Marketing Plan and Environmental Analysis: Greater Union Cinemas - Case Study Example

Marketing Plan and Environmental Analysis: Greater Union Cinemas Executive Summary 3 Macro Environment: 5 The macro environment within which an organization functions is inclusive of all the factors that can influence the organization, but that are out of their direct control. These are in essence the political, economic, social and technological forces operative in the country at any given point in time that are not within the organizational control of a given business but have a bearing on the manner in which the business is run and the outcomes of the business practices nonetheless. For example, a company does not generally influence any laws that are operative in its given national legal system (although they could lobby or be part of a trade organization). These laws are continuously changing, and it is essential that the company retain its flexibility in order to be adaptive to these laws. There may be aggressive competition and rivalry in a market. Globalization means that there is always the threat of substitute products and new entrants. The wider environment is also ever changing, and the marketer needs to compensate for changes in culture, politics, economics and technology. 5 The internal environment: 5 Environment Analysis: process and variables: 6 Environment Analysis: Greater Union Cinemas 6 PEST ANALYSIS 8 Political: 9 Economic: 9 Presently reeling from the aftershocks of the recession and the reduction of money in the economy 9 Social: 9 Technological: 9 Conclusion: 10 Strengths: 11 Weaknesses 11 Opportunities 11 Threats 11 Situational analysis: 12 Market Segmentation and product targeting: 12 Marketing Positioning plan and campaign 13 Frankilin M, Greater Union food ban is incredible, say moviegoers, pub, Sydney Morning Herald, January 5, 2005, accessed June 22, 2009, < http://www.smh.com.au/news/National/Greater-Union-food-ban-is-incredible-say-moviegoers/2005/01/06/1104832243905.html> 19 Introduction: Marketing is ‘the social process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others’, (Kotler, et al., 23). The best and probably the safest manner of retaining and expanding customer relationships and customer loyalties depends on the ability of a venture to deliver a customer experience that is tailored to changing customer needs and values and consistent with the brand promise (Accenture, 2008). Challenges to Cineplex viewing: The pressure on theatre chains is relentless, as more competing opportunities for leisure time are available to consumers on a daily basis: pay-per-view, digital TV, digital streaming of movies...the list has grown dramatically over the last few years. Add to that the more traditional alternatives to going to the movies (sporting events, fitness activities, live theatre), and it has become more difficult to keep seats filled in every theatre in every market. Basic Considerations in Marketing: People today, do not just "buy" a product. They "buy" the concept of what that product will do for them, or help them do for themselves. It is in this context that the relevance of the marketing concept becomes clear as it helps a given organization understand its product and the market to which the product is aimed (Berry and Wilson: 13). What can be understood in this regard is that no product has a universal appeal nor can it have a universal marketing plan, there are a number of considerations that alter plans based on product and brand (Aker ans Mills, 1). It is here that the importance of the marketing strategy that is based on a marketing plan becomes clear. There are basically three parts to any given marketing strategy formulations: 1. Segmentation 2. Targeting 3. positioning This report will focus primarily on the last two aspects of strategizing a marketing plan. The idea is to come with a set of recommendations that are based on an analysis of the audience that is targeted and positioning the brand of Greater Union Cinemas. This would be done in a manner so that the organization gets most advantage in a market that is monopolistically competitive because of the fact that there is limited competition that Greater Union has to face in terms of number of competitors aiming for the same audience segment. Despite this division, the range of the subject under discussion is wide. The following report will be structured in three basic patterns. Executive Summary First, it will discuss on a theoretical basis the exact meaning of the term marketing environment and the ramifications that the marketing environment has on the strategizing of the marketing campaign in general. In its second part the report will discuss the marketing environment that surrounds Greater Union Cinemas, the nature of competition, the threats and challenges through the usage of marketing tools like a PEST analysis. Finally, the report will try to develop on recommendations already made keeping in mind the constraints and the opportunities that are provided by the marketing environment. The marketing environment within which n organization operates impacts the manner in which the organization functions, the restraints that are placed upon it and the advantages that it can utilize to its benefit (Baker: 727). There are three key perspectives on the marketing environment, namely the ‘macro-environment,’ the ‘micro-environment’ and the ‘internal environment’ (See Appendix: 1). Micro Environment: Within the purview of the microenvironment lie the things that influence the organization directly (Peter and Donnelly, 53). A majority of these variables are related directly to the