumer may put their health first and choose healthier soft-drink alternatives, which would cause a lowering of turnover for the company. The fact that there are competitive pricing strategies between the likes of their rivals Pepsi also imposes the likeliness of customers ignoring both companies and choosing even cheaper alternatives such as Sainsbury’s and Asda branded Cola.(Kotler, Wong, Saunders, Armstrong, 2005)

Brand management

Coca-Cola company main asset is their brand image, it is important in retaining their customers. Brand management involves the enhancing of ones brand, keeping customer interest and expanding to new audiences. To do this requires a lot of attention to the customers, getting them to remember the ‘name, term, sign, symbol design or a combination of these that identifies the maker or seller of the product or service.’ (Kotler, Wong, Saunders, Armstrong, 2005)

Brand management is needed, as it increases a company’s ability to get a consumer to add and worship its name and value its quality of product, fending off other competitors by teaching the customer, that their brand is better. There is also an advantage for suppliers, it allows them to Coca Cola understands the importance of its brand image, through the overly use of promotional campaigns and various attempts at direct, and personal selling. It has been said the firm prefer to spend more on its promotional campaigns than its manufacturing costs. The firm has generated a brand image through its logo, which evidently always uses the colour red, in doing this they are reminding customers of their existence whilist increasing their awareness.

Branding strategies

The Coca-Cola Company has introduced major soft-drink of different kinds into the market, each kind has a different image, and this demonstrates an individual branding strategy, through the usage of new brand names for the various new products they have introduced over the years. There are many advantages in doing this, it increases their audience and allows the company to work on new brands, however these new products such as Fanta do not include the original branding, and therefore it could lead to their loyal customers forgetting the Coca-Cola image.

Conclusion

To conclude, The Coca Cola company has implemented good strategies, the managers of the company clearly understand the importance of meeting its customer needs, and enhancing its brand image to retain and remind customers of its good brand, hence the need for such a large expenditure on promotional campaigns, it utilizes the marketing mix well, through the adoption of competitor pricing strategy, it realizes its success can be easily threatened by competitors such as Pepsi, and substitute non-alcoholic beverages such as Coffee and tea. Through its current attitudes and good usage of the marketing mix variables, it is certain this business will continue to dominate and likely double their revenue as they have plan to do so by 2020, however external influences such as social cultural and economic influences could lead to a failure, regulatory bodies imposing restrictions could stop the business from reaching its potential if it continues on producing ‘misleading’ advertisements, however the worldwide recognition of its branding and along with individual brand images, this demonstrates the business has the potential to reach their goal.

Reference and Bibliography

Books:

Palmer, A (2009) Introduction to Marketing. Oxford University Press
Brassington, F & Pettitt, S Essentials of Marketing, FT Prentice Hall 2nd edititon
Doyle, P. Marketing Management and Strategy, Prentice Hall
Kotler, P. (2006) Marketing Management Prentice Hall 12th Edition
Boyd, W. H, Walker, C. (1990) Marketing Management: A strategic Approach International Student Edition IRWIN publishing
Kotler, P, Wong, V, Saunders, J, Armstrong, G (2005) Principles of Marketing 4th European Edition Published by Pearson prentice Hall

Internet Sources:

The Times 100 ‘Market and Product Orientation’ http://www.thetimes100.co.uk/theory/theory–market-product-orientation–211.php [Accessed March 25th 2011]
Smith, R (2010) ‘Sell fizzy pop in smaller cans: Food Standards Agency’ http://www.telegraph.co.uk/health/healthnews/7527712/Sell-fizzy-pop-in-smaller-cans-Food-Standards-Agency.html {Accessed March 25th 2011]
anon, 2008 Focus – Leading water brands hit by credit crunch http://www.just-drinks.com/analysis/focus-leading-water-brands-hit-by-credit-crunch_id95738.aspx {Accessed March 25th 2011]
Sinclair, L (2011) ‘Coca-Cola in Hot Water Over Nutritious Ad’{Accessed March 25th 2011]
Hannaford, K (2007) ‘New Technology by Coca-Cola allows ice-cubes to form in bottles of Sprite: TEC’ < http://www.techdigest.tv/2007/09/new_technology_1.html> {Accessed March 25th 2011]
Sharma, S Kumar, S (n.d) 4ps Analysis of Nestle and Cadbury Dairy Milk Pvt. Ltd. Delhi Business School {Accessed March 25th 2011]
http://www.scribd.com/doc/31376062/MARKET-SEGMENTATION-AN [Accessed 1st April 2011]
Anon, n.d “Coca-Cola Case Study.” 123HelpMe.com. [Accessed 1st Apr 2011]
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Seeking Alpha (2011) ‘Just One Stock: Returns, Cash Flow, Emerging-Market Potential for Coke’s World-Class Beverage Brand”http://seekingalpha.com/article/263186-just-one-stock-returns-cash-flow-emerging-market-potential-for-coke-s-world-class-beverage-brand [Accessed 1st Apr 2011]
British Bottled Water (2009) http://www.britishbottledwater.org/vitalstats.html [Accessed 1st Apr 2011]
http://www.scribd.com/doc/16945054/marketing-plan-of-coca-cola [Accessed 1st Apr 2011]
http://www.scribd.com/doc/9995196/Swot-Analysis-of-Coca-Cola [Accessed 1st April 2011]

Categories
Free Essays

Green product ‘ in Chinese food companies and Prospects for the development of a marketing strategy.

Introduction

The aim of the research is to increase the awareness of ‘green product ‘ in Chinese food companies and Prospects for the development of a marketing strategy to meet the green challenge.

To consider the concept of green marketing emergence and development
To explore the consumption demand of green product via the green customers psychology and their behaviors.
To emphasizes on the impacts of quality, brand, package, price, place, advertisement and public relation on the green food marketing.
To examine the corporation social responsibility relationships between enterprises and society.
To propose a framework for a marketing strategy

RATIONALE:

In recent years, with the level of awareness of food security concerns, the increase in some areas of China green food industry has begun to take shape.

At present, the green food industry has developed the equivalent of 3-5 times the output value of farming. Foods, both at home and abroad, will have huge potential for development, which is the set of economic, ecological and social benefits in one particular industry, there is great economic development.
With the improvement of living standards and changes in consumer attitudes, as well as environmental pollution and resource destruction of increasingly serious problem is conducive to people’s health, non-polluting, safe, high-quality nutritious foods has become a fashion, more and more people of all ages. Development of green food has a sound basis for strong market consumption. Green Food sales data show that people around the world trust in conventional food supply declined, while the rate of increase demand for organic foods has been growing faster than supply. Japan has 91.6% of consumers interested in organic vegetables, 77% of Americans and 40% of Europeans favorite foods.
In China domestic market, organic foods has also been widely welcomed, green food to meet the needs of people living in transition. ? The relevant departments of the two cities, Beijing Shanghai survey showed that 79% -84% of consumers prefer to spend high prices, but also willing to buy green. According to authoritative institutions predict that the national green food will be consumer demand and profits are growing at a rate of 20% per year.
In addition, labor-intensive production of green food, a variety of operating characteristics such as the production of green food in developed countries are subject to certain restrictions, some countries in the aggregate have a serious shortage, at present in Germany, the UK organic foods rely heavily on imports, and import volume of domestic consumption has accounted for 98% and 80%.

Green food industry at home and abroad the strong development momentum and the strong demand for the development of China’s green food industry provides a good external environment.

But experts believe that China’s green food industry is faced with environmental pollution and resource destruction brought about accelerated reduction in the level of quality standards.

The need for the development of green food industry

Green is clean, safe, high-quality nutritious food, green food production and consumption into the protection of the environment, respect for nature to promote the concept of sustainable development of human society. Start green consumer market, the formation of green food production and consumption trends is essential.

First of all, the development of green food is the globalization of China’s integration into the world economy, the inevitable choice. China’s accession to the WTO, as a large agricultural country, should bring agriculture and green food processing industry as the country’s pillar industries. Fo green food industry is not only economic benefits were considerable, but in line with China’s national conditions, construction of green food base, development of special economic – ecological agriculture and green food processing industry, will surely have a difficult to measure social and economic benefits. After accession to the WTO, China should become the world’s foods (mainly organic food), and a major supplier of natural medicines.

Second, the development of green food industry is agriculture, the extensive mode of operation from the traditional to the modern green management style, develop modern agriculture needs. In the current context of China’s resource constraints, but also to change a single large-scale investment of natural resources characterized by low efficiency of resource elements combination, change the grain as the key link, heavy agriculture and light industry agricultural economic growth, changes to a single purely rely on experience in operations, self-sufficient small farmers in semi-subsistence mode of production to achieve the natural economy from extensive agriculture to the commodity economy and the market economy into a modern ecological agriculture and promote the industrialization of green food and internationalization.

Third, the development of green food industry is from the traditional planting and breeding industry to an integrated business segment of society’s changing needs. Should be in legislation, policies and quality standards of green food products with international standards step by step so do a good job to join the WTO and to meet international competition. To face both domestic and overseas markets and make full use of two kinds of resources, the implementation of modern enterprise management and enhance scientific and technological content and enhance the agricultural and food processing industry’s competitiveness.Through different levels and in different forms of vertical and horizontal joint, the formation of trans-regional, cross-sectoral, cross-ownership of modern agriculture and integrated management of enterprises and groups, integrated management of agriculture into the overall pattern of agricultural modernization among.

Fourth, the development of green food industry is scattered from the traditional to the modern management of Agricultural Integration of industrial operation’s changing needs. Through the industrial management of agriculture, you can optimize the combination of production factors into full play the role of science and technology elements to enhance the quality of agricultural products and grades, and achieve multi-level value-added; income of the farmers was greatly improved. ???????????? Through industrialization, the land can be appropriate scales to promote and encourage the farmers embark on a new United Way, and gradually form matched with the needs of the pillar industries, with specialization and regionalization of production of the regional economic structure suited to enhance competition in domestic and foreign markets force and expand market share.

Green food industry faces ecological threat

Although my country has developed green food industry, natural resource advantages, but in recent years, China’s industrialization, the agricultural ecological environment has deteriorated trend, direct threat to the green food industry.

In recent years, due to agro-ecological environmental degradation caused by agricultural pollution is very serious, industrial “three wastes” and the large number of urban domestic sewage to the rivers, lakes emissions. Part of carrying mercury, lead, arsenic, chromium and other harmful toxic substances in industrial waste water through irrigation water to the farmland, coupled with the irrational use of chemical fertilizers (mainly the excessive use of nitrogenous fertilizers), pesticides and the loss of human and animal feces, etc., agricultural pollution is increasing, thus lead to surface water and groundwater quality pollution. More than half of China’s lakes are at different levels of eutrophication status, the Yangtze River and other rivers in the nitrogen content is also showing a rising trend and become a frequent occurrence of red tide offshore of the important reasons.

Former vice minister of Ministry of Agriculture, relative to re-Yang believes that to protect the ecological environment, first of all to speed up the development of national agro-ecological environment protection policies and regulations, as soon as possible the establishment of agricultural and agro-ecological environment monitoring system and the development of relevant standards, regular monitoring and reporting of agricultural by-products and its production environment has been polluted, so as to ensure that agricultural products do not harm people’s health. Actively promote the Festival of nitrogen fertilizer application techniques, adjusting fertilizer structure, and the implementation of balanced fertilizer formula, vigorously develop high-performance multi-fertilizer, promotion of special fertilizer, and actively promote organic manure fertilizer matching system.To strengthen agricultural protection advocacy training to improve management and technical personnel at all levels of agriculture and the peasant masses of agricultural environmental protection consciousness.

Green food industry is a systemic project, the parties must in all aspects to ensure product quality. The establishment of green food base for the industrialization of green food is conducive to speed up the pace of development is conducive to really make the green out of an Agricultural Integration, Chan Jiaxiao stop the industrialization path. At present, common organic fertilizer production methods still in the original state, either can not meet the quality and quantity of green food production.

China Green Food Standards urgently with international standards

As China Green Food standards and international standards are not unified, China’s green food export restrictions importance of working with international practice.

Heilongjiang Academy of Social Sciences researcher Songkui that foods with international standards, first of all to speed up green standards, certification criteria, such as trade rules with international practice. AAAA grade green food is the integration with the international organic food products, its export potential. China’s accession to WTO, has a comparative advantage in agricultural products face a large number of export opportunities. We should speed up the standards of construction, speed up the standards, certification procedures and related rules and regulations with international standards, in order to further explore the international market conditions. In particular, to master its international standards, and management requirements in respect of its changes, the more accurate market forecasts based on the formulation of scientific marketing strategies in order to quickly enter the international markets and expanding market share.

At present, the serious problems faced by the certification body is the certification standards and systems into line with EC standards are not role models, and its certification does not endorse the European Community, recognition is not high. Many customers have specifically requested by the European Community recognized national accreditation body. EC in recent years, some well-known Certification Authority have been carried out in China, the organic product certification work, and significantly increasing customer demand. Chinese certification body in the certification criteria, certification procedures and certification system still needs to be improved, and to the strict accreditation checks.

According to the EC requirements and the status of certification bodies in China, we recommend our organic product standards relevant departments to speed up the changes and development work, and actively with the international standards, as soon as possible a unified organic product regulations, in accordance with international standards to establish a reliable and reputable certification system, and through various channels to expand our certified organic product certification bodies and their well-known abroad for Chinese manufacturers to provide effective access to international markets passes. In addition, in the face of foreign certification bodies for organic products certified in China’s competitive pressure should increase the sense of crisis, turn pressure into motivation, as soon as possible from the organic product certification in China are not European Economic Community, the United States and Japan, accepted the situation, so that China organic products certified bodies to become the world’s major markets for organic products to consumers, importers, wholesalers and exporters in China jointly recognized quality certificate

Speed up the construction of green food base

Foods to form the pattern of big market, the key to have the leading products and mass production as a guarantee. Experts believe that although our country has a lot of green food base, but the most decentralized management, fragmentation is quite prominent, it is difficult to form scale advantages. In many places, though already have developed a number of green food, but delays do not form a superiority reason is mainly a single product structure, production and decentralized operation, economies of scale is poor, production, supply and poor convergence. Most have not formed at home and abroad utter the least sound-quality products. Therefore, while paying attention to industrial restructuring, with emphasis to large-scale, grouping the direction of taking mergers, horizontal joint-stock forms of cooperation, and vigorously to form a group of large-scale green food production bases and Enterprise Group in order to really play a leading enterprise-led scale production push-pull effect of market circulation in order to continuously enhance our foods at home and abroad market competitiveness.

As green food base for the creation, construction, development and growth must be strong leading enterprises to drive. Actively cultivate high-tech, large-scale, market competitive foods processing enterprises, the formation of the Commonwealth Agricultural Integration of green food development to achieve superiority in agriculture industrialization. ?? Our country become the world’s major supplier of organic foods.

In the domestic large and medium cities should be set up through the window, and opened green channel and other measures to continuously improve the market share; in foreign countries to open up shipping routes through the establishment of overseas offices, start-up window, such as direct sales channels, enhance the radiation power of green food market. On this basis, we should adopt recommendation, training, selection and other means to continuously develop and expand the ranks of brokers to establish a domestic and international market to ride the “flow of force”, making organic foods are sold at home and abroad force.

THEORETICAL UNDERPINNING

The subject which relate with my topic will focus on the author ken peattie’s book, the reason is that he was the first person who discovered the green marketing principle and increasing our knowledge on the concept of environment, not only for the society, but also for all types of organizations. The section for this area is only the primly source understanding,

There are four sectors need to be considering in the following order(just a brief description of them):

The green marketing defined

Ken peattie(1992) point out, ‘Green marketing is a style of marketing which has arisen response to the increasing concern about the state of the global environment and the life it contains (including human life).

1. The green product

Ken peattie(1995)said that green product is one of the newest product classifications to arise, but is also one of the most difficult to apply because the green product refers to the production of a specific mode of production, and the relevant specialized agencies by the state found, allowing the use of green food logo pollution, pollution-free, safe, high quality, nutritional food.

3. The green customers and their behaviors

Kotler (1994) defines a product as ‘anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need’.

The green product is the way to meet the green customers.

According to Ken peattie(1992),’The ‘green consumer’ is the driving force behind the green marketing process. It is consumer demand which is encouraging improvements in the environmental performance of many products and the companies that produce them. For marketers, it is important to understand what it means to be a green consumer and perhaps also what it takes to be a green marketer and also said that ‘Marketers are interested in the buying behavior of the customers within the company’s target markets’.

Corporate Social Responsibility

In recent years, corporate social responsibility (CSR) has become a strategic, customer buying behavior, brand, profitability and other key elements of business practice associated with the business. Theory and practice abroad show that corporate social responsibility, not only help to improve the welfare of society as a whole, the improvement of the competitiveness of enterprises also have an irreplaceable role. And because marketing practice, customer satisfaction on long-term corporate profits and shareholder value with far-reaching impact of strategic importance, therefore, to make Chinese companies more proactive social responsibility, in addition to helping companies understand the role of corporate social responsibility and the significance of corporate social responsibility and explore the relationship between the impact of customer satisfaction is definitely a good starting point: the ability to guide enterprises to take the initiative to put its own interests and the interests of the community together, through appropriate corporate social responsibility to act to improve overall competitiveness.

1.on the social responsibility associated with customer satisfaction

Fortune 500 companies have up to 90% already have a clear measure of corporate social responsibility initiatives (Kotler and Lee, 2004). Business Magazine (Business Week) 2005 special report year, a huge amount of large corporate disclosure related to corporate social responsibility investment, Target Corporation has invested nearly 100 million U.S. dollars, accounting for 3.6% of pre-tax profits, General Motors has invested 51.2 million U.S. dollars , representing the pre-tax profit of 2.7%, General Mills’s invested 60.3 million U.S. dollars, accounting for 3.2% of pre-tax profits, Merck has invested 920 million U.S. dollars, accounting for a pre-tax profit of 11.3%, Hospital Corporation of America has invested 9.2 100 million U.S. dollars, accounting for 43.3% of pretax profits.

Clearly, the rise of corporate social responsibility is socio-economic development to a certain stage. In developed countries, this concern of corporate social responsibility and oversight is increasing. Meanwhile, in the marketing literature, customer satisfaction because of the long-term profits and market value has a profound effect (Gruca and Rego 2005), there are also positive on shareholder value impact (Anderson, Fornell and Mazvancheryl 2004) and has important strategic significance, therefore, to explore corporate social responsibility impact on customer satisfaction has important theoretical and practical significance.

Some foreign scholars, the enterprise has undertaken various social responsibility, not only help to improve the welfare of society as a whole, beneficial to the enterprise itself. Bhattacharya, Smith, and Vogel(2004) proposed corporate social responsibility and should be integrated marketing strategy, corporate social responsibility to corporate brand equity, customer equity, market share, positive impact on corporate image.Chahal and Sharma (2006) established a corporate social responsibility analysis of the impact marketing performance framework, and that corporate social responsibility of enterprises is an effective marketing tool. Sen and Bhattacharya (2001) indicated that although the existing empirical studies of methods, approaches, there are still some flaws, but that the corporate social responsibility on corporate financial performance has a weak positive effect. Willmott and Mitchell (2001) research shows that consumers prefer more responsible products and services. These scholars are directly or indirectly, that the performance of corporate social responsibility good or bad indeed has an impact on customers. Therefore, this study suggests that further study of corporate social responsibility, the impact on customer satisfaction, can help us better understand the role of corporate social responsibility and the concept of customer satisfaction orientation.

Some of the existing research support, directly or indirectly, corporate social responsibility and the link between customer satisfactions:

Daub and Ergenzinger (2005) proposed the “general customer” concept. “Most customers” is not only concerned about the consumer experience of the consumer, but also the actual or potential stakeholder groups, one. From this point of view, “the general customer” will show good corporate social responsibility to provide more satisfactory products and services.

Good corporate social performances of companies, more beneficial to create a positive public opinion, enhance the consumer’s evaluation of the enterprise to improve the attitude of the consumer business (Brown1998 and Dacin 1997; Gurhan Canli and Batra 2004; Sen and Bhattacharya 2001). Especially in recent years, some studies (Bhattacharya and Sen 2003, 2004) proposed construction of corporate social responsibility is a key element of corporate identity, to attract customers more comfortable with a company, which is to produce a close relationship. In fact, Lichtenstein, Drumwright and Bridgette (2004) made a good corporate social performance of enterprises improved customer identification, to make it more support for the company, thus creating benefits for the company. Is not difficult to infer, full identification of the customer’s products and services more satisfied. (Bhattacharya, Rao and Glynn 1995; Bhattacharya and Sen 2003)

Luo & Bhattacharya (2006) believe that corporate social responsibility customer satisfaction by influencing the antecedent and thus affect the customer satisfaction. For example, empirical studies have shown that perceived value is an important antecedent to enhance customer satisfaction (Fornell et al. 1996; Mithas, Krishnan, and Fornell 2005b). Luo and Bhattacharya (2006)point out that in the other conditions being equal, a good corporate social performance of companies, customers can get a higher perceived value, thus enhancing their satisfaction with products or services, good social performance as product or service into a “value added.” Brammer and Pavelin (2004) findings suggest that, overall, corporate social responsibility and corporate reputation has a significant relationship. The corporate image as the concept of corporate reputation of the approximation (Dowling, 1993), the European model of customer satisfaction (ECSI), Chinese Customer Satisfaction Model (CCSI), there are certain degree of expression.

METHODOLOGY

Research strategy

Case Study:
Case study research is a method designed to study the particular within context and has a very specific purpose. […] The purpose of a case study is to provide a holistic account of the case and in-depth knowledge of the specific through rich descriptions situated in context. This may lead to an understanding of a particular phenomenon but it is understanding the case that should be paramount by PICARD, A.J (2007)
This paper will using the Tainted Sanlu Baby Milk Powder Incident identify the problems/issues in this case that are relevant to marketing.Analyze the case and apply concepts and theories of marketing to discuss the problems/issues Will be identified.

Marketing Problems:

For example: Celebrity Endorsement

1. Balance theory:

the scandal of the brand a consumer’ negative attitude toward the brand a consumer’s negative attitude toward the celebrity.

2. Social responsibility of the company;

The effectiveness of public relations in a crisis;

Product recall

B2B Problems: Supply Chain Management; Total Quality Management; Outsourcing; Purchasing…

The link including the milk powder production, cow raising, raw milk collection and dairy processing

Outsourcing to dairy farmers and milk dealers – they added melamine to the milk so that the diluted milk could still meet standards

B2B Problems: Supply Chain Management; Total Quality Management; Outsourcing; Purchasing

The link including the milk powder production, cow raising, raw milk collection and dairy processing:Purchasing, Quality control.

Dairy farmers a Milk dealers a Diary Producer (Sanlu) a Supermarket a Consumers:Cow raisingRaw,milk collectionDelivery, storage

B2B Problems: Supply Chain Management; Total Quality Management; Outsourcing ; Purchasing

There are two choose will be use(alternative):

1.investigate the problems from Sanlu (one company) perspective;

2.investigate the whole diary industry (Sanlu, Mengniu, Yili, Nestle; local brands & international brands);

Collect information from various sources; talk with diary distributors, diary producers, milk dealers, even consumers…

Research Method-Quantitative

Questionnaires/Survey

A questionnaire will be completed through http://www.monkeysurvey.com/

This project analyzes the impact of this behavior to identify the determining factor through research on the green purchase intention of consumers to. To this end, I designed a brief questionnaire, from different perspectives influence consumer purchasing decisions on a variety of psychological and social factors that raise questions.

This study will include 16 different area of Chinese food industry category

(See appendix for a complete list of green products to be pre-tested for inclusion in the final survey instrument!).

There will be two scales assessing the benefit emphasis of each item in the pretest.

One scale will assess “benefit to individual” and would range from “very little” to

“Very much” using a 5-point scale. The other scale will assess “benefit to society” in the same manner. The “gray” items will then be excluded, i.e., those which fall in the middle of the spectrum and are considered by some to benefit primarily the individual, by others primarily society.

The purpose for this survey is to identifies the Influence of consumer decision to purchase organic foods on the determinants of access to a more comprehensive and in-depth understanding of sustainable consumption and thus contribute to the further development.

Reference and Bibliography:

1.Anderson, Eugene W., Claes Fornell, and Sanal Mazvancheryl (2004),“Customer Satisfaction and Shareholder Value,” Journal of Marketing,68:4 (October), 172-185.

2. Bhattacharya, C., Rao, H. & Glynn, M.A. 1995. Understanding the bond of identification: An investigation of its correlates among art museum members. Journal of Marketing, 59: 46-57

3.Bhattacharya, C.B., and Sen, S. (2003). Consumer-Company Identification: A Framework for Understanding Consumers’ Relationships with Companies. Journal of Marketing 67(2): 76–88.

4.Bhattacharya, C.B., Smith, N. C., and Vogel, D. (2004). Integrating Social Responsibility and Marketing Strategy: An Introduction. California Management Review 47(1): 6–8.

5.Brammer, S & Pavelin, S 2004, ‘Voluntary social disclosures by large UK companies’, Business Ethics: A European Review, vol. 13, no. 2/3, pp. 86-99.

6.Brown, Tom J. (1998), “Corporate Associations in Marketing:Antecedents and Consequences,” Corporate Reputation Review, 1 (3), 215–33.

7.Chahal , H. and Sharma, R.D 2006, ‘Implications of Corporate Social Responsibility on Marketing Performance: A Conceptual Framework’, Journal of Services Research, vol. 6, no. 1, pp. 205-216.

8.Daub, C.-H., & Ergenzinger, R. (2005). Enabling Sustainable Management through a New Multi-Disciplinary Concept of Customer Satisfaction. European Journal of Marketing, 39(9/10), 998-1012.

9.Dowling, G.(1993).Developing your company image into a corporate’, Long Range Planning vol:101 no.9

10.Fornell, C., M. D., E. W. Johnson, J. Anderson, J. Cha, and B. E. Bryant (1996), “The American Customer Satisfaction Index: Nature, Purpose, and Findings,” Journal of Marketing, 60, 7-18.

11.Fornell, C., Mithas, S., Morgeson, F. and Krishnan, M. S. (2006). Customer satisfaction and stock prices: High returns, low risk. J. Marketing 70(1) 3–14.

12.Luo, X., and Bhattacharya, C.B. (2006). Corporate Social Responsibility, Customer Satisfaction and Market Value. Journal of Marketing 70(4): 1–18 (lead article).

13.Gurhan -Canli Z.Batra R(2004),” When corporate image affects product evaluations:the moderating role of perceived risk

14.Gruca, T.S., and L.L. Rego (2005) Customer Satisfaction, Cash Flow, and Shareholder Value. Journal of Marketing, Volume 69, July: 115-130

15.Kotler,P(1994)Marketing Management:Analysis,Planning,Implementation and Control(7th edn),Prentice Hall.

16.Kotler, P. & Lee, N., 2004.When it comes to gaining a market edge while supporting a social cause, ‘corporate social marketing’ leads the pack’. Stanford Social Innovation Review,

[Online]. Spring, Available t: http://www.ssireview.org/site/printer/best_of_breed/ [accessed4 August 2008]

17.Mitchell, A., Sikka, P., Willmott, H. (2001), “Policing knowledge by invoking the law: critical accounting and the politics of dissemination”, Critical Perspectives on Accounting, Vol. 12 No.5, pp.527-55.

18.Peter A. Dacin (1997), “The Company and the Product:Corporate Associations and Consumer Product Responses,” Journal of Marketing, 61 (January), 68–84.

19.PICARD, A.J (2007) Research methods in information. pp. 85.

20.Peattie, K(1992). Green Marketing. London: Pitman Publishing

21.Peattie,K(1995). Environmental Marketing Management. Pitman Publishing, London.

22.Sen, Sankar and C. B. Bhattacharya (2001), “Does Doing Good Always Lead to Doing BetterConsumer Reactions to Corporate Social Responsibility,” Journal of Marketing Research, 38(2), 225-244

Appendix:

Green Products to be pre-tested for possible inclusion in survey:

1. Beverages

2. Dairy

3. Alcohol

4. Baked goods

5. Cigarettes

6. Convenience food

7. Meat, poultry and eggs

8. Canned Food

9. Tea

10. Oil

11. Condiment (seasoning)

12. Snacks

13. Health-care food

14. Sea food

15. Fruit and vegetable

16. Grain processing

Categories
Free Essays

STP: Segmentation, Targeting and Positioning in Marketing Strategies

Introduction

All marketing is built on STP – Segmentation, Targeting and Positioning (Kotler &
Keller, p.310). In the chapter of fundamental marketing concepts, trends, and tasks it
says: “A marketer can rarely satisfy everyone in a market. Not everyone likes the same
cereal, hotel room, restaurant, automobile, collage or movie. Therefore, marketers start
by dividing up the market into segments” (Kotler & Keller, 2005, p.24).

