PC World - Marketing Planning and Strategy - Report Example

Marketing Planning and Strategy Table of contents Cover page Table of contents …………………………………………………….. 2 Introduction …………………………………………………………. 4 PC World Market Environment ……………………………………… 4 Micro market environment ………………………………………….. 4 The Suppliers ………………………………………………………… 4 The customers ……………………………………………………….. 5 The competitors ……………………………………………………… 5 The general public …………………………………………………… 5 Macro environment market …………………………………………. 6 Demographic forces ………………………………………………… 6 Economic Factors …………………………………………………… 6 Technological factors ……………………………………………….. 6 Natural and environmental forces ………………………………….. 7 SWOT Analysis ……………………………………………………. 7 Strength ……………………………………………………………... 7 Weakness ……………………………………………………………. 7 Opportunities ……………………………………………………….. 8 Threat ……………………………………………………………….. 8 Conclusion …………………………………………………………… 8 PC world Vision …………………………………………………….. 9 Corporate objectives ………………………………………………… 9 Marketing Objectives ………………………………………………… 10 Market Model …………………………………………………………… 11 Market Segmentation, target and Positioning (STP) ……………………. 11 Segmentation ……………………………………………………………. 11 Targeting ………………………………………………………………… 12 Positioning ………………………………………………………………. 13 Branding of PC World products and services …………………………… 13 Marketing Mix …………………………………………………………… 14 McCarthys four McCarthy’s 4 Ps ……………………………….………. 14 Product …………………………………………………………………… 14 Price ……………………………………………………………………… 15 Promotion ………………………………………………………………… 15 Place (distribution) ………………………………………………………. 15 Implementation control tools ……………………………………………. 16 Organisational design …………………………………………………… 16 Incentives ………………………………………………………………… 16 Use of external support services ………………………………………… 16 Critical success factors ………………………………………………….. 17 Sales ……………………………………………………………………… 17 Establishment of new stores ……………………………………………… 17 Customer response ……………………………………………………….. 17 Financial reports and analysis …………………………………………… 18 Budget …………………………………………………………………….. 18 Reference List ……………………………………………………………… 19 Introduction With its trade operations mainly in the UK and Ireland, PC WORLD is probably one of the largest retail chains selling mass-market computer. The business is part of investment giants Dixons retail. The electronics of interest in PC Worlds business is targeted to the fields of computing, home entertainment, household appliances, photography, gaming, broadband, phones and GPS. An ideal PC World store contains a knowhow desk, where customers are able to easily and readily get technology service and support PC World (2014). The business was established in 1991 by Vision Technology Group, with its first store opening on that November. With four established stores in the year 1993, Dixons Carphone - then known as Dixons Group - acquired the retail chain and started working on a business expansion phase. During this phase, more trading businesses were acquired as a marketing strategy in order to increase sale volumes. DN Computers was later acquired in 1996, Byte Computer Superstores in 1998 and MicroWarehouse in the year 2004. Having been launched in the UK in 1997, PC World expanded to have 163 stores in the UK in the year 2006. With a style change scheduled for the year 2007, the change of its official logo took centre stage in 2008, a year that saw the company report first ever losses. PC World Market Environment Micro market environment The Suppliers PC world does not manufacture its own products but deals with other globally renowned brands who supply the products. The company has established a good and a long-lasting relationship with its suppliers to ensure that they are able to get the best in terms of delivery, quality and price. According to Rao (2011) businesses have to be careful to control the relationship they have with their supplier. The success of the business can easily be affected especially when the supplier has the power. PC world works with brands such as ASUS, Samsung, Acer, Sony, Epson, and Hp Canon among others. The customers PC world has a favourable operating environment and this has helped build its market share. The customers have been loyal to the business due to the fact that their stores are all in one offering after sale services like maintenance and repair. This has been found by many customers to be more efficient as they do not have to move from one store to another. Their knowhow services enable the customers get consultancy on products before purchase. The competitors Before PC world was acquired by Dixons, the business was of no threat in terms of competition. The business had only four stores but since the acquisition, the business has expanded its operations and ventured into new markets. This in return has created new competitors. The business main competitors are; Euronics, Apple stores, Asda, B&Q, Homebase, Sony Centre, and Tesco among others. The general public PC world has been on the spotlight in the recent years for having been criticized for its employees aggressive marketing skills and marketing products that do not exist in their stock. The business has also been criticized by the public for offering very poor customer care services with specific complaints about the poor communication skills of its employees. Since then, the business has put strategies to correct these mistakes with training to its employees and working on its marketing approach. According to Coombs (2008) the general public’s perception about a business determines the extent of the business market share and therefore it is very significant for any business to maintain a good reputation. Macro environment market Demographic forces The business has its operations in UK and Ireland. The advance in technology and the internet has made it easier for the company to make high revenues due to the high number of people buying laptops and other related gadgets. Most of the people in these areas have also changed their trends in terms of lifestyles with most people preferring to work with electrical gadgets at home like the washing machine and other home appliances. Economic Factors The UK is almost recovering from the recession and this has enabled the customers have more buying power. More people in UK can now afford buy the products from PC world unlike before where other businesses had to close because there was no business at all. The strong economy has enabled the business expand its operations by setting up more chain stores with