The Marketing Planning Process for Dixons Retail Plc - Case Study Example

? [FUNDAMENTAL OF MARKETING] How Dixons has applied a Formal Marketing Planning Process in devising its Marketing Strategy Dixons Retail Plc is an international retail and service operation with more than one hundred million customers, both online and in its stores (Jobber & Ellis-Chadwick, 2012, p, 66). The company has opened high street stores in the UK. It has increased its market share by expanding its operations through acquisitions such as the PC World acquisition. Dixons Retail Plc has also opened tax free travel stores in airports called Dixons Travel (Jobber & Ellis-Chadwick, 2012, p, 66). It expanded into the European market by acquiring Elkjop, a leading Nordic retailer, and this led to further growth of the business. Further acquisitions include UniEuro in Italy, and other acquisitions in Ukraine and Russia. In Russia, Dixons explored a joint venture with an existing ElDorado, but decided not to pursue the joint venture (Jobber & Ellis-Chadwick, 2012, p, 66). Dixons Retail Plc expanded into Ireland, Greece and the Czech Republic to become Europe’s largest specialist electrical retailer and services company (Jobber & Ellis-Chadwick, 2012, p, 66). All along, Dixons Retail Plc has developed a robust business model, in which the customer has not always been in the heart of the company’s business planning. Initially, the group’s competitive position was focused on the product-focused approach. The company used the ‘stack-em high—sell-em cheap’ positioning statement (Jobber & Ellis-Chadwick, 2012, p, 66). The company’s products were sold in brightly coloured stores that attracted customers by being packed with new and exciting electrical goods. Customer satisfaction was not a central focus to this strategic approach; hence it was overlooked (Jobber & Ellis-Chadwick, 2012, p, 66). However competitors had not missed out in this aspect. Given the marketing environment, Dixons Retail Plc had to devise a marketing strategy to maintain its market share, and even perform better in the market. A formal marketing planning process outlines how the elements of a marketing mix will work together to ensure maximum effectiveness (Grensing, 2013, p 21). The marketing planning process defines marketing goals. It also outlines the strategies that will be used to meet the marketing goals and the tactics, which will be implemented to achieve the marketing strategies (Grensing, 2013, p, 21). Dixons Retail Plc, when devising its marketing strategy, applied a formal marketing planning process, as described next. First, Dixons Retail Plc formulated a mission statement by devising a meaningful statement of the purpose and direction of business. The company devised a transformation strategy which would include the customer at the heart f the business. This approach was to be guided by a new positioning statement ‘bringing life to technology’ (Jobber & Ellis-Chadwick, 2012, p, 67). According to McDonald and Mouncey (2011, p, 27), a strategic marketing plan should begin with a mission or a purpose statement. Therefore, Dixons had formulated a new mission or purpose statement to set objectives that its new marketing planning process had to achieve, in the form of a transformation strategy. Second, there were overall objectives that were meant to shape Dixons Retail Plc’s marketing plan or transformation strategy. In this case, Dixons Retail Plc had five, clear objectives for its strategic plan. The objectives include that of laying focus on the customer (Jobber & Ellis-Chadwick, 2012, p, 67). Therefore, Dixons retail Plc was to put the customer at the heart of the business, in devising its strategic marketing plan. Another objective that Dixons Retail Plc set to achieve was that of focusing the portfolio on winning positions (Jobber & Ellis-Chadwick, 2012, p, 67). Thus, the company’s strategic marketing plan would involve investing in areas or markets where it would be assured of obtaining and retaining many customers, as well as, making more sales. The company also had an objective of transforming the business by including the customer at the centre of the business’ focus, in its marketing strategy. Since many customers carry out their research online, Dixons Retail Plc had an objective of winning in the internet market (Jobber & Ellis-Chadwick, 2012, p, 67). Finally, the company’s marketing strategy incorporated an objective of reducing costs. Formal marketing planning allows a company to be clear on what it wants to achieve and how it intends to achieve these objectives (Donnelly & Harrison, 2009, p, 76). Dixons Retail Plc carried out a situation analysis. The company realised that change was needed by analysing the condition of the marketing environment and the behaviour of competitors (Jobber & Ellis-Chadwick, 2012, p, 67). Also, upon assessing the effect of the looming trouble in global financial markets and recession, Dixons Retail Plc found out that competition had intensified. Therefore, the company had to set about developing a