Segmentation is often the key to developing a sustainable competitive advantage based
on differentiation, low cost, or a focus strategy (Aaker, 1995, p.49). It is difficult to
identify segments, but typically you consider five, ten or more segmentation variables.
These variables needs to be evaluated on the basis of their ability to identify segments
for which different strategies are (or should be) pursued (Aaker, 1995, p.51).
Once the segments are defined, it is possible for the marketers to evaluate what segments
presents the greatest opportunity for business and make an offer to target this specific
segment. The useful segment variables for this are :

(1) Parameters unrelated to the product (demographic, gender etc)

(2) Parameters related to the product

(3) Competitor segmentation

(4) Benefit segmentation

(5) Price Sensitivity

(6) Loyalty

(7)Application segmentation (Aker, 1995, p.52-54).

No company can win if its products and offerings resemble every other product and
offering. Companies must pursue relevant positioning and differentiation. In the line of
making these strategies, each company must represent a distinctive big idea in the mind
of the target market. Positioning is the act of designing the company’s offering and
image to occupy a distinctive place in the mind of the target market (Kotler & Keller,
2005, p.310).

This way of positioning works for static businesses like the shampoo and the washing
powder businesses for example. Products in a more dynamic environment like PC’s and
semiconductors, where things change often, fast and dramatically, need another way of
thinking which is described below:

”Standard approaches to positioning do not necessarily work. A company that is #1
today has no guarantee that it will be #1 tomorrow. New technologies can turn a
seemingly solid position into a fragile one almost overnight. No amount of
advertising can prevent that from happening. Even with the best of slogans, a
company can lose its position in the market.” McKenna (1985, p.15)

Positioning is not something that you do with the product, positioning is what you do to
the mind of the prospect. That is, you position the product in the mind of the prospects.
This is described in the book Positioning (Ries & Trout, 2006), who claims that the
market place today is an overcommunicated society where there is too much of
information communicating its offer (Ries & Trout, 2006, p.6). This is the reason of why
we need positioning. We need positioning to be successful in communicating our
message on the market place in the overcommunicated society.

Positioning is a concept that has changed the nature of advertising, a concept so simple,
people have difficulty understanding how powerful it is (Ries & Trout, 2006, p.2).
According to Trout the history within the advertisement on the market place, which now
is overcommunicated, have been in three different eras (Ries & Trout, 2006, p.22-24):

Product era; where Unique Selling Points were communicated, but was destroyed

by Me-too companies.

Image era; where successful companies found image more important than

product features. This era was also destroyed by the Me-too companies.

Positioning era; to succeed in our overcommunicated society, a company mustcreate a position in the prospect’s mind. In this era, strategy is king and there isnot necessary to invent and be first with the product, but you need to be first in the mind of your customer.
In our overcommunicated society, the paradox is that nothing is more important than
communication. With communication going for you, anything is possible. Without it,
nothing is possible. No matter how talented and ambitious you may be (Ries & Trout,
2006, p.19). Positioning is about communication. Positioning is to say the right things to
the right person at the right time, NASA call this a window in space. In other words,
positioning is an organized system for finding windows in the mind. It is based on the
concept that communication can only take place at the right time under the right
circumstances. With this in mind, it is also important to keep the position statement
oversimplified, to be able to reach the mind of the prospects (Ries & Trout, 2006, p.7)

According to Ries & Trout, there are two possible ways to get into the mind of a person,

the easy one and the hard one. The easy one is to be first, the hard one is to be second or

ater. Most of the people know the name of the first man on the moon, a lot fewer know
the name of the second. But even if you are second, there are strategies for this kind of
situation. These situations are described as repositioning by Ries & Trout (2006, p.63).
Once you are in the mind of the person, the positioning requires consistency. It should be kept year after year. It is very common that companies forget what made them
successful, and change the positioning communication. This is normally wrong strategy
according to Trout, and refers to when Avis changed their successful slogan: “Avis is
only No. 2 in rent-a-cars, so why go with usWe try harder.” to the less successful;
“Avis is going to be No. 1”.

The explanation behind this logic is that to be successful you need to touch base with
reality. And the only reality that counts is what’s already in the prospect’s mind (Ries &
Trout, 2006, p.5). In this case, Avis was not destined to be No.1, unless it could find a
weakness in Hertz to explore.

To develop an offer, you need to know your strategies of what you are going to sell to
whom. If you are working according to the suggestions in Michael Porter’s book
Competitive Strategies (Porter, 1998, p.35), where he claims that you need to choose
between (1) Product differentiation, (2) Low price or (3) Niches to be successful, then
you need to form a clear offer for that specific segment. You can only have success by
being the best in one segment, if you try to combine you will most likely have trouble
with resources and risk that another company wins this area. When you know the
segment, you need to decide about your specific positioning. Kotler recommend the
company to evaluate between 7 specific sources of positioning (Kotler, 1999, p.78):
(1) Attribute positioning

(2) Advantage positioning

(3) Application positioning

(4)User positioning

(5) Competitive positioning

(6) Category positioning

(7)Quality/price positioning. Further on Kotler (1999) writes that companies must not do the following mistakes:

Under positioning: Fail to offer a strong benefit or reason to buy the product
Over positioning: To create a position that is too tight, which results in that you miss customers.
Confusing positioning: To offer two or more benefits that interfere with each
Other irrelevant positioning: To offer benefits to customers that doesn’t matter forthem.

Doubtful positioning: To claim a benefit that customers will doubt the company to achieve.
In the book “Crossing the chasm” by Geoffrey Moore, he claims that the positioning is
the single largest influence on the buying decision. Not only for the final decision, but
also for how to evaluate alternatives leading up to the final choice (Moore, 2001, p.144).

Geoffrey Moore describes the positioning process in four components (Moore, 2001,

p.147):

The claim: The fundamental position statement
The evidence: Develop sufficient evidence for the statement
Communications: Address the right audience in the right sequence with the right message
Feedback and adjustments: Competitors can be expected to respond to the

statement trying to poke holes in the effort, this might require a patch up.

There are different tools to use when evaluating the status of the position. Some of them
can be found in the handbook of Andberg & Eliasson (2005, p.47-54) where they are
mentioned: 1) Marketing positioning diagram 2) Marketing roles 3) Marketing stairs 4)
Profile diagram. Sjostrom, R. (1996, p26) have made a deep analysis of positioning and found out that there are four different groups of how to see positioning:Product-, Competition-,
Relation-, and Phase oriented Positioning.

Marketing Mix, Four P’s

The Marketing Mix model also commonly known as the 4P’s Kotler (2005, p.19),
describes the marketing tools and variables used by a company to pursue its marketing
objectives.

In other words, the Marketing Mix approach to marketing is a model used to assist in
implementing marketing strategies. The Marketing Mix principles are based on ontrollable variables which can be used by companies to meet the changing needs of the
target group. Typical controllable variables are product variety, quality, list price
advertising and channels. The function on the model is useful helping companies to
develop an optimal package (mix) of variables that will not only satisfy the needs of
their customers within the target markets, but also simultaneously maximize the
performance and profit of the company. Pricing is an important but difficult issue in this
model, important because it is the only mix that generate a turnover for the company, all
other P’s in the model are connected to costs, and “Pricing is difficult because the
various products have demand and cost interrelationship and are subject to different
degrees of competition” Kotler (2005, p.387).

Figure – The 4P’s Components of the Marketing Mix (Kotler 2005, p.19)

The Marketing Mix model is described in figure 3, describing the mix of Product, Price,Promotion and Place. Working with the model, also means working with sub-mixes ofeach different P. For example, the Promotion variable can be further decomposed into apromotional mix consisting of variables like; sales promotion, advertising, sales force,public relations and direct marketing. Within the promotional mix, advertising can befurther broken down into an advertising media mix that specifies how much emphasis isplaced on television ads, radio ads, newspaper ads, internet ads, magazine ads, etc.

I would like to reflect on some variables within each group of the model that I find

interesting when analyzing a Marketing Mix of a company.

1 Product

The mix of products in each company is defined in one or more product lines, and each
line has its own length depending on the companies strategy and competition. The
lengths (amount of products) can be stretched to cover wider area of products or it can be
filled (features of product within the range), both activities strive to find new customers
and increase the sales and market share. The product line is also an interesting object for
analyzing, to find out which product line to grow, maintain, harvest or divest. The
quality is a variable to benefit from when communicating the message of the
product/brand, but also when dealing with warranties, services and returns, while
services and returns cost money.

2 Price

Pricing is as mentioned above, a complex issue. There are both internal and external
parameters to consider, with internal I mean manufacturing and marketing costs that
need to be covered and with external I mean that you should consider the need of the
market, the competition etc. I have read about 6 different situations only involving
different product-mix pricing Kotler (2005, p.387). Pricing is also about credits,
discounts, interests and leasing. It is all about to find out the most beneficial method for
the company and in the same time give the customer maximum satisfaction according to
his expectations.

3 Promotion

Promotion is a group that handles variables likeadvert i si ng and sales promotion. These
two variables I mentioned affect each other in a positive way. According to a study
described (Kotler, 2005, p.387), a price promotion resulted in a 15% increase in sales
volume, combined with feature promotion the product sales increased 19 %. Most affect
was when also POP (Point-of-Purchase) was added to the campaign, like
demonstrations. The tools to use are many and some will work better than others
depending on the product and market. The main different areas when talking about

omotion tools are; Consumer-, Trade- and Business and Sales Force Promotion Tools

(Kotler, 2005, p.588-599).

4 Place

I find the variableschannel andlocation in the group “Place” to be important variables
to have control of. The channels are about moving goods from producer to consumer.
Location is about where to find and get the product, not only physical but also places like
web pages on the Internet. When discussing channels, functions and flow (Kotler, 2005,
p.473) are easy to understand for me. Functions like physical or promotion creates a
forward flow, from company to customer, and functions like ordering and payment
create a backward flow. I find it more complex to understand, control and implement the
Vertical marketing System Kotler (2005, p.486), Horizontal Marketing System (Kotler,
2005, p.488) or the most common of them, the Multi channel Marketing System (Kotler,
2005, p.488) into the strategies of a company. But this is the strength of this model I
think, because if you can control all the independent variables in this model, you will
most likely have good success in the sales volume.

Reference

Aaker, D. (1995), Strategic Marketing Management, John Wiley, New York, NY

Adndberg, L. & Eliasson, B. (2005),Marknadspl anen, Liber, Malmo.

Holme, I.M., & Solvang B.K (1997), Forskningsmetodik: om kvalitativa och kvantitativa

studier. Lund: Studentlitteratur. Oversattning: Bjorn Nilsson.

Kotler, P. (1999), Kotlers marknadsforing, Liber, Malmo.

Kotler, P. & Keller K. L. (2005), Marketing Management, 12th edition, Pearson Prentice

Hall.

McKenna, R. (1985), The Regis Touch, new market strategies for uncertain times,

Addison-Wesley Publ. Company Inc., California.

Moore, Geoffrey A. (2001), Crossing the Chasm, 3rd edition, Capstone, Oxford.

Ries, A. & Trout, J. (2006), Positioning: The battle for your mind, McGraw-Hill,

London

Sjostrom, R. (1996), Positionering under strategisk osakerhet, Diss. Ekonomiska

institutionen, LiTH, Linkoping

Categories
Free Essays

Marketing Planning, Orientations and Concepts

INTRODUCTION

Far – reaching changes have been taking place in the Indian economy during the recent past, consequents to the opening up of our economy through globalization and liberalization policies. The flood gates have been through thrown open to allow international competition for manufactured goods and as well as services, making it a question of survival of the fittest in any industry. In the present highly competitive economy, which can be called as Buyer’s market, it is the customer who wields full power. He can make or wreck a company. No wonder that the collective battle cry from sales and marketing people, retailers, wholesalers and advertising wizards alike is now ‘Serve the customer’, or ‘Delight the customer’.

The customer who was considered the ’King’ is now treated almost like ‘God’, emulating the highly successful marketing people of Japan. When consumer expectations become higher and higher, superior market driven strategies or customer driven strategies and their execution in the market are important. Companies have to be fully customer oriented to succeed in the present competitive scenario, and should “Think Customer”, “Live for Customer”, “Smell Customer”, and “Build Customer Relations”.

MARKETING

“Marketing is defined as a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and values with others”. – (PHILIP KOTLER 2007)

THE AMERICAN MARKETING ASSOCIATION defines marketing asMarketing is a performance of Business activities that directs the flow of goods and services from producer to customer or user”. These traditional definitions have undergone some changes and the new version is given as “Marketing is a societal process by which individuals and groups obtain what they need and want through creating, offering, and freely exchanging products and services of values with others”. Thus marketing is a communication channel through which the industry and consumers are communicated.

MARKETING PLAN

A marketing plan is a formal statement of a set of business goals, the reason why they are believed attainable, and the plan for reaching goals and the way of reaching to the customer about to their product. Business plans may target changes in perception and branding by the customer, client, tax- payer, or larger community. When managing a business, a business plan, or B-plan, is often confused with the term Marketing Plan. Marketing plans are decision-making tools. There is no fixed content for a marketing plan. Rather the content and format of the marketing plan is determined by the goals and audience. (Deboreh 2010)

A marketing plan represents all aspects of business planning process; declaring vision and strategy alongside sub-plans to cover marketing, finance, operations, human resources as well as a legal plan, when required.

For example, a business plan for a non-profit might discuss the fit between the business plan and the organization’s mission. Banks are quite concerned about defaults, so a business plan for a bank loan will build a convincing case for the organization’s ability to repay the loan. Venture capitalists are primarily concerned about initial investment, feasibility, and exit valuation. A business plan for a project required equity financing will need to explain why current resources, upcoming growth opportunities, and sustainable competitive advantage will lead to a high exit valuation.

Preparing a Marketing plan draws on a wide range of knowledge from many different business disciplines: finance, human resource management, intellectual property management, supply chain management, operations management, and marketing among others. “A good Marketing plan can help to make a good business credible, understandable, and attractive to someone who is unfamiliar with the business. Writing a good Marketing plan can’t guarantee success, but it can go long way toward reducing the odds of failure”.

THE MARKETING ORIENTATIONS OR CONCEPTS

The marketing function or activities are conducted by various companies based on six alternative or orientations. They are:

The Production Concept
The Product Concept
The Selling Concept
The Marketing Concept
The Customer Concept
The Societal Marketing Concept

The Production Concept

The production Concept believes that consumers will favor products that are readily available at reasonable prices. Improvement in production and distribution efficiency will be the focus for managements under this concept. When the demand for a product exceeds the supply, manufacturers have too increase production. When the product’s cost is too high, the management has to bring it down to affordable levels. Production concept, though useful in some situations, could result in ‘Marketing Myopia’, according to Theodore Levitt. Companies following this concept focus too narrowly on their own activities and lose sight of the real objective of customer’s need satisfaction.

The Product Concept

The product concept believes that the consumers will favor products that offer the most in quality, performance & innovative features. Continuous improvements in product and quality are essential for companies that follow the product concept. So, this concept may also lead to Marketing Myopia.

The Selling Concept

This concept believes that the consumers will not buy enough of the company’s products unless it undertakes pressure selling tactics and heavy promotion efforts. Buyers are believed to have a buying inertia. This concept is especially used for unsought goods which buyers do not think of buying, like cemetery plots, life insurance, etc.

The Marketing Concept

This concept believes that achieving the company’s objectives depends on understanding the needs & wants of target markets and delivering the desired satisfaction in a better way than what the competitors are doing.

The Customer Concept

Many companies are today moving beyond the marketing concept to the customer concept. These companies shape separate offers, services and messages to individual customers, based on their individual preferences. They hope to achieve profitable growth through capturing a larger share of each customer’s expenditures by building high customer’s loyalty and focusing on customer’s life time value.

EXAMPLE: Barbie Dolls, Levi Strauss jeans, Dell Computers.

The Societal Marketing Concept

This concept believes that organizations should determine the needs, wants and interests of target markets. It should then deliver superior value to the customers in a way that maintains or improves the consumer’s and the society’s well being.

Society (Human welfare, environment)

Consumers (Needs, wants and Company (Sales volume, profits

Satisfaction) and growth)

MARKETING PLANNING PROCESS

The marketing Planning process consists of the following activities:

Analysing market opportunities
Selecting target markets
Developing the marketing mix
Managing the marketing efforts.

At the center of the process stand the consumers. The objective is to build a strong and profitable customer relationship.

The first step is market segmentation, targeting and positioning, to customers the company should serve and how. This process identifies the total market, and then divides it into smaller segments.
The next step is to design a marketing mix consisting of factors under its control like :

I. Product

II. Place

III. Price

IV. Promotion

For identifying best marketing mix combination and to put into action, the company engages in the activities like:

I. Marketing analysis
II. Planning
III. Implementation
IV. Control activities

With the help of these, the company watches & adopt to the actors and forces in the marketing environment around it.

Fig. The Marketing Planning Process

1, 2, 3,4 DENOTES:

1Marketing Intermediaries 3 Market planning

2 Marketing Control 4 Competitors

DEVELOPMENT OF MARKETING MIX

The marketing manager is a mixer of ingredients, according to JAMES CULLITON, a noted Marketing expert, who coined the expression,” Marketing Mix”

“The marketing mix is the set of controllable, tactical, marketing tools that the firm blends to produce the response it wants in the target market”

– (PHILIP KOTLER 2007)

The marketing mix consists of the variables such as:

Product
Price
Place
Promotion

These are well known as the Four P’s of Marketing as classified by McCarthy and this figure below gives clear description about the variables of marketing mix and its various tools.

Place stands for the goods and services offered by a company to the target market, to satisfy needs and wants.
Price refers to money value that the consumers have to pay to buy for the product or services.
Promotion refers to the activities of Advertising, personal selling, sales promotion, public relations and communicating products benefits and attributes to target customers to persuade them to purchase.
Place stands for physical distribution activities through which the products moves from the industry to the customers.

To be successful, the marketing programmes have to blend the 4 variables into an ideal integrated action plan aimed at achieving the corporate objective. While the 4 P’s concepts relates to the sellers perspective of the market.

The other P’s which are included as 7 P’s of marketing are:

Packaging
Positioning
People

Packaging is the fifth element of the marketing mix, which refers to the outer physical coverage of the product or the way in which your product is appearing outside.

Positioning refers to the present position of our product among the consumers. “How they think about our companyWhat position does the concern have in the marketWhat is the customer’s perception towards our product in the market?” these questions should be answered in the case of positioning of a product in the market.

People refers to both inside and outside people, the former refers to the employees of the industry and the later refers to the customers of our products and services, where they are considered as the important resources of marketing our goods and services.

The 7 P’s are a useful framework for deciding how the company’s resources will be manipulated (strategically) to achieve the objectives. However, they are not the only framework, and may divert attention from the real issues. The focus of the strategies must be the objectives to be achieved – not process of planning itself. Only if it fits the needs of these objectives should you choose, as we have done, to use the framework of the 7 P’s. (Jackie 2010)

The strategy statement can take the form of a purely verbal description of the strategic options which have been chosen.

Thus these are the various tools and variables described under the marketing mix.

THE MARKETING AND SALES PLANNING PROCESS

Marketing process can be realized by the marketing mix in step 4. The last step in the process is the marketing controlling. In most organizations, “strategic planning” is an annual process, typically covering just the year ahead. Occasionally, a few organizations may look at a practical plan which stretches three or more years ahead. To be most effective, the plan has to be formalized, usually in written form, as a formal “marketing plan”.

The essence of the process is that it moves from the general to the specific, from the vision to the mission to the goals to the corporate objectives of the organization, then down to the individual action plans for each part of the marketing program. It is also an interactive process, so that the draft output of each stage is cheeked to see what impact it has on the earlier stages, and is amended.

TARGET MARKETING

To define a target market for your business plan, you should research the potential buying audience for your product. This could range from millions of people if you are starting an online business, to a few thousand individuals if you are opening a retail store in a small town. If you are catering to the consumer market, narrow your potential customer base to a defined demographic group. By doing so, your business will not only be more attractive to investors, but you will have a much easier time compiling sales and marketing plan.

Study your product or service and determine the most likely consumer. Define the age range, gender, marital status, and income level of the individual most likely to be your customer. Explain the motivations for purchasing your product or service. Is it a necessity or luxuryWhat value does this product bringIt’s best not to assume or guess. Use surveys, questionnaires, or secondary research to gather your demographic data.

Once you have defined the target market:
Explain the purchase habits of this demographic group.
Show how your company will impact those purchase habits.
Explain the motivation behind this demographic group and how you will help them meet their needs.
Project future changes in this market.
Indicate how you will meet their changing needs.

Base your future projections on research and details from your findings. Make projection based on past buying habits, the average purchase amount, and other factors, such as your ability to make the products or services available. The more you know about this target market, the more confidence you will have in your sales projections.

The same need to identify your target audience (business-to-consumer market) will also hold true if you are serving a business market (business-to-business market). You need to determine which companies will benefit from your products or services. Will you meet the needs of a specific industry or several industriesLarge or small businessesPublic or privately owned businessesDefine exactly the types of businesses that will buy our product or services and target them through your marketing efforts. Determine how you will reach your target market, i.e. online, by referral, by cold-calling. For more about learning about the customer you intend to pursue, read Use Demographics to Understand Your Target Market.

Another way to look at target market is to consider how you are positioning your company and your products. Read “What’s Your Position in the Market?” to get the basics of this important but tricky concept.

MARKETING PLANNING AIMS AND OBJECTIVES

Behind the corporate objective, which in themselves offer the main context for the marketing plan, will lay the “corporate mission”, which in turn provides the context for these corporate objectives. In a sales-oriented organization, the marketing planning function designs incentive pay plans to not only motivate and reward frontline staff fairly but also to align marketing activities with corporate mission.

This “corporate mission” can be thought of as a definition of what the organization is, of what it does: “our business is …” This definition should not be too narrow, or it will constrict the development of the organization; a too rigorous concentration on the view that “we are in the business of making meat-scales,” as IBM was during the early 1900s, might have limited its subsequent development into other areas. On the other hand, it should not be too wide or it will become meaningless: “we want to make a profit” is not too helpful in developing specific plans.

Abell suggested that the definition should cover three dimensions: “customer groups” to be served, “customer needs” to be served, and “technologies” to be utilized. Thus, the definition of IBM’s “corporate mission” in the 1940s might well have been: “We are in the business of handling accounting information [customer need] for the larger US organizations [customer group] by means of punched cards [technology]”. (Karunakaran 2010)

Perhaps the most important factor in successful marketing is the “corporate vision.” Surprisingly, it is largely neglected by marketing textbooks, although not by the popular exponents of corporate strategy-indeed, it was perhaps the main theme of the book by peters and waterman, in the form of their “Super ordinate Goals”. “in search of Excellence” said: “Nothing drives progress like the imagination. The idea precedes the deed.” if the organization in general, and its chief executive in particular, has a strong vision of where its future lies, then there is an good chance that the organization will achieve a strong position in its markets (and attain that future). This will be not least because its strategies will be consistent and will be supported by its staff at all levels.

In this context, all of IBM’s marketing activities were underpinned by its philosophy of “customer service,” a vision originally promoted by the charismatic Watson dynasty. The emphasis at this stage is on obtaining a complete and accurate picture.

A “traditional” – albeit product-based-format for a “brand reference book” (or, indeed, a “marketing facts book”) was suggested by Godley more than three decades ago:
Financial data-facts for this section will come from management accounting, costing and finance sections.
Product data-form production, research and development.
Sales and distribution data-sales, packaging, distribution sections.
Advertising, sales promotion, merchandising data-information from these departments.

Market data and miscellany-form market research, who would in most cases act as a source for this information. His sources of data, however, assume the resources of a very large organization. In most organizations they would be obtained from a much smaller set of people (and not a few of them would be generated by the marketing manager alone).

It is apparent that a marketing audit can be a complex process, but the aim is simple: “it is only to identify those existing (external and internal) factors which will have a significant impact on the future plans of the company.” It is clear that the basic material to be input to the marketing audit should be comprehensive.

Accordingly, the best approach is to accumulate this material continuously, as and when it becomes available; since this avoids the otherwise heavy workload involved in collecting it as part of the regular, typically annual, planning process itself-when time is usually at a premium. Even so, the first task of this annual process should be to check that the material held in the current facts book or facts files actually is comprehensive and accurate, and can form a sound basis for the marketing audit itself.

MARKETING PROGRAMS

Marketing programs are the most important, practical outcome of the whole planning process. These plans must therefore be:

Clear – They should be an unambiguous statement of ‘exactly’ what is to be done.
Quantified – The predicted outcome of each activity should be, as far as possible, quantified, so that its performance can be monitored.
Focused – The temptation to proliferate activities beyond the numbers which can be realistically controlled should be avoided. The 80:20 Rule applies in this context too.
Realistic – They should be achievable.
Agreed – Those who are to implement them should be committed to them, and agree that they are achievable. The resulting plans should become a working document which will guide the campaigns taking place throughout the organization over the period of the plan. If the marketing plan is to work, every exception to it (throughout the year) must be questioned; and the lessons learnt, to be incorporated in the next year’s planning.

A marketing plan for a small business typically includes Small Business Administration Description of competitors, including the level of demand for the product or service and the strengths and weaknesses of competitors.

Description of the product or service, including special features.
Marketing budget, including the advertising and promotional plan
Description of the business location, including advantages and disadvantages for marketing
Pricing strategy
Market segmentation
Operational plan

Operational plans are an important element of writing a business plan and they notify business assessors for how business owners are going to release product/services into the market. That’s why operational plans are also a very important part of writing a marketing plan. In simple words, operational plans help to understand ways for business reviewers, by which products are set to pass the production phase heading toward the targeted customers and these plans must be in the business plan outline. Operational plans are a usual phenomenon in a how to write a business plan, but they outline crucial answers basic questions as such:

What are the daily activities of a business
What is the raw material sources used
How will the company or business use vendors and suppliers
What are the labours requirements
Who is the product supplier

Operational plans need to ascertain the activities and finances for almost every section of the firm or business for the next 1 or 3 years. Operational plans also connect with intended plans and the activities that the business may deliver to its customer base.

Good operational plans ought to include:

Apparent target areas
Preferred results
A procedure to supervise growth execution schedules
Employment and resource requirements
Quality levels
Finally, activities which a firm or business may deliver to its targeted customers.

REFERENCES:

Deboreh (2010) International journal of Market research, “ Agenda Development for marketing research” vol 52, pp 339 – 362.

Luan (june 2010) journal of marketing research, “Forecasting marketing mix responsiveness for new product” vol 47, pp 444 – 457.

Karunakaran (2010) “Marketing Management” The Himalaya publishing house 1st edition pp256

philip kotler (2007) “Marketing Management” Analysis, planning, implementation and control 9th edition prentice hall, New jersey

Baker, M., J.,Hart, S. (2007) the Marketing Book, (5TH edn.), Butterworth- Heinemann,UK.

Categories
Free Essays

Analysis of Samsung Marketing and Brand Strategies

Introduction:

In this report we have evaluated the literature and actual brand strategies used by Samsung. Samsung Electronics Company is worldwide leading consumer electronics brands which have very high opponents in the same business field like HTC, Sony, Panasonic, and Nokia. With the help of its creative products and services it is attracting lot of customers.

It was founded in 1938 by Lee Byung-chull as a trading company. In 1969 it establish and developed the different business to electronic market that make Samsung flourish into the world’s leading electronic brand. Samsung became the leading electronic manufacturers in Korea by catering to the international market. It makes Samsung to be a champion to international market with high-tech products. Later on in 1993 Samsung became the world’s best popular because of joined into the LCD industry.

Samsung set up its branding strategy by Chairman Kun Lee who planned to originate universal program to make Samsung to be an international brand in 1996. For increasing its brand awareness in the world, Samsung paid budget to the investment in marketing and branding and it’s about US 3 billion. (Business Week,2006)

In addition, Samsung has spend lot of money in sports for its brand image for example, for sponsoring in Olympic Games Sydney 2000, In Athens 2004 Olympic Games furthermore, Samsung also supported tools and distributed 14,000 cell phones during the games. Afterwards, Samsung has joined Yahoo Company in strategic marketing. In 2001, Samsung is to be voted to the number one in 100 brands by Business Week. To highlight on its brand awareness, Samsung encourage the official sponsor of Chelsea, the popular English Premier League football club in 2005. To continue to increase perception of brand Samsung became the official sponsor of 2010 Guangzhou Asian Game.

MEANING OF BRAND

Brand is the identity of a product, sign, symbol or design and how it describes to key points like customers, staff and partners etc.

Main goals which a good brand includes:

Conveys the message purely.

Convince the buyer.

Confirms credibility

For success in branding we have to concentrates on requirements and needs of customers. With the help of branding we can convince the customers to great extent.

Strategies of Branding

Developing a brand strategy can be one of the most challenging steps in marketing plan process. It plays a vital role in creation of company’s identity.