more investors coming on board. According to Great Britain Treasury (2009) the global recession affected most UK businesses with most of them recording losses. The businesses strategies had to be changed in order to keep up with the hard times in operations. Technological factors The drastic advance in science and technology has enabled PC world acquire more diverse and advance products from its suppliers. The advancement has guaranteed the business more quality goods and services. With these changes, PC world has made steps to create innovation within its operations with the technology allowing the company to create an online store where customers can buy and order products without going to physical shops. Natural and environmental forces PC world has been advocating for environmental conservation and protection of other natural resources related to its industry. Electronic devices can cause a great deal of impact if they are not well disposed. The business has a recycling programme where it encourages the customers to return devices and gadgets they no longer use to their stores for proper disposition. According to Niaounakis (2013) companies dealing with electronic devices and other related gadgets have a role to protect the environment by ensuring that even after the sale of its products, they can still work with the customers in ensuring that their products do not end up being hazardous to the environment. This can be achieved by developing repair services and recycling programmes. SWOT Analysis Strength Every business has its strength and weaknesses. PC Worlds strength has been offering diverse products and services. With majority of its employees being young, the business can use this strong workforce to boost its operations. By focusing on the strengths, the business will create a competitive advantage over the rest of the businesses in the market. Weakness PC World has been faced with criticism of offering poor customer care services. The complaints show that the communication skills of majority of the employees were poor and did not give much attention to the specific needs of their clients. By restricting and reorganizing the customer care department, the business will create customer and brand loyalty from its increasing customer base. Grigoroudis & Siskos (2010) say that the success of any business goes around customer satisfaction. If the customer is not satisfied, the business will not be productive. Opportunities PC World currently has its chain of stores within the UK and Ireland alone. There were other stores in Spain and Italy before but have since been shut down. Nonetheless, there is a great opportunity for the business to expand its operations by setting up new stores from all over the world other than the two regions alone. Considering that their products and services are of universal nature, it would be easy for them to venture into new markets. According to Barnes (2008) going into new markets for any business brings new challenges but more important is the opportunity to expand in customer base as well as revenue. Threat The main threat to the business is entry of new players into the business. This is especially seen in the online stores as more investors are switching to online stores. This will offer competition to PC World which for a long time has been operating on the traditional kind of physical stores. The business is at the threat of losing clients due to its poor customer services. Conclusion PC World has the potential to invest into other markets other than limiting its services within UK and Ireland alone. There is a great opportunity for the company to restore its operations in the rest of the European markets like Spain, Portugal and Netherlands. The business has established its brand in its operating regions and this has enabled it to be consistent over the years. The threat from the competitors is not that high due to its diverse in terms of products and practices. This has also been supported by the expertise the business gets especially from the parent company Dixons. There is a need to improve customer service considering the criticism from the general public. More emphasis should be given to training of the staff regarding customer relations. The business also needs to set up a programme that will improve its marketing strategies. By making advertisements that do not concur with the products and services offered will lead to loss of confidence by the customers. PC world Vision PC World has a vision to provide products and services to the customers at an affordable price. Corporate objectives The objectives of PC world have been set out by the mother company Dixons. They include; 1. To develop an incorporated mobile retailing proposition to our improved customers offering across multiple electrical categories, through a true multi-channel approach. The business has set up a series of stores in UK and Ireland to ensure that customers can access their products and services from different areas. The business offers both online shopping and in store shopping for its customers. 2. Enable our customers to shop from the store, online or combination of both avenues through facilities like Click collect or Pay Collect with the help the extensive store network. By offering different payment methods, the business ensures that all the customers are able to access the services and pay for them in whichever way they find convenient to them. 3. Provide a comprehensive service proposition to our customers including setting up of products, delivery, after sale services and insurance, as well as repairs, recycling and accessories, in order to improve the relationship with customers. Most customers have consistently been going to PC world because they are able to access all the services and products under one roof. By working with experts in offering these services, the company has reduced the movement of customers going in and out of the stores every now and then to have their products corrected. 4. Put focus and emphasis on both existing and other new markets with the aim to help the business evolve on a global basis in order to improve our revenues. Initially, the business had only four stores but over years, it has expanded to have over 53 stores and this has helped boost its revenue. This has especially been made possible with the acquisition of PC world by Dixons retails. 