Business Strategy of Harford Bicycle - Case Study Example

THE NEW FACE OF HALFORD’S Halford’s: We go the extra mile Target market identification Halford’s strategy is localized marketing relevant specifically to the Hull region. Thus, only a portion of the statistical information regarding the lifestyles of national cycling behaviours will encompass the local culture. Therefore, without regionalized psychographic data available, the task is identifying the most likely markets based on what is known at the moment. This effort further segments a broader cycling consumer profile by marginalizing the potential customer volume between June and September 2011. However, following traditional methods of identifying consumers and market segmentation, the hard demographics offer a profile by which to isolate and deliver integrated communications. Hull consists of a population of 262,000 individuals with a near 50/50 gender ratio. No particular cycling habits were identified through studies pertaining to very regionalized cultural habits in Hull. It is an understanding that certain geographical features and inherent landscape motivations will determine some consumer behaviour, however without this data this marketing function seeks for mass market appeal via a systematic IMC campaign. In this city, the infrastructure for this activity is present, the motivations and incentives are a missing component. Using valid concepts of human behaviour, target markets were identified as subsections: 1. Consumer profile operating on group norms – potential youth market, young adult market and isolated niche adult groups. 2. Enthusiast – Fitness focused, aggressive, self-motivated. Demographics: 24-45, unisex. 3. Follower – Usually not self-motivated, low involvement. Since no identifiable model of consumer target characteristics could be identified, this segmentation approach represents a modified acknowledgement of the FCB Planning Model and the Elaboration Likelihood Model of consumer decision-making. Taking into assessment the history and structure of Hull, these markets coincide with the geographical proximity of Halford’s product distributors and can be targeted through mass-focused communications over a systematic time period. Positioning Halford’s Products The concept is not about making comparable difference claims about Halford’s internal brand reliance and partnerships, positioning Halford’s is identifying its strengths and weaknesses that are most likely to be present in the local environment. Halford’s currently refers to itself as much like a distributor when referring to its product selection, thus making it competitive through its product. Halford’s requires a repositioning during this summer period that gives the business a personified image. It is choice of quality positioning as a lifestyle leader for key markets with a supplementary identity as a premier sales organization. Quality. It speaks a different language depending on the target market assessing levels of quality. Social psychologists remind us that most people have the inherent desire to be liked (faculty.uml.edu 2007). Halford’s is no different. When Halford’s thinks of quality, it is in reference to not only the service merchandise and the service staff, it is about the company’s attitude in relation to their key market opportunities. Quality in relationship management, creativity, and exclusivity that is only found at Halford’s identifies its new image in 2011. At a time period where the business is suffering lost market share from much less-knowledgeable supermarkets and other distribution centres, Halford’s needs to reinvent itself rather than focusing on per product pricing differences and reliance on the brand knowledge of other manufacturers. This is competitive positioning and it is losing the company opportunities to remain faithful to its customer service focus and gain a new foothold in the mass market groups by appealing to these trends. “To differentiate means to create a benefit that customers perceive as being of greater value to them than what they can get elsewhere” (Zwierzynski 2009, p.1). Pricing in a region where distribution forbids much exclusivity and diversity in product selections compared to other retailers cannot provide this same perception in target groups. Service dimensions in a retail environment selling products that have risks associated with maintenance and repair are common expectations from buying audiences of many demographics. What Halford’s once considered to be nothing but peripheral stimulus for buyers, this being quality in sales and knowledge, is to become the central theme in positioning against all other local retailers. Positioning requires effective use of a character personified, appropriate lifestyle-oriented actors in advertising, and integrated this duplicity of character in a method suitable for all recognized target customers. Marketing objectives Modest increases in revenue should be expected as return on investment for integrated communications campaigns, however the objectives to this strategy are long-term strategic marketing objectives for sustained customer loyalty in Hull after the campaign period. By redirecting consumers to understand a new emphasis on quality and knowledge, as well as concentrated exposure in the local market, it is not unrealistic to anticipate a 20-25 percent increase in sales during this period with ongoing increases well beyond 2011. The secondary objective in this campaign is to educate