organization and the product at hand. These include suppliers that deal directly or indirectly, consumers and customers, and other local stakeholders. Micro tends to suggest small, but this can be misleading. In this context, micro describes the relationship between firms and the driving forces that control this relationship. It is a local relationship, and the firm may exercise a degree of influence. Micro-environment would include logistics, employees, management functions and underlying organizational culture and strategy. Macro Environment: The macro environment within which an organization functions is inclusive of all the factors that can influence the organization, but that are out of their direct control. These are in essence the political, economic, social and technological forces operative in the country at any given point in time that are not within the organizational control of a given business but have a bearing on the manner in which the business is run and the outcomes of the business practices nonetheless. For example, a company does not generally influence any laws that are operative in its given national legal system (although they could lobby or be part of a trade organization). These laws are continuously changing, and it is essential that the company retain its flexibility in order to be adaptive to these laws. There may be aggressive competition and rivalry in a market. Globalization means that there is always the threat of substitute products and new entrants. The wider environment is also ever changing, and the marketer needs to compensate for changes in culture, politics, economics and technology. The internal environment: All factors that are internal to the organization are known as the 'internal environment'. They are generally audited by applying the 'Five Ms' which are Men, Money, Machinery, Materials and Markets. The internal environment is as important for managing change as the external. As marketers we call the process of managing internal change 'internal marketing. Environment Analysis: process and variables: The process of environmental analysis is comprised of three basic evaluations that consist of first, the PEST analysis, second, the SWOT analysis and third the Five force analysis, (See Appendices, 2, 3 and 4). The PEST analysis consists of the political, economic, social and technological factors that make up the immediate environment within which the organization functions. In fact, these macro economic environmental factors affect business. The SWOT analysis on the other hand is made up of the strengths, weaknesses, opportunities and threats with which the business and the organization are faced. The SWOT analysis is the most handy tool while making an assessment of the internal dynamics of the micro economic factors that govern the business process. Finally, the Five force competitive analysis is the best manner in which to evaluate the competitivce threats that are facing the business (See Appendices 3). This helps the marketing professional understand competition and thus devise strategies that are relevant in dealing with the competition. Environment Analysis: Greater Union Cinemas Greater Union and Birch Carroll & Coyle, a wholly owned subsidiary, combine to be the largest film exhibitor in Australia, operating 453 screens from 60 locations. The principle competition that Greater Union faces comes from Hoyt Cinemas and the Village Cinemas by virtue of the fact that all three operate keeping similar marketing segments in mind. Greater Union has its advantages and its disadvantages over its competitors, the greatest problem being that as a brand it is not unique nor is it discernible from other brands that are selling the same product, the movie watching experience. A situational analysis of the movie going experience that Greater Union sells would show a number of correlated variables that assume importance simultaneously (Reuters, 2007). These include sale of tickets, targeting audience through appropriate channels, coming up with incentives other than just the film to attract the crowd. There are also those that suggest that it is not just about the how nice an experience the multiplex is able to create but the content of the film being screened holds the big key as well. These are factors that are essentially not in control of the movie going audience. the idea is to create a more personalized experience for the audience. PEST ANALYSIS Political: Government promoting free enterprise Encouragement to public spending schemes in the face of recession Business Friendly Trade practices Act, 1974 High entertainment tax that brings up cost of tickets especially in multiplexes Third Line Forcing: The per se offense is problematic Economic: Presently reeling from the aftershocks of the recession and the reduction of money in the economy Not a lot of encouragement for further expansion of business because of low rate of credit availability in the market No big budget or blockbuster movies beside ‘Harry Potter’ in the next few months Inflation rate of 2.5% Social: Low levels of disposable income availability Erosion of the weekend movie culture Cinema still seen as one of the primary entertainment spots The Australian population is currently growing at 1.84% per annum. (UK 0.4%; USA 0.9%).Natural population increase and immigration, without adequate supply-side response, increases demand for every sector including entertainment Disposable household income has been rising faster than wages Technological: New technological methods of advertising available that are cost effective Internet bookings and promotion 3D cinema-big attraction and