Plaisio Computers - Research Paper Example

Plaisio Computers Business overview Plaisio Computers is finding rather instant profit growth in its European market, becoming a trusted brand leader for its one-stop shopping concept. The company provides sales of electronic devices, such as laptops and digital cameras, whilst further providing assistance in areas of computer and technology support. This one-size-fits-all type of business model, with both service and product in mind, helped the company grow rather quickly after its entry into the publicly traded market in 1999. By 2003, the company had experienced growth of 61.8 percent in profitability because of Plaisio’s innovations in service, support and positive marketing to consumers. In order to further profit potential as part of the strategic expansion plan, Plaisio should consider market entry into the United States. This report outlines the operational and marketing needs to make this goal a reality. The new sales environment In the United States, there is a growing trend for environmental responsibility at the corporate level, at such a level that it seems to be driving the activities of competing companies in how they approach their advertising strategies. Unlike the European markets, the United States companies in the technology sales and service support industry often use environmentalism and corporate support for improving a greener lifestyle as part of heavy promotional investment. In fact, a large retailer in the US, Best Buy, has been offering free recycling services for customers as a means to lure them into their stores. This includes old desktops and old analogue television sets, as two examples. Being the sales leader that Best Buy has become in this market, consumers who need to get rid of their old computer technologies, and have no idea how to go about it, are drawn to this strategy and it can serve as a significant strategic marketing advantage to improve sales with American consumers. Also in this environment, consumers are reconsidering the importance of extended service plans, those plans that offer continued benefits for making an electronics product purchase. Says a retail executive in this country, “You used to be able to fix a TV with a solder gun and transistors. That’s not the case anymore; it can be a $400 part” (Klosek, 2009, p.28). The extended service plan also provides companies with considerable profit opportunity, since it is a pay-now type of risk agreement where the retailer is able to measure actual cash balance in real-time by adding costs to the product sales receipt. There are difficulties with this market entry strategy that should be identified, the most considerable is the high level of competition in sales of electronics and similar devices all across this populated region. Competitors such as Best Buy, Target, Wal-Mart, Dell, Gateway, Sears and countless others have major market dominators that continue to innovate or use their resources to create more eye-catching marketing that draws consumers to different brands. This competitive environment has many different technology support and sales retailers looking for their own unique innovation, at the competitive level, in order to make sales. A business analyst from the United States offers, “People either want a smartphone or a device they can carry in their pocket and use on an all-day basis or they want something with a large display they can do data entry on. We are not too bullish on an in-between device that is too big to fit in your pocket and lacking a keyboard” (Nuttall, 2010, p.26). So, how does this translate for Plaisio? The retail sales market in the US is heavily saturated in almost all urban markets and there are exacting consumer demands. Of course, Plaisio could not successfully compete at like levels with major retailers, however with enough niche marketing focus, Plaisio could develop a strong following in both the online sales environment and with bricks-and-mortar support centres offering low-cost repair for electronics and face-to-face sales. With the growing consumer recognition of international affairs and Americans understanding their role in global society, Plaisio can actually make positive market gains by relying on their reputation from the New Economy sales environment in Europe. Offers the president of Absolute Sound in Florida, a US company, “plumbing past customers generates new business” (Klosek, 2008, p.39). In this country, there looks to be problems with keeping sales moving upwards in many different organisations due to problems in the regional economy, consumer cut-backs, and growth in competition. This leads to cold-calling or other traditional marketing strategies in order to call upon their old clients and regain their previous loyalty or simply to refresh it. It is a note for Plaisio in regards to market entry that will be discussed in further detail in this report. This heavy competitive environment even has companies making strategic decisions that temporarily weaken corporate balance sheets in an attempt to outperform competition through heavy investment in innovation (Puri, 2009). This will require Plaisio to always remain unique, both in branding strategies and in customer service for direct sales, to avoid heavy