strategy to secure its future (Jobber & Ellis-Chadwick, 2012, p, 67). Most companies carry out a comprehensive situation analysis, adopt a proactive approach to the future, as well as, carry out a self generated market research (McDonald, Frow, & Payne, 2011, p, 65). The market planning process of Dixons retail Plc involved a marketing audit to make it formal. Marketing audit involves the use of an organisation’s situational information for marketing planning so as to assess the situation of marketing in the business (Wilson, 2005, p, 4). Marketing audit also involves the assessment of resources, products, distribution methods, competitors and market shares. In this case, Dixons Retail Plc reviewed all the product ranges and target markets. In this review, it was discovered that the product ranges were too narrow, and there was a need for more price point in order to satisfy all customers’ needs (Jobber & Ellis-Chadwick, 2012, p, 67). Dixons Retail Plc’s marketing planning process involved the analysis of the market by studying the market in which Dixons was, as well as, the markets which Dixons was targeting in terms of size growth and structure. A SWOT analysis was carried to assess the company’s current position showing internal strengths and weaknesses factors and external threats and opportunities. It was discovered that the customer was not included in the business operations of Dixons Retail Plc, and there was a need to change the strategy to include the customer (Jobber & Ellis-Chadwick, 2012, p, 67). It should also be noted that Dixons Retail Plc’s marketing strategy had marketing objectives and strategies, whereby Dixons had in mind what it wanted to achieve through the marketing function. This was in line with corporate objectives. The business also defined clearly how it could achieve these objectives, through its five, clear objectives (Jobber & Ellis-Chadwick, 2012, p, 66). There was a marketing budget regarding training of colleagues and an action plan for the implementation of the transformation strategy. Finally, Dixons analysed its past decision of not including the customer as the core element of the business to understand its results, as well as, the strategy that it would use for new products and solve existing problems. How each of the Business Functions at Dixons retail Plc have Contributed to the Success of Dixons Marketing Strategy Plan Each of the business function of Dixons Retail Plc had to contribute to the implementation and success of the transformation strategy. For instance, at the operational level, stores were remodelled stores to become easy to shop (Jobber & Ellis-Chadwick, 2012, p, 67). All the business channels were extended to form a fully integrated multichannel approach. Therefore, the inventory management department ensured that it adopted a multichannel approach to satisfy customer needs. Also, the inventory management and distribution department ensured that goods were delivered and picked on time. This could ensure that goods reached the customers and the company’s stores. Errors committed in delivery and picking of goods were analysed and interventions created. Secondly, the selection of products at Dixons Retail Plc focused on seeking to give the widest, best and most exclusive product choice. This selection was also based on customer needs (Jobber & Ellis-Chadwick, 2012, p, 67). In addition, after sales service and support, a role of the marketing function were restructured and rebranded to suit the strategic plan. The marketing function of Dixons Retail Plc ensured that advertising of the company’s products and services was carried out appropriately. This is because the company had discovered that advertising is the point at which multiple touch points of the customer touch. Having known that more than three quarters of the company’s customers shop online, Dixons Retail Plc improved its online sites, as well as, its stores because most of the sales made online were collected at the store (Jobber & Ellis-Chadwick, 2012, p, 67). Senior management of Dixons Retail Plc played its role by taking decisions that helped to clean up the business. As a result, the company exited poorly performing areas and identified process improvements to reduce costs (Jobber & Ellis-Chadwick, 2012, p, 67). Management also communicated the role and importance of the transformation strategy to colleagues. This ensured that customer needs were given priority, and getting the customer voice heard in the business was also considered. Through the transformation strategy, the concept of value range and service remained intact even during few changes on the marketing strategy as it evolved. The marketing department reviewed the target markets and product ranges to expand them through more price point to satisfy all customers’ needs (Jobber & Ellis-Chadwick, 2012, p, 67). The department changed its segmentation strategy to have seven to eight target segments in the United Kingdom (Jobber & Ellis-Chadwick, 2012, p, 67). These segments were based on lifestyle, income and