Brand Image of Samsung

Brand imaging is an essential tactic for company’s marketing plan and consumer behavior research (Dobni & Zinkhan, 1990). A clear image of a brand enables consumers to know about the brand, use the brand, and talk about the brand. All these factors are beneficial for the brand in identifying it from any rivals in the market. Good brand image strategies can lead to a good brand performance (Roth, 1995).

Brand image has three components:

Product Attributes
Customer’s benefit
Brand Personality

Samsung Logo:

The first expansion of brand image of Samsung Electronics Company was started in 1993. Samsung Electronics Company has driven into a new corporate identity by changing its logo from the basic black bold type letters of the word Samsung with red star signs at the side into white Samsung word on a blue color background (Spaeth, 2007). The blue background was designed to be an elliptical shape which gives an impression of modernization and advance. It is determined to agree that Samsung has succeeded in the development of its brand logo.

Gardner and Levy (1955, as cited in Park, Jaworski, & Maclnnis, 1986) once stated that the brand will be successful in a long term could depend on a company’s strategies of choosing a brand image and to maintain the image over time. Samsung has clearly proved that it has driven on the right track as the brand is now widely well known around the world with its reputation of global electronics brand

Character:

Its character obviously describes that it is a strong brand approximately innovation, cutting edge technology and world class design. To clear its brand image, it reinforces Samsung’s strong connection to the brand community to customer; besides, it reinforces its brand image of always being in leading position of innovation and design.

(Martin Roll,2006.The global bestseller Asian Brand Strategy (“Best Business Books 2006” by Strategy Business magazine)

Another powerful development of brand image of Samsung was to design an impression of the brand with global sport events. Samsung became the official sponsor of the wireless technology in the Olympics when Seoul was hosted in 1998. By representing its brand into sport events, the brand will be greatly notice by lot of consumers. Nowadays also Samsung is using the same strategy. Samsung has decided to become an official sponsor for Chelsea football club since 2005/6 season and it was the second largest sponsorship signed by Samsung since the Olympics Games (Jones, 2005). By doing this Samsung logo is now appearing on every shirt of Chelsea players and it can be seen as an impressive way to maintain image of the brand.

Slogan of Samsung:

In this year, Samsung informed its all-new brand slogan “Turn on tomorrow”, to chase of a better future. This new slogan started from mid of July a series of promotions was showed to every customer to improve Samsung’s new brand strategy.

Country of Origin

Samsung has been involved to promote the country image of South Korea since Seoul Olympics in 1988 (Nebenzahl and Jaffe, 1991). The company image has to focus on the “country-of-origin” known as COO which is highlighted the impact of purchase behaviors (Martin and Eroglu, 1993). The perceptions of consumers on Korean products as overall image are still not considered as “high quality products” but known as a “good value products” (Nebenzahl and Jaffe, 1991).

Marketing Strategy

Samsung mission is to continue to become a world’s leader of digital convergence with the number one market share of most products segments. ( Ilse Jurrien, 2005). Samsung ambition is to boost sale volume in every segments of product.

In addition, Samsung objective is to stand on top of the world ranging electronic market; accordingly, it has team which is named as “Global marketing team”. This team separated from another part and divided in to three layers that are:

Product strategy team
Marketing strategy team
Regional strategy team.

Product strategy team

In Product strategy team managing market research , collection the information and analysis data of competitors in daily task.

Marketing strategy team

Marketing Strategy team’s main responsibility is to expand global marketing strategy for example to present the core message that Samsung want to communicate to customer and every promotional activities to international-wise.

Regional strategy team

Regional strategy team’s main job is to move the task from Marketing strategy team and managing to different regional. One attempt that appropriate in the United States does not mean that it would success in other countries. Regional Strategy team’s duty is to recover strategy concerning in regional demographics.

Market Driven Change

In earlier days Samsung’s attempt was promoting in own way that resulted in confuse information and obscurity brand image that make consumer confused in company. Afterwards, the blockbuster launched movie called “The Matrix” and Samsung have the opinion of that it was a perfect time to improve brand image under slogan “Digital All-Everyone’s Invited”. Moreover, Samsung choose to corporate with Warner Brother for product placement at “The Matrix”. Samsung’s important place on customer’s insight to new product development method. (Kinda,2008)

Target Market

Samsung has changed and emphasizes on the high-end target group and business which means Samsung spend budget to promotional in niche market like the main competitor’s Sony. That directly affects the brand image in high-class value and to certify higher margins and efficiency. (Business weekly,2002)

Market Shares

Product

Samsung’s
global M/S

Competitors

M/S

Year

Source

DRAM

40.4%

Hynix

19.8%

Q32010

[69]

NAND Flash

40.4%

Toshiba

33.1%

Q22010

[70]

Large-size LCD Panel
(revenue)

26.0%

LG Display

25.9%

Q32010

[71]

Active-Matrix OLED

97%

LG Display, AUO

1~3%

2010

[72]

Lithium-ion battery

18.7%

Sanyo

19.4%

Q12010

[73]

LCD Monitor

18.0%

Dell

12.8%

2009

[74]

Hard disk drive

9%

Seagate
Technology

31%

Q42009

[75]

Television sets
(LDC, PDP, CRT, LED)

17.2%

LG Electronics

14.8%

Q32009

[76]

Mobile phone

21.0%

Nokia

32.4%

Q32010

[77]

Digital camera

11.8%

Sony

17.4%

2010

[78]

Meaning of Brand Value

The success of brand is the goal pursued of companies whose attempting to lead the market. Brand value is one of significant criteria that enhance branding of the company. The uniqueness of the brand is influenced consumers in both directly and indirectly, hereby improving the company value (Melewar and Karaosmanoglu, 2006). The strong and successful brand was able to dominate and persuade decision making of consumers.

Samsung ranks 19th in the Top 100 Global brands in 2009 to 2010. That shows Samsung brand value up 11 percent from year earlier, according to annual report by global branding inter brand. The reason for this success is Samsung approach to develop in marketing strategy for different regions; moreover, to increase in perspective in brand, Samsung sponsored in Olympic Games and other sports such as sponsor Chelsea Football League in England, sponsored Texas motors speedway. (Interbrand,2010)

The growth of Samsung’s brand value is always put main emphasis to response demand and approach to experience in customers. Moreover the company focused on every detail of their brands, develop products, cohesive identities compatible in every products, every market round the world and every communicate to customers.(Business Week,2008)

To expand an integrated method to endeavors, the context of brand has to change to adopt culture, expertise and organizational systems include products, if senior management is using these assets and ability effectively (Doyle, 1998)

Strategies adopted by Samsung:

Creating Identity of the Brand.
Reaction from rival’s
Cost involved in repositioning of brand
Research and development

Best global brands of 2010

16

16

France

Luxury

21,860

4%

17

20

United States

Electronics

21,143

37%

18

17

United States

Tobacco

19,961

5%

19

19

South Korea

Electronics

19,491

11%

20

18

Japan

Automotive

18,506

4%

21

21

Sweden

Apparel

16,136

5%

22

24

United States

Business Services

14,881

9%

23

23

United States

Beverages

14,061

3%

24

22

United States

Financial Services

13,944

-7%

25

26

United States

Sporting Goods

13,706

4%

26

27

Germany

Business Services

12,756

5%

27

25

Switzerland

Beverages

12,753

-4%

28

28

Sweden

Home Furnishings

12,487

4%

29

37

United States

Financial Services

12,314

29%

30

30

United States

Alcohol

12,252

4%

31

31

United States

Transportation

11,826

2%

32

32

United Kingdom

Financial Services

11,561

10%

33

33

Japan

Electronics

11,485

10%

34

29

Japan

Electronics

11,356

-5%

35

34

United States

FMCG

11,041

6%

According to the table of Brand Value in Global brands in 2010,

Samsung was stable in rank 19th in last year and current that show it can manage marketing strategy in good brand value in crisis economic situation. In term of Sony the main competitor, in the chart of Brand Value showed it rank is up from 34th to 29th in 2010 ;nevertheless, Sony still stay behind of Samsung. And in Change of value Sony is -5percent and Samsung is 11 percent.

The reason of achievement to be in global brand of Samsung are many strategy that company chosen; for example, Samsung considered to customer experience that make it placed 2nd after Coca-Cola sponsorship in Olympic Games. Samsung assemble the organization for brand building and the key of brand building is employees and consumers. The employees received the emotional benefits from pride in being associated with the sponsorship and direct connection to the Olympic activities. In term of consumers, Samsung provided a new experience to the customers; for instance as a part of Samsung’s brand proximity program it put up in Olympic [email protected] Samsung, The Athens Olympic Sports Complex located in a 1,064 square meter entertainment complex which was a central company place for athlete, their families and viewer coming to the Games. The [email protected] give a wide range of activities; for example, the customers were received the opportunity to try out Samsung’s revolutionary products by themselves.

Brand Position

In term of Samsung company has position the brand position as innovation, cutting edge technology and high-class design. In marketing plan, Samsung created team of global marketing to develop to assign the identity of products. The design of product is the important part to attractive to consumer to purchase. Samsung present the different of leading of electronic to innovation, high-end and focus on niche market. In addition Sony focus on high-end and niche market according to, the group assessment that show in perceptual map.

In growing competition and more require consumer that CEOs facing these day, they have to know how to created more value into products and services because of nowadays, there are many competition, fast innovation and more demanding consumers. (Court et al.,1999)

According to, Samsung has developed technology to standing in leading of electronic market; for example, Samsung is the first brand of Thinnest Blue-ray player in 2009, Released the world’s first infrared video phone in 2009. That make Samsung is the No.1 in customer loyalty for 8 years in succession by Brand Keys of the USA

Brand Relationship

To created more value into Samsung product, the company chosen to communicated in campaign that satisfy with slogan; moreover, Samsung has joined the campaign with the movie call “The Matrix” to customer perspective in brand image is innovative and high technology. The company chooses the right time and right place to show the way of company.

The campaign in advertising, Samsung show the high-end and luxury design to the Television commercial. That makes customers absorb brand image of Samsung and effected to brand value in consumer’s mind.

Samsung continue to purchase budget to promote brand in advertising campaign and continue to sponsor in the Olympic Game. Samsung be concentrate in strong of brand image including selecting the distribution channel, to research and developing the products, creating the new technology to be the number one of the electronic world.

Customer Perspective

After evaluating the brand value, position and image the next step is the customer perspective of Samsung we get this information from different websites. The evidence shows that Samsung attracted lot of customers it creates a very good image in customer’s mind. In most of products and Brand value range confirms that the customer is trustworthy and satisfied with the brand. In eco-friendly blue earth phone are also embedded with solar panel which helps in making .Samsung growing up from 4th to 2th in mobile market share. The design of product of Samsung emphasis to approach the customer insight is very effective. Nowadays mobile phone is not used only for communicating purposes but also use as fashion accessories with latest models and technology. The customers require the mobile phone for self-image which includes design, function and reliable of product. Samsung come to stand in customer’s mind and gain more market share from its main competitor Nokia. (Business Time, 2010)

Strengths of Samsung

CDMA Handset market
Brand Position
Product Quality
Horizontal Integration
Core Competence
Distribution Network
Conclusion

Samsung has created lot of attraction among customers during last year’s and nowadays also by using different marketing strategies. The main goal of CEOs is to drive their brand to worldwide which shows that Samsung have good management of and intention to identify their brand to global whiles improve and develop the products among to premium quality with main competitor is Sony. The marketing strategies help to contribute to be a good brand image such as to sponsor in Olympic game; including, product placement in the movie. Samsung concerned to the environmental and launched the products that are eco-friendly.

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Free Essays

For an international tourist destination of your choice, critically discuss the marketing strategies that could be adopted to mitigate the impacts of a natural or man-made disaster.

Introduction

The tourism business around the world which is one of the most susceptible and vulnerable sectors, must always manage and survive from the global crises. In recent decades, the tourism industry in many countries all over the world has experienced major crises from natural disasters such as hurricanes, storm, and tsunami to terrorist attacks, political instability, and economic recession. Generally, disasters are large non-controllable problems that evaluate the capability of nations and communities to effectively protect the population and its ability to recover after the disasters. No tourist destination is immune to such crisis. Hence, the global tourism industry requires strategies and set of directions which help tourism businesses prepare a way to manage a crisis event from its onset and rapidly implement a recovery strategy. The purpose of this essay is to examine the post-disaster destination marketing viewpoint, its effects on the city of New Orleans, and the attempt to reposition as a premier destination for domestic and international of New Orleans after the devastating effects of Hurricane Katrina, the most destructive natural disaster in American history in August 2005. Besides, this essay will critically examine the effectiveness of recovery marketing strategies undertaken by the city’s tourism marketing organizations and the lessons learned for post disaster market repositioning are also discussed.

The first section will define the tourist destination, destination crisis, tourism disaster, and a narrative of vital tourism statistics for the city of New Orleans before the hurricane. The second section will mention the effects of the hurricane on the New Orleans tourism. Finally, the third phase will critically examine the effectiveness of recovery marketing strategies undertaken by the city’s tourism marketing organizations.

According to Beirman (2003), a destination is defined as a country, state, region, city or town which is marketed or markets itself as a place for tourist to visit. Many countries’ main income is collected from tourism activities; they have invested heavily in tourism and required a high level of economic dependence on inbound tourism. The economic disruption to the country, state or region is considered as a result in the viability of a destination and it could be a result in loss of income, unemployment and poverty. However, these implications do not determine the choice of destination in tourists and their prime concern is to travel to destinations that satisfy their own desires with minimum threats to their safety and well-being. Therefore, the marketing of destination crisis is no longer being treated as a problem of a specific destination; it is now an issue of global tourism industry and become a critical political, economic and social priority for many nations which tourism is a significant industry.

Faulkner and Russell (2000, cited in Beirman 2003) defined a disaster as ‘a tourism destination is confronted with sudden, unpredictable, catastrophic changes over which it has little control’. In order to modify the definition of Faulkner and Russell, Beirman defines a destination crisis as ‘a situation requiring radical management action in response to events beyond the internal control of the organisation, necessitating urgent adaptation of marketing and operational practices to restore the confidence of employees, associated enterprises and consumers in the viability of the destination’.

For many years, New Orleans was an ideal vacation destination and it is the world famous tourist destination due to its rich cultural heritage, copiousness of unique food and many opportunities to enjoy local art, music and festivals. Throughout the past 30 years, New Orleans focuses on its efforts to attract tourists by constantly redefine its image through all taglines such as ‘The Crescent City’, ‘The Gateway to the Mississippi Valley’, ‘America’s Most Interesting City’, ‘The City that Care Forgot’, and the ‘The Big Easy’ (Clement 2008). Moreover, it often cited as “European” charm and the unique French Quarter historic district, thus, there is a large number of tourists visit the city for many years to take part in the distinct experience that New Orleans has offered as a vacation venue. In January 2005, just seven months before Hurricane Katrina, New Orleans was ranked sixth among the top United States vacation destinations which were conducted by the University of New Orleans (UNO) Hospitality Research Centre (Chacko and Marcell 2008). Statistically, in 2004, tourism of New Orleans was one of the main economic engines of the city and the employment in hospitality and leisure accounted around 80,827 jobs generating $30 million in state income taxes. Besides, the number of visitors came to city reach to peak 10.1 million and spent $4.9 billion in 2004. Before the Hurricane Katrina occurred, the tourism industry accounted for 3.8% of Gross State Product, provided 175,000 direct jobs, and generated under 8% of total tax revenues of the states (Louisiana Research Team 2004).

New Orleans is a unique circumstance of Hurricane Katrina. Faulkner (2001) addressed the difference between the definition of crises and disaster that crisis was defined as ‘induced by the actions or inactions of the organization’ while a disaster was considered to be an ‘induced natural phenomena or external human action’. The terrorist attack September 11, 2001 in the U.S and Chernobyl nuclear accident would be classified as crises while the Turkey earthquake and the plane crash in Lockerbie were disasters. According to Faulkner’s definition, Hurricane Katrina would have been classified as a disaster with over 1,300 died; 228,000 housing units were flooded in the New Orleans metropolitan area and over 70% of 188,000 housing units were damaged by the storm and subsequent flood (Olshansky et al. 2008). However, the poorly man-made concrete levee walls which were designed by the U.S. Corps of Engineers, a federal agency aimed to protect the city breached, did the flood waters deluge 80% of the city and created a crisis of gigantic proportions. In addition, federal, state, and local government authorities lacked of capacity in preparing and re-acting in a timely manner to the city citizen’s needs. Therefore, the Hurricane Katrina can be described as an induced natural phenomenon or a disaster followed by the inactions of organizations or a crisis.

Two major organisations responsible for the overall tourism and hospitality marketing of the New Orleans are the New Orleans Metropolitan Convention and Visitors Bureau (NOMCVB) and the New Orleans Tourism Marketing Corporation (NOTMC). The primary mission of NOMCVB is bring meetings, conventions, and tour groups to the city, supply many hotels, restaurants, attractions and provide tourism goods and services for customers. This organisation uses personal selling as the primary sales strategy and solicits business from several tourism intermediaries such as meeting planners and tour operators. The second organisation’s goal is to spur the city visitation and uses two million dollar in its budget for advertising and positioning the leisure market of New Orleans. Besides, tourism marketers capitalise New Orleans’s strength as an exotic, unique, and ‘foreign’ locale (Stanonis 2006). In addition, just two months before Katrina, marketers produced a television commercial which is part of the summer campaign 2005, featuring New Orleans’s well-known and talented local musicians with titled ‘Do They Play Jazz in Heaven?’ According to Kotler et al. (2005), the appeal of the message was more emotional than rational and included the lines ‘do they play jazz in heaven, in New Orleans we know they do’ (Chacko and Marcell 2008). These messages reinforced the well-established position of the city as an exciting and popular destination with great food and music. However, the arrival of Katrina made a major shift in positioning strategy in producing hundreds of hours of negative publicity in the mass media.

Unfortunately, New Orleans’s city was truly in a state of disaster after Hurricane Katrina. The storm and flooding are not only washed away physical infrastructure of the city, but also eroded the perception of the city’s tourism destination. According to Northington (cited in Chacko and Marcell 2008), the city loss $15.3 million and this was potentially devastating to New Orleans’s tourism industry, especially the loss of economic impact from many festivals and events that it hosts. However, the biggest obstacle that New Orleans’ tourism industry has to face is the tarnished perception as a tourist destination of the city. Faulkner (2001) claimed that the power of media and tendency in lingering negative images, the destination usually takes longer to recover than the period requires services restore to normal.

The tourism industry of New Orleans has met a lot of challenges after Hurricane Katrina. Prior the disaster, the research focused on measuring the industry and profiling the visitors to New Orleans, but now the focus has sharply shifted to measuring the perceptions of visitors about New Orleans. Mayor C. Ray Nagin said in an interview with the New Orleans Times-Picayune that ‘We have an image challenge throughout the country. You ask what New Orleans is like today, and any people only have images of a city in crisis. And that’s a concern, that they don’t see the rebuilding that is going on’ (Thevenot 2005). Moreover, due to the national and international media continued to display images of a ravaged city every detail, the tourism industry was getting worse and worse. According to journalist Eric Morgan (2008), ‘because of the media, people believe we have infrastructure issues, hotels aren’t open, restaurants aren’t operational, and there are no supporting service industry workers’. In March 2006, the New Orleans Tourism Marketing Corporation conducted a perceptions study of a panel of 5,000 online travellers, 22% indicated they believed that some neighbourhoods of New Orleans still had standing flood water from Hurricane Katrina, 14% of them believed New Orleans is not a safe place to visit because of contaminated air or drinking water, and 12% indicated that the historic districts in New Orleans are still destroyed or devastated. However, the optimism seems to have increased over time with 77% of meeting planners over the three quarter between October 2005 and January 2006 indicated that they were “very optimistic” about the sufficient recovery of New Orleans in regaining its status as a major destination city. Although meeting planners fully expect city’s recovery, they believe it will be a slow process (Chacko and Marcell 2008).

In reality, New Orleans is different from the potential leisure travellers’ perception. The city’s tap water was safe to drink according to city health officials and there is no standing water on the streets. Transportation and airline are suitable to handle travellers and 80% of hotel room inventory has rebounded as pre-Katrina levels. Nevertheless, many flooded neighbourhoods’ recovery is still slow and the city is continued framing news coverage in these environments and undermining positive messages by the media. Therefore, the challenge is to find the appropriate marketing strategies to mitigate the impacts of disaster for New Orleans.

As the result of the Katrina disaster, the NOMCVB, NOTMC, and other tourism organizations have elaborated on their past branding campaigns and created new campaigns to change perceptions of potential travellers and using brand elements such as new slogans and logos to alter the images of New Orleans. The slogans and themes try to counteract negative images which were played out in the national media and reconstruct and increase brand identity of New Orleans. According to Braun-LaTour, LaTour, and Loftus (2006), ‘reminding consumers of their past connection with a brand may be a particularly effective way to repair the brand’s image after a crisis situation’. Slogans were launched through branding campaigns of organisations such as ‘fall in love with Louisiana all over again’, ‘New Orleans: Happenin’ everyday’, ‘do you know what it means to Miss New OrleansWe know you do’ and etc. to rebrand New Orleans as a multicultural destination and created a sentimental image of New Orleans, divert attention of travellers from the human suffering’s reality, physical destruction and stimulate consumer desires to travel to the city by constructing a narrative of past grandeur. According to Greenberg (2000), the urban branding campaigns function not only as ‘texts-on-cities’ but also power-laden ‘texts-as-cities’ that position of organisations and tourism professionals as important voices in the articulation of the collective identity of the city and thus ultimately the urban brand.

In January 2007, with support from Lieutenant Governor Mitch Landrieu, the NOMCVB launched ‘an aggressive, strategic, marketing, public relations and direct sales campaign designed to celebrate its authentic culture, lure domestic and international visitors back, preserve the city’s leading industry (hospitality) and overcome misperceptions about New Orleans among consumers’ (NOMCVB Press Release 2007). The ‘Forever New Orleans’ campaign is an international branding campaign which was designed to re-brand the city internationally by showcasing the confidence of hospitality industry in New Orleans and developing a deeper understanding of the city culture as unique and authentic. It uses headlines in outdoor advertisements and print campaigns such as ‘New Orleans is Open. To Just About Anything’, ‘Soul is Waterproof’, ‘Old World, New Promise’ and other phrases to celebrate a spirit of swagger, appeal the meetings industry, travel trade professionals and the traveling public. According to Morgan (2008), the largest out-of-home advertising company in the United States – CBS Outdoor donated 44 billboards worth a valued of $3 million to New Orleans. Besides, the 30 minutes television show ‘A Whole New Orleans’ attempts to attract visitors with displays of the city’s most authentic, historic destination and unique culture.

The NOMCVB and other tourism professionals try to increase the development of New Orleans’s tourism post Katrina and mention the perspective of ‘internalising the brand’ as a major ingredient in branding New Orleans as an entertainment destination (Gotham 2007). New urban rebranding campaigns are being implemented in order to present ‘authentic’ image of New Orleans as clearly demarcated, disconnected, and segregated from flooded neighbourhoods by tourism professionals. Besides, a new industry of ‘disaster tourism’, for example ‘Hurricane Katrina: America’s Worst Catastrophe!’ tour through devastated neighbourhoods of Gray Line New Orleans Bus Tours focused on ordinary places that have historical and cultural significance thereby mobilizing travellers to visit them. Moreover, in order to attract corporate brands to invest in New Orleans, political and economic elites have pushed for the development of lucrative tax subsidies and help finance the rebuilding effort. Therefore, the above points demonstrate that tourism organisations are trying to marketing the imaginary of New Orleans base on entertainment version to attract investment and rebuild the city. The branding strategy is a new method to promote urban place to align local political interests with transnational corporate entertainment to organise urban rebuilding. Rebranding New Orleans post-Katrina is not just attracting consumers and visitors to spend money in the city, but also ‘about socializing residents to view the city as a brand and imagining an urban future that conforms to a semiotic script’ (Gotham 2007).

Due to tourism professionals mention the perspective of ‘internalising the brand’ as a major ingredient in branding New Orleans as an entertainment destination, there are some conflicts intrinsic in the understanding of urban brands. Firstly, there is the lack of clear and understandable object capable of being branded. Cities and places are multifaceted and complicated systems of organization and they contain a range of different groups, diverse identities and conflicted social relations. Branding destinations is more complex and challenging than other goods and services because of the existence and interdependence of multiple stakeholders, multiple components and multiple suppliers involved in the tourism service delivery (Buhalis 2000) and especially when it involves national characteristics and loyalties and popular permission of whole population. The second is the lack of control between urban branding organisations and branding campaigns when they deal with uncertain and unstable environment of many stakeholders who have diverse interests, contending perceptions and urban visions (Park and Petrick 2005). The branding work of New Orleans’s tourism professionals are informed by market research and tourist trends, however, they do not know whether the campaigns are successful or not. Besides, the branding process is full of instability and uncertainty. Moreover, the urban branding’s unpredictability derives from gained knowledge about visitors through surveys is partial and incomplete because consumer’s desires and preferences always change. Thirdly, there is exist the risk that visitors and residents may reject the images of brand and view them as irrelevant, inauthentic or affronts to local culture. Additionally, there is the lack of consensus about the positive or negative effects of tourism in the city and a clear differentiation between residents who favour tourism and those who against it. In the construction of urban reality and produce meanings, residents are actively involved in and sometimes they are challenge the dominant imaginary of urban and brand. Due to the views of residents about New Orleans are not singular or fixed, thus, ‘internalising the brand’ is no means ensured or guaranteed. There is unclear and questionable about the partial internalisation whether it is realised as a vehicle for enhancing brand value or not when some residents may incorporate some affective links with the New Orleans brand into their lives.

Conclusion

In summary, hurricane Katrina has weakened the New Orleans’s tourism industry, displaced thousands of people, problematized meanings of community identity, and can cause wholesale changes to all aspects of tourism destination management. Numerous prescriptive strategies have provided examples, templates and checklists for tourism agencies to formulate marketing strategies which are the very important in the recovery process. Restoring the urban brand strategy of New Orleans is a differentiation and diversification process whereby local tourism organizations harness and construct destination images in order to control consumer impressions and understandings of a particular locale. Although urban brand has network of power operate and clear profiteering motives, it is also important to recognise branding as a contradictory process with unpredictable outcome, unforeseen consequences and facing a long road to recover destination image. However, tourism marketers of the city are using repositioning strategy or (re)brand strategy to make New Orleans regain its status as an outstanding tourism destination.

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Free Essays

Tourism Marketing Analysis at Wrest Park Gardens

Introduction

Wrest Park is one of the most important Gardens in England. The natural landscape and statues was built during the late 18th century. Wrest Park’s formal gardens provide a fascinating history of gardening styles of 150 years old and inspired by the great gardens of Versailles in England. The gardens are overlooked by a stylish French-style 18th century mansion and contain amazing garden buildings. Visitors looking for an unusual day out will find Wrest Park a wonderful place to explore in the company of our audio tour. The main Theme in this Wrest part is should be implements are market segmentation, targeting and positioning and marketing communications including their Internet presence to capture park atmosphere to the people and improve the continuous visitor to the park for a day. Wrest park has following the different strategy to adopt the visitor Like Event program, Demonstration about the park and all so the beauty wrest park

Tourism marketing communication

In the Wrest Park the important aspect is the marketing mix is a traditional way to understand marketing garden in general. The marketing practitioners consider the Mix as the toolkit of operation of marketing segmentation, target and positioning and marketing communication for the operational planning in the park. The exact role for the Wrest Park to contribute the Mix to the success of commercial organizations is very limited; the several studies confirm that the 4Ps Mix is indeed the trusted conceptual platform of practitioners dealing with tactical/operational marketing issues. The marketing mix has been defined as a mixture of controllable marketing variables that the firm uses in order to pursue the marketing mix have been adapted by many scholars and marketing professional, also within the tourism industry, in a number of forms. Firms marketing strategies use marketing mix variables in order to plan an operational marketing plan are used in the wrest park in different aspects are segmenting the group of peoples and positioning the park according to their age group, Gender. The wrest park has the competitive environment with other parks that bring the Targeting in the Tourism Market. And the tourism marketing has the customer demands and competitors? strategies to capture the segmentation, Positioning and targeting the people for the park and changing The Traditional marketing P’s as product, place, and promotion.

In the wrest park has the multisensory tourism marketing communication has use the term inter medial marketing to the people to understand the tourism market to have the interactive with the peoples in the around areas.

The Wrest Park that provides the marketing to visitors is only part of the job. And the park service marketing must also incorporate internal marketing, Segment marketing and Target marketing. The resources should be allocated to communicating the park mission and values to all members of staff to ensure they share the philosophy of service excellence and visitor satisfaction.

The national is the more successful regional parks, in particular, developing longer-term relationships between the key focus for marketing. Segment marketing programmers are increasingly being used by park to diversify from their traditional audiences. They are employing audience development and product diversification, building unpaid assistant and supporters to offering loyalty incentives and demonstrating their relevance to their communities through wider cultural, social and economic initiatives.