investment. An analysis of the competitive environment should be ongoing to see what is driving competitive marketing actions and take proactive steps to differentiation in this country. “Indeed, being proactive is imperative for managing through this market cycle” in time of economic uncertainty and saturated competitive sales markets (Puri, 2009, p.40). Plaisio’s strengths In 2001, Plaisio created an agreement with Eleftheroudakis SA publishing to collaborate within a commercial area in Thessaloniki where both companies could successfully operate together (WMA, 2001). Plaisio understands how to work cooperatively, at the business-to-business level, to create long- and short-term partnerships in order to improve the company’s competitive position and market reach. The ability of this business’ leadership to achieve profit success through strategic collaboration will be a valid and necessary skill in the United States, amongst a business environment where skilled executives partner and collaborate on a daily or at least annual basis. The educational level in the United States is intense, noticeable with the growth of different online colleges and universities, as well as in-house corporate training programmes that develop competent and well-rounded business leaders. In order to conduct ongoing B2B relationships, business leaders in the United States demand professionalism, know-how and diversity of communications from their business partners. Unlike many companies in the New Economy that are struggling to gain ground due to lack of strategic collaboration experience, Plaisio needs to recognise that this is a strength for competitive advantage in certain regions. Plaisio also understands the fundamentals behind setting up a strong brand and has managed to do so in the European sales market. This is noticeable with innovations in advertisements, one being a company catalogue for Turbo X computers, in simple yet detailed animated front covers (e-learning.dmst.aueb.gr, 2010). This and other creative marketing and impressive direct mail materials produced by Plaisio will be necessary after entry into the United States. Plaisio, in its current sales market, provides make-to-order computers for consumers (expo21xx.com, 2009) and is a big hit with buyers. In the United States, there are not many make-to-order computer companies that can offer these services without a considerably-high price tag. Plaisio, because of its small size and limited volume of employees in each unit, does not have the high operating expenses of its largest competitors in this area of make-to-order products. In unique markets or less-populated markets, these services would be appreciated by hassled buyers with little technology skills. At an affordable make-to-order pricing guide, along with precise, targeted marketing, Plaisio can quickly earn higher profit by being a participant in what is actually a niche make-to-order competitive market. Market entry plan Plaisio has a great advantage in entering this market, doing it in a fashion that is low-cost and budget-conscious. In the United States, growth in certain larger sectors, such as the mass market retailer, has caused problems with many small business owners that currently have their businesses set-up in small mini-mall stores. Unable to procure enough customers, many of these business owners are forced to default on their leases, leaving these small spaces open for businesses looking for small retail space. Vacancies in these areas have reached 7.7 percent (localcenters.com, 2010, calculatedriskblog.com, 2008), in some areas even higher based on the type of businesses and the consumer audience that does or has supported them. With very little financial investment, Plaisio can be proactive and begin making lease agreements in specific markets to advance the movement of Plaisio products and services into the US. The preliminary marketing strategy involves identifying key markets. The goal for Plaisio is to avoid highly-urban areas where competition is high and mass market retailers, along with niche companies, can be found on every city block. The markets most suitable for Plaisio are those similar to its localised markets in Europe where the company can, first, set-up a local presence and then expand the brand into mass markets, especially in areas of website product sales. Make-to-order products are a long-term strategy for competing with larger organisations that provide these customised computer and electronics products. Population regions of choice for Plaisio’s best chances of success are those with 100,000 to 200,000 residents, in suburban regions outside of major commercial hotspots of activity. Plaisio, rather than conforming to the business norm by Americanising the business, should develop multi-national signage that expresses its European heritage as well as its new devotion to the US consumers. Signage should remain with the current foreign language as it is colourful, attention-grabbing and can be an innovation in cross-cultural business presence and brand strategy. Rather than try to make heritage transparent, Plaisio products will be using its point of origin to gain buyer interest. Signage, a rather inexpensive business purchase and an asset, can be developed to show