lifecycle. Since the plan was integrated to involve all areas of business, senior management explained how their area of business contributed to the implementation of the plan (Jobber & Ellis-Chadwick, 2012, p, 67). How the KNOWHOW Customer Service Brand has contributed to the Performance of Dixons Marketing Strategy The KNOWHOW customer service brand has made significant contribution to the performance of the marketing strategy of Dixons Retail Plc. First, the KNOWHOW customer service brand was created to consolidate sales and after sale elements (Jobber & Ellis-Chadwick, 2012, p, 68). After sale elements include delivery services, which are aligned with the logistics function, as well as installing upgrades, inspecting and offering education (Wisner & Stanley, 2008, p, 98 and Bidgoli, 2010, p, 106). The company realised that a difference could be made around service therefore, all the existing brands s such as Tech Guys and Partmaster were put together in one service umbrella brand. Since the KNOWHOW customer service brand was created for after sale services, it helped to differentiate Dixon as a brand. It was ensured that every customer problem was solved (Jobber & Ellis-Chadwick, 2012, p, 68). With the KNOWHOW customer service brand in place, staff members were trained to ensure that everybody understood that customer service was at the heart of everything that Dixons did. This means that all staff members had sufficient knowledge on how to solve customer problems that pertain to the goods that purchased form Dixons Retail Plc. The KNOWHOW customer service brand represented a new after sale and support brand that offers a multiple touch point to the customer (Jobber & Ellis-Chadwick, 2012, p, 68). Among the functions of that these after sale and support service offered to Dixons customers, was delivery and installation. Most of the product market and sold by Dixons require critical handling and complex installation procedures. Therefore, the KNOWHOW customer service ensured that Dixons Retail Plc personnel helped customers to transport the goods to their premises. They also helped with the installation (Jobber & Ellis-Chadwick, 2012, p, 68). Customers become loyal and will always come back if their needs are catered for by businesses. It is also important to offer after sale services because with a good after sale service record, the company obtains a strong selling tool (Vashisht, 2005, P, 154). After sale service and customer support builds and maintains a company’s goodwill and adds to consumer satisfaction. The KNOWHOW customer service brand provided support to Dixons retail Plc’s customers in setting up and upgrading complex technology products (Jobber & Ellis-Chadwick, 2012, p, 68). Since the customer was the central focus of the new business strategy at Dixons Retail Plc, with its new positioning statement, ’bringing life to technology’, there was a significant need of providing support to the customer. Also, most customers carried out their research online before they decided to purchase products from Dixons Retail Plc. Therefore, the KNOWHOW customer service brand provided help and support online, as well as on the phone and in-store (Jobber & Ellis-Chadwick, 2012, p, 68). This enhanced effective performance of the marketing strategy of Dixons Retail Plc. The customer requires every sort of support from the online platform to the in-store platform to ensure success of the transformation strategy. Through the KNOWHOW customer service brand, Dixons Retail Plc personnel carried out repair and offered protection of products for customers. Most customers get irritated when things go wrong with the products that they purchase and the selling company fails to offer repair services to them. Therefore, repair and protection, offered by Dixons Retail Personnel enhances peace of mind for the customer when things go wrong (Jobber & Ellis-Chadwick, 2012, p, 68). Finally, the KNOWHOW customer service brand provides training to Dixons Retail Plc personnel. This training ensures that there is right knowledge and behaviour among staff members to ensure that they respond to all customer needs. Every new strategy requires training of personnel so that they can adopt the new way of performing services. Therefore, the KNOWHOW customer service brand has contributed to the performance of Dixons retail Plc marketing strategy by ensuring that employees stay up to date on after sale service and customer support issues (Jobber & Ellis-Chadwick, 2012, p, 68). How the Marketing Environment has Influenced Senior Management Decision-Making and Marketing Planning at Dixons The marketing environment of any organisation is vital to the success of any organisation. This is because the response of the senior management to the elements of the marketing environment determines such an organisation’s success in terms of sales and overall performance. In the case of Dixons Retail Plc, the marketing environment has influenced senior management decision making in various ways. First, the condition of the marketing environment