Segmentation and targeting marketing relationship often overlap the park, particularly in the public sector form collaborative partnerships or to contract out some of their ancillary services. The park’s perspective this integrated and holistic marketing strategy approach should ensure that the park brand maintains its qualities, image and reputation; the park is best placed to achieve its mission, and above all, visitors receive a quality experience.

Multiple senses in marketing through Segmentation, positioning and also target the tourism Marketing

In the wrest park, are using to communicate with the public by the Marketing communication that also defined by the new media techniques as the Tourism Marketing for its procedures. With the help of tourism market communication the park association has providing the customers services and the consumer behavioral culture. The wrest park should have to fulfill the public perception of service quality and future behavioral, so the next time the peoples will have the intention to visit the park again, this bring the positioning for the tourism marketing. The wrest park have the different process of senses to depends on age, gender, cultural background and their Behavioral experience about the nature, that the peoples expect from the wrest park to provide to visitor to the wrest park, the that shows the Targeting the visitor in the tourism segment for the Wrest Park.

In the Wrest Park Market segmentation are correctly using to understanding the needs of customers expectation, and Park authorities will decide between one offer and another. Between the customers who have shared their experience with the other peoples will be similar with their criteria. The Park should able to determine the groups of customers have been comfortable with their service should fully satisfy their need and wants of the customer. The primary objective of the park segmentation should have proper procedures and they should have the analytical aim to satisfy the customers.

In the Wrest Park they should creates and maintains a product mix that specifically that fits the needs and preferences of the parks activities. The Wrest Park should have the proper marketing procedures that can be divided into segments that relate the contemporary and traditional. The Park should choose to target the entire customer expectation service and pricing strategy that should accepted by all the customers and also the Tourism visitor to the park.

And the Park should have the target market segment for providing the service to the tourism peoples that gives the entire market popularity between the efficient tools for the park should have the promotion between the income and gaining the benefits to the wrest park authorities. The wrest park haves the greater market share between locals peoples and tourism peoples from other countries that gives the segmentation that the Wrest park has carefully directing the marketing plan that reaches to the right people and the right opportunities that park has to capture park visitor. The Park authorities should have the well planned resources that they can concentrated on their service and package that are offers the customers to visit again and again to the park. In the Wrest park there are marking the restoration of new facilities for the visitor in the formal gardens. The gardens have been completely lost or simplified to make them easier to maintain for the workers and also capturing the marketing between the tourist visitors.

And the park has Targeting the tourist visitor by providing the facilities like a new cafe, new shop and plant centre and a new play area for both young and older children. There will also be space to hold events and a new events programme is created there to targeting the different segment of Gender, Age and Size of the family and looking the Geography factor to attract the visitor for the park.

In the park they are marketing the facilities to the new visitor for the Wrest park by showing the rooms will open and the house with new exhibitions telling the story of the de Grey family who lived at Wrest Park and how they created the gardens. Historical images are showing to Visitor and the rooms are well furnished and creating good atmosphere for the visitor that bring the Marketing about their product, quality and service to the tourism visitor.

The Wrest Park has also opening the Countess’s Sitting Room and this will be the only furnished room in the mansion. Visitors will be able to enjoy the view through to the conservatory and the walled garden just as the Henrietta, Countess de Grey did. Outside, the garden buildings will also have interpretation and a new guidebook, family trail and audio guides are being created. There will also be a selection of activity backpacks for children to borrow with all sorts of games and activities to help them explore and learn about Wrest Park.

Conclusion

Thus the Wrest Park has the appropriate and effective segmentation, Targeting and positioning the marketing activities are likely to be mediocre at best. The tourism sector has traditionally lagged behind the Park in utilizing the concept of segmentation in marketing decision making, there is evidence to suggest that increasingly better market selection in the Wrest Park on the basis of resource allocations decisions are made for developing the Park strategic level according to current trends.

The Wrest Park has too many destinations, attractions and tourism organizations, that they are using well, but outdated and unsophisticated segmentation bases to define their markets. The Park has clearly have an improvement on the traditional, simplistic segmentation bases and can provide more refined visitor profiles in the fact they were initially designed for servicing the visitor, that means they are doing their yield with multi-dimensional benefits of the tourism and Leisure values . Ultimately are decisions are taken in the park to segmenting the visitor market and they have eligible to employ will be dependent upon the scope of the destination’s market planning needs and resources and expertise. The Wrest Park should remember about the tourism to understanding and they should have the distinct and homogenous needs of different visitor that they based on their motivations and attitudes that will allow the destination or attraction to the visitor in the Wrest parks.

The Wrest Park has most successful tourist destinations have undertaken a detailed segmentation, Targeting and positioning the analysis about the tourism marketing. The Park have the targeted those segments that closely matched their strengths before designing a value-added composite visitor experience the all aspects have been extended with marketing mix are integrated with the needs of the selected target segments of the Park visitors.

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Free Essays

How has Integrated Marketing Communications (IMC) contributed towards the evolution of Brand communications?

Introduction

Over the couple of previous decades, research on IMC (Integrated Marketing Communication) has generated immense discussion leading to interesting contribution to the evolution of IMC as a strategic means that can develop firms to be more valuable in achieving their brand communication objectives (Madhavaram et al. 2005).

Kitchen et al. (2004), describes the IMC as an endeavour to come together, combine and synergize elements of the communications mix to act as strength and offset the weakness of other element. The need for attempt to combine and synchronization of communication mix has found place in twenty-first century interactive market place where marketing and its communication strategy are in transition (Schultz and Schultz, 1998).

Factors influencing need for IMC

The emphasis on IMC has been driven by continues international changes in the marketing communication surroundings and the call for efficient marketing communication. Sophisticated customer database, cost of emerging customer attainment, disintegration of mass media, change in costumers way of reacting to traditional marketing mix and approaches are the major global changes which instigate the emergence of integrative communication strategy (Reid, 2002). Below describes are the key issues influencing the traditional marketing communication changes as suggested by Shimp (2000):

Decreasing confidence in mass marketing because of communication means and diluted consumer loyalty.
Ever increasing dependence on hugely targeted marketing methods based on developing relationship marketing communication in business.
Increasing pressure on agencies and others which are suppliers of marketing communications to influence and become brand conscious rather than just a supplier of communication services.
Increased focus on return of investment on marketing and communication services demanding greater accountability of marketers and their measurement of substitute consumer attainment and relationship activities.

On an international level, it can be distinguished that fundamentally there are three factors which has changed the traditional marketing communication strategy; deregulations of market-place, globalization and individual preference of consumption (Holm, 2006). These factors depend mainly on development of technology and the current market-place is dominated by the consumers’ interaction through rapid development of information technology which will drive e-commerce (Schultz and Schultz, 1998). Marketers are not in position to push their strategy to the customers instead there is need for pulling information form consumer end to marketer. This situation influence marketers the need to regulate and emphasize marketing strategies to change from tactics to strategy according to the change in market-place reality (Holm, 2006).

Recession in global economy and increasing competition has had an impact on client agency relationship (Brown, 1997). Financial gain, client sophistication, disillusionment with brand and advertising and disillusionment with agencies has necessitated IMC to be supposed as the key fundamental which will complement client-agency relationship and maximise their cost effectiveness by integrating their communication methods (Brown, 1997). Apart from technological development and consumer awareness, internal communication has key strategic role and advantageous for organisations when assessing knowledge sharing (Kalla, 2005). Therefore the integrated structure of internal communication drives organization to reap benefit of all dimensions of knowledge sharing within an organization. Furthermore, internal integrated communication spread beyond the corporate communication activities to the all form of internal and informal communication taking place within an organisation. Market based approach as suggested by Stewart (1996) indicates that marketing communication design and its execution required to be keeping customer focus in mind that how organisation is delivering value to the consumers’. This approach cannot be executed by centralized communication function of contemporary marketing communication method.

IMC: solution to contemporary marketing communications problems

According toSchultz and Schultz (1998) IMC is not considered just as a marketing concept but as a whole strategic business process to map and develop, implement and evaluate in a structured method to develop a brand communications program with customers and other external and internal stakeholders. Author suggests that the most important factor of this definition is that this system is driven by customer data and consumers brand contacts and awareness as this methodology focuses on customers’ assessment and their present and future potential value for the organisation (Schultz and Schultz, 1998). IMC suggests the coordination of message in one sound, one voice between various media and message as a whole facilitating the effectiveness of organizations marketing effort to include and use broad consumer information in defining communication strategy (Sisodia and Telrandhe, 2010). As opposed to traditional marketing which employs a push strategy, IMC employs both push and pull strategy. The IMC concept is not limited only to simultaneously using multiple media in which success of every activity depends upon every communication activities used by the firm creating synergy and one voice (Raman and Naik, 2006).

Schultz and Schultz (1998) have acknowledged four level of integration of IMC for an organization to be fully integrated. Cross functionality through tactical coordination generate high level of competence by achieving synergy along with increased individual communication efficiency. Organizations tend to go beyond the coordination to focus on customer driven, approach as opposed to corporate driven which is found in traditional marketing communication. The next level of integration requires the application of information technology which not only enables solutions but also drive the change in paradigm of marketing communication. IT-based marketing communication incorporate data based system and can be described as the IT development has put good old time of marketing communication far behind (Holm, 2006). The final level of integration represents the involvement of top management of the organisation as it includes and provides the structure of resource planning and execution with arrangement of organization (Schultz and Schultz, 1998). As discussed in previous four level of coordination of IMC approach, it is perceived either theoretically or practically IMC offers considerable value to the clients and agencies (Eagle et al., 2007).

It has been found that integrated communication approach is being executed as a practice as a result of changing consumer behaviour and market development with greater demand for commitment and effectiveness in every communication activities (Eagle et al., 2007).

To quote an example, dLife an integrated network of multi-media communication channels aimed to enhance the living of American with diabetes portrays a perfect model of rising IMC trend. Started in late 2004, dLife used IMC approach to reach the target audience and set itself (dlife.com, dLife direct mail marketing, dLife radio and TV, dLifeEducator, a focused marketing for the community of Hispanic diabetes dLifeLatino and dLifeRetail a collaboration with pharmaceutical business) as the sole integrated patient and consumer education and communication source to effectively reach diabetic community (Stokes, 2009).

dLife’s integrated marketing was innovative and informative which won several awards like national Health Information for executing perfect marketing plan through various modes of communication channel viz. innovative documentary “The Story of Insulin” along with public campaign regarding blood glucose test using slogan “Test! Don’t Guess”. Using integrated approach dLife also used multimedia channels like television shows hosting guests and celebrities and comedians, radio spots and website which contained mail option and enquiries. Stokes (2009) believes that dLife display how sponsorships with public relation attribute organisations to develop new relationship with patients and marketers.

For any news channels it’s not easy to maintain interest in viewers’ 24-hours to remain occupied. CNN is one such example to use IMC as an influential marketing and communication means with variety of traditional journalism and latest marketing strategic tool to create steady audience. CNN used the tactics of retaining old and traditional marketing strategy like CNN Newsroom broadcast and with leading journalists planned to organize programs according to their specialism e.g. The State of Union John King and Larry King Live etc) with CNN.com as their advanced website filling the gap of ongoing social media. Through website’s iReport section which facilitates for viewers to access current news from any platform, website’s correspondent blog section audience can read, react and comment at any stage during live broadcast which have some famous blogs like Paging Dr. Gupta blog and Anderson Cooper 360 blog etc. news on cell phone are made available via CNN mobile, viewers can tweet @CNN breaking news, video and audio contents can be accessed through podcast section and multi-lingual section for foreign language speakers allows CNN to capture wide section of audience. By using different media and latest technology CNN is able to produce single brand with same message and CNN dominates in the news channel industry.

Conclusion

Rapid technological development, internationalization of global economy, deregulation, current customer driven market-place and changing consumption pattern has changed the perception of behaviour and brand value through direct communication. This scenario has instigated marketers to rethink their objective and strategies to the realities of current marketing and communication approach. Keeping this fact, communication needs to shift from tactics to strategy. Strategically focused integrated marketing communication can drive business to develop powerful and attractive brand and brand equity as dominant factor for the success of organisations. Communication of the significance of the brand in the current customer driven market-place will instigate marketers towards collaborative, strategic and coordinated approach to managing their communication and marketing objective with minimal resources and marketing funds. Integrated marketing is being adopted as both an up-and-coming strategic management concept, and as marketing and communication approach for developing brand value.

References

Brown, J. (1997). Impossible dream or inevitable revolutionInvestigating the concept of integrated marketing communications.Journal of Communication Management. 2 (1), p70-81.

Eagle, L. and Kitchen, P.J. and Bulmer, S. (2007). Insights into interpreting integrated marketing communications: A two-nation qualitative comparison. European Journal of Marketing. 41 (7/8), p956-970.

Holm, O. (2006). Integrated marketing communication: from tactics to strategy. Corporate Communications: An International Journal. 11 (1),

Kalla, H.K. (2005). Integrated internal communications: a multidisciplinary perspective. Corporate Communications: An International Journal. 10 (4), p302-314.

Kitchen, P.J. and Brignell, J. and Li, T. and Jones, G.S.. (2004). The emergence of IMC: A theoretical perspective. Journal of Advertising Research. 44 (1), p19-30.

Madhavaram, S. and Badrinarayanan, V. and McDonald, R.E.. (2005). Integrated marketing communication (IMC) and brand identity as critical components of brand equity strategy: A conceptual framework and research propositions. Journal of Advertising. 34 (4), p69-80.

Raman, K. and Naik, P.A. (2006). Integrated Marketing Communications in Retailing. Retailing in the 21st Century, p381-395.

Reid, M. (2002). Building strong brands through the management of integrated marketing communications. International Journal of Wine Marketing. 14 (3), p37-52.

Schultz, D.E. and Schultz, H.F. (1998). Transitioning marketing communication into the twenty-first century. Journal of Marketing Communications. 4, p9-26.

Shimp, T. (2000) Advertising and Promotion: Supplemental aspects of integrated marketing communications. 5th edition. Dryden Press Tx.

Sisodia, S. and Telrandhe, M.N. (2010). ROLE OF INTEGRATED MARKETING COMMUNICATION IN MODERN INDIAN BUSINESS. Journal of Arts Science & Commerce ISSN. 1 (1).

Stewart, D.W. (1996). Market-back approach to the design of integrated communications programs: A change in paradigm and a focus on determinants of success. Journal of Business Research. 37 (3), p147-153

Stokes, A.Q. (2009). Living the sweet (d) Life: public relations, IMC, and diabetes. Journal of Communication Management. 13 (4), p343-361.

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Free Essays

Marketing Across Cultures: The impact of McDonalds and Starbucks Marketing elements

Introduction

The process of globalization enforce many multinational company like McDonald and Starbucks need to modify their marketing strategy to adapt the cultural difference. Cross-culture marketing is one specific knowledge that is increasing needed for marketers to learn and perform. Within Marketing across culture, marketing mix is the most common tools for marketers to analysis and develop critical strategies for their target markets. In order to make the best sales for multinational companies in different countries or cultural areas. Marketers need to identify the issues and problems within different cultural markets. The following essays is first going to discuss the McDonald’s marketing strategy by using product and promotion marketing mix analysis, then demonstrate the practical example about how McDonald’s achieve its market efforts. After that, the essay will analysis the product and promotion of marketing mix of Starbucks and how it manage its market efforts.

In 1960, Jerry McCarthy stated a marketing theory in his book ‘Basic Marketing’, that is: Product, stress on the development function, requires the product with a unique selling point, functional requirements of products is paramount; Secondly, price, depend on different marketing position make different price strategy, the products pricing is based on brand strategic of company; Next is place, the company not direct face to customers, but focus on cultivate franchiser and establish marketing network, the connection between company and customer are through distributor to build up; Finally, promotion, company focus on changes of sales behavior to stimulate customers, use short -term behavior (such as buy one get one, etc.) to encourage consumption growth or attract other brands of customers spending in advance to promote sales. Product, Price, Place and Promotion are famous 4P marketing theory. This paper will focus on 2P(Product and Promotion) in depth to discuss.

Marketing mix of McDonald and How it manage its marketing efforts

McDonald’s is one of the most successful fast-food restaurants. The goal of McDonald’s is to establish a standardized product, whether McDonald’s in Singapore, South Africa or Spain, customers will taste the same flavor. MacDonald’s realized that due to the procedure of standardization can save significant cost of product, enable to adapt to the environment and make sure success. So, McDonald’s has adopted the idea “think global, act local” (Vignali, 2001).

Adaptation contains many requirements, such as customer’s tastes, preferences and the local law. McDonald needs to adapt to many situations, religion, laws and customs. For instance, after initial protests in Israel, McDonald’s supply Big Macs without cheese in several outlets, thus allowing the kosher restaurants required separation of meat and dairy products. Moreover, McDonald’s restaurants in India provide Vegetable McNuggets and a mutton-based Maharaja Mac (Big Mac). Beef is not acceptable in Hindus, Jains (among others) do not eat any type of meat, Muslims do not eat pork, as this innovation is essential within a country. McDonald’s need to experience rigorous inspections by Muslim clerics in Malaysia and Singapore, this is for ensure ceremony cleanliness; a series of act was award with a halal (” clean, acceptable”) certificate, making known the completely lacking products that contain prok (Vignali, 2001).

McDonald’s also has many examples to adapt the original menu in different countries just for meet customer demand. Guava juice was introduced to the McDonald’s menu in tropical markets. In German, beer is served on the menu. In Turkey served chilled yogurt drinks, McDonald’s in Italy supply espresso and cold pasta. McDonald’s in Japan sold Teriyaki burgers, vegetarian burgers in The Netherlands. The McSpaghetti launched in Philippines is getting popular gradually. Grilled salmon sandwich named McLaks is launched in Norway, poached egg hamburger that is named McHuevo in Uruguay. In Thailand, sweet sauce is served with Samurai Pork Burger at McDonald’s. Above examples are how McDonald’s adjusts its product based on cultural difference in different areas.

No matter how to change the basic menu structure of McDonald’s is unify in the world: the main course is hamburger or sandwich, fries and drinks (majority is Coca-Cola). Main course may be very difference, but the McDonald’s sign idea: fries, is always be there and used in McDonald’s around the world, no matter their political statement or religious beliefs. This is the reason why McDonald’s do fries so successfully and continue efforts to work on improving the delivery of this industry winner (Vignali, 2001).

Kotler had stated promotion as composed of five major tools in 1994: sales promotion, direct marketing, publicity, advertising, public relations and personal selling. McDonald’s has very different advertising based on different culture in different country. For instance, McDonald’s find England football representative Alan Shearer as a figurehead to increase selling hamburgers; in France, they use French national goalkeeper to promote hamburgers. McDonald’s wanted to express the same concept: in different culture use different personalities to communicate their message.

McDonald’s has distinct advertising in China. In the fall of 1994, they had not put advertisement on Beijing television program. The general manager of McDonald’s indicated that McDonald’s advertising on television is meaningless, because of China’s advertisement is different from the West; it is only emerged in interval between programs. After watching this program, audiences will switch to another channel, which means the advertisement have little chance to be seen. Newspapers and magazines are popular, these is a good way to presented McDonald’s public image (Eckhardt & Houston, 2002).

In Beijing, the localization strategy of McDonald’s is totally different to the united state; the Beijing McDonald’s relies on interaction with customers to a great extent. There are several public relations employees are available to answer customers’ questions in daily operations and in each restaurant. Every outlet assigned five to ten female receptions to look after children and chat with parents. The whole courtesy issue is too important that McDonald’s have to pay extraordinary attention on that. (Cai, 2003). This public relation measures is completely not in the UK, people in there have totally different mentality, they are happy to just left the restaurant after meal (Vignali, 2001).

There are certain numbers that McDonald’s does not adopt a global strategy. McDonald’s signed up a ten years global alliance contract with Walt Disney in Jan 1997, allowing them to share the exclusive marketing rights, from film to food. This is means McDonald’s producing toys from movie in “happy meals”, such as Toy Story, Finding Nemo and A Bug’s Life. In this case, McDonald’s would not take local measures, because of Disney has a huge influence in the world, and there is no need to do modification for different regions. As well, another global public relations exercise is being presented in associate with McDonald’s, Walt Disney and UNESCO (United Nations Educational, Scientific, and Cultural Organization), which is the Millennium Dreamers Global Children’s recognition program. Young generation from all over world have opportunity to give expression of their dreams, future plans and wishes (Abramowitz, 2006).

Marketing mix of Starbucks and How it manage its marketing efforts

This paragraph is going to discuss the marketing strategy of Starbucks and how it manages its market efforts. The product strategy of world’s largest coffee chain store Starbucks emphasis on not just sell a cup of coffee, but selling the coffee experience. The most attractive of Starbucks is innovation in the ordinary, change consumer goods existed hundreds of years into a popular trend, changed the modern life. In Taiwan, the coffee industry imported two kinds source of coffee: Arabica (accounted for 75% of total world output), Robusta (about accounted for 25% of world output). Most of the low-cost coffee in the last use of Robusta, but now the new franchiser join the coffee market stressed use the Arabica coffee bean’s quality is better than before, also the price is a little bit high.

Starbuck not just sell coffee, but also sells coffee beans, coffee-related equipment, books, coffee cups, sweets and pastries. The coffee store make warm leisure and chatting atmosphere, it is intangible products. Burca (2004) noted that modification of product is required for one company so that they can enhance attraction to its customers within its target market. Taiwan Starbucks developed green tea flavored products and approved by the United States headquarters. These products exported to the Starbucks in Singapore. Starbuck adapted the local culture to increase its sales. Taiwan Starbucks not only sales the Christmas merchandise in Christmas global activities, but also exploit exclusive moon cake in Chinese Mid-Autumn Festival, it is sell tens of thousands boxes in one year.

When modern consumer goods in commercial process, it is no longer from the view of political and economic environment to see commercialization, but further put centre of commercialization into cultural meaning. Modern customers in consumption not just consume goods, but includes the “symbol” of goods, product itself has a “cultural meaning”. The culture meaning of coffee is represented afternoon tea, relaxed, comfort and high degree of European culture. which is a increasing new life style in Chinese society.

Starbucks emphasis on product innovation and continuous introduced new products. In 1995, Starbucks introduced crashed ice cappuccino made Americans’ preference of hot coffee toward ice coffee. Now, Starbucks is faster to introduce new products, only in 2002 introduced 7 kinds of new drink to increasing attraction to young people. Starbucks continue to play the brand force to find new channel to sell more kinds Starbucks. In 1996, Starbuck cooperation with Dreyer’s to develop Starbucks ice cream.

On the other hand, brand image and product standardization are also the competitive advantage of Starbucks. The name of Starbucks is one of the main reasons why millions of customers buy coffee from Starbucks (Cateora et al, 2009). Johnasson (2009) had stated several reasons why product standardization can benefit one company. Cost Reduction, increase global customers, enhance global segments, enhances customer preference and Improved quality. Those are the advantages of product standardization.

In promotion aspect, according to Borden in 1964, promotion includes policies and procedures that associate with coming up with special sales plans and form of devices for customer promotions. Starbucks in North America and Europe launched online and mobile phone pre-ordering services in 2002, nearly two thousands Starbucks sticker a small antenna affixed on the door to marked there is high-speed wireless internet in store, this is Starbucks cooperation with German telecommunication company to provide new service. Starbucks will bring out annual Thanksgiving Day in the winter, when customer consume something will have 85% discount. Except these Starbucks also introduced delivery service, some stores offer delivery service, deliver drinks and pastries (Laura, 2003). Above examples are how Starbucks adapts local culture or specific needs in order to meet its market efforts.

There are many marketing features of Starbucks, for example, in Taiwan, unlimited supply of sugar, whipping cream, cinnamon, vanilla powder, cocoa powder, cardamom powder. Provide American traditional style consumer environment, use of the South American style of music: JAZZ. provide introduction of coffee culture, for example, books about coffee, the choice of coffee beans, all kinds of coffee name, coffee conditioning tips. Offers a wide range of coffee brewing equipment and coffee subscription service. The reason for that is within Taiwan society, there is relatively high cultural identity toward western culture such as American culture (Mathews, 2000). Starbucks also encourages environmental friendly, if customers bring their own cups that have cash discount.

Conclusion

In conclusion, marketing across culture plays an important role for those multinational companies when they expand abroad. Most multinational companies have been struggle on how to balance product standardization and localization. However, we can hardly say that witch strategy is best for some specific area or cultures. There is still needs for a period of marketing observation and survey then decide which strategy is suitable for that market. The reason why McDonal and Starbucks are such successful global companies is that they identify the cultural difference and local requirement. Only when marketers who can identify the cultural difference and issues so that the company can smoothly manage its market efforts.

References

Abramowitz, R. (2006). “Disney Loses Its Appetite for Happy Meal Tie-Ins”. Los Angels Times. 8th May, 2006.

Borden, N. H. (1964). “The concept of marketing mix”, Journal of Advertising Research. Vol. 24 Issue 4, pp. 7-12.

Burca, S. D., Fletcher, R. & Brown, L. (2004). International Marketing An SME perspective, Essex: Prentice Hall.

Cai, D. (2003). West meets East: The Evolution of McDonald’s Marketing in East Asia. Online Available at: http://wps.ablongman.com/wps/media/objects/4116/4215271/DexCaiResearchPaper.pdf

Cateora, P. R., Gily, M. C. & Craham, J. L. (2009). International Marketing. New York: McGraw-Hill.

Eckhardt, G. M. & Houston, M. J. (2002). “Cultural Paradoxes Reflected in Brand Meaning: McDonald’s in Shanghai, China”. Journal of International Marketing. Vol. 10. No. 2. pp. 68-82.

Johansson, J. K. (2009). Global Marketing Foreign Entry, Local Marketing & Global Management, 5th Edition, New York: McGraw Hill.

Laura, R. -G. (2003). “Starbucks brews a different blend of marketing”. Caribbean Business. Vol. 31 Issue 17, p44

Kolter, P. (1994). Marketing Management. London: Prentice-Hall.

Mathews, G. (2000). Global Culture/Individual Identity. London: Routledge.

McDonald (2004). McDonald’s Worldwide Corporate Responsibility Report 2004. Online Available at: http://www.aboutmcdonalds.com/etc/medialib/csr/report.Par.38839.File.tmp/2004%20Report%20(English).pdf [Accessed: 2th April, 2011].

Vignali, C. (2001). “McDonald’s: “think global, act local” – the marketing mix”. British Food Journal. Vol. 103. No. 2. pp. 97-111.

Categories
Free Essays

The role of social media as marketing tool for tourism in kenya. case study: kenya safari and tours.

INTRODUCTION

With two thirds of the global internet population visiting social networks, businesses are increasingly utilizing these platforms to engage with clients and other businesses, don’t get left behind!

Social Media is an extremely effective form of marketing which can be used to increase brand awareness, brand loyalty, customer service, and lead to increased sales. It can be used to present a business brand to millions of people worldwide.

Social media is not just for large corporations, small businesses can also reap the benefits of implementing a social media campaign and therefore for many businesses, social media is just one more buzz word they have to wrestle with. However, social media isn’t just a buzz word and it’s not going away social media can have a profound effect on almost any type of business. (http://www.housingea.co.uk/an_introduction_to_social_media_for_business)

Coming together with the Web 2.0 phenomenon, the birth of social media is busted out in new marketing era. It is becoming a hot topic for its huge influences. The existence of social media earns the attention of people by making them from being passive consumers to active producers in terms of sharing and contributing via networks (Anderson 2008, 63).

That is explanation why most companies today are thinking of applying social media into their business. Its advantages to and effects on organizations, however, have not been recognized accurately in comparison with other marketing tools.

Using social media as a marketing tool in tourism industry adds profound value to the new media trend. How tourism companies gain the benefits from social media is a worthy phenomenon to be researched

1. Scope of the study/backgrounds

Strategies of social media marketing in an organization are the main factors that contribute to a well-being of the most companies operating in business and customer markets. This is because the use of social media in marketing their products and service create customer awareness. Hence in most situations the customers tend to prefer to the services that are mostly satisfied with.

Planning a successful use of social media marketing strategy involves linking a company mission and business strategy to marketing decision and programs. In the current situation the case study company is using the social media marketing in marketing their tourism company and therefore it important for us to understand how the company is planning its operation and what are the current benefits of the company resulting from the use of social media marketing.

Social media marketing strategy in an organization defines how the organization uses the social media tools such as facebook, twitter and YouTube to achieve a marketing objective for the organization. The social media strategy implements and supports higher-level strategies and provides markets and customer information which is used for development and adjustments of the organization business strategy. the current approach being used by the case study company on the use of social media marketing shows that the company strategy is not fully implemented hence the company needs more decision on how to maximize the available marketing opportunities to win many customers depending on the improve strategy that they are heading to in terms of using social media marketing to market their company. The scope of the study will create proposals on how the case company can utilize social media marketing principles to achieve an effective market for their company. The outcome of the implementation of the suggested social media marketing principle and strategies will allow Kenya safaris and Tours to allocate enough resources strategically, and maximize market opportunities through the use of social media marketing which will increase the company reputation and increase profits of the company.

