TNT Courier Service - Business Plan Example

TNT Marketing Grade Table of Contents Executive Summary 3 Introduction 3 Situation Analysis 4 Product/Services Situation 4 Competitive Situation 4 Distribution Situation 4 Environmental Factors 5 SWOT 5 Strengths 5 Weaknesses 6 Opportunities 6 Threats 7 Marketing Strategy 7 Mission 7 Marketing Objectives 8 Target Market 8 Positioning 9 Strategy Summary 9 Marketing Mix 11 Product/Service 11 Pricing 11 Promotion 11 Placement 11 People 12 Process 12 Physical Evidence 12 Market Research 12 Budget 13 Controls 13 References 15 Executive Summary This research is about the analysis of TNT Courier Service as it deals with a highly competitive market. The aim is to analyze the business and its resources, and the environmental variables to propose how TNT can enhance its numbers in terms of portfolio of services and in terms of profitability in the long run. This paper is about developing a marketing strategy plan for TNT Courier Service based on various strategic management tools and techniques that would be applied at various instances in this paper. Introduction A can-do attitude prevailing in the courier and logistics business for over 65 years, picking and delivering goods from all across the world, and one of the few reliable names in the industry is what TNT Couriers is all about. In majority of the cases, it is essential for a sender to be sure that the consignment reaches the consignee in a safe and timely manner. TNT provides this assurance with its vast line of services in over 200 countries across the world that nearly covers all places – either directly or via joint-venturing with local service providers. TNT is not just a profit making name, but also a profit sharing one – it shares profits with the people via the environmental activities that they participate in, making the organization a corporately social responsible business. The business that started off with a single truck in Australia, way back in the 1940s, today stands with a human resource of over 75,000, an air fleet of over 45 jets, and over 26,000 road vehicles. The following section is a detail Situation Analysis & SWOT of TNT Courier Services. Situation Analysis According to Aaker (2007), situation analysis defines the structure and scope of organization and its surroundings (competition). Some of the major constituents of situation analysis, as described by Baye (2010) are discussed as below with reference to the TNT Courier Service: Product/Services Situation TNT has a wide and broad range of services, taking care of small shipments such as a letter to the movement of large equipment and inventory. The broad category of services includes Express Delivery Service, Industry Solutions, Shipping Tools, Electronic Shipping Systems, and Outsource Services. These are available to the corporate as well as the individual consumers at competitive pricing. There is no competitor for TNT on the complete line of services, covering the wide area across the globe. Competitive Situation Cravens (2008) states that courier, logistics and transportation are a highly competitive industry across the globe – with strong competition from competitors such as UPS, and FedEx. The advantage that TNT has is its wide range of services that it caters to a mass audience. The competitive edge of TNT is its extensive line of service, all under one roof that caters to the wide variety of customers. Distribution Situation TNT has a wide spread network, and places where its network is inefficient, it has networked to local partners which have better standing in that particular region. This strong distribution network stands as one of the prime strengths of the business. Environmental Factors According to Cravens (2008), the industry is highly competitive, but the fact that local laws and regulations at times restrict the movement of international brands, and tighter regulations are an important environmental factor to consider. To proceed with further analysis of the environmental factors, the proceeding section describes SWOT analysis for TNT. SWOT According to Grant (2010), SWOT presents a classical view of the internal and external factors prevailing in the environment of an organization. Strengths and weaknesses are the internal factors, while opportunities and threats define the outer environmental factors of the organization. Following is a summarized presentation of the SWOT factors for TNT: Strengths TNT has a wide range of services These services are available across the world Presently in over 200 countries and expanding further The company has extremely efficient utilization of its available resources and networks. TNT uses the concept of strategic alliances where it does not have an ample infrastructure to drive away the competition. Despite having an edge over the competitors in terms of economies, accessibility, infrastructure, etc, TNT is yet a competitively priced business, committed to providing the best quality of service, transferring the benefits of economies to the consumers, and thereon into profits, rather than doing so to start off with. TNT has exceptionally high economies advantage because of its 60+ years of presence, and exceptionally effective resource utilization. TNT uses the concept of derived markets to an effective degree – details would be discussed in the forth coming sections. Strong infrastructure is another major strength of the business. TNT is a one stop shop for delivery and logistic problems TNT eyes expansion – thus job creation, and therefore a favour to the local economy and state. Weaknesses TNT has a strong reliance on the European markets to earn big numbers in terms of sales volumes and profits. With European economy still unable to revive, this becomes a major cause of concern for the business. TNT is in short on liquidity position, with cash flows not working in the firm’s favour. TNT is a big player in the market, and as mentioned, provides all services under one roof, but with rising number of competitors specializing in particular fields rather than providing all services, the market share for TNT has been on the decline, and losing to the new competitors of the industry. Opportunities TNT has a strong vision to develop its markets and leadership in the market as a goal for 2015 – this can be strength but this aim in essence leads to an opportunity for the entire sector because once TNT initiates a line of service or brings about a new product