consumers about the process of environmental awareness, assisting in motivating them to consider the long-term merits of the Cycle2Work programme. This personality, though in line with the intended quality positioning for Halford’s, is presented through a pictorial representation that sparks interest for certain fitness-focused customers. Actors appropriate for these new Halford’s dimensions are necessary to gain their attention and use marketing literature to promote new interest in the lifestyle. Marketing strategies Development of direct marketing materials aimed at the target age demographics is the first, inexpensive method of reaching desired customers. Group norms are known to be powerful as they influence social rewards (faculty.uml.edu). At the same time, peer acceptance and the relationship dimensions are contributing factors to youth development and belonging (Brown & Lohr 1987). These aspects of youth values should be exploited in a method that establishes a norm of leadership quality and know-how, communicated in a language familiar to young adult customers and youths with the persuasive influence to coerce parental decision involvement. Halford’s believes that linking humour with quality service characterizes the attitude portrayed in this marketing objective, reinforcing a belonging atmosphere that is prevalent in all promotional and advertising literature produced. Direct mailing literature directs the customer to visit the retail centre and discover higher involvement factors such as price and durability whilst considering the opportunity for sweepstakes results or new recreational options. During the duration of identifying with youth markets using creative to-your-door advertising, the business will be launching its aggressive direct advertising for a broader community visibility in 2011. Similar lifestyle oriented or environmentally-themed mailings reinforce the new commitment to knowledge and education, using appropriate actors with attributes acceptable to the target market. Consider the attention value of this method for intended inclusion into the campaign: Rising awareness of environmental issues, along with the existence of the current Cycle2Work programme reinforces the importance of participating in a community-minded effort to reduce pollution. Shock value associated with a growing brand presence can motivate consumer actions and decision-making regarding new lifestyle changes or improvements. Coupled with an inherent desire for belonging and social adjustment, this can be presented as a team effort using shocking and accurate depictions of cycling in contemporary society related to environmental awareness. This direct marketing effort spotlights a more sophisticated citizen with a desire to take advantage of the Cycle2Work programme or can be motivated by social group rewards. With youth obesity rates as high as they are throughout Britain, education regarding the role of cycling in lifestyle along with youth-oriented advertising images on direct mailers are appropriate for the first stage of the IMC objectives. Mailing lists are procured through approved school student listings or council authorities to ensure this literature is delivered to households with sales potential. To stimulate growth in this list, a contest structure will be incorporated into the literature with incentives for online registration and can be monitored digitally for effectiveness. It should be structured with a social norm mandate communications style to promote action and also toward parental role in securing a healthier functioning body. Reinforcement of Halford’s name on all of this literature, and the associated logo, produces the desired effect for exploring more of the business and considering investment into cycling research in the consumer decision-making cycle. Missing as a key element that adds characterization to Halford’s is the appropriate use of a logo that identifies with the company’s attitudes and quality dimensions. In this case, the character usage portrays the goal of fitness education provided by Halford’s and suggests a motivation to consider discovering Halford’s attitude difference. During the summer period, working with outsourced professionals for procurement of ad space on mobile technology makes Halford’s more active and “out there” in the community. Direct advertising conducted in this style will be delivered with contracted sponsorships with Hull community events to give the brand more presence during the months most suited to sparking interest in cycling. It does not make sense to hide Halford’s in a retail centre, rather show its dedication to upward and mobile lifestyle motivation. Narver, Slater & Tietje (1998) identify a market-oriented business as one where individuals accept the core value concerning the deliverance of superior value for customers. The value proposition for this business speaks for itself: opportunity for advanced fitness improvement that requires ambition. Part of the advertising focus conducted in this method is creating positive psychological associations between the brand and its character and cycling. Taking ownership of cycling from a competitive viewpoint is the quality proposition. The Cycle2Work programme is the most dynamic element of marketing for Halford’s. The incentives are significant for the individual if they are able to motivate commitment from employers (Halfords.com 2010). Halford’s commitment to going the extra mile will show by enhancing the process