1.1 Research context

The theoretical part of this research will include various aspects of social media marketing strategies. The research was conducted in a co-operation of case study Company known as Kenya Safaris and Tours. Kenya Safaris and Tours have an office located in Nairobi, the capital city of Kenya and several reservation and booking in different countries. Kenya Safaris and tours is a company owned by the Ministry of tourism in Kenya and the company is specialized in offering tour services to individual customers and corporate customers traveling to Kenya

A qualitative approach was chosen in writing this research. The first part of the research will present the theoretical background followed by the company case company introduction and analysis

1.2 Purpose of the study and research question

Most companies operating in the tourism industry in, Kenya are either locally or foreign owned with majority of the companies having trying to adapt the use of social media marketing in marketing their company products and services. The fact that Kenya is destine to be a popular tourist destination has attracted large number of tourist all over the world. Therefore the introduction of use of social media marketing in advertising the companies across the planet is seen as a possible improve in the Kenya tourism industry. Though the companies doesn’t implement the use of this social media marketing correctly in regardless of the profit they earn by using it.

Therefore the research will try to investigate and generate strategies which will assist tourism companies in developing an effective use of social media strategies. The proposal discussed includes implementing major social media marketing strategies and other minor strategies to help the Kenya Safaris and tours achieve its business and organizational goals.

The final result of the research will present a social media marketing strategies which if implemented will result in Kenya Safaris and Tours gaining a competitive advantage in Kenya tourism industry. In theory, the research will try to contribute and generate new ideas from a holistic approach which may be of help in positioning and attaining competitive advantage by implementing social media marketing strategies. Therefore based on this information the research question for this thesis is work:

1. To find out how tourism companies are integrating social media into marketing so as to boost awareness and generate excitement about tourism destination?

2. What has the adoption and integration of social media strategies done to market tourism?

1.3 Limitation of the research

In this section the main concept are introduced and limitation for the research are presented

It is necessary to highlight assumption and various limitation of the study. The main focus of this study is business to customers. The objective was to prepare a social media marketing strategies that would serve the entire customers whom Kenya safaris and tours plans to appeal to during their period of operation. Social, media marketing strategies that can assist the case study company appeal to cooperate customers have been briefly analyzed in the empirical section. The limitation of this research affects how social media marketing strategies are examined and how an effective social media marketing strategy can be implanted.

The theories used in this research content have an international character. Although relating to marketing strategies , the research emphasize social media marketing strategies which concentrated only on matching companies offering the tour facilities to its customers’ needs. The technological aspect of information systems and application that are used in the social media marketing context are out of the scope but are only discussed briefly in terms of the value they can deliver to Kenya safaris and tours. It also essential to highlight that this study is not an effort to solve one specific aspects of developing a social media marketing strategies in details, but rather a research that would contribute to knowledge about various aspects of social media marketing.

1.4 Structure of the research

The research consists of six sections and the diagram in figure 1 illustrates the various sections it contains. Section 1 includes an introduction and background information of the research; the theories relevant for the research problem are presented in section 2 and 3. Section 4 entails a description of the methodology approaches chosen for the research. The case study (Kenya Safaris and Tours) company is presented in section 5. Sections 6, 7 and 8 include the empirical research and the discussion concerning the case study and the final conclusion is in section 9. The figure bellows shows how the research was planned and conducted and the linkages in the various sections

Figure1; structure of the thesis

2 THEORETICAL FRAMEWORKS

2.1 The evolution of social media in marketing business

The use of social media evolution in marketing business has become fundamentally transformative and is rapidly evolving the architecture of business, communications, and the dissemination of information and influence. To understand what marketing exactly means it define as a process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return (Kotler & Amstrong 2010)

Today, there are businesses that engage in social media and those that do not. Those at least experimenting with the formidable, yet shifting landscape of intelligence and communication are learning how to adapt and connect in a new world of conversation, networking, and influence. Those that have yet to evaluate the opportunities and advantages for socialized marketing, service, sales, and branding will find it increasingly difficult to learn, adapt, and magnetize customers, prospects as well as their influencers.

As markets evolve, consumers gain a greater sense of adeptness and perspective. They too learn and adapt. In the process, individuals and the authoritative communities they form, possess a more sophisticated understanding of media literacy, community support, and prowess in new media communication. Consumers have choices and they’re increasingly practiced through natural selection. . (http://www.briansolis.com/2010/01/the-evolution-of-social-media-and-business/ (accessed 1 April 2011)

Then along came the internet and growing rapidly. Unlike the traditional marketing of mass media, internet broadens the scope of marketing in wider range of audiences. It overcomes the limitations of geography and time zones to send the marketing message very fast to target segments. In today‘s life, when customers are no longer being passive in access of information, the use of social media creates opportunities for both businesses and individuals to find their new audiences. Customers become more communicative and better in control than ever. (Ryan & Jones 2009, 19) The changes of marketing are mentioned in the figure below;

Figure 2; Social engagement spectrum (Armano 2009)

Through the social engagement spectrum showed in figure 2, we can see that marketing is experiencing a profound shift from lower engagement to higher engagement level. If the traditional marketing and tradigital marketing are push‘, then it becomes ?pull‘with social media nowadays. Even tradigital marketing is more interactive with users but it is lacks engagement of customers whereas social media empowers customers to participate in the online community by using social networking sites, for example. It does not mean anymore the technology only but social engagement with people has become a core factor. Thus with higher engagement, it leads to an increase in demand of niche markets, creates new opportunities in the emerging marketplace. (Anderson 2008, 57)

2.2 Social media overview

In this section the author gives an overview of social media and its impact on marketing definition and related concepts.

2.2.1 Web 2.0

The term Web 2.0 is associated with web applications that facilitate participatory information sharing, interoperability, user-centered design, and collaboration on the World Wide Web. A Web 2.0 site allows users to interact and collaborate with each other in a social media dialogue as creators (prosumers) of user-generated content in a virtual community, in contrast to websites where users (consumers) are limited to the passive viewing of content that was created for them. (http://en.wikipedia.org/wiki/Web_2.0 (accessed 27 March 2011)

Goossen (2008) in an interview with Klein suggested the key concepts of Web 2.0 are the harnessing of social networking, collective intelligence. It more concentrates on the data collected through computers rather than its own technological factor (Klein 2008).

Web 2.0 is here today, yet its vast disruptive impact is just beginning. More than just the latest technology buzzword, it’s a transformative force that’s propelling companies across all industries toward a new way of doing business. Those who act on the Web 2.0 opportunity stand to gain an early-mover advantage in their markets (Musser & O‘Reilly 2006).

2.2.2 Social media

According to B&C (2010), the term “social media” is widely used nowadays. The first time it appeared was in 2004, after LinkedIn created its social networking application. The applications primarily an online technology tool to allow people to communicate easily, utilizing the Internet to share and discuss information (B&C, 2010). According to Zarrella (2010), social Media is defined best in the context of the previous industrial media paradigm. Traditional media such as television, newspapers, radio and magazines are one-way, static broadcasting technologies. Zarrella (2010) argues that magazines and newspapers are distributing expensive content to consumers while advertisers pay for the privilege to insert their ads into the content.

Readers, in turn, have no possibility to send the editors instant feedback in the case they disagree with something. New web technologies have made it easy for anyone to create, and most importantly, to distribute their own content. A blog post, a “tweet” on Twitter, or a YouTube

Video can be produced and viewed by millions virtually for free. Advertisers do not have to pay publishers or distributor’s huge sums of money to embed their ads; now they can create their own interesting content that viewers will flock to (Zarrella, 2010). Also, Weber (2009), states that traditional media such as television, radio and newspapers are providing one-way communication; while social media, on the other hand, allows everyone to publish and to contribute in online conversations. He defines social media as “the online place where people with a common interest can gather to share thoughts, comments and opinions”.

He further states that social media consists of social networks, such as Facebook, branded web destinations, like Amazon.com and ebay.com and companies, such as IBM and Dell. Additionally, Palmer and Koenig-Lewis (2009), define social media as online applications, platforms and media which aim to facilitate interactions, collaborations and the sharing of content”. The social media is a new world of unpaid media, created by individuals and companies on the Internet (Weber, 2009). According to Zarrella (2010), social media comes in many forms:

blogs
micro blogs (Twitter)
social networks (Facebook)
media-sharing sites (YouTube)
social bookmarking and voting sites (Digg, Reddit)
review sites (Yelp)
forums
virtual worlds (Second Life) Palmer and Koenig-Lewis (2009) also divides social media into the following key categories
Blogs– Comprising individuals or firms online journals that are often combined with audio or video podcasts.
Social networks– Applications allowing users to build personal web sites accessible to other users for exchange of personal content and communication.
Content communities– Websites for organizing and sharing particular types of content.
Forums/bulletin boards– Sites for exchanging ideas and information, usually around special interests.
Content aggregators– Applications allowing users to fully customize the web content they wish to access.
2.2.3. Benefits of social media

Social media marketing experts underscore the advantages of using social media for marketing as the ability to reach a wide audience, two-ways communication, accessibility and viral effect. Social media marketing promises to improve promotional efforts significantly. One of the major advantages of social media marketing is the ability to reach a wide audience breaking down geographic boundaries. Historically communication with others was limited by geographical boundaries and the current technological of the era. Today’s social media technologies enable nearly everyone to reach a global audience for interpersonal interaction and exchanging information (Hank, 2008).Web 2.0 encompasses tools and platforms that enable people from different part of the world to be connected and to exchange information with each other

2.2.4 Social media optimization

Social media optimization (SMO) consists of more narrowly defined activity than social media marketing. Varagic (2008) described social media optimization as a process of optimizing one‘s sites/ blogs to be higher presence in social media searches and sites, more easily linked by other sites and more frequently discussed online in blogosphere and other social media.

Social Media Optimization is in many ways connected as a technique to viral marketing where word of mouth is created not through friends or family but through the use of networking in social bookmarking, video and photo sharing websites. In a similar way the engagement with blogs achieves the same by sharing content through the use of RSS in the blogosphereand special blog search engines to understand this work the diagram below shows how various key social platforms are linked

Figure 3; key social media platforms (source; virtual project consulting 2010)

2.3 Word-of-mouth and social media marketing

Word of mouth is a pre-existing phenomenon that marketers are only now learning how to harness, amplify, and improve. Word of mouth marketing isn’t about creating word of mouth — it’s learning how to make it work within a marketing objective.

That said, word of mouth can be encouraged and facilitated. Companies can work hard to make people happier, they can listen to consumers, they can make it easier for them to tell their friends, and they can make certain that influential individuals know about the good qualities of a product or service.

Word of mouth marketing empowers people to share their experiences. It’s harnessing the voice of the customer for the good of the brand. And it’s acknowledging that the unsatisfied customer is equally powerful.

Word of mouth can’t be faked or invented. Attempting to fake word of mouth is unethical and creates a backlash, damages the brand, and tarnishes the corporate reputation. Legitimate word of mouth marketing acknowledges consumers’ intelligence — it never attempts to fool them. Ethical marketers reject all tactics related to manipulation, deception, infiltration, or dishonesty.

All word of mouth marketing techniques are based on the concepts of customer satisfaction, two-way dialog, and transparent communications. The basic elements are:

Educating people about your products and services
Identifying people most likely to share their opinions
providing tools that make it easier to share information
Studying how, where, and when opinions are being shared
Listening and responding to supporters, detractors, and neutrals

In order to deepen the understanding of social media marketing and word-of-mouth marketing, a comparison is provided in the Table below

Word-of-mouth marketing (WOMM) Social media marketing (SMM
Relies primarily on influencers to spread the word.Spreads by itself through the social web and relies on passing message along from person-to-person.
Requires excellent product or service influencers can use, be excited about and pass along.Message must be outrageous, entertaining or provide exceptional value to attract attention and be passed along
Generates brand-awareness and sustained website traffic.Not always relevant to the brand
Engages customers long-term through the product life-cycle.Usually generates a short traffic spike.
Online and offline (15 – 20% online).Online only.

Table 1; comparison between Word-of-mouth marketing (WOMM) and Social media marketing (SMM) (Rijk 2007)

From Table we can see most clearly the differences between the two types of marketing. Word-of-mouth marketing is based on the drastic involvement of user and empowers the ?influencers’ who play the role of opinion-making leaders spread the word about your products and services both online and offline whereas social media marketing makes interaction merely online through social media channels.

Word-of-mouth Marketing Association (2010) has suggested different subcategories of word-of-mouth marketing techniques such as buzz marketing, viral marketing, community marketing, grassroots marketing, evangelist marketing, product seeding, influencer marketing, cause marketing, conversation creation, brand blogging and referrals programs. Brief explanation is given below;

Buzz Marketing: Using high-profile entertainment or news to get people to talk about your brand.
Viral Marketing: Creating entertaining or informative messages that are designed to be passed along in an exponential fashion, often electronically or by email.
Community Marketing: Forming or supporting niche communities that are likely to share interests about the brand (such as user groups, fan clubs, and discussion forums); providing tools, content, and information to support those communities.
Grassroots Marketing: Organizing and motivating volunteers to engage in personal or local outreach.
Evangelist Marketing: Cultivating evangelists, advocates, or volunteers who are encouraged to take a leadership role in actively spreading the word on your behalf.
Product Seeding: Placing the right product into the right hands at the right time, providing information or samples to influential individuals.
Influencer Marketing: Identifying key communities and opinion leaders who are likely to talk about products and have the ability to influence the opinions of others.
Cause Marketing: Supporting social causes to earn respect and support from people who feel strongly about the cause.
Conversation Creation: Interesting or fun advertising, emails, catch phrases, entertainment, or promotions designed to start word of mouth activity.
Brand Blogging: Creating blogs and participating in the blogosphere, in the spirit of open, transparent communications; sharing information of value that the blog community may talk about.
Referral Programs: Creating tools that enable satisfied customers to refer their friends

(http://womma.org/wom101/2/ (accessed 27 March 2011)

3. SOCIAL MEDIA AND TOURISM

3.1 The different forms of social media

Social media websites come in a wide variety of ‘flavours’, which are all broadly based around the premise of personal interaction, creating, exchanging and sharing content, rating it and discussing its relative merits as a community. In today‘s consumer‘s life, social media have reached the position where very fast-evolving growth and its overwhelming coverage in digital media scene have been recognized. More than 70% of companies have already used social media and many are unresisting of social media‘s increase. Social media is approaching to a large number of active Internet users all the time by its variety of platforms which provoke online customers’ interaction, facilitate the content creation and sharing (Bloomberg BusinessWeek 2009).

Ryan and Jones (2009, 157-169) have developed a list of social media forms which is based on relatively their primary functions.

Social bookmarking

Soacial bookmarking allow users to ‘save’ bookmarks to their favourite web resources such as pages,audio, video, whatever and categorize them using tags labels that help you to identify and filter the content you want later. The idea of social bookmarking services is to stimulate the users to manage their bookmarks using tags instead of having them in the browser-based systems of the computer‘s folder. This also makes them easy to share with friends, colleagues or the world at large, and the tag-based organization means no more cumbersome hierarchical folder systems to remember. Just choose a ‘tag’ and you’ll be presented with a list of all the bookmarks labelled with that tag.

Behind the scenes these sites anonymously aggregate the data submitted by all of their users, allowing them to sort and rank sites according to their user-defined tags and popularity. One favourite social bookmarking site is delicious.com

The advantage for using boomarking in marketing is that it create an exposure to your business through its useful content it makes it easy for visitors to bookmark your pages by providing’ Share this’ links or icons encouraging them to do just that you can harness the social element of these sites to improve your reach, and get valuable, targeted traffic in return. The tags applied to your pages by people who add them to social bookmarking sites can help search engines and visitors to gauge what your site is about more effectively. This can boost its perceived relevance and authority for particular keywords, which can in turn help your search visibility. (Ryan & Jones 2010, 158)

Social media submission sites

Social media submission sites are made for submission and discussion of articles about online marketing, are rather like social bookmarking sites only instead of saving personal bookmarks users submit articles, videos, podcasts and other pieces of content they think the broader community would appreciate. The more people who ‘vote’ for a particular content item, the higher up the rankings it rise. Submissions that get enough votes end up on the site’s home page, which can drive significant traffic. As well as the votes, of course, there also tends to be a lot of discussion and debate on these sites, which means they can offer tremendous insight into the way people think and react. Some favourite social media submission sites are Digg (www.digg.com) and Reddit (www.reddit.com), and niche sites like Sphinn (www.sphinn.com)

There are many advantages of social media submission sites such as amplifying the visibility, traffic and online. If a company have the articles or content rise high in those social media submission sites, that company will get a significant traffic and loyal. Besides that, the opportunities for a company to reinforce its profile and a perceived position within online community are at hand. If you keep on with anything relevant and compelling by joining into the submission and online round-table discussion, audiences will start to pay attention to you, trust you and gain perception of your brand or service. (Ryan & Jones 2009, 159)

Forums and discussion sites

The advent of forums and discussion sites comes at very early in the days of Internet development. Some of most popular discussion boards come up such as Yahoo Groups and Google Groups. Those groups are created with public or only-member access which allows users to post messages and to discuss within the forum. (Ryan & Jones 2009, 159)

Forum and discussion sites are used for many reasons in marketing for example

Forum and discussion sites are used for many reasons in marketing for example

Get closer to your customers: Checking out what consumers are talking about in forums is a great way to find out what makes them tick. The more you can learn about your customers, the better prepared you will be to engage with them in a meaningful way.
Raise your profile: Contribute to the discussion, offer help and advice, and demonstrate your expertise. Pretty soon people will start to respect and trust your contribution to the community – and that can do wonders for your online reputation and profile.
Nip bad things in the bud: By participating in forums you will be able to spot potentially negative comments or conversations relating to your business or brand and be proactive in resolving them before they escalate
Media sharing sites

Media sharing sites are incredibly popular it allows communities of members to upload, share, comment on and discuss their photographs. YouTube (www.youtube.com), Y! Video (video.yahoo.com), MSN Video Soapbox (video.msn.com/) and others do the same for video content. The sites typically allow you to make content publicly available or restrict access to the people you specify, to send content to your ‘friends’, and even to ‘embed’ (seamlessly integrate) the content in your blog post or website for others to find it, distribute it and discuss it. Some favourite media sharing are Flickr (www.flickr.com) and Picasa Web Albums (www.picasaweb.google.com)

Marketers use media sharing site for analyzing the popularity of items on content submission sites and reading the user comments, you can gain insight into your target market’s likes and dislikes and can incorporate that into your own content creation. These sites are the ideal vehicle for rapid distribution of your own digital media content. (Ryan & Jones 2009, 160)

Reviews and rating sites

They allow users to review and rate companies, products, services, books, music, hotels, restaurants – anything they like. They can be stand-alone review sites, like Epinions.com (www.epinions.com), Reviewcentre.com (www.reviewcentre.com) or LouderVoice (www.loudervoice.com), or a review component added to a broader site, such as the product rating and review facilities on e-commerce sites like Amazon (www.amazon.com)

Review and rating sites rely on advertising to generate revenue and therefore offer advertising opportunities for businesses either directly or through advertising and affiliate networks. Even if people aren’t rating your business directly, you can still get valuable information on these sites on what’s working for consumers and what’s not within your particular industry with the use of review and rating sites. It also helps in posting reviews about your business, that sort of feedback is pure gold reinforcing what you’re doing well and pointing out areas where you can improve for marketing the site is a research free tool. (Ryan & Jones 2009, 162)

Social network sites

The purpose of those sites is to allow users participate in a social network by creating their own profile and connecting with friends or other contacts within network or inviting friends and real-world contact to joint into the online community. So, there are vast numbers of users engaged in the social network sites. It is an online meeting platform for people for creating the content, sharing them with others, and interacting with the like-minded people easily (Ryan & Jones 2009, 162).

Talking about social network, some popular sites have come up such as Facebook, MySpace, Bebo and LinkedIn, which attain most attention on the stream of social media marketing.

Social network sites are best places to look for advertising chances based on analyses of users’ profile information. Controversies around the benefit of advertising in social network sites still take place. However, it is undeniable that the advertising is trendy on those sites. (Ryan & Jones 2009, 162)

If a company offers customers transparent information and stimulate their interest in products or services, the long-term relationship is created online and offline. The company should keep eyes on customers and let the influencers within the online community to promote the company‘s brand.

Podcasts

Podcasts are, in many ways, just the rich media extension of the blogging concept. A podcast is simply a series of digital media files (audio or video) distributed over the internet. These can be accessed directly via a website or, more usually, are downloaded to a computer or synchronized to a digital media device for playback at the user’s leisure. They tend to be organized as chronological ‘shows’, with new episodes released at regular intervals, much like the radio and television show formats many of them emulate. Users can usually offer their feedback on particular episodes on the accompanying website or blog. Some fovourite podcast are Podcast.com (www.podcast.com), Podcast Alley (www.podcastalley.com), Podomatic (www.podomatic.com) and even Apple’s iTunes (www.apple.com/itunes) offer a convenient way to find, sample and subscribe to

podcasts of interest.

Podcasts can be a valuable channel to reach target market. Unlike mass media, this social media platform open the new way for companies to be digital conscious players. Companies can create own podcasting services which provide podcasts to prospect customers. Initially, if customers are less tech-savvy, they prefer to view now or listen now with nothing to install or register. However, if the customers find the content compelling and right for them, then they will subscribe the company‘s site. (Ryan & Jones 2009, 165-166)

Micro-blogging

Micro-blogging is a relatively new craze that’s sweeping through online early adopters, and looks set to explode as more people embrace social media and learn of its existence. It is essentially a short-message broadcast service that let’s people keep their ‘friends’ up to date via short text posts (usually less than 160 characters). Some favourite micro blogging sites are Twitter (www.twitter.com) is the biggest player in this space, Google-acquired Jaiku (www.jaiku.com) and Pownce (www.pownce.com). The real value of micro-blogging isn’t necessarily in the individual posts; it’s in the collective aggregation of those mini-posts into more than the sum of their parts. When you receive frequent, short updates from the people you’re connected to, you begin to get a feel for them, to develop a better understanding of what they’re all about, and to feel a stronger connection with them.

Micro-blogging is efficient in improving customer service. On micro-blogging sites, a company can share the information about products and services very quickly. People can post their opinions, which can be positive comments or complaints. Those are like instant feedback for the company to analyse, resolve any mistakes and to improve customer service managing system

Wikis

Wikis are online collections of web pages that are literally open for anyone to create, edit, discuss, comment on and generally contribute to. They are perhaps the ultimate vehicle for mass collaboration, the most famous example, of course, being Wikipedia (www.wikipedia.org), the free online encyclopedia. (Ryan & Jones 2009, 168-169)

Wikipedia has become the largest encyclopaedia in the world with more than 3 millions articles in English, reaching the visitors number of 68 million every month. In comparison with Encyclopaedia Britannica – an English encyclopaedia published by experts, Wikipedia has surpassed to be the leader in this field (Wikipedia n.d).

Wikis for marketers

The concept of using wikis as a marketing tool is a very new phenomenon, and their value may not be as readily apparent as with some other forms of social media. However, they are a powerful collaborative tool and, with collaboration between companies and their customers in the ascendancy, look out for increasing use of wikis by innovative organizations in the very near future.

Build a strong collaborative community of advocates around your brand: Wikis can be a great way to encourage constructive interaction and collaboration between people inside your organization and people outside it. Consumers begin to feel ownership and connection with a brand that encourages, facilitates and values their contribution. That ownership evolves into loyalty and then advocacy: powerful stuff from a marketing perspective, especially when you consider that these contributors will often be online influencers who will go on to sing your praises on other social media sites.
Harness the wisdom of the crowd: How much talent, knowledge and experience do you have inside your organizationProbably quite a lot but it pales into insignificance when compared to the massive pool of talent, experience and expertise you can access online. Retired experts, up-and-coming whizz-kids, talented amateurs, undiscovered geniuses – they’re all out there. Wikis give you a simple, powerful and compelling way to draw on and capture some of that collective intelligence. Why not harness a wiki, for example, to help refine the design of your products, come up with your next great marketing campaign, define a more efficient business process, produce and/or augment product documentation, develop a comprehensive knowledge base – or anything else that might benefit from a collaborative approach
Blogs

In the space of a very few years the widespread popularity and adoption of the blog as a medium of self-expression and communication have caused one of the most fundamental shifts in the history of modern media. Barriers to entry have come crashing down, and easy-to-use blogging platforms have liberated millions of individuals, giving them access to a global audience. People all over the world are using blogs to report local news, vent their frustrations, offer their opinions, share their visions and experiences, unleash their creativity and generally wax lyrical about their passions. Bloggers read each other’s posts, they comment on them, they link to each other prolifically, and the best of them have a massive following of avid and loyal readers. These readers go on to elaborate on what they’ve read in their own blogs, and spread the word through their own online social networks. Some fovourite blogs are (www.blogger.com) and WordPress

(www.wordpress.com)

Blog is becoming an important component in the business arsenal too, adding a personal component to the bland corporate facade, helping companies to reach out and make human connections in an increasingly human online world. Blogs also helps to show customers a personal side to your business, give them valuable information they can use, provide answers and improve their overall experience of dealing with your company. (Ryan & Jones 2009, 164-165).

3.2 Definition of tourism

Although many of us have been “tourists” at some point in our lives, defining what tourism actually is can be difficult. Tourism is the activities of persons traveling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business or other purposes.

Tourism is a dynamic and competitive industry that requires the ability to constantly adapt to customers’ changing needs and desires, as the customer’s satisfaction, safety and enjoyment are particularly the focus of tourism businesses

3.3 Marketing and Promotion of tourism in Kenya

There is need to change the image or perception of Kenya in overseas markets which has been adversely affected by negative publicity, whether warranted or unwarranted. The Kenya Tourist Board shall be strengthened to continue its key role in promoting and marketing Kenya both internationally and locally. Key policies include the promotion of up market eco-tourism and wildlife safaris; gradual move away from low value package or mass tourism; the diversification of tourism products and markets; and the promotion of regional and domestic, as well as international, tourism. Emphasis shall be placed on obtaining a precise understanding of customer needs, and developing and delivering the products that customer’s desire. The policy endorses the following broad strategies for development of tourism from international, regional and domestic markets:

3.3.1 International Tourism

The main objective (once the current market recovery initiative is completed) is to establish Kenya as the destination of choice in Africa for international visitors. Destination marketing shall be spearheaded by Government through the KTB in partnership with the private sector. The main means of achieving this objective shall be to:

Differentiate Kenya with a distinct market image and positioning in target markets as a quality safari and coastal destination offering a rich diversity of culture, adventure and activity experiences;
Build on the new Kenyan brand image in a manner that reflects the diversity of the tourism product and that has a strong and distinct appeal in the marketplace
Maximize the impact of scarce marketing resources of the government and private sectors by aiming at concentration rather than dispersal of marketing efforts;
Target new segments in established source markets and core segments in emerging markets, particularly in Africa and Asia;
Effectively carry out joint marketing with appropriate partners, particularly with the Kenyan private sector, airlines, KWS, exporters, regional operators; and other tourism and conservation organizations;
Establish overseas offices in key markets and employ marketing representatives through the Kenya Tourist Board on an agency basis in subsidiary markets;
Work closely with EAC partner states to jointly market complementary products and to facilitate multi-destination tourism within the region;
Make full use of, and adapt to, the opportunities afforded by internet and niche marketing to influence consumers and travel agents, and to increase the marketing reach of Kenya in new emerging and niche markets;
Encourage the making of documentary and feature films in Kenya as a highly cost-effective means of increasing destination awareness; and
Support the establishment of a sustainable funding mechanism for tourism marketing and development;

The Task Force (comprising line Ministries and private sector representation) which has been appointed by Government to address media responses to matters relating to terrorism threats and their implications for tourism shall remain in place in order to ensure consistency in Government media communications and to avoid sending inappropriate signals to the generating markets.

3.3.2 Domestic and Regional Tourism Markets

Domestic and to a lesser extent regional tourism have sustained the operation of many hotels, lodges and other tourist facilities during recent difficult periods. The marketing strategy recognizes the importance of these markets, and the need to allocate adequate resources and budgets for the promotion of regional and domestic tourism.

3.3.3 Domestic Tourism

Kenya’s tourism products attract visitors from all over the world. However, most Kenyan nationals have not been able to experience the same attractions due to financial constraints, lack of tourism knowledge coupled with a paucity of programmes and packages that would enable nationals to participate in domestic tourism. Strategically, the domestic market (comprising Kenyan nationals as well as foreign nationals living in Kenya) shall be further developed to form an enduring foundation of the demand for tourism facilities and services, and not just a temporary palliative during times of difficulty. Focusing on tourism awareness education, public relations and publicity, Government shall take a proactive role in promoting domestic tourism to nationals and residents of Kenya as a core strategy. It shall forge linkages between the industry and national and resident domestic segments through ongoing tourism awareness educational campaigns aimed at the local population; sensitizing tourism suppliers as to the value of domestic tourism; and encouraging the development and promotion of tailor-made products, programmes and packages specifically for domestic tourists.

