Integrated Marketing Communications - Essay Example

?Integrated Marketing Communications Table of Contents Integrated Marketing Communications Table of Contents 2 Introduction & Issues Faced by Timber Industry 3 Organizations involved in the reporting forest/timber industry-related information 4 Carbon Right and Carbon Emissions 6 Branding and communication Strategies in Timber Industry 6 Marketing Mix 8 Product 8 Price 9 Place 10 Promotions 10 People 10 Process 11 Physical Evidence 11 Press Release 12 B&Q- Vision 2015 12 References 13 Introduction & Issues Faced by Timber Industry Timber industry is one of the most important industry segments of the world with the demand for the product of the industry being consistently on the rise. The global production levels of pulp based production increased by a margin of seven percent in the year 2010. This was mainly on the backdrop of increased demand of wood based products from the different segments. The total production of chemical based pulp was recorded at an impressive 45 million tons which represents a significant rise from its figures in the previous years. The increased demand supply dynamics has also helped in increasing the prices of the products which has boosted the bottom line profitability of the participants of the timber industry. This also represents a challenge as higher price of products may lead to instances where the customers would switch over to the alternate products. The benchmark index of the timber industry namely the Softwood Wood Fiber Price Index (SFPI) and the Hardwood Fiber Price Index (HFPI) showing increase of 16.5 percent and 17.7 percent respectively in the year 2010. The increase in prices was uniform across all the regions of the world with the exception being Southern United States. USA, Sweden, Brazil and Spain were among the regions where the margins or price rise were the highest. The financial crisis had its negative impact on the products and profitability of the timber industry. The dip in demand for products eroded the profit margins of most of the market players. However the year 2010 was a fruitful year with all the major economies showing signs of resurgence and recovery. This has again led to the growth in demand which is evident from the facts stated above. The figures for the year 2010 represents the best possible results for the participants of the global timber industry since the advent of the global financial crisis (Ekstrom, 2010, p.1). Certain formidable challenges for the timber industry include repositioning of the image of the industry. In addition to these certain other issues include handling issues of climate change and carbon footprint. The nature of the industry makes it prone to criticisms with regards to environmental issues. Deforestation and greenhouse effect which are directly linked to deforestation lead to severe challenges for the participants of the industry with regards to compliance with the environmental laws and other legislations (Urtubey, n.d.). A report by the United Nations states that approximately 13 million hectares of the land in forests were being deforested and used for other purposes (Food and Agricultural Organization of the United Nations, 2011). The challenge for market players emerges as to devise strategies that would help in convincing the suppliers as to maintain compliance with legislations and to generate profitability and sustainability. Another formidable and important issue is the threat from substitute products. The advent of electronic communication and internet has eroded the attractiveness and the usefulness of the participants of the timber industry. Moreover with widespread campaigning against use of paper has again emerged as a formidable challenge to the market players. It remains a challenge for the market players to ensure product modifications and formulation of strategies that would help in projecting the image of the product as an eco friendly and un-substituted product. Diversifying into areas like packaging can help the organizations gain new market opportunities and generation of long term sustainability (Butler, 2009). Organizations involved in the reporting forest/timber industry-related information The forestry related activities and issues are national concerned as it a matter of environmental protections and maintenance of green nature. The forest is also a very important for social and economic development as offers number very necessary resources. Timber is one of the most useful and essential resources based on which a number of industry have been developed like furniture industry, paper industry, sport industry, construction industry etc. Now, these industries have been experiencing a global exposure in the international market. However, due to rapid use of timbers in these industries, deforestation has become one of the most vital issues for the entire world. Therefore, with the increasing in timber related business activities and forest related concerns, information regarding timber industry are crucial for the global timber industry. There are a number of international organizations that disclose crucial information regarding the timber. Among these international organizations, the Forestry Commission