Marketing Communication of Smiths Group - Term Paper Example

The author examines the marketing communication of Smiths Group which has five technology groups under its portfolio – microwave sub-systems, connectors, protection, interconnect wireless technologies and high-reliability components. Marketing Communication Table of Contents Introduction 2 Smiths Group 4 Smiths Interconnect 5 Existing Markets of Smiths Interconnect 5 Need for Marketing Communication 6 Marketing Communication Mix 8 Guiding Factors in Selecting Marketing Communication Mix 9 Elements of Marketing Communication for Smiths Interconnect 10 Strategy for Marketing Communication Methods 11 Other Considerations 13 Conclusion 15 References 16 Introduction In simple words, communication can be referred as the act of imparting or exchanging meaningful information, opinions or thoughts by way of speech, writing or signs. There are two major forms of communication namely verbal and nonverbal. A process of communication has six constituents i.e. the context, the sender, the message, the medium, the receiver and the feedback. In the organisational context, communication can be classified as upward, downward or lateral. The objective of communication is attained only when the receiver successfully decodes the message in its truest sense and provides feedback to the sender. In the highly paced world of today, proper communication is believed to be the key of success. Marketing, on the other hand, has been defined by the American Marketing Association as “an organisational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organisation and its stakeholders”. Communication is the most crucial aspect of a successful marketing plan. The stake-holders are to be properly communicated in terms of organisational plans, strategies and policies. The end-users or the business partners should have fair knowledge about the product line, the availability of the products, the price and the promotional measures. And all these could be achieved with proper communication as and when required. With all things in place, without effective communication, the organization can never expect to reach its desired goal. So, the inter-connection between marketing and communication is apparent from the above discussion. Smiths Group Founded by Samuel Smith way back in 1851, Smiths Group is a leading global technology company today. Since the end of 2000, the company is known as Smiths Group PLC. The company is listed with the London Stock Exchange and has its headquarters at 80, Victoria Street, London. The Smiths Group with its vow to bring technology to life has five major divisions of business namely Smiths Detection, John Crane, Smiths Medical, Smiths Interconnect and Flex-Tek. According to their website, these divisions “are focused on the threat & contraband detection, medical devices, energy, communications and engineered components markets worldwide. Our customers range from governments and their agencies, to hospitals, petrochemical companies and equipment manufacturers and service providers in various sectors around the world” (About Smiths, n.d.). Smiths Detection deals with designing and manufacturing of sensors that help to detect and identify explosives, narcotics, weapons, chemical agents, biohazards and contraband. John Crane assists in enhancing productivity for the major process industry which includes the oil and gas, pharmaceutical, chemical, pulp and paper, etc through its array of products and services. The third division, Smiths Medical, is a global leader engaged in supplying specialist medical devices and equipments in the fields of medication delivery, vital care and safety devices. Smiths Interconnect is engaged in connecting, protecting and controlling critical systems in the telecommunications, aerospace and defence sectors through its high-end electronic and radio-frequency products. Flex-Tek, the fifth division, supplies engineered components that help to heat and move fluids for the sectors like aerospace, industrial, construction and medical. Smiths Interconnect Smiths Interconnect deals with application of specific signal, power and microwave solutions and assist the customer in achieving optimum system performance through innovative technologies. With Ralph Philips as the divisional president, Smiths Interconnect caters to the markets of United States, Mexico, Costa Rica, Ireland, United Kingdom, France, Germany Italy, India, China, Australia and a few more countries. It has its divisional head-quartered at the United States with more than 3000 employees worldwide. Multiple levels of the supply chain are supplied by the Smiths Interconnect. The customers of Smiths Interconnect include the notable service providers and system suppliers. Also, sub-system manufacturers and OEM suppliers are the major purchaser of Smiths Interconnect. Ericsson, Motorola, Alstrom, GE Medical, Finmeccanica are some of the blue-chip customers of this divisional product of the Smiths Group. Existing Markets of Smiths Interconnect Smiths has five technology groups under its portfolio – microwave sub-systems, connectors, protection, interconnect wireless technologies and high reliability components. The driving force behind increased sales of the microwave sub-systems has been the number of military programmes of the United States. The high-tech sectors like Mobile Directional Antenna System, War-fighter Information Network, and Navy Multiband Terminal have been the major markets for the microwave subsystems. Connectors has very widely diversified markets ranging from industrial rail traction and test & measurement markets of Europe to the emerging medical markets of the Asian economy like that of China. The existing market for connectors also includes the military sector. The existing markets of protection includes the likes of wireless infrastructure and the broadband network (with in the United States). Also it is venturing in to the defence sector. The fourth technology groups namely interconnect wireless technologies (IWT) assists the microwave subsystem by conducting solutions for the wireless communication infrastructure market where as the high reliability components (HRC) has the existing market at the sectors like military and the space. Need for Marketing Communication We have inferred earlier