3.3.4 Regional Tourism

Tourism practitioners shall also be encouraged to recognize the importance of, and pay increased attention to, attracting visitors from other parts of Africa to Kenya by developing and implementing specific strategies and action plans aimed at nationals and residents of neighboring countries. Particular attention shall be given to promotions to those African countries with which Kenya has good air links and to which Kenya can offer complementary – rather than similar – products.

3.3.5 Cruise Tourism

Government shall seek to re-establish Kenya’s role and position in Indian Ocean cruise tourism by encouraging KPA to develop improved cruise ship and passenger reception facilities at the Port of Mombasa. It shall also encourage KPA and other stakeholders to actively participate in the Cruise Indian Ocean Association; attend Sea Trade and other cruise industry trade exhibitions, particularly with a view to attracting North European cruise lines to winter in the Indian Ocean using Mombasa as a homeport; and join together in targeted marketing to individual cruise lines. Government shall also encourage and support measures to re-establish cruise tourism on Lake Victoria. (http://www.tourism.go.ke/ministry.nsf/doc/Final_Draft_National_Tourism_Policy.pdf/$file/Final_Draft_National_Tourism_Policy.pdf (accessed 21 January 2011)

4 RESEARCH METHODOLOGIES

The objective of section (section 3) is to explain how the research was conducted detailing the methods used and evaluating reliability and validity of the research.

4.1 Research approach

Due to nature of the study the study a qualitative research approach was used to examine the study. A qualitative method as pointed by Strauss and Corbin (1998) allows respondents freedom of expression, opinion, views, and arguments that might not have been attained explicitly through other approaches. Qualitative research according to Collins and Hussey (2003) also helps the researcher to discover different aspects during the interview and investigates answers in details

“A major strength of the qualitative approach is the depth to which explorations are conducted and descriptions are written, usually resulting in sufficient details for the reader to grasp the idiosyncrasies of the situation.”

“The ultimate aim of qualitative research is to offer a perspective of a situation and provide well-written research reports that reflect the researcher’s ability to illustrate or describe the corresponding phenomenon. One of the greatest strengths of the qualitative approach is the richness and depth of explorations and descriptions.” Myers (2002)

Main Types of Qualitative Research

Case studyAttempts to shed light on phenomena by studying in-depth a single case example of the phenomena. The case can be an individual person, an event, a group, or an institution.
Grounded theoryTheory is developed inductively from a corpus of data acquired by a participant-observer.
PhenomenologyDescribes the structures of experience as they present themselves to consciousness, without recourse to theory, deduction, or assumptions from other disciplines
EthnographyFocuses on the sociology of meaning through close field observation of sociocultural phenomena. Typically, the ethnographer focuses on a community.
HistoricalSystematic collection and objective evaluation of data related to past occurrences in order to test hypotheses concerning causes, effects, or trends of these events that may help to explain present events and anticipate future events. (Gay, 1996)

Table 2; Types of qualitative research methods (James Neill 2006)

4.2 Data collection and Methods

The data used in the analysis was gathered from two main sources. As discussed by the Saunders et al. (1997), for a research to be considered a valid and accurate, both primary and secondary sources of data have to be used

4.2.1 Primary sources
4.2.1.1 Interviews

Primary data was collected in form of interviews with industry experts who comprised of ministry of Tourism in Kenya and established Tour operators in Kenyan Safaris. All discussions were recorded during telephone conversation. The data was then transferred to a Microsoft Word document in order to avoid omitting information or ambiguous errors. Also to ensure that the right information was retrieved over the telephone, the respondent requested copies of the answered as email attachment. The preliminary questionnaires and information was sent prior to the interviews with background information to formalize the respondent in the research area. The duration of the interview was approximately forty-five minutes per respondent

4.2.2 Secondary sources

4.2.2.1 Text books

Text books are written by different professionals and academic staff. They mainly do not have a specific reference to a certain areas and few of them are recently published however, the merit of using text books is that they basically contains generals ideas and a researcher can compare different authors on different topics

4.2.2.2 Newspapers and related journals

The journals used were current or archives. Newspapers contain information researched by journalist who might be biased. Attention was paid to newspapers articles used. Journals have more tendencies to be biased even though they are more practical in orientation. The journals used in this research were mainly in electronic format and downloads via the internet.

4.2.2.3 Past research

Past research constitute research conducted by other students in the past years. In the this researcher, past research was used mainly to gain ideas on how past research was conducted and format of the research

4.2.2.4 Electronic sources

Internet contains the most updated information about the area of researcher. Even though the internet has much information regarding the researcher area, Collins and Hussey (2003) argue that researchers have to be careful that they do not become victims of information overloads where they can spend long time searching for irrelevant information from the internet. The internet was used to retrieved up-to-date information as well achieves relating to the researcher areas. The researcher was aware of information bias and information overload as the main disadvantage of using the internet. As a result of this, Web address from newsgroups, companies’ Web pages and established search engines were the only ones used.

4.2.2.5 Reliability and Validity

Collins and Hussey (2003) argue that four experiments are commonly used to establish the quality of a case study research. The four experiments are constructed validity, internal validity, external validity and reliability. As Collins and Hussey (2003) elaborate, reliability and validity are critical issues in qualitative research since the measures of the reliability may offer procedures rather than end results. Validity in the same way should focus on extracting rich data from explanations and analysis. Internal validity tests concern explanatory cases studies in which only the study with casual relationships is studied. From the results of the discussion of this case study, the study is explanatory by nature which means that internal and external validity tests are not relevant to and thus not applied.

The case study consists of tour and Travel Company categorized under the tourism sector. The study is reliable and the data of this study is based on the data was gathered from the interview

5. CASE STUDY COMPANY

The case was selected because the aim and the objective of this study was to find out how the social media outline the market place situation and the marketing strategies and programmers that would help the case company achieved its business and organization goals. Apart from that, the researcher knows more about case company and the research was needed since the case company had not utilized the available social media strategies in marketing their company.

Kenya safaris and Tours is a travel and tour company providing tour operation services in Kenya. The company was founded in early 2006. Being a Kenyan company, Kenya Safaris and Tours reservations staffs have extensive first-hand knowledge of the country to assist and advise the customers in designing their holiday itinerary. The company provide the following services to intervals customers and business customers: luxury tours, chauffeur-driven and self-drive car hire, hotel and lodge reservations ,conferences, facilities, camping safaris mountain climbing, beach holidays, water rafting and gorilla safaris. In addition, the company is able to offer their customers tailor-made services upon request.

6. EMPIRICAL RESEARCH

The main results that were achieved discussed the importance of a social media in an organization and the factors that contribute to a successful social media marketing strategy for the case company. Since the case study company is still new company the information obtain from the research was used to develop the following paragraphs that constitute the case company use of social media to realize its marketing trends and objectives.

6.1 Background information

Kenya Safaris and Tours began operations on 15th January, 2006 and provide safari adventures, sport and travel packages to planning to travel or going for holidays to Kenya. The Kenya Safari and Tours majority of customers are from Europe and the United States of America, though the highest numbers of customers are particularly from the United Kingdom. The founders and employees of Kenya Safaris and Tours are experienced travel-industry professionals and passionate about what Kenya Safaris and Tours promotes and offers.

6.2 A glance at the Kenya tourism

Kenya recorded the highest number of tourists’ arrivals ever at 1,095,945 tourists as at 31st December, 2010. This was a 15% growth compared to the 952,481 experienced in 2009. This figure excludes the cross border tourists’ arrivals which could add up to another approximately 700,000 tourists once the results are fully tallied by the Kenya National Bureau of Statistics.

The 2010 Tourism performance has surpassed the 2007 record by 4.5 percent the later being the best recorded year in terms of tourist arrivals and earnings. “This performance is impressive and is optimistic to achieving Kenya’s vision target of 2 million international tourists by 2012
the sector has earned $1.8 billion in terms of revenue earnings within the same period. This is the highest tourist revenue ever recorded and it represents an impressive growth of revenue by 18 percent compared to the 2009 revenues.

The Kenya tourism board said the performance was impressive and the sector has shown great resilience in spite of thelocal and global challenges. The board accrued the impressive performance to aggressive marketing in the new markets and efficient utilization of the resources available.

Kenya Tourist Board has continued to reposition the destination since 2009 as a high value for high spending tourists and this is paying good dividends. The table below gives a complete Kenya tourism statistics for visitor arrival and departures by purpose of visit

ARRIVALSDEPARTURES
Year/HolidayBusinessVisitors in 00HolidayBusinessVisitors in00
QuarterVisitorsVisitorsTransitTotalVisitorsVisitorsTransitTotal
1996795.7100.555.8952785.799.259.5944.4
1997820.8103.756.2980800.5101.157.5959.1
1998804.8101.772.3978.8744.394.066.2904.5
1999686.986.8101.9875.6672.985.091.9849.8
2000746.994.4107.4948.7746.593.7106.4946.6
2001778.298.3138.51,015772.297.0103.5972.7
2002728.892.1152.6973.5742.093.2134.1969.3
2003732.686.6163.3895.99744.693.4153.6991.6
2004684.0182.1219.11,085.2606.6164.1198.4969.1
2004885.6246.4162.21,294.2856.2255.8147.91,259.9
20051,063.2206.179.81,349.11,027.1201.671.61,300.3
20061,087.5226.2137.21,450.91,077.9219.5116.81,414.2
20081,278.5242.2130.91,651.61,232.0232.3124.61,588.9
2009936.1109.462.01,107.50891.7108.965.21,065.8
20101,061.2180.698.41,340.21,064.9169.397.41,331.6

Table 3; Visitor’s arrival and departures by purpose of visit (source; ministry of tourism Kenya)

6.3 Results on the company’s market analysis

6.3.1 Market summary

The research found that the travel and tourism market is generally categorized Business and leisure travel are always grouped together. The tourism market is however separated into domestic and international tourist. Domestic tourist comprise individuals from the specified country who purchase holiday packages in their country where international tourists comprise individuals from other nationalities purchasing holiday packages in other countries apart from their country. In Kenya, domestic tourist account for approximately 23% of industry revenues with international tourist accounting for 77%.Business travelers are usually divided into two categories, the medium-to-large corporate account, and the small independent businessman. Leisure travelers are classified according to the types of packages they purchase, income, or age.

For Kenya safaris and tours, the company has four primary safari travel groups that constitute, adventure, special-interest, honeymoons and sightseeing (short safaris) expeditions, high-income travelers, budget-conscious travelers and families, students and seniors

In Kenya tourist industry, adventure safaris travel generate approximately ˆ0.3 billion of the approximately ˆ0.5 billion- annual industry revenues. ˆ 0.1-0.15 billion of these revenues is accounted from UK markets. Based on these and other figures, Kenya Safaris and Tours estimated UK safaris travel, markets to be worth approximately ˆ 100 million annually.

6.3.1.1 Market demographics

Kenya Safaris travel is categorized under the leisure travel category. Safari travel is sub category of leisure and can be further sub categorized into long and short adventure travel. Both long and short adventures might involve physical and athletic activities. Long adventure safari activities, as then name suggests, generally involve long duration of traveling in the wildness where short safaris activities are always short in duration and cheaper compared to long safaris.

Safaris travelers are more likely to be new couples or old couples. Kenya Safaris and Tours’ primary customers are married couples, ages 25-35 with children and household income over $ 50,000. Kenya safari and Tours is panned to be located in the UK.

The Wild animals in the natural habitat, beautiful scenarios and sunny beaches attract many safari-oriented individuals. Per capita the UK has more people than any other nation who actively participate in, the Kenya safaris, such as mountain climbing, hunting safaris, honeymoons packages etc. These are the people in Kenya Safaris and tours market. Kenya Safaris and tours should focus on the sale and promotion of safaris travel primarily to individual through the use of social media. And social media marketing strategies so has to be more successful

6.3.1.2 Markets needs

Kenya safaris travel activities are a specialized products and first- hand knowledge of these activities are necessary in order to effective promote and sell them. Many potentials customers are unsure of the location they wish to reach. Part of the value associate with travel agencies is knowledge they posses about destinations. Customers depend on the agency to provide them with sound advice for a competitive price. Kenya Safaris and Tours should be confident in its ability to do so. Kenya safaris and Tours can safe the customers’ time and money and help to ensure that customers are satisfied with their vacations-

6.3.1.3 Market Trends

One notable trend in the travel industry is increased deregulation. Deregulation has increased competition and the need for differentiation. In many cases, the price of airfare and other travel –related services has dropped. Additional include the limit of agency commission by many of the larger airline, increases in adventure travel, and the reduction of profit margins. The UK markets contributed the highest number of tourist to Kenya and this trend is predicted to continue.

6.3.1.4 Market growth

The Kenya tourism industry is growing. Reasons for this growth include a government initiative to promote the industry in foreign market through the of social media adverts for example the Magical Kenya on BBC news adverts., 5% annual domestic economy improvements has increased business which in turn boosted domestic business travel agencies.

6.3.2 SWOT analysis

The following four sections of the SWOT analysis was obtained from the interviews contacted on the case company and are the most relevant issues to Kenya Safaris and Tours successful operation. From the research it can be outline that Kenya Safaris and Tours strengths include its management, experienced staff, marketing knowledge and targeted focus. Kenya Safaris and Tours should capitalize on these and other strengths to take advantage of opportunities and manage treats. The Kenya Safaris and tours weaknesses are primarily those inherent in a growing venture are discussed in one of the following sections.

6.3.2.1 Strengths

Strengths in this perspective are an internal capability or factor that can help support the organization in achieving its objective. Kenya Safaris and Tours strengths are

Management: Kenya Safaris and Tours manager has a successful record in this industry. His experience and the network of valuable connections he has developed should contribute to Kenya Safaris and Tours’ success.
Location: Kenya Safaris &Tours is ideally located. Kenya is a popular destination with safari enthusiasts who make Kenya Safaris and Tours target audience profile. The company is also located in the UK which accounts most of the highest numbers of safari travelers to Kenya.
Experienced staff: Kenya Safaris and Tours team is experienced in the travel business and in adventure safaris. Most members have over three years experience. Moreover, the members are willing to spend extra time and effort to build a successful business. In addition with the intangible benefits derived from succeeding in an independent endeavor, Kenya Safaris & Tours is ready to offer profit sharing and potential partnership opportunities to its employees.
Popularity of safari travel: safari activities are very popular, and Kenya safaris and tours is aware that the popularity will continue to grow, Many of the safaris activities such as mountain climbing, honeymoon safaris, and game viewing, have had family connections for many years where families tend to go for safaris after they have been recommended by members of the family who have been on safari.
6.3.2.2 Weaknesses

A weakness is an internal capability or factor that may hinder the organization from achieving its objectives or effectively handling opportunities and threats. Kenya Safaris and Tours weaknesses are:

Start-Up status: Kenya Safaris and Tours is a start up business where most of start up companies tends not to perform well.
Limited personnel: Though Kenya Safaris and Tour staff are exceptional, but from the research it shows that the workers had to work long hours with little pays.
Financing: Preliminary estimates of sales and expenditures suggest that Kenya Safaris and Tours will remain financially stable. However, unforeseen expenditures or poor sales will threaten company’s cash position, which will be partially vulnerable during the introduction of social media marketing into the company’s operation
6.3.2.3 Opportunities

Opportunities are external circumstances or factors that Kenya Safaris and Tours can attempt to exploit for higher results. Kenya Safaris and Tours opportunities are:

Growth market: The Kenya tourism industry is growing 8%annully, and preliminary estimates suggest that the UK market is part of that growth rate.
Potential to achieve sales from the UK market: As Kenya Safari and Tours establishes to gains financial stability; it can begin to market its services in other markets. The company plans to begin this effort via a World Wide Web campaign (Internet) as this will help to diversify its communications efforts through the use of social media marketing
Potential to become a premier provider: from the researcher it can be argued that Kenya Safaris and Tours have the management and staff to produce a top-quality service.
Vertical integration: The potential to integrate services and add branches exist.
6.3.2.4 Threats

Threats are external circumstances or factors that could inhibit Kenya Safaris and Tours’ performance if not considered. Kenya Safaris and Tours threats are:

Internet and price competition: when airlines were deregulated, price competition increased. Further, the internet has provided a sales medium for business that competes on price and has also given consumers the ability to plan and arrange expedition for their own benefits. Thus, the traditional agency has greater competition.
Local competition (existing and potential): There are no agencies in the UK region that specialize solely in Kenya safari travel. However, most of the travel agencies can book a safari expedition to Kenya. More over, additional Kenya safari travel specialists may follow Kenya Safaris and Tour’s lead.
Economic downturn: The strong Kenyan domestic economy has been good for the travel and tourism industry continued growth is anticipated. However, unforeseen or unanticipated economic recession would threaten Kenya Safaris and Tours’ existence.
6.3.3 Competition

In the travel industry, as in other industries, there are large national chains, small home-based businesses, providers on the internet, etc. Membership numbers of travel-related associations give some indication of participants in this industry.

The Kenyan Association of travel organization (KATO) reports 500 members in Kenya, most of which are small businesses. In addition, there are many agencies not affiliated with these associations but with one or more of the approximately 30 industry associations in competition in the country. Kenya Safaris and Tours have approximately 15 travel-industry associations in the country. Kenya Safaris and Tours have approximately 30 immediate competitors in the UK the main direct competitors in UK include:

Thomas Cook: A German based in major towns in the UK, Thomas Cook is the most well- known and popular travel agency in the world. The company has provided safaris travel packages over the years and has successful integrated travel agency services and safari travel activities. This offers the company complete control over the entire packages. Thomas cook have the advantages of an established reputation, high-quality trips, economies of scale, and strategic alliances. However, their packages are expensive and appeal primarily to a high-income clients; they also rely on agencies in Kenya to provide services on their behalf unlike the Kenya safaris and Tours which deals directly with its clients

Kuoni travel: The Swiss firm is traditional agency and has been in the business for more than ten years. They have gradually expanded towards becoming a holiday travel specialists even though it offers holidays in 634 countries. Kuoni‘s strengths are experience, reputation, and financial stability. Weakness may include high personnel, fixed dates and lack of a clear plan for future growth.

Samoik safaris: was established in 1980 as a successfully Kenya safari specialists. The company is Kenya- own based in the United States of America. Samoik has positioned itself through successful marketing communications especially through the use of social media and management combined with high-level services. However, the company has added other countries to its destinations which means Kenya Safaris and Tours is the only travel agency offering safari packages to Kenya destinations alone in the UK markets

6.3.4 Services

Kenya safaris and Tours is a full-service agency and sell standard travel agency goods and services, including airfare and travel packages. Additional include assistant with Visas. Providing access latest technology equipments and supplies, and superior offering that includes access to better than average activities, accommodation, and entrainments. The value added for Kenya Safaris and Tours offering is its knowledge and expertise, competitive rates, and specialty focus on adventure travel, which translate into increased satisfaction for the customers

6.3.5 Kenya Safaris and Tours keys to success

For Kenya Safaris and Tours to operate successfully the company has to effectively segment the UK safari travel market and other safari travelers, successfully position Kenya safari and Tours as Kenya specialists in the UK, communicate the differentiation and quality of the company offering through personal interaction and media and develop a repeat-business of loyal customers

6.3.6 Kenya Safaris and Tours critical issues

For Kenya Safaris and Tours to operate successfully the company needs market growth projections for the Kenyan tourist industry and for Safaris travel to be accurate, national economic conditions which are favorable to the travel industry, should not experience decline in the next five years, international conditions remains favorable for services providers and the company should be capable to produce effective , targeted communications that promote the benefits and adventure travel and Kenya safaris and Tours specialty and focus.

7 MARKET ANALYSIS AND STRATEGIES

7.1 Marketing strategy

From the research, Kenya Safaris and Tours’ goal of the business is to create and keep customers. The company’s marketing strategy will reflect this goal as its builds its reputation in the UK region. Though Kenya Safaris and Tours operate in the travel industry, it will provide much more than travel. Company’s customers are thought to spend 50 weeks of the year in an office. Kenya Safaris and Tours offers people the ability to go for holidays and remember how much they love the challenge and excitement of a safari. Kenya Safaris and Tours will promote the benefits and safari travel. These benefits include excitement, personal experience and lots of fun. Kenya Safaris and Tours will also promote the benefits of its services. These benefits include saving time and money, and confidence in successful vacation.

Kenya Safaris and Tours is a travel agency that specializes in Kenya safari travel. The company provides consulting and customized travel arrangements and packages. Kenya Safaris and Tours mission is to become the foremost provider of Kenya safari travel packages to the people of United Kingdom. Company employees and owner are safari enthusiasts, as well as safari travel-industry professionals. Kenya Safaris and Tours seeks to connect Kenya safari travel newcomers and veterans with services providers, adventure activities, and accommodation that match the client’s desires and budget level.

7.1.1 Marketing objectives

Kenya safaris and Tours marketing plan hope to achieve an, annual growth rate of at least 10%, promote Kenyan safaris travel activities through strategic alliance with hotel, department of Kenya tourism board, and other foreign own travel agencies, archived 45% of sales through the internet thus becoming the market leader of safari travel provider in the UK region.

7.1.2 Target market

Target market involves targeting one segment with one marketing mix. It helps the organization understand one segment of customers rather than spending organization resources across multiple marketing activities for multiple segments. From the research, Kenya Safari’s and Tours aim to target the following groups:

Couples and individuals safaris adventure travelers: This is the customers group that meets the demographic profile for safari travelers. They are age 25-35 married and with household income greater than $ 40,000.
Group’s adventure travelers: These are groups that belong to some travel organizations and always as a group to different destinations.
Corporate adventure travelers: Kenya Safaris and Tours will target UK business in an attempt to secure corporate accounts

Kenya Safaris and Tours should plan to focus its initials efforts on the safari travel market in the UK regions. As Kenya Safaris and Tours grow, market efforts can be expanded to other markets. The major purchasers that match Kenya Safaris and Tours target market are located in urban areas within big UK cities.

7.1.3 Positioning

Positioning helps create a compressively distinctive position for a service in the minds of targeted customers. For individuals and corporate clients who wish to participate in safari travel, Kenya Safaris and Tours should be positioned as the premier safari travel agency in the UK regions. Kenya Safaris and Tours experience with enthusiasm for safari adventure travel should be displayed in the exceptional services, value, and advice it provides for the customer. It is however that the company understands that positioning is a decision to; make frequently since markets and customers are not always the same and the company must be prepared to reposition its services if necessary for desirability and deliverability

7.1.4 Market mix

Kenya Safaris and Tours must allocate the promotion budget over to the five promotion tools: advertising, sales promotion, public relations, sales force and direct marketing. It is however important to note an organization, can spend more on some promotion tools if is perceived that the specified promotion tools will have a major impact compared to other promotion tools.

Kenya Safaris and Tours should employ a wider advertising communications and promotion to achieve its marketing goals. Research on the demographics of Kenya Safaris and tours target market suggest that the most effective communication will be come through advertising in several specialty publications and via local media. In addition, direct interaction or promotion at shopping malls, Exhibitions and other should be part of the company’s marketing mix.

Kenya Safaris and Tours sell travel agency goods and services including airfare and travel packages. Additional services will include assistance with tourist visas applications to Kenya, providing access to latest technology equipment and supplies, and a superior offering that includes access to better than average safaris activities, accommodations, and entrainment. The value added of Kenya Safaris and Tours offering is its knowledge and expertise, completive rates, and specialty focus on Kenya safari adventure travel, will mean increased assurance and satisfaction for the customer. The company’s initiative to focus on Kenya safaris adventure travel was made because economic indicators suggest that an increased demand for Kenya n safaris adventure travel services exists. The UK region does not have solely Kenyan safari adventure travel specialists, and members of the company team are experienced and enthusiastic about safari adventure travel activities. It is hoped that this enthusiasm will be communicated to the customers and Kenya Safaris and Tours experience will result to satisfaction and repeat business.

The concept of integrated marketing communication suggests that a company has to blend the promotion tools carefully into a coordinated promotion mix. Companies within the same industry differ greatly in the design of their promotion mixes. Organizations mainly use promotion strategy to communicate with their customers and other stakeholders. During Kenya safaris and Tours first year of operation, the company will hold and opening events and organize several programmer. At the opening event the company will provide with literature information about trips and activities. Negotiations with Kenyan department of tourism and hotel in Kenya have begun and additional promotion will likely occur through these strategic alliances. Specialty rather than national publication should serve as media vehicles for Kenya Safaris and Tours advertising. Local radio station could also be used for promotion purpose. Personal selling could also occur, through telemarketing should be avoided. Kenya Safaris and Tours plans to occasionally station personnel in location around UK and other parts, such shopping malls. The organization’s goal is to develop personal familiarity between its employees and the community.

7.2 Kenya Safari and Tours analysis on the use of social media

The company’s results on the use of social media from different aspects as mentioned and analyzed below.

7.2.1 Social media for Kenya Safari and Tours

According to the research answers, applying social media is quite a new thing for the tourism enterprises in their business. Most of these tourism enterprises include only one to three persons taking all of business operations. Therefore, new ways of marketing might be a challenge for them. Knowledge, time and capability to use social media are factors should be taken into account. In addition, the use of social media in tourism businesses depends on firm‘s target group which is one of the most important elements in marketing.

The research went further by stating that social media can accomplish the traditional marketing. Nowadays more and more people found information on internet and decided to book a hotel after reading many complimentary comments about it for example. Therefore, social media reaches the customers faster and targeted. The results obtained suggested three social media sites for the Kenya Safari and Tours and these are Facebook, YouTube and Twitter

Furthermore, in a new era of online communication social media has influenced on consumer behaviour. They are empowered more than ever in making purchasing decisions. Social media let people speak out loud their thoughts on something they had interacted with. They turn out to find social content from social media outlets to plan of their travel.

Consumers increasingly read feedback of other travellers and compare the prices of service offering because they felt trustworthy of the peer‘s opinions. This changes significantly way of business. It means when your company receiving a lot of negative feedback on social media site, then you sure losing your customers.

7.2.2 Advantages and disadvantages

Applying social media in business particularly in tourism enterprises does bring advantages and disadvantages in use.

From the research it shows that if the tourism business has the knowledge and capability of using social media; it will give a cheap way of marketing especially for current and topical things such as offers, events and packages

It also shows that social media is very fast in reaching customers with large scale of influence. If a company can realize influencers within the online community and stimulate them to brag about the company‘s brand then it will certainly earn attention from the customers.

Customer service is mentioned as an advantage of social media. It is very easy to interact with customers through social networking site. Whenever they raise a complaint about your company, you will get back to comfort your customers at anytime without geographical obstacle.

The feedback also shows that social media helps in finding out who are leading in the market through their comments on these social platforms. Understanding of competitors can be also examined. Moreover, it is useful to predict the trend of customers on what they like and what they expect from the company.

After finding out the advantages of social media it is important also to note its drawbacks. Social media are considered effective in approaching customers and spreading information really fast with huge impact. It is one of its advantages but also its disadvantage. If bunch of negative comments arrive to the company‘s social media site or any misrepresentation is spreading very fast which will definitely ruin the company‘s image and getting out of control. Because of that, keeping track on customers is required to be implemented. However, it is considered as time-consuming and the results of marketing through social media do not come out after one or two days but taking months or even years. The research also stated that when a tourism company considers using social media as their marketing strategy, should improve skills of staff.

7.2.3 Social media target customers for Kenya Safari and Tours

The research also establishes to find out the target customers that the tourism business can reach through social media and it shows that customers‘age is very important thing. Younger and middle-aged people use information technology, not older people. However, target customers are determined depending on what the company is selling. If you are selling group packages for senior citizens, I think that social media is not the best way for marketing.

7.2.4 Social media site for Kenya Safari and Tours

A company profile is evaluated as one of most important attributes. The information providing on social media sites helps to increase more selling. From the interviews different opinions were obtained on how tourism company‘s profile on social media sites should have in order to attract visitors and to get higher engagement from them. The responses from the interviews were dominated by two following suggestions:

In the company‘s social media site, it should especially have current and topical news and offers. Up-to-date information is welcomed by travelers because it plays as information sources for their traveling plan.

Besides that, packaging is one of the major option and agreat way to drive attention of customers towards the company‘s social media site. Packaging is a concept of services and accommodation combination. For example, the company offers a sale of holiday tour including airfare and hotel accommodation without booking separately from different websites. This is also an effective way to get high possibility of reservation of target customers for those packaging services.

8. SOCIAL MEDIA SUGGESTIONS FOR KENYA SAFARIS AND TOURS

8.1 Determining an objective

In any business, a marketing objective plays an important role to outline what is to be accomplished by the company. Setting an objective is to determine an effective marketing strategy which in turn brings the best outcome.