development, the competition is bound to follow. The major aims come from the vision of expansion of the air freight and logistics business in the overall global markets. Increasing reliance on courier rather than conventional postage system The increased trend of rising transactions in terms of e commerce and online shopping has led to another window of opportunity for courier and logistics businesses. Threats Easy entry and exit in the industry is a major threat to the existing participants. Strong and stringent laws and regulations pertinent to the individual countries of presence is another major threat for the business In courier and logistics business, it is essential to have a strong understanding and grip of the local regulations because items sent from one country may strongly be prohibited in the other country, and may even cause a legal implication. Increasing localized and specialized competition is another major threat to this industry whereby individuals or corporate residing in a particular region prefer local and personalized services. Marketing Strategy This section develops the marketing strategy for TNT, while taking into account the SWOT that has been analyzed in the previous section along with the analyses of the assets of TNT. The proposed marketing strategy is as follows: Mission Following is the mission statement of TNT: “TNTs mission is to exceed its customers expectations in the transfer of their goods and documents around the world. TNT delivers value to its clients by providing the most reliable and efficient solutions through delivery networks. TNT aims to lead the industry by: instilling pride in its people, creating value for its shareholders, and sharing responsibility for the world in which it operates” (Source: http://group.tnt.com/annualreports/annualreport09/company-strategy-2009/mission.html) Marketing Objectives According to Jobber (2006), defining marketing objectives is an extremely critical part of a marketing strategy because it defines the overall objective in specific terms and thus brings measurable worth to the project. The proposed marketing campaign is about establishing a new line of service i.e. assisting the movement of individuals from one place to another via packaging their home goods, stuff, furniture, baggage, etc. Along the similar lines, following is the marketing objective set up for the said marketing strategy: To become the market leader and the customer’s first choice when it comes to choosing courier or transportation/logistic services – growing at least 10% market share across the board in all the sectors of services by the year 2015. Target Market The target market for the services is divided into two major sections i.e. B2B (Business to Business) Customers These include corporate customers; firms, businesses, organizations. From the line of services, B2B customers may want any or all of the services being provided by TNT e.g. express delivery, industry solutions, e-shipping, or outsource services. With reference to the said marketing plan, B2B customers would be the ones who would seek this new line of service for movement of their employees across geographical boundaries or even within the state. B2C (Business to Consumer) Customers These include individual customers. From the line of services, B2C customers have restricted requirements and may only require express delivery or e-shopping services. With reference to the said marketing plan, B2C customers would be the ones who would seek this new line of service for their movement and immigration across cities, states, and countries. Positioning According to Mullins (2010), positioning defines where the business wants to place itself in the mindset of the customer – it is what the business wants the customers to perceive about it. The brand positioning of the business is unique – it’s a one stop solution provider to corporate clients as well as individual customers; it has all services under one roof. As stated by Johnson (2008), one stop solution for clients is always a big advantage for the business and gives the same a strong cutting edge against the competition. For the said new line of service, the service needs to be positioned for both the corporate and individual customers in a different manner – corporate customers can be dealt with on the basis of long term relationships while the individual customers would generally be a one off transactions. Strategy Summary This sub-section defines in a summarized form: the strategy that is to be made and deployed across the TNT network. The strategy is simple for TNT – utilizing the available and existing infrastructure, resources, and line of services to enhance the concept of: Derived Market According to Nag (2007), derived market is a concept whereby utilizing the existing resources and infrastructure, businesses come up with a need or a niche in the existing market segments. Mulcaster (2009) further elaborates that in such a scenario, businesses gain more economies, and more profits, exploiting the readily existing resources. These usually exist in the back of the customer’s mind and are difficult to capture. Kotler (2005) lays extreme stress on the importance of these areas, and comments that these are the opportunities in the consumer mind that needs to be explored because marketing these to the customer would be more of a need recall rather than developing the need for this service from scratch. Relationship Marketing Relationship marketing is a simple concept, according to Drummond (2007), whereby giving the clients a close and personalized service, marketers are able to generate excessive revenues. In modern marketing, it is also known as ‘pampering the customer’. Doole (2006) describes it in other words that it is similar to giving such relaxation to the customer in terms of line of services that the customer in turn becomes dependent on the service provider. This concept also assists in new product development processes whereby relationship managers analyze and learn from the customer about their growing needs, subsequently able to forecast their future requirements. Decision Buying Unit According to Doyle (2006), decision buying unit is similar to the supply chain unit of the client i.e. the department that is responsible for procurement and purchases. As a service provider business, the relationship managers need to ensure appropriate reach and relationships with the decision buying unit. Channel Distribution