5. Offer and deliver specialized technical support solutions to connected gadgets using existing logistics infrastructure, available insurance expertise, after-sale services, repairs and technical support capabilities. The after sale services have ensured that the company is able to build confidence and win the trust of its customers. The KnowHow desk helps customers gain basic skills on how to use products bought from the stores. Marketing Objectives Establish four new stores in Europe in the next 12 months. Increase the annual revenue by 10% in the next financial year. Increase business sales by 25% in the next financial year. Improve the customer service by introducing customer relations department in each store. Train all the staff on customer relationships by the end of the next financial year. Market Model PC world is operating in a perfect competition model with other many businesses offering the same service. The competition has enabled the company to develop new strategies based on performance of the other competitors. However, despite the tough competition there is a good deal of demand for the products and services. The challenge that PC world faces is that some of its suppliers are also competitors. Sony, Epson, HP and other big brands have their own stores in the same market that PC world operates. These means that some of the clients who are more concerned about brand are likely to go to the brand stores other than a reseller like PC world. According to Wilkinson (2008) whenever a supplier becomes a competitor to the business, there is a risk of conflict of interest. The business is also at a risk of getting unfavourable deal from the supplier. Market Segmentation, target and Positioning (STP) Segmentation Segmentation is the process through which a business is able to understand why people purchase products and services. It also helps analyse the people within a group that a business can best satisfy and what steps and moves the business can take to be more acceptable to them. According to Lamp, Hair & McDaniel (2010) market segmentation seem like a new idea to many corporate but the value it adds to the business is what makes it unique. Segmentation of a market enables the business plan with specific needs in mind other than looking at working with a whole market. Demographic: The products from PC world are targeted to people mainly of 12 years of age and above as it deals with a wide range of products that can be used by all ages. The customers gender and marital status also applies to all categories. Psychographic: Most of the clients are more concerned about global recognized brand and would go for established brands regardless of the price. Most of the customers have an average type of lifestyle and can therefore afford to purchase most of the products and services. Behavioural: Majority of the customers will get information regarding the products and services before coming to purchase. They get information from the internet and also friends using the same products. Targeting Targeting is the process through which a business selects the customers it wishes to sell products and services to. This will help the business identify the specific needs of the customers and the locations to operate from. According to Havalder (2010) establishing the target market is very essential whenever a business is in the process of expansion. This information is crucial in analysing the products and services that are most likely to do well in specific markets. Market size: The business looks to expand to new markets in Europe by setting for new stores in Paris, Rome, Amsterdam and Moscow. Currently, the business has 53 stores distributed across England and Ireland. Market Difference: The UK market is more active and bigger because of the long period in operation and also much focus has been given to the stores in the regions. The other markets are relatively doing well too but have less competition compared to the ones in UK. The four new stores to be established will be operating from different geographic locations and are likely to make more revenue because of the difference in terms of taxation. Positioning This is the process of determining the place a business products and service occupy in consumers’ minds relative to other competing products. This is determined by consumers’ attitude on important attributes. This process involves implanting the unique benefits of the brand and differentiation in the mind of the customer. According to Hooley et al. (2008) every product can be attributed to certain perception by the customers. This perception determines the customers approach to the brand and eventually the willingness to buy it or not. Competitive advantage: PC world has over 53 stores across UK and Ireland and this means a high market share. This also means high revenue for the business and can easily fund the new stores. Unique selling proposition: PC World offers a wide range of products and services at a relatively low prices and this helps it win more customers. Branding of PC World products and services By improving the customer service and the after-sale services, more customers will be attracted to the business. The services will be offered either free of charge for subsequent customers or at an affordable price to customers from other competitors. The business will also work on improving the service and maintenance of all connected devices by boosting the network and introducing more fields personal who will offer door to services to the customers who need it but at a fee. There is need to improve the customer care services. The business will also work on introducing a department that will specifically deal with complaints from the clients and making sure that their issues are solved as quickly as possible. According to Bliss (2013) customer relations for new comers as well as the repeating customers should not be compromised. This is regardless of whether their complaint was too small or big. The customer has the power to control the success and failure of a business. Marketing Mix McCarthys four McCarthy’s 4 Ps Product PC World deals with a wide range of products and services. Majority of the products offered are related to latest technology and they are almost entering their maturity stage in the lifecycle. The services offered by PC World relate to the products and therefore their relevance is attached to the performance of the products. The market still demands the products and services offered by PC world. Majority of the products that are