boost to business Innovations in underwriting, reporting and research Big role in reaching customers-SMS campaigns, daily polls, radio promotions Enterprise Management - Employ technological innovation is a way to emphasize and enhance firm's strategic areas of competitive advantage. Conclusion: The cinema industry despite its’ problems is booming and will continue to do so as it is a relatively easier and cheaper mode of entertainment given the standards of dining out and vacationing among others. There is a need to cash in on this trend, especially given the fcat that the customer now more than ever would demand absolute value for his money. With new technology and better marketing innovations, Greater Union can, not just retain its old clientele but also build up a new one, which is more loyal. This would also be an ideal time for brand building, given the fact that people would be aware of the best facilities that were made available to them. SWOT ANALYSIS Strengths: Great Staff Low cost Cinema going culture- Product genre popularity Large number of outlets spread all over the country Big market segment Weaknesses Long period of promotion Direct promotion tough, promotion of product sold through the experience High entertainment taxes Unpopular in house policies like no outside food Opportunities Economic climate Large proportion of population within the traditional cinema loving age Promotion needs to focus on just the initial reaction Limited competition, no competition from most standalones Threats Equal opportunities to the competition High chances of promotional clashes Value added services mean value added costs Very high overhead costs Difficult to create unique brand for multiplex, similarity of scene SWOT analysis conclusion: From the above SWOT analysis we could see what we good at and what we going to face. However, we still have disadvantages and possible threats facing, we have lots opportunities for us to be success. A good decision to solve the threats, would turn our weakness to strength. The idea is to keep strength and hold the opportunities. There are a number of threats but with a clever marketing strategy most of these can be sidestepped in order to pave way for the creation of a brand for Greater Union Cinemas that would help create its position on top of the pile. Situational analysis: There are a number of factors that are at work in the cinema selling business. What comes across clearly from the environment scan is the fact that there are a number of factors that affect sales and the choice that a customer makes behind choosing one brand over another one. What this means is that there need to be in place strong incentives, which would make the consumer, chose Greater Union as the cinema brand over another one. The marketing strategy therefore needs to be all encompassing starting from the stage where the ticket is sold to the stage where the consumer buys popcorn and drinks during an interval to finally when he walks out o the theatre. Market Segmentation and product targeting: With 66 clusters, there were identified similar prospects with the same characteristics as existing customers, but the social values, attitudes and motivations that are helpful in communicating through advertising, email, and other media (Asher, 1997). Using only the six-digit postal codes of past theatre attendees, the unique characteristics of the Greater Union customers could be identified, along with three key target groups for marketing. These three target groups could be tied to the actual counts of target households within each theatre’s trading area, so that direct mail could be targeted and local marketing could reflect the specific local market. Market research shows the three targets; these include Core Established Urbanites in the 45-50+ age group, with children at home and account for more than 50% share of the market; Families in Burbs in the age group of 35-54; and Urban Young & Trendy segments below the age of 35. This particular segment accounts for about 35% of the market segment. The current penetration of each segment is shown, along with the untapped potential, so the marketing potential can be identified. The average household expenditures on movies for the established urbanites is about $181 on the national average of $160, that of the families in Burbs is $172 for a national average of $160 and for the young is $126. The major competition for each the first groups are from live performing arts, for the second group are home entertainment and personalized and rented DVDs, for the young group it is artistic hobbies and performing arts. Finally, in the marketing segmentation it would be interesting to note the behavioral patterns that affect the choice of films watched, for the established socialites, it is a pursuit of intellectual activity and some escapism. They usually prefer movies that are culturally oriented. The second group, watch movies usually to keep up with trends, focus on new releases, and kid oriented movies as chaperones; finally the group made up of the youth like emotionally intense movie and make last minute decisions. Marketing Positioning plan and campaign The market positioning strategy has been defined using two basic concepts (: 1. What is it that would make Greater Union Cinemas unique and differentiate it from other brands offering similar services? In short, a brand building strategy. 