is the major government department that regulates the forestry in UK. It is also responsible for providing key information regarding the international and UK forestry. This information is very crucial to frame the forestry and timber industry related policies and regulations (Forest Commission, 2001). Besides there are certain organisations that represents major suppliers and business organisation engaged in the timber industry. BRE group of organisation includes BRE Timber services that provide guidelines for better timber business management. It aims to bring long term sustainability in the international timber industry (BRE, 2011). The European Forest Institute (EFI) is international body for representing entire European timber industry. Nearly 23 European nations are associated this organisation which offers useful reports on environmental protection, relevant policies & regulations, and better information for better foresight (EFI, n.d.) United Nations Economic Commission for Europe (UNECE) primarily focuses on the environmental policies and forestry is one of the major considerations in framing a sustainable environmental policies. It can be termed as umbrella organisation taking care of multiple environmental aspects. The Forestry & Timber Section is engaged in collecting relevant and trusted data and presents it to its member consisting of 56 countries (UNECE, 2007). Carbon Right and Carbon Emissions With the increasing pace of industrializations and deforestation, the environmental related concerns have become international issue. The higher rate of carbon emission and deforestation has significantly contributed towards endanger biodiversity and global warming. Hence, the international bodies are trying to impose stricter regulations for carbons rights and carbon emissions. These issues have become a challenge for the entire world needs to be resolved urgently. Carbon right is a policy which strives to bring major environmental developments. As per the Carbon right policies, any organisation can own the right to emit certain amount of carbon in the environment or conduct deforestation by paying a significant amount of money. More specifically, this right permits organisations to deforest for gaining resources or timbers. The payments made by the right acquirers are used for benefits of the environments (REDD-net., 2010). For example, during 2007, Fortis group bought the right for 800,000 tonnes carbon emission by making the payment of 13m Euros. This initiative was taken by the Clean Development Mechanism. As per the mechanism of the carbon right, funds from the carbon rights are used in poor countries for countering the adverse effect of global warming (Hirsch, 2007). Branding and communication Strategies in Timber Industry The timber industry involves environmental issues and hence, managing timber related business has become a challenging task for the entire industry. The global timber consumers are becoming more environmental conscious and moreover, there are also a large number of substitute of timber products are available in the market. These issues are major challenges for the international timber brandings. However, in order to counter these challenges, the proper communication and branding strategies are inevitable. B&Q is one of the leading retailers for the home improvements goods which are made of timber materials. However, the competition in UK timbering brand is quite intensified as a number of market leaders like The Home Depot, IKEA, Lowe's and BI GmbH & Co. Deutschland KG are present. However, these giant DIY and home improvement goods retailers are also present in the global market. Hence, these all market leaders including B&Q are facing a steep competitive rivalry. In such competitive market, the brand development communications strategies have become a major trend in this industry. Specifically, these market players are focusing on the integrated marketing communication (IMC) strategies for establishing higher brand identity and better communications. IMC strategies are very helpful in farming a comprehensive branding and communications plans. One of the major trends for communication among timbering brand is the use of the social networking sites. For example, The Home Depot advertises the best buy offers through the Facebook, a popular networking site (Woo, 2011). Moreover, these key competitors of B&Q also focusing of the social environmental awareness. On the other hand, the development of customer loyalty through better brand building is also a prevailing strategy for these companies. The timbering industry involves major issues relating to environment and hence, they are also trying to portray themselves as environmentally conscious brands. Therefore, they are also trying to provide full information regarding their green operations. These competitors usually report their green policies through their sustainability reports. In addition to this, they are also trying to bring development in environment through volunteering. This social marketing tactics is very effective tool for preparing a respected brand image in the market. However, they are also communicating their activities to their stakeholders through effective advertisements