no longer in demand have reduced in stock and order to the supplier. According to Ross (2004) proper inventory planning enables businesses track the lifecycle of a product in the market. This enables the business to plan for the new marketing trends as well as avoid obsolescence. Some of PC world’s products and services are; Electricals Kitchen appliances TVs Computer devices Household appliances Maintenance and repair services Systems installation and supply Price The products and services offered by PC world vary just as the products and services themselves. However, the prices are relatively low compared to the rest of the competitors. This gives the business a competitive advantage as majority of the customers would prefer saving the extra cash they will get from PC World. According to More (2013) determining the price of a product has to be done with consideration on the prices of the rest of the market. A successful business will try and win the customers by giving a relatively low price. This will lead to more clients and eventually profits due to economies of scale. Promotion Promotion activities are very necessary in order to improve the performance of the product and services offered. Currently, marketing and promotion has been done using advertisements on TVs, magazines and Newspapers. The above methods will still be deployed including the following; Use of billboards Social media and company websites Event sponsorships Press releases Place (distribution) PC World has a chain of stores across UK and Ireland. The four new stores will help expand the market and distribution points for the customers. The stores will be supplied with the products from the regional warehouses and distribution points. On the service level, the business will work with expertise based in each region to ensure no movements are experience causing disruption of services. Implementation control tools Organisational design The structure of the organization is a key tool. The executive management, operations managers, the staff all have roles and duties. The marketing strategy will be integrated to each level of the organization structure. This will make sure that all employees in the business play a part in the implementation of the strategy. According to West, Ford & Ibrahim (2015) strategy implementation in any business is not the duty of the management alone. Every member of the staff should participate as new strategies tend to affect every department. Incentives Rewarding the best performing members on achieving the goals of the strategy will be very significant. The use of incentives will motivate the employees to work extra hard in order to reach the set goals. This will be offered in different levels from management to the low level employee. According to Fisher (2008) employee motivation rarely fails. Any form of motivation whether pay bonus, or vacation, or prolonged leave always motivates employees to work harder. Use of external support services Working with other firms related to the field of marketing. Such firms would include research firms, advertising companies and consulting companies. This will give PC world a different perspective towards the implementation of the strategy and highlight of other areas that might have been forgotten. According to Chaffey & Ellis-Chadwick (2012) outsourcing services in terms of marketing can be successful in some cases than working with the staff of the business. This is because of the business culture that may be hostile to new strategies. However, combining the outside firms with the already existing systems could be more effective and efficient. Critical success factors Sales One of the objectives for this strategy is to increase the sales by 25% by the end of the next financial year. By analysing the sales made by that time, we will be able to get the results. Doole & Lowe (2008) say that one of the easiest methods to judge a marketing strategy is comparing the sales of the business before the strategy was implemented and after implementation. Establishment of new stores The strategy aims to establish four new stores by the end of the next financial year. This will be focused in the three major cities in Europe. This will also be used to determine the success of the strategy. According to Cherunilam (2010) business expansion is not an overnight decision. It should form the central part of a marketing strategy in order for it to be effective. Customer response By analysing the comments, feedback and complaints of the customers, PC world will understand whether the customer relations have been improved or not. Forey & Lockwood-Lee (2010) say that every business should have regular review of the complaints from customers and correct them. If not taken care of, this might cause great damage to the business. Financial reports and analysis One of the targets for this marketing strategy is to increase the annual revenue by 10% in the next financial year. By comparing the performances of the two years, we will be able to see the increment or fall in revenue and hence judge the result of the strategy. Gartner & Bellamy (2009) say that financial reports help in analysing the results and of different strategies in a business. The management’s strategies and marketing strategies have very high implications of financial performance of a business. Budget Marketing Tactic £ Budget % of Total Marketing Budget TV commercials 100,000 20% New paper advertisements 100,000 20% Billboards 100,000 20% Online 100,000 20% Events 100,000 20% Total 460,000 100% Reference List Top of Form Rama Moahana Rao, K. (2011). Services marketing New Delhi, Pearson Bottom of Form Coombs, W. T. (2008). 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(2009) Creating the enterprise. Mason, OH, Thomson South-WesternBottom of Form Top of Form Cherunilam, F. (2010) International business: text and cases. New Delhi, PHI Learning Private Limited. Top of Form Doole, I., & Lowe, R. (2008) International marketing strategy: analysis, development and implementation. London, Cengage Learning. PC World Business (2014) About Us Retrieved April 30, 2015, from PC World Business: http://www.pcworldbusiness.co.uk/customer-services/about-us.jtp Grigoroudis, E., & Siskos, Y. (2010) Customer satisfaction evaluation: methods for measuring and implementing service quality. New York, Springer. Barnes, D. (2008). Operations management: an international perspective. London, Thomson. Bottom of Form Read More