2. Identification of competitive advantage and exploiting this to the full in order to gain the competitive edge. The basics that would need be followed for this purpose would be: to know the customer, coming in under the competition radar, own product branding, this means that the product should be immediately identifiable with the ads, staying ahead of the competition and making it an experience. First, the marketing mix needs to be decided. Primarily, the marketing strategy needs to focus on e-marketing as the primary tool for gaining attention, as it would provide the easiest method to deal. The unique and the differentiating factors of the chain need to be highlighted. The parking, the sound quality, the seating, and the culinary experiences also need to be marketed. The staff should be trained in order to provide a great hospitality experience.       The AIDA model should find application here. The model, basically states that in order to get a customer interested one has to first gain attention, thereby arousing desire which would ultimately lead to action. This also means that the price that the customer will have to pay needs to be worth the service that he is being provided (Nickels and Wood, 76) This means in simple terms that the customer has to feel that he is getting value for his money. Seven positioning strategies:  1. Product Attributes: The specifications of the product are that it is a leisure commodity, to be used by the target audience for entertainment. The pricing and services therefore should ensure that the consumer gets value for money 2. Benefits: Benefits to the consumers include not just cinema but a movie experience. 3. Usage Occasions: The product is used to relax, to pursue hobbies and to enjoy oneself in the rush of everyday existence 4. Users: Identified in market segment 5. Against a Competitor: This is an essential bit in the campaign because the idea of a ‘brand building’ exercise is to demonstrate the positives of the brand vis-à-vis the other brands in the market. The competitive advantages that have been identified are to be used here, as they would demonstrate the strength of Greater union Cinemas. For example, the reclining seats, the sound system. Keeping in mind the fact that it is established urbanites with kids that form over 50% of the market segment, a crèche or a childcare centre could be established, where the parents could leave their children to professional care. 6. Away from a Competitor: This is a strategy whereby the campaign is scheduled away from the competition; here the singular traits of the brand are to be established. It is for this purpose in fact that there can be movie theme related competitions organized, free food coupons, the excellent nature of service, the sound system, the parking facilities, and convenient geographic locations need to be highlighted. Internet campaigning is again a handy tool. One of the approaches that can be used is setting up of communities within social networking websites like Facebook and Twitter that provide members with alerts regarding new releases, competitions and other attractions. 7. Product Classes: Finally, the campaign needs to be comparable to the others in the same field and draw from their mistakes.   The plan strategy is to accelerate marketing and sales by chasing lucrative contracts through ensuring corporate contracts and memberships. There needs to be a thorough look out for viable acquisitions or joint relationships with firms that offer complementary services like food, drinking. There should also be the development of value added services like home delivery, private label packaging, computerized inventory and business dealing processes like ticket counters and other counters, and other customized services. There can be joint work with suppliers to find new applications and products to open up new market niches; finally, there can be the usage of technologies for competitive edge. The best way of ensuring footfalls however is to try to manipulate the cyber world. An article in the Sydney Morning Herald dated, January 5, 2005, for example writes about the insane prices that the customer has to pay for popcorn or cola. These prices needs to be justified and reduced. The overhead costs can be cut or recovered in different manners, like the crèche, or an entertainment and gaming centre. Conclusion: In conclusion therefore it may be reiterated that the product being offered the customer by Greater union and its competitors might be similar or even same, but it is an effective marketing campaign that would make the difference between the Greater Union Brand and just another multiplex that is chosen on the basis of convenience and not on brand loyalty. Appendices: Figure 1: The Marketing Environment Figure 2: Pest Analysis: Five Force Competitive Analysis: Reference: Kotler P, Adam S, Brown L and Armstrong G, Principles of marketing, Edition 3rd, pub, Prentice Hall Pearson, Australia, 2006 Berry M and Wilson D, On Target, pub, Palo Alto Software Inc, 2000 Aaker D and Mills M, Strategic Marketing Management, a pacific Rim Focus, pub, John Wiley and Sons, 2005 Baker M J, The Marketing Book, pub, Butterworth Heinemann, Boston, 2003 Asher B, 1997, Competition in the Film Industry, pub, Australian Competition and Consumer Commission, NATO ‘97 Conference Heritage Park Resort, Bowral Accenture Publication, 2007, Creating Loyalty, A Customer Centric Approach, p2-5, accessed May 22, 2009, < http://www.accenture.com/NR/rdonlyres/672904CE-5407-4A5C-AE92-7606F6A0FB2C/0/CustomerAcqusitionandRetentionCreatingCustomerLoyalty_ACustomer_CentricApproach.pdf> Frankilin M, Greater Union food ban is incredible, say moviegoers, pub, Sydney Morning Herald, January 5, 2005, accessed June 22, 2009, < http://www.smh.com.au/news/National/Greater-Union-food-ban-is-incredible-say-moviegoers/2005/01/06/1104832243905.html> Read More