strategies. Marketing Mix Marketing mix is a very vital aspect for the growth and sustainability of any organization. The elements of marketing mix help in generating the brand image and positioning of the organization in the minds of the customer. The elements of marketing mix helps in devising strategies that tends to counter the competitors and also to provide the customers with an offering that tends to match their needs and wants. The elements of marketing mix include product, price, place and promotions. In case of services based industries like B&Q three extended elements include people, process and physical evidence which state to take care of the intangible nature of the services (Kotler, 2010, p.46). In order to address the challenges B&Q must formulate an effective marketing mix that would help it to leverage on its opportunities so as to generate competitive advantage in the turbulent business market. Product B&Q is the world’s largest service provider of home improvement products including furniture’s, paints etc. The company is a subsidiary of Kingfisher and is presently located at UK and China (B&Q, 2011). An effective product mix for the company for the organization would include use of eco friendly paints. This would help in promoting ecological stability and adherence to the norms. In addition it would also generate an eco friendly image of the organization in the minds of the customer. This is very significant in the current context considering the fact that eco friendliness has evolved as a major aspect in the minds of the people across the world due to the growing awareness of the use of eco friendly products. Use of natural binders and doing away with trim and synthetic solvents would go about a long way in maintain eco friendliness and sustainability as well as building a formidable brand image for the organization in the minds of the customers (Miller, 2006). The other products of the firm would include wooden products like furniture’s, wooden panels and other related items. B&Q should use innovative designs for this product category that would help in meeting the demands of the customers. Certain other product features would include accessory items for home decoration such as curtains, bed covers, sofas etc. Besides an effective product strategy for timber based products would include procurement from well proven suppliers. The other product category which can help derive advantage is that of gardening based products. Focus on new product categories like bedding plants would help the firm derive competitive advantage (Professional Practice for Sustainable Development, 2011, p.3). The company can also target the office segment where there is a lot of demand with regards to the usage of products sold by B&Q. This would help in undertaking a market diversification strategy which would not only open new avenues for business but would also provide better risk management options. Price Pricing is one of the most important aspects of the product mix for any organization. An optimum pricing strategy is a must to derive competitive advantage. B&Q must follow a pricing strategy that would seek to provide value for money to the customers. Adopting such a pricing strategy would help in drawing more crowds to the stores. This is also important because organized retailing is a new concept in the product category of B&Q. In addition the company has also opened up a new store in Shanghai, China. Use of this pricing strategy in a new market would help in attracting crowds initially. The combined effects of a good brand image, innovative product line and attractive pricing would help in generating sustainable advantage for the organization (Hitt, Ireland & Hoskisson, 2009, p.176). Place Place implies the location and related strategies for an organization. B&Q has stores based in UK and China. The choice of location reveals the highly specific nature of the organization and its streamlined focus with regards to the choice of the target markets. Future strategies with regards to location would include expanding into markets with high potential. These could include advanced markets like Germany, US and France as well as developing nations like India. Moreover the company should also adopt a market penetration strategy by expanding into other areas of its existing markets in China and UK. A combination of attractive pricing and penetration strategy would help derive success in the business markets (Daly, 2002, p.76). Promotions B&Q would follow an attractive promotional policy and would use numerous channels of communication like television, print media and the internet. While framing a promotional strategy the company should keep in mind the local cultures and sentiments of the individuals of the target market. A strategy of thinking globally and acting locally must be adopted. This is significant considering the fact that the company operates in diverse markets with distinct cultures. An appropriate strategy in this regard would be to select local personalities as brand ambassadors. This would help in generating a better connectivity with the target market audience so as to spread the intended message to the customers (Copley, 2004, p.161). People People include the