In accordance with Hooley (2007), channel distribution, in its application towards courier and logistics business, is about reaching the customer in a timely manner or having the accessibility issues resolved. In today’s competitive world, service providers need to be present close to their customer, and the same fact stands valid for TNT as well. Marketing Mix In light of the theories presented by McDonald (2011), this section discusses the various constituent of the marketing mix as applied to the TNT business: Product/Service The service provided by TNT is courier, logistics, and transportation. The only variables that are used to check the quality are the safety and timeliness of services. Pricing The pricing strategy used by TNT is extremely competitive. Being an old player in the market, the existing economies of infrastructure and operations allow TNT to keep the pricing very competitive in the market – premium pricing may drive the customer away, while low pricing may drive away the profits. Promotion TNT has strong promotional activities, just like UPS or FedEx – so to make a difference; TNT is highlighting much of its CSR (Corporate Social Responsibility) activities to stand out from the competition and to have a green brand name on it. TNT holds the distinct edge of being the first courier/logistics business that has widely activated CSR activities across the board. Placement TNT has been placed as a customer-pocket-friendly brand – with competitive pricing and targeting both corporate and individual customer base, TNT has placed itself effectively to combat the competition. Any other brand, for that matter, having such a huge infrastructure and excellent resourceful network, would have ideally placed itself as a premium brand. But TNT has kept a preference towards the customers, and thus, placed itself strategically. People TNT has a strict policy in terms of hiring the right talent, and this is done through a stream of strong ability testing hiring process. There is a strict eligibility criterion for all jobs, and priorities for promotions are given to the internally groomed customer centric employees. TNT is a people’s organization, where human resources are respected and regarded as the prime brand ambassadors, because its people who drive the business – that is the organizational philosophy. Process The processes within the organization are well defined and structured, and revamped every now and then to improve the effectiveness and efficacy of the organization. Structured processes make evaluation and commitments easier for the organization towards the clientele. Systematic work processes allow the goals and objectives of the firm to be achieved effectively and efficiently as well. Physical Evidence The biggest drawback, and fundamental, of services sector is the absence of physical evidence, this means something tangible. But when it comes to courier/logistics business, the evidence in terms of customer satisfaction, and recognition/acknowledgement/rewards achieved in the global arena are the physical evidence of the quality of service provided by the business. Market Research Brief instance of market research conducted by the competitor and widely available on the internet, reveal the fact that there is a great opportunity existing for a business with the existing infrastructure and resources such as TNT – the opportunity is that of movers and packers. Today, transition and immigration of individuals in terms of intra-city, inter-city, and inter-country is on the higher side, and there is a lack of a big brand that can provide safe and timely services pertinent to the same. This window of opportunity is a derived market for TNT. Budget According to Cole (2011), budgets are essential part of a marketing strategy, and need to be analyzed to ensure that there is a good value return associated with a marketing investment. With the rising trend of migrations across areas and regions, TNT can potentially capture majority of the market, using its existing resources, and exploiting the existing economies that it has. Even at a competitive price, TNT can make good use of its network to provide a potentially wider range of services to this sector of the economy. Forecasts and budgets would depend on the economy where the plan is deployed but this certainly has some fruits associated. Controls Baines (2010) states that controls are essential to evaluate and measure the outcome of a deployed strategy. Implementation of this plan requires extensive marketing primarily within the existing customer base, both in terms of corporate and individual customers. It is because not just individuals move around, but corporations have regular requirements in particular while relocating candidates from other cities, towns, or even countries. These activities can be evaluated by using simple ratio analyses of return vs. costs of advertisement and added to the variable cost incurred during the course of this project. The most interesting aspect of this new line of business would be the fact that there is no fixed cost associated or any large sum of investment in terms of infrastructure or network development as both readily exist for the organization. The new line of service would not just strengthen the existing value towards the organization’s portfolio of services, but also enhance the size of the business in terms of transactions, customer base, and other variables. This is a positive growth symbol for the business, and would definitely bring goodwill to the economic conditions of the environment as most economies are facing down turns, with expansionary moves such as these, TNT would be showing a good socially responsible movement towards enhancing the economic benefit and investments in the economy. References Aaker, D & McLoughlin, D., 2007 Strategic Market Management. European Edition. John Wiley & Sons. Baines, P. Fill, C. & Page, K., 2010 Marketing. Oxford: Oxford University Press. Baye, M., 2010. Managerial Economics and Business Strategy. McGraw-Hill Higher Education Cole, G.A. & Kelly, P., 2011. Management Theory and Practice. Cengage Learning EMEA. Cravens, D. & Piercy, N., 2008. Strategic Marketing. McGraw-Hill Higher Education. Drummond, G. & Ensor, J. Ashford, R., 2007. Strategic Marketing: Planning and Control. 3rd Edition. A Butterworth-Heinemann Title. Doole, I. & Lowe, R. 2005. International Marketing Strategy. 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