that the communication and marketing are complimentary to each other. The objectives that a company satisfies with a proper marketing communication are as follows: When a company plans to launch a new product or service and prepares to venture into a new market segment, proper marketing communication is the need of the hour. Marketing communication is extremely important to meet the objectives of brand recognition and brand awareness. A detailed marketing communication facilitates the company to develop brand purchase intention among its customers. Marketing Communication Mix The broader objectives of marketing communication can be met only with proper marketing mix. The various characteristics of a marketing mix are as follows: Advertising – Advertising is used to build along term relationship with the buyer. The prime advantage of this medium is that it can reach widely scattered customers. Advertising is also often used to trigger quick sales. Sales Promotion – Sales promotion is another constituent of the marketing communication mix. The techniques involved in sales promotion include that of discounts, coupons, premium offers, interesting contests, etc primarily with the objective of drawing quick buyer response. Public Relations – This method includes formal press releases, organising parties in support of the products, advertorials. It is believed that this method of marketing communication is under-used by the companies. Public relations can turn out to be the major channel as it has the features of high credibility and that of catching buyers off guard attached to it. Direct Marketing – The ways of direct marketing primarily includes direct mail, telemarketing and online marketing, etc. The advantage of direct marketing is that it knocks the prospect at the personal level as the ways are customized and often interactive. Personal Selling – Personal selling generally involves sales through the one-to-one technique initiated by the sales person. It is the credit of the sales person in this regard as he could persuade the buyer to purchase from him. It might be because of his networking, personal relationships or his ability to convince the buyer. Guiding Factors in Selecting Marketing Communication Mix Having a generalised marketing communication mix may not serve the purpose of the business. Marketing communication mix should be need based and should be able to address the objective for which it is adapted. The following are some of the factors which determine the proper marketing communication mix for a business: Type of Product – It has been observed by number of studies that that consumer goods tends to be sold more through sales promotion and advertising. On the other hand, goods sold on business to business mode generally get benefitted by the technique of personal selling. Buyer-Readiness – Selecting a proper marketing communication mix also depends upon the readiness of the potential buyers of the product. If the objective is to build brand awareness, advertisement and the public relations are best suited for. To build customer conviction, personal selling is the best way. Closing of a sale is mostly influenced by personal selling and sales promotion. Product Life Cycle – Communication mix is different at the different stages of the product life cycle. At the initial stage, public relations and advertising are the best options to use as it would lead to brand awareness. Also, methods like personal selling; sales promotion and direct marketing can be used. In the growth stage, the market is already aware about the product so personal selling and sales promotion would be sufficient to induce maximum sales. In the maturity stage, more emphasis should be laid on advertising, sales promotion, public relations and personal selling. In the decline stage, only way out is to increase sales promotion measures until company decides to take the product out of the market. Elements of Marketing Communication for Smiths Interconnect To operate at the business to business mode, marketing communication is most crucial. And Smiths Interconnect is no exception to the fact (even after being such a reputed company for more than 150 years). To sustain in today’s competitive market, a company has to feel, understand and act according to the pulse of the market. And this is more stressing incase of business to business mode of marketing. As, both the parties involved have a considerable reputation in the market, so both of the companies have more bargaining power. Therefore, it is very important to choose the right elements of the marketing communication mix: The high-technological product of micro-wave subsystem is prevalent with in the US market among its department of defence. So the awareness of brand or brand recognition objectives is already attained. The Smith Group can target other nation’s department of defence as new market. For the purpose, measures to enhance public relations among the delegates of the prospect nation can be taken. Another promising element for the micro-wave subsystem would be to induce personal selling. Smiths Interconnect should employ salesperson with high network of worthy persons to retain the existing market and to venture into the new market. Connectors have been marketed also into Europe and Asia apart from US. For the purpose of connectors too the best suited channel of marketing communication would be to follow the personal selling technique. The marketer of connectors might establish rapport with the governmental authorities of the emerging economies as it is generally for industrial rail tractions. So, the channel of personal selling is suggested. To venture in to the medical markets it might apply the channels like public relations or sales promotions. The protection, which deals with wireless technology and broadband connection, can use the channels of marketing communication of direct marketing or sales promotion. Also, it would be beneficial to exercise the option of personal selling. So, it can be deduced that in the case of Smiths Interconnect, like all other business to business initiatives, personal selling is the apt marketing communication element. Also, other methods like public relations or direct marketing can be used. Strategy for Marketing Communication Methods As it has observed that there are