both English and the host language in the same concept, thus bridging the cultural gap and showing a new consumer group the dedication of customer service that foreign business can provide. The only financial and management issues with this new strip-mall business format are issues of staffing and recruitment, along with bricks-and-mortar management, and maintaining a level of control over the internal operations of this foreign business extension. Customer service will be key to making localised impressions with buyers, as well as supporting national heritage, therefore it is recommended to deliver several expatriate managers with skills in English and Greek (or other local dialects) to give the business proper representation. With coordination with local governmental officials and appropriate legal channels, expatriate management can be trained both in-house and with outsourced management leaders to familiarise the expatriate with American business customs and other relevant consumer information. These long-term expatriates would report directly to headquarters through appropriate IT systems. Preliminary primary research data on different local markets, when selected, can offer insight into what drives the local culture in terms of technology, household electronics, and using computers in business and recreation. These tools will act as the foundation for direct mail marketing that is not customised at the headquarters overseas, it is conducted by well-trained management professionals on an as-needed basis, preferably monthly. In a country marked by economic problems that are unpredictable in some areas, incentives marketing should be included with direct mail literature such as rebates or percentages-off specific product purchases. The company, among competition, should be positioned in terms of value and foreign heritage while many small businesses offering service and support struggle with traditional marketing tools. It will be necessary, however, for Plaisio to use television advertising in local markets in order to make the Plaisio experience more localised and customised for US markets. Though this is a financial investment, the company’s cash flow statements and balance sheet indicate a profitable company that can afford this investment. Using this advertising format, Plaisio should use 15-second promotions that consistently flash the company’s foreign logo, the same as its signage, using representatives with traditional Greek-looking features. Simple narration, along with smiling actors, and grotesque exposure of the foreign logo during these spots will likely secure instant brand recognition in local markets. Secondary spots should be run that detail the exact nature of the company and its successes in Europe, along with an explosive offer for first-time purchasers who register with the company online. This will draw consumer traffic and really begin the profit momentum. These television spots should be run while the business is being set-up in the strip mall and managers are undergoing training, therefore brand recognition is served prior to launch. The unveiling of this new innovation in computer sales and service should also take advantage of word-of-mouth advertising by making a spectacle of its launch. At each strip mall organisation, a colourful banner illustrating a saying such as, “She’s a Beauty” or something eye-catching will gain consumer interest in local markets with local citizens using instant messaging and other mobile communications to discuss this unveiling. In many localised markets, these efforts will work, at no cost, to expand the Plaisio name into mass market audiences for later expansion. Unfortunately, this marketing strategy requires Plaisio to manufacture its make-to-order computers only for limited markets, unless the company can secure the financing for a manufacturing facility in the US that can support high order demand. There is a well-developed commercial and transportation infrastructure in the United States and plenty of educated, knowledgeable business professionals that can assist in procuring needed consolidated freight on low-cost freight carriers. With the right business resource planning tools and inventory control systems, consolidated freight is worth the low-cost investment whilst still allowing managers to maintain control over distribution. Differentiating one computer or one television from the next competing brand is difficult work and some manufacturers or retailers must invest heavy finances into promotion in order to accomplish this. Sometimes, in order to satisfy profit expectations, these costs are passed onto the consumer. Using a brand slogan like, “We’re clearly more valuable” will undercut competition in areas of make-to-order products whilst giving consumers the impression that other retailers or specialty support companies are invalid. Advanced marketing for growth Plaisio has used celebrity, in small detail, on their ordering website with pictures of famous individuals being shown on the home page for different television product sales (plaisio.gr, 2010). In the United States, this is a phenomenon that has given many competing companies, and those in different industries, sales success through psychographics and as a differentiation