Objectives of using social media might be to build awareness, to increase website visits, to increase ranking on search engine or to attract potential customers. According to analysis on other chapter, author suggest the objectives in the case of Kenya Safaris and Tours are improving the local residents’ awareness as well as people from other parts of Kenya, attracting a stable number of new customers and increasing website traffic. The reasons of setting those objectives are explained as following:

Majority of visitors coming for safaris are from local municipal and they form as visit groups.
In order to expand the image of Kenya safaris and Tours, taking care of visitors from different places is necessary to accomplish.
Getting new customers to raise the service‘s sales is important.

8.2 Appropriate social media tools for Kenya Safari and Tours

The primary research is shown under two different points of view of social media users and a tourism specialist. The responses of answerers had described the customers’ needs and expectations of social media use. Moreover, the expert recommendations helped to choose appropriate social media outlets for Kenya Safaris and Tours. Making sure to apply the right social media channels is a decisive factor because not all social media tools are suitable for all business lines, especially in the tourism sector.

The appropriate social media tools for Kenya Safari and Tours is shown in the table below. The list can be change according to the changes of marketing objective and marketing strategy at certain periods.

Social media channelDescription
FacebookA social networking site was founded in 2004. It allows people to keep up with friends, upload an unlimited number of photos, share links and videos. The site has more than 19 million members.
WikipediaWikipedia is a free encyclopedia that anyone can edit the content. The site attracts nearly 78 million visitors monthly as of January 2010. This site is recommended because it is one of the largest reference websites people come to search for information.
YoutubeYouTube is the world‘s most popular online video community

Table 4; List of social media tools for Kenya Safaris and Tours (Author’s own construction)

An online search on Google was conducted to research whether Kenya Safaris and Tours have its official profile or related-upload articles on the above social media channels. The results were shown that the company did have its profile on Facebook and other social media sites however very basic information was uploaded. The information of the company on Facebook site is copied the same as on other social media sites making no differences and attraction to the audiences. Consequently, the profile of the company should be improved on Facebook. Writing new related articles in Tripadvisor and uploading photos and videos are being considered as next steps for Kenya Safaris and Tours to consider

8.3 Attracting visitors and strengthening the social media objectives

More fanpage or higher rate of visitors to the social media sites of Kenya Safaris and Tours means more people are being attracted by the company. It thereby helps to raise the traveller‘s awareness of Kenya Safaris and Tours.

The content on social media sites is requisite for its site traffic increase. From the received answers of the interview, many opinions are given. The visitors of the Safaris are expected to see travelling tips and lots of photos besides basic information. In addition, the social media site of the company should not have old photography and exaggerated text but being a space in which people can freely talk about what they think of Kenya Safaris and Tours or even anything about travelling experiences of them.

The author opinion, Kenya Safaris and Tours should provide on its official Facebook of online virtual tour which give a lively insight into the Safaris and attract new visitors.

Strengthening the social engagement of people on the social media sites of the Safaris can be accomplished through different ways. On Facebook, Kenya Safaris and Tours may increase the contribution of the visitors by organizing a contest for unprofessional photographers, for instance, with the Safaris-related themes. This not only satisfies members on Facebook with such good photographs but also gives chances for people getting to know about Kenya Safaris and Tours. Kenya Safaris and Tours should also create its account on Flickr and upload those received photographs on the site, and direct the link to other social media sites.

Effectively social media is a new way of marketing for tourism companies. However, it is unable to deny that traditional still plays a very important role in marketing strategy of a business. Therefore, even making the presence on social media site but Kenya Safaris and Tours should use the local networks to connect with people around has this will also helps to promote the company’s safaris package and also the Kenya Safaris and Tours should make sure that all the infrastructure leading to all safaris places are in good condition as this will also raise the number of people going for safaris.

CONCLUSIONS

Social media has become a platform that is easily accessible to anyone with internet access. Increased communication for organizations fosters brand awareness and better customer service and therefore the aim of this thesis was to find out the importance of using social media in marketing tourism.

It is also to address the opportunities for Kenya Safaris and Tours in Kenya for applying social media in order to achieve its business goals. The research question was, therefore to find out how tourism companies are integrating social media into marketing so as to boost awareness and generate excitement about tourism destination.

The use of social media in advertising Kenya Safari and Tours boost awareness and generate tourism destination to various safari visitors. Social media is made up with various platforms of social media submission sites, media sharing sites, forums and discussion sites, review and rating sites, social networking sites, blogs, podcasts, micro-blogging and wikis. All this social media platforms contribute a lot in marketing tourism business as well as boosting awareness about various destinations that the company offers.

Rapidly growing social media have influenced the online consumer behavior. Particularly in tourism, travelers are on their own initiative when coming to information searching and purchase decision-making. In the general view of tourism business, social media is being embraced in relating to marketing and service, consist of identifying and attracting new customers, increasing brand awareness and connecting with customers.

The qualitative research showed the users of social media have not understood these social media channels very well and still restrictive in the use of social media for tourism purposes. The most familiar tool is social networking site Facebook. Some others were mentioned such as Wikipedia, YouTube, and Twitter.

The thesis comes to the conclusion that the use of social media in tourism businesses, especially in tourism sector encompassing both advantages and disadvantages. The target customers of social media outlets are determined depending on what kinds of services the tourism companies are offering. However, the young people are considered as the main users of social media channels while old people hesitate to try new technology.

When applying social media in marketing Kenya Safaris and Tours there are some recommendations should be considered. Firstly, there has to be setting up an objective for Kenya Safaris and Tours what it wants to receive from social media. The objective might consist of increasing the local awareness, attracting new customers and improving Kenya Safaris and Tours official website traffic.

To benefit the social media outlets with positive return Kenya Safari and Tours should also attract more visitors to its social media sites and stimulate their engagement by posting up-to-date information or organizing any online activities for customers and finally the writing of this thesis work was a great learning experience for the author a lot of knowledge concerning the concept of using social media in marketing tourism was acquired while writing the thesis.

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Free Essays

Marketing plan and marketing strategy for the re-launch of a selected product which is currently being sold by DIY retailers in UK.

Introduction

The purpose of this report is to present a marketing plan and marketing strategy for the re-launch of a selected product which is currently being sold by DIY retailers in UK. The product selected for the re-launch is Passion Radiators that is being sold by Wickes Plc. The marketing plan and strategy is applicable from 1st June 2012 to 1st January 2013. Passion radiators are designer and eco-friendly radiators that are currently being sold in three colours and designs. For presenting the marketing plan, many areas have been discussed such as the company analysis, competition, current market trends, Pestel analysis, swot analysis etc. The key reasons for the re-launch of the product have been discussed. In the current economic downturn, the purchases of new homes have decreased. So people are renovating their current homes where they prefer trendier, designer and efficient products for their households. People are also looking for more ways to bring down their expenses. During the re-launch period, two special events are there: Olympic Games and the Christmas. The marketing plan and strategy is proposed in such a way that it can take full advantage of these events. A plan has been given for all the marketing activities to be carried out during the re-launch period. Academic journals, articles, newspapers and books have been referred to present the marketing plan and strategy for Passion Radiators from Wickes.

Background / Current Situation

Wickes Plc launched Passion radiators in 2005-06. Passion radiators are designer itself from the rest, as it is eco and user friendly. A Passion radiator consumes 80% less water and produces 15% higher output though the same consumption of electricity. This feature can save electricity and the environment at the same time as it consumes less and generates more. The sales of Passion radiators are very limited. Little information is available about the product on the broachers and the company website. Passion radiators have only three products in their range. Other key issue is the price; at present, the company is charging around ?713 GBP for a radiator, which is expensive, compared to the competition. Based on this, the main reasons to be considered for the failure and re launch of the product are:

Low Awareness
Comparatively High Price
Market Trend
Economic situation in UK
Installation Charges and after sale services were higher.

These points are discussed in the later sections of the report.

Company Analysis

Define company analysis (reference)

To meet the financial and marketing objectives and recover the loss due to failure. (see objectives)
Specific R & D of passion radiator and analysis of competitors.(see product)

Wickes Plc is one of the largest DIY companies in UK. It was established in 1972 and is currently owned by Travis Perkins Plc. It has over 200 stores and around 8500 DIY products in UK. The company has a large range of home improvement products. One of the important commitments of the company is to provide more eco friendly products that help improve the environment.

Analysing the financial data for the company of 2010-2011, it is evident that the sales grew by 3.1%. But, the significant growth was seen in market share which at present makes the group the largest DIY retailer in UK. Considering the current economical conditions, the company is making good progress by acquiring more market share and increase in sales figures. Following success, company has planned to launch more DIY products that are environment friendly and open more stores in UK.

Customer Analysis

Define customer analysis.(reference)

Labour are expensive and we make this product user-friendly to reduce expenses.
Customer satisfaction is our first-priority because the customers are the only element to make the product success or fail
How we retain the customers

Currently economic condition of UK is not very good. Following cuts in benefits, customer confidence is decreasing. The real estate market is also struggling. Customers at the moment want to buy cheaper products and want to save money in any way they can. The trend of buying new homes is decreasing these days in UK, and more people prefer to renovate the old ones. This seems a good opportunity for home improvement products. For Wickes Plc, the other important point is that many small retailers are closing due to tough economic times. This was the reason that the company gained market share in 2010-2011 following closures of many small retailers and shops.

According to research conducted by AMA, it is evident that the designer radiator market is showing good growth potential. The two important products are the designer radiators and towel warmers. People tend to make their home more design oriented by installing designer radiators to make their house look more beautiful. Consumers prefer innovative designs, odd shapes and more colour options. On the product development side, consumers prefer better thermal performance, efficiency and lower running costs. Adding on, customers look to bring down their utility expenses and purchase more environment preserving products in homes.

Market / Competitor Analysis

Define and reference

CompanyCompetitor

High quality-low price
Different package with passion
Customer can pay its easy instalment without pay any interest.
High efficiency that there is no need to jump from single to double glaze windows, which saves the customer extra budget.

There are currently many companies in the designer radiator market. The other DIY companies such as B&Q, the radiator company and other designer radiator range from Wickes group itself such as Havel, dynasty and others. When comparing the prices, the designer radiators range from around ?250 to ?1500, depending upon the size and style. Price competition has become very fierce as more companies are entering the designer radiator market, which are importing products manufactured in low cost foreign markets.

The market of designer radiators has shown an inspiring increase of around 10% to 20% in the recent years. In 2008, the market for designer radiators was nearly ? 75 million. However, due to economic downturn a decrease of 9% was seen in 2009 reducing the market size to nearly ? 69 million. But, according to a research conducted by AMA, it was forecasted that the market would grow nearly 16% by 2012 compared to 2009 and the market size would be around ?80 million. The market for designer radiators can be segmented into three main sectors: domestic renovation, domestic new build and commercial installations. The key sector is the domestic renovation as due to current economic downturn it is more likely that people will make improvements in their current homes rather than buying new houses.

PESTEL Analysis

Political: The current coalition government has many plans to support eco friendly improvements in houses and encourage environment friendly products. The government has launched a benefit scheme under which the householders need to prove that they are using products that saves money on utility bills and thus save environment.

Economical: The current economic downturn and government cuts in benefits have decreased customer confidence. The real estate market is struggling and so people are improving their current homes and installations. The opportunity here for Wickes is to gain market share as it did in 2010 following closures of many shops and other retailers.

Social: People are looking ways for decreasing money on their expenses. The product Passion Radiators is ideal as it will help save money for its customers on utility bills. During the re-launch period, Christmas and Boxing Day are there. Customer spending during this time is the highest. The company should offer lucrative offers to attract more sales and customers.

Technological: In the radiator market, the trend is for installing more decorative and innovative radiators that are energy efficient. The company should increase the range of Passion radiators by introducing more shapes, colours and making them more energy efficient.

Environmental: People surely prefer more environmental friendly products for their homes. Passion radiators can satisfy this need of the customers. Passion radiators consume less water and produces more thermal output saving electricity.

Legislative: The government is providing exemption from VAT on purchase of eco-friendly radiators where the people can save money. However, the rules are very complicated to claim for exemption.

SWOT Analysis

Strengths:
Passion radiators are eco friendly and thus energy saving.
The Wickes group has a large distribution network of around 200 outlets in UK from where the products can be sold to customers.
The product has a warranty of 5 years with two years of after sale service.
Low electricity/gas consumption.
Customer can install by themselves.
Passion radiators are a product of Wickes Plc, which is currently the leading DIY Company in UK. This shall increase reliability and provide a good marketing platform for the product.
Weakness:
Passion radiators have a very low awareness in the market.
The price for the product is relatively higher compared to its competition.
Fierce competition among the companies for selling designer radiators.
Opportunities:
The opportunity of this company is market share regarding the re-launch of radiator successfully, result in gaining more market share by grasping more customers.
The product can address the current market trend where people prefer more innovative and designer products that are energy efficient.
The markets for the designer radiators have good potential to grow of around 16% in 2012.
Government benefits and tax exemptions for eco friendly products in homes.
In the current economic situation, people are more likely to improve their existing homes. Further, they want to cut their expenses. This product can address people’s need in current situation.
Threats:
Wickes Plc has other products in the designer range. Re-launching Passion radiators and giving more emphasis to it might reduce sales of its other products and can hamper the company in overall sales.
Competition is introducing cheaper products made in low cost foreign markets.
Other products are available in market with same features.
The leakage of the latest technology used in these radiators.
New entrants can be entered after the leakage.

Objectives

Marketing Objectives:
The company should maintain a strong growth during the entire re-launch period of Passion radiators.
Wickes should achieve stable market penetration in the designer radiator market.
Company must take full advantage of the Christmas and Boxing Day.
More market share leads to optimize profit.
Customer loyalty and satisfaction.
The re-launch period also has the 2012 Olympics (27th June – 12 Aug). It is very likely that the commercial installations of radiators could possibly increase during this period. The company should establish Business-to-Business relations to take advantage of the Olympics.
Financial Objectives:
Company should manufacture the radiators in low cost foreign regions in order to decrease price of the product.
Company should maintain research and development costs in order to improve efficiency, introduce more designs and innovations in the radiator.
Wickes should concentrate on acquiring more market share of the designer radiator market.

Marketing Strategy

Target Market Segments
Repeat again

At present, the designer radiator market is nearly ?75 million GBP and has good potential to grow in 2012. With current market trend of people more likely to purchase designer and energy efficient radiators, Passion radiators have a good potential. As mentioned earlier in the report, the designer radiator market can be segmented into mainly three categories: domestic renovation (65%), domestic new homes (20%) and commercial installations (15%). After analysis, the company must consider two main categories here i.e. domestic renovation and commercial installations. In the tight economic situation, people will improve their current homes. The Olympic events are in the re-launch period. The commercial installations of radiators will surely increase in hotels and other places. Wickes should surely target the commercial market with Passion radiators.

The company should associate the Passion radiators with environmental activities for marketing the product. They should also give a punch line to the product that suites its functionality and features. In the outlets, the product should kept in such a way that it attracts more people visiting the stores. On the website, the product should be highlighted. One of the commitments of Wickes is to introduce more environmental friendly products. By promoting and giving emphasis to Passion radiators, the company can come closer in achieving its commitments given to its customers.

Competitive Advantage:

There are surely many designer radiators available in the market. But, very few are eco-friendly. Being designer and eco friendly are the most distinctive features of Passion radiators that separate it from the competition. The other important point is that it is a product of the Wickes Plc. People will prefer a product from a more reliable and trusted company such as Wickes. Wickes also has a good loyal customer base. The company is also strong financially so they will be able to invest more in the re-launch of the Passion radiators.

Marketing Mix

The marketing mix of Passion radiators should be like this in terms of product, price, place and promotion.

Product:
Increase range of the product. Introduce more shapes, colours and designs.
Maintain research and development to improve efficiency of product.
The product is user friendly for which customers can install and fit the radiators by themselves easily.
Innovative product with meaningful features.
Price:
Pricing of the different radiator should be finalised after considering the competition.
Special discounts on Christmas and Boxing Day.
During Olympics, provide more discounts to businesses as they mostly purchase in bulk.
Maintaining Low Prices with High Quality is the main target.
Promotion:
The company must promote the product through TV ads, hoardings, banner Ads and social networks, newspapers and advertising on internet.
If the company will able to make the product associated with the Olympic Games, it would be a huge benefit.
Passion radiators should be associated to many eco friendly events and charities.
Place:
Wickes should display the product in all its outlets in the UK.
Customers can be able to order the product online and through phone calls.
Increase the number of distribution centres for ease access to customers.
Free delivery services.

Implementation and Control

The company should select proper milestones during the re-launch period for it success. The company must also monitor that activities are finished on time and budget. A Gantt chart has been prepared for implementing the marketing activities which is given at the end of report.

The company should monitor the actions of the Re-launch plan of the Passion radiators. The following areas should be observed:

Revenue: The sales of the product should be checked during the entire period especially during Olympic Games and Christmas time.
Expenses: during the entire re launch period i.e. 1st June 2012 to 1st January 2013.
The company should strictly monitor that the customers of the product are satisfied as it will be the key to successful re-launch of the product.
Constant development and expansion of the product.
Conclusions

Passion radiators at present are very limited to only three types and colours. Being energy efficient and eco friendly will surely help the company to re launch the product. In the present market t rend, people prefer designer and energy efficient radiators. In tough economic conditions, people look ways to cut down expenses. Passion radiators can meet all these requirements of the market trend in UK. The Olympic games and Christmas both fall in the re-launch period. During Olympic games, the commercial renovations of radiators is surely to increase. During Christmas and Boxing Day customer spending is the highest in the year. The company Wickes, should not miss the opportunity and grab the maximum advantage they can from both these events. There is immense competition in the designer radiator market but very few have eco friendly radiators. This gives Passion radiators the extra edge over the competition. Being a product of Wickes DIY will certainly add more to it. The government is also providing benefits to environment friendly households and giving VAT exemptions. The market trend, government support, edge over competition, Olympic games and Christmas; all these aspects will surely make the re-launch of the Passion radiators successful.

Recommendations

The weak points of Passion radiators are high price compared to competition and less varieties in the product range. Wickes should consider manufacturing in the product in low cost foreign regions so they can bring down the price of the radiators. Company should continue research and development throughout the re-launch period in order to bring more innovations in the product and add more products in the range. The company should also improve the efficiency and make the product more environmental friendly. Wickes should establish good relations with businesses as they will go for renovations during the Olympic games. The company should provide flexible and discount prices as businesses generally purchase in bulk. Sales target should be set and met during the Olympics and Christmas period. Wickes should associate Passion radiators with other environment preserving events and programs for promoting the product. By attaching the company name and the product to environmental programs will increase goodwill among the consumers and the company can also satisfy its commitment of preserving environment. The product should be highlighted in all its outlets and website. Customers should be able to purchase the radiators online and via phone calls. The company should also assist through proper instructions and help line if customers face any problems in installing the radiators. Good customer service is always important for the success of any product. It is important for the success of re launch that the marketing activities and milestones occur on time and on budget. Wickes should steadily follow the marketing plan and strategy for the accomplishment of the re-launch of Passion radiators.

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The Impact of Socio-Marketing in Environmental Issues: University of Hertfordshire. A critical review

The piece is a proposal for a study to carry out a critical review of one particular organisation, looking at the role played by socio-marketing in environmental issues. Globalisation has increased the interest in, and urgency surrounding, ‘green’ issues and possible ways of addressing them. In particular, there is a new interest in ‘green’ marketing and other ways of doing business, and ways of trying to encourage consumers to be less reliant on environmentally harmful products.

The proposed study will examine the issues through the particular case of the University of Hertfordshire, a relatively new university in the South-East of England which has been active in developing policy in line with wider national and international guidelines for environmental matters. The University has a number of specific policies designed to promote ‘green’ awareness and behaviour. The overall aim of the study is to examine the different ways in which the University markets its ‘green’ policies to its students and staff. This will be done through a case-study analysis which combines literature review, examination of the University, its environmental policies and the way it markets these, and a primary study amongst students at the university. The proposal includes an introduction to the study, a literature review, and a methodology.

The literature view looks at the growth of environmental awareness in society in general and amongst consumers in particular, documenting the phenomenon of ‘green’ marketing. The associated concept of social marketing is also considered. A number of theoretical models of human behaviour, including the mechanisms whereby behavioural change can be brought about, are considered, in order to through light on how marketing is able to effect change in behaviour.

The case study examines a number of relevant areas concerning the University. The policies and strategies it has adopted are considered, and the different ways in which information is disseminated to staff and students is analysed, with particular attention given to social media.

The primary research proposed will combine quantitative and qualitative data in order to provide depth and texture as well as statistical reliability and validity. Research is to be done by questionnaires, distributed primarily face-to-face, with a limited number disseminated online. 200 students and staff from the University took part. Data collected is to be subject to textual and statistical analysis. Limitations, ethical issues and validity, reliability and generalisability are discussed.

Project Details:

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Title: Impact of Socio-Marketing in Environmental Issues: University of Hertfordshire. A critical review.

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Academic Level: Undergraduate.
Work done so far: 5,000 words (Introduction – Methodology).

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Critical Analysis of the Integrated Marketing Communications in the UK

INTRODUCTION

Over the last decade, product marketing and ways through which communication takes place between manufacturers and consumers has changed tremendously (Belch & Belch 2004). Due to the technological revolutions and the rise of innovations such as the mobile phones and the internet, control over information has shifted apparently from the manufacturer’s hands to the hands of consumers (Belch & Belch 2004). The market environment has also changed due to globalization of marketing strategies, loss of confidence in mass media advertising, increased reliance on targeted communication methods, and media fragmentation and so on (Belch & Belch 2004).

Given the changing market environment, the need for more efficient and cost effective marketing strategies has induced changes to the way marketers conduct their marketing activities and led to the adoption of more integrated approaches (Dewhirst & Davis, 2005). The consequence has been the adoption of a more holistic customer oriented approach to conducting marketing communication activities, a process often known as Integrated Marketing Communications (IMC) (Dewhirst & Davis, 2005).

IMC CONCEPT
A vast number of studies have made attempts to define the term Integrated Marketing Communications. One of the most succinct and widely accepted definitions of the IMC concept is that defined by the American Association of Advertising agencies (AAAA). That is, “a concept of marketing communications planning that recognizes the added value of a comprehensive plan that evaluates the strategic roles of variety of communications disciplines (for example, general advertising, direct response, sales promotion, and public relations) and combines these disciplines to provide clarity, consistency and maximum communications impact” (Arnott & Fitzgerald 1999: p.4).

RATIONALE OF THE STUDY

IMC has moved beyond simple communication to the use of promotional elements in a unified way in order to create a synergistic communication effect (Cornelissen 2001). It has become a powerful tool for developing and implementing marketing communications consistently and more effectively; and is certainly one of the most innovative marketing functions endorsed by advertising and marketing practitioners (Cornelissen 2001). Despite its continuing appeal, this concept has become a subject of great controversy with regard to its merits and validity.
In the recent years, a controversy has emerged between the proponents and opponents of the IMC concept. While the proponents suggest that the concept represents a revolutionary way to organizing marketing efforts and enhancing the brand awareness, critics argue that the concept is simply a “pop management theory” without a solid theoretical base (Duncan, 2002). Others contend that the IMC concept suffers from ambiguity in its definition and practice (Eagle & Kitchen 2000). It is thus the sole purpose of this analysis to critically explore on the IMC concept and its synergetic communication effects in relation to advertising strategy and planning in the UK.

HISTORY OF THE IMC CONCEPT

The origin of the IMC concept can be traced back to the 1990s when Prof. Don Schultz first introduced it at Northwestern University (Kitchen & Schultz 1998). Back in the 1960s and 1970s, marketers relied primarily on the advertising agency for the development of all marketing communication activities (Kitchen & Schultz 1998). In the recent years, two strands of change have however occurred. That is, the wider appreciation of techniques and the creation of specialist companies that deal with specific marketing communication areas (Dewhirst & Davis 2005).
As a result, there has been a progressive fragmentation of provisions in this field. Initially, there was an emergence of specialists in the various fields of marketing communications such as direct marketing, public relations, and sales promotion among others (Duncan & Moriarty 1997). Today, there are various companies with the ability and expertise to advertise their brands using a wide range of communication medium (Dewhirst & Davis 2005).
As a result of the IMC concept, marketers are increasingly employing several devices which were once the domain of dedicated and specialist companies (Dewhirst & Davis 2005). This concept has been embraced in practice by many companies not only due to the acquisitions and mergers which have resulted in consolidation of the advertising industry but also due to the synergies that have emerged from the integration of the various communication activities within the IMC framework (Dewhirst & Davis 2005).

LITERATURE REVIEW

The IMC concept has also received greater attention in the academic sphere. Several academic journals have devoted space to explore on the deeper implications of IMC in advertising and planning (Low & George 2000). These include: journal of marketing communications, journal of Advertising research and journal of Business research among others. Scholarly work on IMC, however, seems to be evolving from the limited view of effective coordination to a strategic process (Low & George 2000). The depth and breadth of research in the field of IMC has also evolved since its initial inception in the late 1980s.
A review of the various publications and scholarly work on IMC shows recurring themes, in particular, themes related to the definitional issues of the IMC concept and its theoretical development (Low & George 2000). Several scholars have undertaken and sufficiently discussed on the IMC concept by providing more in-depth literature reviews, which will not be repeated here. Of particular interest is the work undertaken by Shultz et al., (1993).

CRITICAL ANALYSIS OF THE IMC CONCEPT IN RELATION TO ADVERTISING AND PLANNING IN THE UK

According to Shultz et al (1993), the IMC concept is based on a holistic view of marketing communications whereby brands capitalize synergies among advertising, public relations, direct response and sales promotion; and combines these communication disciplines to provide consistency, clarity and maximum communication impact.
Each of these promotional elements plays a major role in marketing communications.
Advertising: – due to its amplified expressiveness, persuasiveness and public presentation, advertising campaigns have become extremely important in creating awareness about the product, company or brand (Peltier, et al 1992).
Sales promotion: – campaigns for sales promotions offers some kind of stimulus (free sample, discount etc.) and are more preferable in cases where new products are being launched (Hutton 1997).
Public relations: – since public relations are characterized by high credibility, PR campaigns enjoy a high level of trust among the potential customers (Riley & James 1991).
Direct marketing: – this approach is based on databases that contain information of potential customers. Therefore, direct marketing offers greater opportunities to reaching the target audience (Peltier, et al 1992).
As Shultz et al (1993) asserts; the coordination of these promotional activities is necessary to deliver a clear, consistent and competitive message about the brand. It is important to recognize that consumers often combine information from various media. In order to prevent them from integrating this information inconsistently, marketers must take charge of this process so as to deliver clear and consistent information about the brand (Schultz, 1996). The overriding purpose of the IMC framework is managing all marketing activities that impact profits, sales and brand equity (Schultz, 1996).
A good example in the UK can be seen with Wrigley Company which developed an integrated marketing communications program in January 1998 that brought with it tremendous effects in terms of the cost and time devoted to the campaign (Anon 2000: p.89). The program cost the company approximately 500,000 pounds in the first 18 months. The aim of the program was to persuade the dental profession to recommend the use of sugar free chewing gum by raising awareness of the role of saliva in dental health (Anon 2000: p.89).
Among the promotional elements included in the program were advertising in the trade press, a quarterly magazine, a patient education action pack, posters and leaflets (Anon 2000: p.89). The results were amazing with about 73% of the dentists recommending sugar free gum to patients, up from 44% before the campaign (Anon 2000: p.89). This provides a good illustrative example of the synergetic effect of combining several communication instruments (advertising, personal selling, sales promotion, and public relations) in a solid integrated campaign.

COMPARISON OF THE IMC MODEL TO THE STANDARD MODELS

The main advantage with the IMC model over other models is that it provides for the joint effects or synergies which are generated by the orchestration of the multiple marketing activities discussed above (Duncan & Everett 1993). The major difference between the IMC model and the standard models is that, unlike traditional marketing, the effectiveness of each activity depends entirely upon the other communication activities (Eagle & Kitchen 2000). Also, while traditional marketing employs a “push” strategy whereby communications are designed to promote the firms products, the IMC model on the other hand employs both the “push” and “pull” strategies by incorporating feedback from the customers so that the firm’s products and communications can be adjusted to meet the needs of the end user (Eagle & Kitchen 2000).