various marketing communication methods, it is required to choose the most appropriate strategy which would help Smith Interconnect to reach its desired goal. The following are few of the strategies: Personal Selling – It can be said with absolutely no doubt that personal selling is the best method of business to business mode of marketing. The marketer in-charge should have enough set of contacts. He should be able to win over the purchasing officer of the customer company or the government. For business to business sales, most of the offers would be in the form quotations. So, he must have the pre-knowledge of the actions of his competitors and should be able to act accordingly. Direct Marketing – Direct marketing involve methods like approaching the customers through mail or phone. Direct marketing can be successful only if the marketer knows when to approach the customer. He should wait for the right time. As in the business to business mode of marketing, open advertisements are almost never used, so apart from personal selling, direct marketing holds the key. The marketer must know about the underlying demand of the market. This method can be successfully used even to retain the existing customers as the rapport is already set with them. Public Relations - Public relations is another proven way of business to business marketing. The Smiths Interconnect might organise seminars, exhibitions and corporate summits to make its customers aware about the product line. Also it might publish souvenirs to justify the usefulness of its technology. They can also come up with advertorials in technology based magazines. To have trade relations with various governments, they might take up sponsorships of certain governmental programmes. Sales promotions – Smiths Interconnect can also use the method of sales promotion to enhance business to business sales. Sales promotion can include measures like discounts and promotional offers (while lunching a product). Sales promotion technique would fit in as it has number of corporate customers who would always like to get the products cheap. Exhibitions – As Smith Interconnect deals with high-end technology product, it has to offer proper understanding of the working procedure of its product line to its customers. Without demo runs, it would be tough for them to identify the product’s usage and advantage. So, if the supplier can organize trade fairs and detailed exhibitions of its product, it is expected to be highly beneficial marketing communication element. Other Considerations To have an established marketing communication channel, any organisation is expected to bear considerable amount of cost. So, prior to deciding upon the elements of marketing communication mix, the allocated budgets are to be considered with due seriousness. As it happens in reality, high networking marketers, who are champion in case of personal selling and direct marketing methods, charge exorbitant salaries. Also, incentives are crucial to any marketing professional. To motivate them for increased sales, the marketer has to be offered handsome remuneration. Touring is part and parcel of marketing. In this competitive scenario, the marketer has to be present at the right place at the right time. It also incurs lots of expenses. Organising trade fairs or exhibitions for high end technological products and demonstration also call for fund allocation. Apart from these traditional expenditures, to close deal a modern marketer has to offer gifts to the purchasing officer of the government which may be in the form of world tour or a residential apartment at a posh area. So, it can be presumed aggressive marketing measures call for host of expenditures. Therefore, before finalising the method of marketing communication the feasibility of the effort has to be analysed with due seriousness. If it appears that the marketing communication method would not secure expected sales revenue, the channel should not be selected. Apart from the cost-related considerations, other factors to be analysed before selecting proper marketing communication channel includes that of: Market Reach – The selected marketing communication channel should be able to reach the potential customers. The prime objective of any marketing communication channel is to make the customer aware of its products and services. If the communication channel selected fails to achieve this objective, there is no point selecting it. Also, the marketing communication channel should be able to reach to the customers of Smith Interconnect’s competitors with the aim to generate increased sales revenue. After Sales Service – As the products (microwave sub-systems, protectors, and connectors) are high-end technological goods, so the importance of appropriate after-sales service is always sensed. It might not be feasible for a construction-based company to maintain or repair a wireless communication system in its best possible way. Rather, the onus lies on the selling company to employ technological-literate person to assist the customer. Also, they should be conversant with all sorts of after-sales crisis that erupts from the operation of the products. After sales service aids the selling company to raise the level of satisfaction among its customers which would contribute to repeat purchase and spread of brand equity and goodwill. Conclusion The essence of communication in our life can be understood from an observation of the noted American psychologist, Rollo May, “Communication leads to community, that is, to understanding, intimacy and mutual valuing”. And for the purpose of successful marketing (especially in business to business mode), the value attached with proper communication can be easily ascertained. The marketer has to communicate his product in the correct way to the prospective buyer and convince him in order to make sale. The Smiths Group has been a company of repute since 1851 and is well conversant with the befitting marketing communication channel for the entailed circumstances. Still, in this era of continuous innovation, Smiths Group must have regular research to find the best set of marketing communication mix that suits its purpose. References About Smiths, No Date, Official Website, [Online], Available: http://www.smiths-group.com/about_smiths.aspx, [May 10, 2009] Read More