employees of the organization who actually deliver the service to the customers. B&Q has a dedicated employee base consisting of talented individuals from different departments. People and employees form the core of the organizations policies. The organization has a record of having a large number of employees who are over fifty years of age. This tends to develop into a socially responsible image for the organization. Subsequent strategies would include providing effective training and development to the employees so as to generate greater efficiency which would help in inculcating better practices that would provide greater value to the customers (Cook, 2008, p.184). Process Process includes the manner in which the service is being delivered to the customers. In case of B&Q it includes billing and other aspects like online shopping, home delivery options etc. These aspects are generally a part of the value added services and play a major role in shaping the positioning of the firm and its brand in the minds of the customers. B&Q must adopt strategies like easy billing options, online shopping and formulate strategies to reduce the number of queues in the stores (Gao, 2005, p.276). In addition home delivery options should also be used to generate competitive advantage for the organizations. Physical Evidence Physical evidence is perhaps the only tangible aspect in the service mix of an organization. B&Q’s strategies include an attractive store design with innovative use of different shades of colors. The specific aspect in this is that the firm plays considerable attention to the local sentiments and culture of the target market while selecting a design of its stores. The stores also have special areas for children where they can play while their parents actually go in for shopping. In addition the company also has an eco friendly design for its stores which helps in protecting the environment and also helps in portraying an eco friendly image of the organization in the minds of the customers (ICMR, n.d.). Press Release B&Q- Vision 2015 It gives us extreme pleasure to announce our draft proposal named vision 2015. This policy template would serve as the guiding principle for shaping the company’s policies for the next five years. The vision aims to serve two aspects of defining the growth of the organization and maintaining sustainability. As a part of its drive to increase its market presence the company would try to enter certain new markets like India and Russia. It would also try to penetrate the existing markets of China and UK. The international expansion would be carried out with a joint venture partnership agreement with a local player for which consultations are in a decisive stage. The vision statement is a part of the company’s plan to emerge as a market leader and consolidate its position in the business markets. References B&Q. (2011). About B&Q. [Online]. Available at: http://www.diy.com/diy/jsp/corporate/content/about/index.jsp [Accessed on April 13, 2011]. BRE Timber services. (2011). Timber. [Online]. Available at: http://www.bre.co.uk/page.jsp?id=55. [Accessed on April 13, 2011]. Butler, R. (2009). The UK Experience with Due Diligence: a changed perception? [Pdf].Available at: http://www.katoombagroup.org/~foresttr/documents/files/doc_709.pdf [Accessed on April 13, 2011]. Cook, S. (2008). Customer Care Excellence: How to Create an Effective Customer Focus. Kogan Page Publishers. Copley, P. (2004). Marketing communications management: concepts and theories, cases and practices. Butterworth-Heinemann. Daly, J.L. (2002). Pricing for profitability: activity-based pricing for competitive advantage. John Wiley and Sons. EFI. (No date). About EFI. [Online]. Available at: http://www.efi.int/portal/about_efi/. [Accessed on April 13, 2011]. Ekstrom, H. (2010). Global Timber and Wood Products Market Update. [Pdf]. Available at: http://www.timbercommunity.com/sites/default/files/gtwmu-wood-costs-global-pulp-industry-2010.pdf [Accessed on April 13, 2011]. Food and Agricultural Organization of the United Nations. (2011). Forest biodiversity at risk. [Online]. Available at: http://www.fao.org/news/story/en/item/45904/icode/ [Accessed on April 13, 2011]. Forest Commission. (2001). About Forest Research. [Online]. Available at: http://www.forestry.gov.uk/fr/infd-5txhaj. [Accessed on April 13, 2011]. Gao, Y. (2005). Web systems design and online consumer behavior. Idea Group Inc. Hirsch, T. (September 26, 2007). Fortis group buys carbon rights. [Online]. 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Available at: http://redd-net.org/themes/carbon-rights. [Accessed on April 13, 2011]. UNECE. (2007). About the UNECE/FAO Forestry and Timber Section. [Online]. Available at: http://timber.unece.org/index.php?id=13&unece_menu_id=2. [Accessed on April 13, 2011]. Urtubey, J. (No date). The Challenge of Sustainable Business Development in Argentina. [Online]. Available at: http://www.americasquarterly.org/node/1367 [Accessed on April 13, 2011]. Woo, S. (April 7, 2011). Facebook Won’t Become E-Commerce Force, Analyst Says. [Online]. Available at: http://blogs.wsj.com/digits/2011/04/07/facebook-wont-become-e-commerce-force-analyst-says/. [Accessed on April 13, 2011]. Read More