of gaining customer commitment by creating a template for improving corporate support and then promoting this in the ongoing direct mail campaign and through online communications for download. Halford’s will consistently reinforce its new support template and instruct sales personnel to remain committed to getting customers a copy much like companies that rely on credit applications to meet profit expectations. Personal sales will be a large part of strategy in gaining employee perceptions that the process can be simplified and decisions made quickly rather than through high involvement assessments. By taking the hassle out of a potentially hassle-filled scenario, Halford’s reinforces its integrity and extra mile approach that can guarantee quick sales results. “The nature of today’s marketplace demands firms to interact with their customers and business partners using technology interface” (Aziz & Yasin 2004, p.3). Growing use of Facebook, Twitter and other social media networks provide low cost opportunities for incorporating live support or various file shares with customer audiences. Weekly informational “bulk mailings” are available for customers browsing the website with new media publications, Halford’s editorials, product spotlights, and other elements associated with extended, go the extra mile quality. Offers one consulting business professional, “You don’t need to know absolutely everything…the notion that you would be able to know everything when it comes to technology is very unrealistic” (startconsultingbusiness.com 2010, p.1). Since these systems can be easily incorporated into the company’s existing website with minimal information technology support assistance, lessons regarding these exchanges of information will occur out of becoming familiarity with this new social media function in the sales or marketing role. The risk in this scenario is responding to and analysing certain project risks for implementation and incorporation of social media tools and minimize probability of adverse results, as is defined by risk management systems (dot.ca.gov 2007). The notion is to use the social media tools to continuously express a new Halford’s personality or witticism related to the marketing goal to avoid becoming stale in those who count on the company’s knowledge and information about cycling and cycling products. This marketing strategy is also intended to obtain long-term benefits to the business that can be experienced well after the 2011 summer season in Hull. Functional cross-training in technology systems, direct contact with the virtual client, and customer relationship management will occur as an evolution of the new brand identity using characterization and attitudes visibly linked to long-term strategic goals of fitness and recreation. The direct marketing industry over digital services is generating one-to-one relationships through these new channels between customer and marketer (Abbott 2008). Another by-product of this effort is improving the working conditions and creativity of the sales and marketing team by making them more interactive in decision-making regarding website postings content and design specifications. Some of the unique personality attributes of this team will be incorporated into the weekly discussions and online forum services, thus Halford’s will be built on quality internally as well as in relation to the external market environment. The integrated marketing campaign will also put new spotlight on the repair and maintenance services offered by Halford’s (repetition is key) in light of its recent expansion to include automotive repairs. Growth and effective use of integrated advertising schemes are intended to generate more loyalty towards this business as a functional tool in lifestyle for some markets, thus potentially carrying into other dimensions of the business. True to the Halford’s name and sudden dimension of character in the 2011 season, some variety of competitive marketing will be utilised that takes a humorous stand on competitive failsafes or operational components related to safety, maintenance and cost. Once Halford’s builds a recognizable identity, secondary synergies are expected as the business diversifies its product and service variety. The idea is once Halford’s has taken a lead role in educating consumers, their knowledge of the brands inside will continue to improve. Salespersons will be given pre-campaign training on the psychological elements associated with knowledge creation in certain consumer markets. The goal is to remain well within budget and still remain focused to the Hull market. If successful in this region, such a programme can be test-marketed throughout the rest of its operating locations. Pre-training will help sales staff to associate with the complex dimensions of understanding cycle products and the pursuit of validation in salesperson relationships to more effectively commit to the goal of customer service. These concepts will include common, university level knowledge courses (designed using appropriate academic templates) in areas of defence mechanisms, behavioural norms, and class assessment. A key element to gaining success in this short-run IMC process is through dedicated staff trained with knowledge necessary to achieve long-term goals of customer management and growth. To ensure knowledge is used effectively, mystery shoppers representing the interests of the business will be monitored and then used as a performance strength