CONCLUSION

Clearly, we have established that the major benefits of the IMC framework is its ability to create synergies among the various marketing communications disciplines and to combine these disciplines to provide clarity and consistency of the set of messages conveyed to target audiences.
It therefore follows that, in order for firms in the UK to remain successful in the competitive environment, they must adapt to this new approach to marketing. All marketing communications must be designed from the view point of the customer and interwoven together in a manner that forms a coherent whole. Undoubtedly, the integrated planning and implementation of the various communications mediums is far more effective in achieving maximum communications impact than their separate usage.
(1, 569 words)

REFERENCES

Anon, 2000. Some aspect of measuring integrated marketing communications. In: Economics and organization, p. 89
Arnott, D., and M. Fitzgerald, 1999. Marketing communications classics: An international collection of classic and contemporary papers, Thomson Learning
Belch, G. E., & M.A. Belch, 2004. Advertising and promotion: An integrated Marketing communications perspective. 6th edition. New York: McGraw-Hill/Irwin.
Cornelissen, J. P., 2001. Integrated marketing communications and the language of market development. International Journal of Advertising, vol. 20(4), pp.483-499.
Cornelissen, J. P., & A.R. Lock, 2000. Theoretical concept or management fashionExamining the significance of IMC. Journal of Advertising Research. Vol. 40(5), pp.7-15.
Dewhirst, T., & B. Davis, 2005. Brand strategy and integrated marketing communication (IMC). Journal of Advertising, Vol. 34(4), pp.81-92.
Duncan, T., 2002. IMC : Using advertising and promotion to build brands. New York: McGraw-Hill.
Duncan, T., & S.E. Everett, 1993. Client perceptions of integrated marketing communications. Journal of Advertising Research, Vol. 33(3), pp.30-39.
Duncan, T., & S. Moriarty, 1997. Driving brand value: Using integrated marketing communications to manage profitable stakeholder relationships. New York: McGraw- Hill.
Eagle, L., & P. Kitchen, 2000. IMC, brand communications, corporate cultures. European Journal of Marketing, Vol. 34(5), pp.667-686.
Hutton, J. G., 1997. A study of brand equity in an organizational-buying context. Journal of Product & Brand Management, Vol. 6(6), pp. 428-437.
Kitchen, P. J., & D.E. Schultz, 1998. IMC – a UK ad’ agency perspective. Journal of Marketing Management, Vol. 14, pp. 465-485.
Low & S. George, 2000. Correlates of Integrated Marketing Communications. Journal of
Advertising Research, Vol. 40, pp. 27-39.
Peltier, et al., 1992. Direct Response Versus Image Advertising. Journal of Direct Marketing, Vol. 6 (1), pp.49-66.
Reilly & C. James, 1991. The Role of Integrated Marketing Communications in Brand Management, The Advertiser, Vol.1 (Fall), pp.32-35.
Schultz, D. E., 1996. The inevitability of integrated communications. Journal of Business Research, Vol. 37, pp. 139-146.
Schultz, D.E., et al., 1994. The new marketing paradigm: integrated marketing communications. NTC Business Books, pp. 105-156.

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Global Marketing efforts of Toyota Motors

INTRODUCTION

Global marketing is the act of marketing products or services across national, political or cultural boundaries in a bid to maximize sales, diversify, achieve economies of scale, and explore new territories (Keller, 2003). Marketing on a global scale has been born primarily due to globalization and international expansion. Multinational companies need to expand beyond their home markets, and this involves investing in new territories, often with differing cultures and socio-cultural norms. Hofstede (2011) notes that the most significant hurdle in global marketing has been over the past decade with an increasing number of multinational corporations seeking to gain substantial market share in China, and other developing countries (such as Brazil, India and Russia), as these countries have relatively low market penetration, high demand, but very different cultures to western countries.

According to Schneider and Barsoux (1997), cultures around the world are increasingly converging, and these have resulted in the ability of multinationals to leverage their international reputation and successfully sell one product across multiple regions. Murphy and Lacziniak (2006) have also stated that the influence of technology, economic, socio-cultural and political forces makes it easier to create a marketing strategy with a mix suitable for a variety of regions and catering for different cultures. However, in as much as converging cultures may have unified demand, this does not necessarily translate to similar consumer perception or expectations across all markets. Culture affects consumer behavior by influencing consumption decisions, hence creating desires and driving the consumer to select products or brands that fulfill specific needs. As a result, organizations need to understand how cultural norms may affect their marketing strategies within respective regions in order to create a marketing strategy that can successfully penetrate new market environments (Usunier et al, 2005). This paper focuses on the global marketing efforts of Toyota Motors, and how various cultural dimensions may have an affect on its marketing activities in international markets.

Cultural Analysis

Toyota is the third largest automobile manufacturing company in the world, employs over 300,000 staff, and operates globally (Whoriskey, 2012). Its extensive global operations make the company an ideal case study for cultural analysis.

Scholars have conducted extensive research on cultural dimensions across different regions, and the most notable of these are of Hofstede (2011), who developed a model hierarchy of the world based on an analysis of IBM managers in several countries. His model identified four main components that define cultural dimensions and these are: power distance, uncertainty avoidance, masculinity / femininity, and individualism / collectivism. According to Hofstede (2011), several regions differ in their cultural dimensions, and these could have a significant impact on the marketing activities of international firms such as Toyota operating extensively within different cultural regions.

Power Distance

High power distance cultures are usually characterized by authoritarian societies and work environments, in which subordinates are highly dependent on their bosses in decision-making and welfare. Such societies are highly authoritative and are usually characterized by high amounts of income and gender inequality (Mooji and Hofstede, 2010). Hofstede (2011) found power distance to be high in Latin American and Arab countries, and much lower in Europe and the US. According to Hocklin (1998), high power distance cultures are usually characterized by chauffeur driven cars, while Dash et al (2009) found that countries with low power distance usually expect highly responsive and quality service; while those high on power distance attach a greater importance to tangible service attributes.

These attributes relevant to the automobile industry could be prestige, reliability, exclusivity, luxury, type and cost. Therefore an emphasis of branding, in such a way that it communicates to the buyer that it would improve their prestige, reputation, and it is exclusive, would be effective in high power distance cultures. However, in low power distance cultures, an emphasis on service delivery such as roadside assistance, extended warranties, reliability and servicing could be equally effective.

Power distance is also prevalent in youth consumption. In the US, a low power distance economy, about 49% of 17-year olds had driver’s licenses in 2008 (Neff, 2010). This translates to the fact that more young people are able to buy cars. However, when compared to a high power distance country like China, much less numbers of youth are able to afford automobiles, due to the high-income disparity between the rich youths and the rest of the population (Lee, 2010).

Individualism / Collectivism

As the title suggest, collectivism suggests a collectivist society in which a greater emphasis is placed on family values, community and team in the work place (Mooij and Hofstede, 2010), as opposed to individualism whereby it is mostly about an individual’s accomplishment and self-actualization. Dash et al (2009) found that consumers high on individualism expect lower empathy and assurance, while Murphy and Lacziniak (2006) noted that consumers high on individualism are more focused on personal preferences than family or team preferences. Regarding Toyota’s products, cultures with high individualism may see higher sales in two door sports cars and luxury vehicles, as opposed to collectivist cultures where sedans and family cars could sell higher. Furthermore, with respect to advertising and marketing, Mooij and Hofstede (2010 advocate denoting a brand in a more collective light within collectivist cultures. So for a car manufacturer like Toyota, branding efforts could center on family road trips or team based activities; or a happy couple driving their brand new jeep with a baby in the back. However, for an individualistic culture, it may focus more on a sense of self-achievement or fulfillment.

Uncertainty Avoidance

This refers to the extent to which people feel threatened by unknown situations (Hoecklin 1998). Cultures that are strong in uncertainty avoidance are aggressive, active, compulsive and intolerant while those weak in uncertainty avoidance are less aggressive; more relaxed, contemplative and relatively tolerant (Hoecklin 1998). Markets with high uncertainty avoidance are also characterized by much lower consumer credit (Mooij and Hofstede, 2010), as consumers usually desist from financial items such as consumer loans, credit cards, mortgages or car loans. This may likely lead to a lower amount of cars being sold.

Mooij and Hofstede (2010) also notes that innovativeness and a wish for change are low in high uncertainty regions, so the emphasis would center on more of the same. The same trusted brands, driving standards, and an emphasis on Toyota’s core values could be marketed. While marketing to cultures with high uncertainty avoidance, Toyota could also emphasize on the safety of its motor vehicles, the value of its brand, and its reputation; as these would most likely promote the sense of a predictability and safety.

Masculinity / Feminity

According to Mooij and Hofstede (2010, “an important value of masculine cultures is achievement, and when combined with individualism, success can be shown”. Hofstede (2011) labeled those cultures that strive to differentiate the roles of men and women as masculine cultures while those that permitted more overlapping social roles for the sexes as feminine cultures. Japan ranks high among the more masculine countries while Netherlands ranks lows The UK and US, on the other hand, rank in the middle of this dimension though slightly more towards masculine cultures (Assael 1998).

Toyota promotes its luxury brands (Lexus) as a status symbol, while some of its other brands are off-road, strong, high capacity vehicles. With these, they have gained substantial market share in the US. Societies placing high value on feminism are less assertive, and focus more on quality of life, interpersonal relationships and a concern for the weak (Aaker & Alexander 1993). These societies tend to be less extravagant in consumption and their purchase decisions, are more modest, and seek low-end products.

Toyota Cultural Marketing

Based on the cultural dimensions analyzed, Power Distance seems to have the most significant impact on marketing, especially in high power distance cultures. This chapter would give recommendations on how Toyota could adjust its marketing mix to account for a culture with high power distance[1].

Firstly, Toyota should focus on differentiating the market into the upper 20% and the masses. The upper 20% would be targeted for their affinity for luxury goods, and their spending power. They would be capable of purchasing luxury cars and jeeps, which would appeal to their status within the society.
An emphasis should be placed on marketing service attributes such as prestige in owning the vehicle, it’s luxury, reliability and it’s status-enhancing power. Individuals should want to own new Toyota’s because it makes them feel better than their peers, and like they have achieved something.
In such a high power distance culture, it is likely that the youth population and the lesser earning individuals may not be able to afford luxury vehicles. However, the vehicles sold to them, no matter how cheap or small, should be packaged in such a way that it enhances their social standing, and offers a sense of achievement even in the smallest sense.

Conclusion

The analysis within this report has shown that cultural attributes within a region do have an impact on global marketing. Dimensions such as power distance, uncertainty avoidance and individualism affect consumer behavior due to its impact on culture. As a result, different marketing messages and tactics are likely to appeal to different audiences based on their cultural values. It is therefore in the best interest of multinational companies to ensure they understand their target markets, and develop appropriate methods of marketing their products in the most appealing way.

REFERENCES

Aaker D and Alexander, L.B. (1993) Brand Equity & Advertising’ Advertising’s role in building strong brands, Lawrence Erlbaum Associates, London.

Aaker, A. D. (1991) Managing Brand Equity, Capitalizing on the Value of a Brand Name, The Free Press, New York.

Assael, H., (1998) Consumer Behaviour and Marketing Action. 6th edition, International Thomson Publishing.

Dash, S., Bruning, E., and Acharya, M. (2009) The effect of power distance and individualism on service quality expectations in banking: A two-country individual- and national-cultural comparison”, International Journal of Bank Marketing, Vol. 27 (5), pp.336 – 358

Harner, S. (2011) Japan’s Automakers Face New Challenges (1): Toyota in China, www.forbes.com, [accessed: 12/03/2012]

Hoecklin, L., 1998. Managing Cultural Differences, Addison Wesley, ISBN 0-201-42770-2

Hofstede, G., 2011. “Geert Hofstede Cultural Dimensions”, {Viewed on 15th March 2012} from http://www.geerthofstede.com/

Keller, K.L., 2003. Strategic Brand Management: Building, Measuring and Managing Brand Equity, 2nd Ed, Prentice hall, New Jersey.

Lee, K. (2010) Debunking Myths About China’s Youth Culture, www.forbes.com, [accessed: 12/03/2012]

Mooij, M, and Hofstede, G. (2010) The Hofstede model – Applications to global branding and advertising strategy and research, International Journal of Advertising, Vol. 29(1), pp85 – 110

Murphy,P.E. & G. R. Lacziniak, 2006. Marketing Ethics, Pearson Prentice Hall

Neff, J. (2010) Is digital revolution driving decline in US car culture, www.adage.com, accessed: 12/03/2012

Schneider, S. C, & J.L Barsoux, 1997. Managing across cultures, 2nd Edn, Prentice Hall

Usunier, Jean-Claude & J. Lee, 2005. Marketing Across Cultures, 5th Edn, FT Prentice Hall, ISBN: 0273685295

Whoriskey, P, (2012) GM once again leads the world in auto sales, www.washingtonpost.com, accessed: 12/03/2012

Zhang, Y., Winterich, K. P., and Mittal, V. (2010) Power Distance Belief and Impulsive Buying, Journal of Marketing Research, Vol. 47 (5)

References

Aaker, A. D., 1991. Managing Brand Equity, Capitalizing on the Value of a Brand Name, The Free Press, New York.

Aaker D & L.B. Alexander, 1993. Brand Equity & Advertising’ Advertising’s role in building strong brands. Lawrence Erlbaum Associates, London.

Assael, H., 1998. Consumer Behaviour and Marketing Action. 6th edition, International Thomson Publishing.

Hoecklin, L., 1998. Managing Cultural Differences, Addison Wesley, ISBN 0-201-42770-2

Howard, J.A., & J.N. Sheth, 1969. “The theory of buyer behavior”.

Hofstede, G., 2011. “Geert Hofstede Cultural Dimensions”, {Viewed on 15th March 2012} from http://www.geerthofstede.com/

Keller, K.L., 2003. Strategic Brand Management: Building, Measuring and Managing Brand Equity, 2nd Ed, Prentice hall, New Jersey.

Murphy,P.E. & G. R. Lacziniak, 2006. Marketing Ethics, Pearson Prentice Hall

Schneider, S. C, & J.L Barsoux, 1997. Managing across cultures, 2nd Edn, Prentice Hall

Usunier, Jean-Claude & J. Lee, 2005. Marketing Across Cultures, 5th Edn, FT Prentice Hall, ISBN: 0273685295

[1] Toyota is in virtually all developed, developing and under developed market so it was near impossible to find a new market where they could take an existing product. The best thing was to come up with a hypothetical new market and give recommendations.

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Why is fast fashion marketing effective? An analysis into the online fashion marketing industry and examination of marketing principles and technique, and how these can be linked to greater sales figures

1. Introduction

The fashion industry has undergone significant change and development over the last few decades, gradually transforming from a more stable industry into a very turbulent one. The change in the fashion industry is said to be driven mainly by sourcing from abroad which can be directly attributed to cheaper labour costs (Jones, 2002). The industry is practically finding it difficult to compete on price alone as a result of tough competition from countries with low labour costs (Bruce and Daly, 2006). This suggests that firms that want to compete successfully in the industry must adopt a number of alternative strategies that would ensure that they remain competitive.
Competition from low cost products has forced some fashion retailers to adopt alternative strategies. One of these strategies is fast fashion marketing. Fashion retailers such as Topshop, H&M and Zara have adopted fast fashion marketing as a means of responding to low cost competition. Fast fashion marketing has had a significant impact on revenue streams of the companies that practice it. Fast fashion marketing companies not only solicit and value customer insights but take appropriate action on those insights so as to enable them improve their competitive position (Miller, 2006). Fast fashion retailers work mainly on a basic principle which suggests that “the customer is always right”. By so doing, the companies ensure that the customer is satisfied while at the same time realising maximum benefits their knowledge about the customer (Miller, 2006).
Fast fashion retailers continuously seek to understand customer needs and preferences. In addition, they study how these needs and preferences change over time. By understanding customer needs and preferences as well as their changes over time, fast fashion retailers can develop fashion products that meet customer requirements at all times and at the same time adapt to changes when necessary. For example in Topshop, when a customer picks up a pink skirt, and asks a salesperson whether there is a complementary white T-Shirt with a plunging necklace, the store manager immediately understands the customer’s need and transmits the message to the company’s buyer’s and design team. In less than a few weeks the complementary T-Shirt can be found on the shelves of Topshop (Miller, 2006).
Fast fashion retailers are growing at an alarming rate with their growth rate calculated to be almost three to four times the rate of the apparel industry as a whole (Miller, 2006). While traditional retailers bring in new products approximately once a month, fast fashion retailer like Topshop, Zara, and H&M source approximately 300 new designs per week. This shows that the turnover of fast fashion retailers is approximately ten times that of traditional retailers. The shelf life of a garment in Topshop and other similar fast fashion retailers is approximately a few weeks as oppose to approximately six months for traditional fashion retailers. This suggests the reason why these shops are referred to as fast fashion retailers. The innovation in the fast fashion industry can be compared to the innovation that took place in the fast food industry in the 1960s. Unlike in the traditional fashion retail stores where styles are dictated months in advance, fast fashion retailers depend on in-season trends for their cues. In addition, fast fashion retailers do not advertise heavily. Rather, they rely on the frequent flow of new products to lure customers into their stores. Compared to traditional fashion retailers who introduce new designs to racks just ten to twelve times a year, fast fashion retailers introduce new designs to racks approximately two to three times per week.
By creating a “buy it now” mentality, consumers of fast fashion products have been made to believe that there only a single opportunity for them to buy a particular product as it would not be replenished. Moreover, fast fashion retailers have made consumers to believe that their products are reasonably priced, which means that there is no need to postpone their buying decisions. Consequently consumers are forced to buy on the spot. It is therefore difficult for consumers to think that the product will go on sale. They have been made to believe that the product will no longer be available by the time they are expecting it to be on sale.
Fast fashion retailers therefore have significantly higher sell-through rates compared to traditional fashion retailers. This is evidenced from the fact that most fast fashion retailers are capable of selling their products at as much as 85 percent of the full price as opposed to an industry average of 60 percent. While production cost from local sourcing appears to be higher, fast fashion retailers are still capable of achieving profitability that is approximately two times as high as that of their traditional counterparts.
Fast fashion retail was a concept that was initiated by European retailers who have maintained a leadership position for some time now. However, a number of U.S companies have gained significant interest in the business model and are beginning to catch up with their European counterparts. Despite this catch up, U.S retailers are yet to fully embrace the concept. For example, Fast fashion represents only 1 percent of the U.S clothing market as opposed to 12 percent for the U.K. The companies that top the charts in the U.S include Forever 21, Charlotte Russe and Bebe Stores. These stores influence shoppers with instant messages, iPods and reality TV (Miller, 2006).
Some U.S companies have reacted to the threat of fast fashion by infusing “pseudo-fast fashion” into their business strategies. In early 2006, Target for example introduced a new series known as “Go International Series, Limited-edition collections” which was produced by up-and-coming apparel designers and was available only for 90 days. This series sent a clear message to consumers that it was a fast fashion product that will be available only for 90 days indicating that anyone who failed to purchase it within the 90-day window would be lost out. Another example of the “pseudo-fast fashion” in the U.S was by Chico who introduced the FAS. This strategy enables the company to employ frequent product flows to generate newness and scarcity thus transmitting an instant message to consumers that they may lose out if they fail to take necessary action.
While fast fashion appears to be leading the charts in the clothing and apparel sectors, one is forced to ask questions as to whether they are successful. The key question that one needs to ask is why is fast fashion marketing effective. This paper aims at providing answers to this question by conducting an in-depth analysis of a number of online fast fashion marketers. These include Zara, Topshop and H&M. The study will be looking at four key aspects of these companies. These include category management, quick response, marketing and production. Therefore, the study will be interested in answering four sub-questions:
– How do fast fashion retailers manage their categories to ensure that customers are satisfied?
– What are the strategies adopted to ensure that rapid response is achieved?
– How do fast fashion retailers source their products?
– What are the marketing strategies adopted by fast fashion retailers.
Providing answers to the above questions will enable one to understand why fast fashion marketing is successful and thus provide recommendations as to whether traditional fashion retailers can change their business strategies into the fast fashion model so as to increase their competitive position.
The study is organised under five key headings: Section 1 above provided a general background to the study and provided the objectives of the study; section 2 will provide a literature review which will focus on both theoretical and empirical literature; section 3 will be concerned with the methodology and data description; section 4 will provide the empirical findings and results as well as a discussion of the findings; and section 5 will provide general conclusions, recommendations and areas for further research.

2. Literature Review
Brun and Castelli (2008: 169) review the work of Blumer (1969) who defines fashion as “the word used to describe trends, which affirm themselves in a spontaneous way in accordance with the Zeiteist, i.e., the spirit of the age prevailing at a given moment”. This definition suggests that fashion is something that varies with time. Dealers in fashion products must therefore develop distinctive capabilities that can enable them to easily adapt to change. In other words, fashion dealers must have the capabilities necessary for delivering the critical success factors of the industry.
In response to its changing nature, fashion is no longer the way it used to be. A new type of fashion has emerged. Today, most retailers and designers talk of fast fashion. Fast fashion is a contemporary phrase employed by retailers of fashion products, which signifies that new designs leave the catwalk to the store within a very short time so as to meet up with current trends in the market (Tony and Bruce, 2001).

Fast fashion emerged from a product-driven concept known as quick response to a market-based concept known as fast fashion (Lowson et al., 1999). The main objective of fast fashion is to produce a product within the shortest time possible using the most cost efficient method. In order to achieve cost efficiency, the retailer must achieve a detailed understanding of the needs and preferences of the target market (Lisa, 2008). A number of factors are required for the success of fast fashion. These include category management, quick response, marketing, production, etc.
Category management links the retailer and the manufacturer in a more collaborative relationship (Sheridan et al., 2006). Sheridan et al. (2006) defines category management as “the strategic management of product groups, which aims to maximise sales and profits by satisfying customer needs”. Collaboration between retailers and manufacturers enables them to pool scarce resources together thereby maximising the total profits of the industry. This in turn makes it possible for high quality products to be offered at low cost to customers thereby keeping them satisfied.
As earlier mentioned, fast fashion emerged from a product-based concept known as quick response. Quick response emerged as a means of improving manufacturing processes in the textile industry with the objective of removing time from the production system (Hines, 2007). The concept of quick response resulted in lower lead times in manufacturing processes and to a more competitive U.S textile industry as well as to lower imports of textile products (Hines, 2007). Quick response is used today as a means of supporting fast fashion. It facilitates the creation of new products while at the same time pooling customers back to repeat purchases (Bruce and Daly, 2006). Speed is at the centre of fast fashion marketing (Miller, 2006). Fast fashion retailers achieve shorter cycles times by delaying decisions farther and farther along in the process (Miller, 2006). For example, Topshop is capable of changing the wash on jeans going through a factory within 24 hours; it can decide to change a short-sleeve jersey into a long-sleeve jersey within minutes following a single last-minute call to manufacturing. Rapid response depends heavily on a flexible supply chain. Flexible supply chains means that fast fashion retailers cannot depend solely on low cost production countries like India and China where labour costs are perceived to be cheap. Rather fast fashion retailers must also make use of local manufacturers who may just be their best option for last minute designs and manufacturing.
In addition to category management and quick response, fast fashion relies heavily on marketing for its success. Marketing remains the key determinant of the success of fast fashion in that it creates the desire for the consumption of new designs as close as possible to the point of creation. Marketing achieves this through its promotion of the consumption of fashion products as something fast, low priced and disposable. The objective of fast fashion marketing is to reduce cycle times from production to consumption so as to ensure that consumers engage in as many cycles as possible over any given period of time.
Unlike traditional fashion retailers who follow the annual cycle of summer, autumn, winter and spring, fast fashion retailers have reduced the fashion cycles into shorter periods ranging from four to six weeks and even lower in some cases. By so doing, more buying seasons have been created within the same time dimensions. Fast fashion retailers employ two main marketing strategies. While some operate with no advertising, others rely on advertising. Primark for example does not invest in advertising. Rather, the company invests in the store layout, shop fit and visual merchandising thereby creating an instant hook. This hook results in an enjoyable shopping experience which in turn leads to the continuous return of customers. Evidence suggests that approximately 75 percent of customers make their decisions within 3 seconds while standing in front of the fixtures. By not spending on advertising, Primark is able to pass these cost-savings to customers through low prices (Sheridan et al., 2006).

In line with this requirement, fast fashion marketing has been developed to enable fashion dealers easily respond to current and emerging fashion trends in a fast and efficient manner.
Fast fashion marketing can be defined as “the strategies that retailers adopt in order to reflect current and emerging trends quickly and effectively in current merchandise assortments” (Sheridan et al., 2005: 301). The speed by which decisions are made, as well as the innovations introduced into the store determine how sourcing and buying decisions are combined in the fast fashion industry (Bruce and Daly, 2006). Consumers of fashion products grow strongly and vigorously on constant change, which means that new products have to be introduced frequently to keep up with the pace of change (Bruce and Daly, 2006). Fast fashion companies can achieve this fast turnaround by making contacts with new suppliers with different products in addition to updating and maintaining relationships with existing suppliers who through an understanding of change in the fast fashion industry as an ineluctable factor that determines competitive advantage have developed capabilities to deliver it (Bruce and Daly, 2006). Buying activities therefore play a critical role in the industry through the selection of suppliers and product decision making (Bruce and Daly, 2006). Buying in the fast fashion industry has therefore changed from a pure strategic decision, which was considered less important to a strategic decision, which must be treated with some level of caution.

The fast fashion retail market can be divided into different segments. Three main segments have been identified. These include luxury, high street, and supermarket/out-of-town discounter. Competition in the clothing market has increased recently owing mainly to the entrance of supermarkets into the clothing sector. Supermarkets have made it easy for customers to buy fashionable clothing as part of their weekly shopping. This has reduced the amount of time spent visiting the high street. One of the major fast fashion retailers is Zara. The company has a rapid stock turnaround and is vertically integrated to its supply chain. According to the Economist (2005); and Stabe (2005) Zara is the market leader in the fast fashion industry. The company focuses on a limited range of products as well as on basic shapes. This enables it to deal with a very narrow product range. Fast fashion does not apply to the whole range of products in a store. Approximately 80 percent of products may be core products with fast fashion accounting for just about 20 percent of the entire product range (Mintel, 2002).
A number of empirical studies have been conducted following the emergence of the fast fashion industry. Most studies have focused on how this has impacted the supply chain of the fashion industry. Christopher et al. (2004) for example argues that the emergence of fast fashion has led to significant changes in supply chain operations. The study argues that product life cycles have become shorter as a result of fast fashion. In addition, impulse buying has increased as well as demand fluctuations. Moreover, higher demand fluctuations have made it difficult for demand to be predicted. Forza and Vinneli (2000) provide explanations for shorter product life cycles. Accordingly, they argue that because consumers have increased their desire for new products and variety, it is difficult for a particular product to stay for long thereby leading to shorter product life cycles (Forza and Vinneli, 2000). Consumers’ desire for new products and variety has been attributed to the higher media availability of fashion trend-based and “gossip” magazines (Doyle et al., 2006). Birthwistle et al. (2003) argues that the supply chain needs to be structured in such a way that facilitates rapid response as this can significantly benefit fast fashion retailers. This is because; time has become a key dimension of desirability in a fashion sector that is also characterised by high levels of demand unpredictability. While Christopher et al. (2004) advocates close-market or domestic sourcing as a solution to rapid response for fast fashion retailers, Finiton (2005) argues that while this may provide some benefits, the domestic or close-market sourcing model is best suited for international fashion retailers rather than to national retailers. Besides, it has been argued that rapid response is not determined mainly by the supply chain. Rapid response depends mainly on the requirements of the market and not on the proximity between the retailer and the supply chain (Abertnathy, 2000; Lowson et al., 1999). Fashion retailers are therefore urged to focus on understanding market requirements rather than trying to figure out which supply chain best suits them.

References

Bruce, M., and Daly, L. (2006), “Buyer behaviour for fast fashion”, Journal of Fashion Marketing and Management, vol. 10 No. 3, pp. 329-344
Brun, A., and Castelli, C. (2008), “Supply chain strategy in the fashion industry: Developing a portfolio model depending on product, retail channel and brand”, International Journal of Production Economics, vol. 116, pp. 169-181.
Hines, Tony, and M. Bruce. 2001. Fashion marketing – Contemporary issues. Oxford: Butterworth-Heinemann.
Hines,T. (2007) Supply Chain Strategies, Structures and Relationships, in Hines, T. and M.Bruce. Eds. Fashion Marketing Contemporary Issues 2nd Edn. Oxford, Elsevier
Lowson, B., R. King, and A. Hunter. 1999. Quick Response – Managing the Supply Chain to Meet Consumer Demand. Chichester: Wiley.
Miller, C. (2006) “Fashion’s New Fast Lane”, available online at: http://www.forbes.com/2006/09/13/leadership-fashion-retail-lead-innovation-cx_ag_0913fashion.html [ accessed: 23rd December 2011].
Muran, Lisa. “Profile of H&M: A Pioneer of Fast Fashion.” Textile Outlook International (July 2007): 11-36. Textile Technology Index. EBSCO. Mary Couts Burnett Library, Fort Worth, Texas. Available online at: [accessed: 26th December, 2011].
Sheridan, M., Moore, C., Nobbs, K. (2005) “Fast Fashion Requires Fast Marketing: the role of category management in Fast Fashion Positioning”, Journal of Fashion Marketing and Management, vol. 10, No. 3, pp. 301-315.