and competitor behaviours triggered the need for change in Dixons. Senior management at Dixons retail Plc realised that by 2006, economic forces were expected to affect market performance (Jobber & Ellis-Chadwick, 2012, p, 67). Therefore, the company had to make a decision that would help it withstand the harsh economic conditions and flourish in future. Secondly, there were significant fears about the signs of trouble in global financial markets and recession (Jobber & Ellis-Chadwick, 2012, p, 67). This led to intense competition for market share. There had to be a strategy to secure the company’s future, given that global leaders had shown interest in the United Kingdom market. For instance, a leading United States’ retailer called Best Buy had spotted a market opportunity in the United Kingdom’s electronics, consumer market (Jobber & Ellis-Chadwick, 2012, p, 69). This company wanted to offer consumers a better deal in terms of service. The intention of Best Buy to enter the United Kingdom’s electronics, consumer market triggered Dixons Retail Plc to change its marketing strategy. Given that all the competitors of Dixons Plc incorporated the customer in their business processes, including Best Buy, senior management at Dixons Retail Plc had to transform its marketing strategy and focus on the customer. Therefore, Dixons Retail Plc revolutionised its strategy and approach (Jobber & Ellis-Chadwick, 2012, p, 69). The company’s senior management adopted a transformation strategy whereby customers were put at the heart of the business, and Dixons retail Plc slogan or positioning statement changed to ‘bringing life to technology’. Market conditions led to significant investments in promotions so as to reposition the brand and engage the interest of the consumers in different target markets. Senior management had to embrace innovation and tailor prices according to customers to follow market demand (Jobber & Ellis-Chadwick, 2012, p, 69). Therefore, the marketing environment influenced the decisions that Dixons Retail Plc made to ensure success in the highly competitive United Kingdom consumer, electronics market. Evidence from the External Marketing Environment which is Likely to have Implications for the Future Direction of Dixons Marketing Strategy Dixon Retail Plc has succeeded in the consumer electronics market, courtesy of its transformation marketing strategy. However, there are elements of the external marketing environment that are likely to have implications for the future direction of Dixons Retail Plc marketing strategy. First, there still exist major competitors in the consumer electronics market such as Best Buy. For instance, Best Buy is limited by the fact that it does not have a national reach to offer its exceptional customer satisfaction experience to customers on a national scale in the United Kingdom (Jobber & Ellis-Chadwick, 2012, p, 69). In case, Best Buy decides or resolves to invest in the Unite Kingdom and compete in the consumer electronic market, there will be significant implications for the future direction of Dixons Retail Plc’s marketing strategy. This is because Dixon will have to ensure that it retains its market share in the presence of this stiff completion. Therefore, the marketing strategy of Dixons Retail Plc might require some adjustments so as to meet the demand requirements then. Secondly, it should be noted that there still exists some competition. The company’s competition might be made stiff, if the other competitors amalgamated. For instance, if the company that bought Comet, Kesa and Currys made strategic alliances, Dixon retail Plc’s marketing strategy will have to change. This is because competition will increase. When companies engage in strategic alliances and amalgamations, they become more competitive (Aquinas, 2008, p, 60 and Shanmugasundaram, 2008). Therefore, in future, Dixons Retail Plc will need to maintain its market share by meeting or exceeding customer needs better than the competitors (Jobber & Ellis-Chadwick, 2012, p, 69). This means that the Dixons retail Plc’s marketing strategy will have to be altered from time to time to suit with the requirements of the changing demand in the consumer electronics market in the United Kingdom. The greatest challenge for Dixons Retail Plc is to ensure that its marketing transformation strategy continues to gather momentum and drive the business forward, in future even when faced with competition. References Aquinas, P. G., 2008. Organization Structure and Design: Applications and Challenges. New Delhi: Excel Books Press. Bidgoli, H., 2010. The Handbook of Technology Management. Hoboken: John Wiley & Sons ress. Donnelly, R., & Harrison, G., 2009. The Marketing Planning Process. Burlington: Butterworth-Heinemann Press. Grensing, J., 2013. Business Development and Marketing for Lawyers. New York: eBooklt.com Press. Jobber, D., & Ellis-Chadwick, F., 2012. Principles and Practice of Marketing (7th ed). London: McGraw-Hill Higher Education Press. 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