versus weaknesses performance appraisal. Helping sales staff to identify with their knowledge of needs fulfilment will ensure more commitment from the desired target customers. The campaign will conclude with materials highlighting seasonally appropriate merchandise and heavily reinforce the quality and characterization of the new automotive expansion project for dedicated customers now familiar with Halford’s name and reputation for knowledge. In-store materials with incentives appropriate for the local community along with a final set of direct mailing literature will be developed and distributed prior to October 2011. Budget, implementation and control Consultation with outsourcing professionals and the cost investment in direct mail advertising materials: £2000. Standard volume rates typically apply when working through online or local circular producers. Mobile advertising: £3500 – This investment includes full discretionary usage of mobile advertising medium and knowledge actors associated with community appearances. Technology use in IMC: £2000 – Represents a reasonable estimate for the information technology support to incorporate social media capability on existing systems including support and service costs (if applicable). Training investments are already associated with operating costs and payroll that is considered in other aspects of the accounting system. Though low cost, yet labour intensive, support exists at the internal level for all personnel related dimensions related to marketing strategy. The £7500 pound budget is practical considering the volume of cycles expected to be sold during the short summer season and is in line with a modest return on investment per product sale in each target buyer category. Online production of advertising materials keeps these costs low other than the support needed that is recognized in other areas for IT assistance. Monitoring through mystery shopper evaluations of staff competence, revenues analysis, and data mining practices will ensure whether this integrated marketing campaign is meeting its target results. Return of incentives materials in the initial direct mailing effort to build familiarity with knowledge and new characterization can also be measured effectively through simple analysis. The goal is to remain true to the market needs of Hull and focus primarily on gaining more local customers. Measurement of success is available not only in sales improvements, but in employee assessment of their daily traffic volumes and face-to-face discussion regarding employee sentiment towards the new campaign. The sales staff will represent considerable control elements based on their incorporation into this campaign and ability to express concepts and improvements openly to guarantee a more rewarding customer experience. As the key liaison to the company, the sales force is a low cost investment guarantee. Evaluation of success can also be measured in the volume of return customers to other Helford’s businesses when referred using direct mail literature at the end of the campaign. To prompt these returns, a short satisfaction questionnaire will be included in this direct mail merchandise produced in September so that the company can gain first-hand customer data, valuable data, about the performance and quality of the business. Should future repositioning be necessary based on customer reaction, the campaign can be readjusted and piloted again in the future. Humour linked with knowledge and a spontaneous characterization in a way that speaks of going the extra mile is how this campaign is expected to be differentiated among competitive retailers of cycle products. References Abbott, R. (2008). Direct marketing leagues, Marketing London. Apr 2, pp.29-33. Aziz, N. & Yasin, N. (2004). The influence of market orientation on marketing competency and the effect of internet-marketing integration, Asia Pacific Journal of Marketing and Logistics. 16, 2, p.3. Brown, B. & Lohr, M. (1987). Peer group affiliation and adolescent self-esteem: an integration of ego-identity and symbolic-interaction theories, Journal of Personality and Social Psychology. 52, pp.47-55. Dot.ca.gov. (2007). [internet] Project risk management handbook – Threats and opportunities. 2nd ed. [accessed 11.13.2010] [available at http://www.dot.ca.gov/hq/projmgmt/documents/prmhb/caltrans_project_risk_management_handbook_20070502.pdf] Faculty.uml.edu. (2007). [internet] Social psychology – general psychology. [accessed 11.12.2010] [available at http://faculty.uml.edu/mhaynes/47.101/lectures_spring07/socialpsychology.pdf] Halfords.com. (2010). [internet] Cycle2Work Explained [accessed 11.11.2010] [available at http://www.halfords.com/webapp/wcs/stores/servlet/product_storeId_10001_catalogId_14552_productId_563154_langId_-1_categoryId_173020] Narver, J., Slater, S. & Tietja, B. (1998). Creating a market orientation, Journal of Market Focused Management. 2, pp.241-255. Startconsultingbusiness.com. (2010). [internet] Starting a consulting business: The right skills and knowledge are key [accessed 11.12.2010] [available at http://www.docstoc.com/docs/7200884/Start-a-Consulting-Business-The-Right-Skills-and-Knowledge-Are-Key] Zwierzynski, T. (2009). [internet] Differentiation - - Smart Marketing Strategies for the Solo Entrepreneur [accessed 11.13.2010] [available at http://www.selfemployedweb.com/differentiation-marketing-strategy.htm] Appendix A: Advertising concept for public performance and direct mailing literature Read More