tool. Because Plaisio desires to gain an instant reputation in localised markets, the company expatriates (or even outsourced talent in promotion) can conduct research in local newspapers or other secondary publications to find local talent that has been recognised for an accomplishment in computers, software or other technology. Local direct mail advertisements, coordinated with these IT talents, will show the company’s dedication to local markets or even direct a competition in which the winner receives a custom-made computer as a prize. Promoting these accomplishments or reward prizes invests in the dedication to innovation and customer service that Plaisio will be providing. Areas of environmental concern is something that Plaisio can take the lead on, developing a recycling centre for unwanted computer and technology systems for delivery to recycling facilities. These agreements should be developed prior to launching the new strip mall stores so that this service can be promoted at the time of launch. Using the Best Buy model or other retail store guidelines for recycling, consumers will have an alternative for disposing of unwanted systems, especially in regions where disposal of these products is highly regulated or expensive for pick-up by professional waste services. It is these suburban regions where taxes continually rise and where services are being cut by strained local budgets, therefore this service will avoid the costs associated with consumers having to have their old electronics picked up with costly service providers. Offering a small incentive for purchase with the trade-in of these materials is another effort to boost sales and consumer growth. Summary Plaisio has a great opportunity for expanding its business into the US environment in a manner that is low-cost and is most intensive in the early stages of launch and during the entire launch period. There has never been a better time in this country to use foreign business credentials and histographies as a means to exploit instant brand recognition in suburban American markets. At a time where the global economy and global society are becoming part of daily lifestyle in this market, Plaisio will be an innovation in direct foreign investment. It is the method by which the company delivers it message, creates the necessary pre-launch buzz to excite people about its opening, and reaches its local markets prior to mass market movement that will be worth the investment for Plaisio. Even in highly competitive markets, such as the US, Plaisio can secure virtually unlimited commercial space at discounted rates that are generally below the average and use inexpensive word-of-mouth tools to make an exciting and interesting business launch. It will also provide a window into what drives Greek or other European cultures at the human resources level so that consumers genuinely feel a personal connection with Plaisio products and services. Using a similar, colourful catalogue of products or services, either localised or as a brand whole, surely Plaisio will be a top leader in innovation for SME business operations and international marketing. The United States, more than any other country, represents the largest and fastest profit potential for Plaisio and it should pursue this plan immediately. References Calculatedriskblog.com. 2008. Strip-mall vacancies hit 7.7 percent. Calculated Risk Finance & Economics. http://www.calculatedriskblog.com/2008/04/strip-mall-vacancies-hit-77.html. (accessed Jan 27 2009). Corporate.plaisio.gr. 2006. Plaisio Annual Financial Reports. http://corporate.plaisio.gr/FilesInvestors/FinancialStatements/2006/Notes%20to%20the%20accounts%2031-12-2006%20uk.pdf. (accessed 26 Jan 2009). Corporate.plaisio.gr. 2007. Plaisio Computers SA – Financial data and information. http://corporate.plaisio.gr/FilesInvestors/FinancialStatements/2006/Balance%20Sheet%2031-03-2006%20UK.pdf (accessed 24 Jan 2009). e-learning.dmst.aueb.gr. 2009. Plaisio Computers. http://e-learning.dmst.aueb.gr/mis/Cases/Plaisio/index.htm. (accessed 27 Jan 2009). e-learning.dmst.aueb.gr. 2010. Plaisio Case. http://e-learning.dmst.aueb.gr/mis/Cases/Plaisio/Case/Overview_Images/comp.gif. (accessed Jan 26 2009). Expo21xx.com. 2009. Plaisio: Company info popup. http://www.expo21xx.com/popup/8878.htm. (accessed Jan 25 2009). Gunther, M. 2009. Best Buy Wants Your Junk. Fortune, New York. 160(11), p.96. Klosek, N. 2008. Beating the odds. Dealerscope, Philidelphia. 50(9), pp.38-43. Klosek, N. 2009. Accessories Resist Recession. Dealerscope, Philadelphia. 51(10), pp.28-31. Localcenters.com. 2010. Sacramento Retail Market Report Q1-Q2. www.localcenters.com. (accessed 27 Jan 2009). Nuttall, C. 2010. Doubts creep in after fantasy world of Vegas. Financial Times, London. 20 January, p.26. Plaisio.gr. 2010. 2010 Laptops. http://www.plaisio.gr/ (accessed 26 Jan 2009). Puri, K. 2009. Seven positive steps for negative times. Dealerscope, Philadelphia. 51(2), p.40. WMA. 2001. Plaisio computers collaboration agreement with Eleftheroudakis. World Media Abstracts, London. p.19. APPENDIX 1 : Plaisio Logo in use in current stores Source: Corporate.plaisio.gr. 2008. http://corporate.plaisio.gr/FilesInvestors/FinancialStatements/2006/Notes%20to%20the%20accounts%2031-12-2006%20uk.pdf Read More