ABC College
L3 Diploma in Business
Unit: Marketing Principles and Techniques
By
A. Learner
Registration No
2234/2100
Submitted To
Sample Tutor
Submission Date
13/05/2016
Report to the owner of
Crystal Design + Printing Company.
Terms of reference
This report will explain the principles of marketing. Using examples it will show how a printing and design business can use marketing techniques to increase its sales and profitability
Introduction to the business
Crystal Design + Printing was set up in 1952 in the centre of Manchester. Originally it was a printing company – producing all types and sizes of printed materials: posters, leaflets and booklets. Most of the output was for other businesses or individuals in and around the Manchester area.
Crystal Design + Printing is a family owned and run business and the grandson of the founder now manages the business. The business is successful and profitable although it has changed a lot.
In 2001 the business changed its name from Crystal Printing to Crystal Design + Printing. This change was made because the profitability and volume of printing had declined. It was felt that offering a design service would help regain business, which it has done. A qualified designer is now employed full time and two freelance web designers are used for specific projects.
Report Contents
Marketing
1.1 An explanation of marketing activities
1.2 Market segmentation
1.3 The marketing mix
1M The different tools used to market products and services
1D The marketing mix and decision making
Market Research
2.1 The aims of market research and market analysis
2.2 Different research methods
2.3 Market analysis tools
2.D. Evaluation of market research techniques used
E- marketing
3.1 Methods used to e-market products and services
3.2 Managing on line Image
3.M Assessment of the benefits of e-marketing
3.D Evaluation of measures used to manage on line image
Application of Learning
4.1 Using market analysis techniques
4.2 Interpret findings of market research
4.3 Present findings
4.M Make decisions using market analysis
4D analyse and present findings
1.1.
Marketing is the process of identifying customer needs in a market and creating products that satisfy those needs. By doing this successfully businesses will generate profits. Marketing is not a one off activity, it has to be ongoing as customer needs and markets are always changing. There are a number of different aspects to marketing and a business that wants to effectively market itself should undertake all the steps.
- Market research
This involves gathering information about the size and growth of a market and the level of competition within that market. This helps firms to understand both their position within the current market and how the market is changing over time.
Example. Looking at changing sales figures for a business’s own products over a period of time.
- Customer profiling
Customer profiling is about creating the fullest and most detailed picture of a business’s customers. The profile should take into account: age, gender, income, likes and dislikes, sports, hobbies, where they live, personality type, hobbies and interests.
Example. The main customers of the company are small businesses local to Manchester.
- Targeting
Targeting is when a specific group of customers, defined by their profile is targeted by a business. This works best if the target group is very well defined: it does not mean that the firm will not sell to customers outside of its target market.
Example. Magazines are a good example of how individuals are targeted according to their hobbies, interest and lifestyles.
- Advertising and Promotion
Advertising is paid for communications from the business to the customer. A range of different media can be used for advertising: TV, magazines, radio, leaflets, technology or posters. Promotion involves distributing information about products to others who then promote it –many magazines have review sections where they “test” and talk about a product. Promotion is a form of advertising.
Example. Advertising in craft magazines, attending a business to business meeting at the Manchester Chamber of Commerce, putting an advertisement on the Chamber of Commerce website.
- Pricing
Firms use different approaches to setting the price of their product or service.
- A business may work out the costs of production – fixed and variable costs and then then add either a percentage or fixed amount as a mark-up.
- A business may take into account what they think the customers are willing to pay
- A business may set the price in relation to what its competitors are charging.
- Alternatively a business may take a more strategic view of where it wants to be in the market. There are different types of strategic pricing strategy: Price skimmingis a strategy in which a firm charges the highest initial price that customers will pay. Examples of this are new games for PS4 or X box. As the demand of the first customers is satisfied, the firm lowers the price to attract another, more price-sensitive segment; Penetration pricing is the tactic of offering a low price for a new product or service during its initial offering in order to attract customers away from competitors. Examples would include the launch of a new type of chocolate bar, where consumers must be persuaded away from their existing choices.
- Public Relations (PR) and Managing social media
PR is the careful management of communications between the business and customers. With the growth of social media it is important that businesses have a presence on social media, however it is equally important that they manage what is being said about them.
Example. Creating a press release about a special aspect of the company, e.g. the business has been printing on their site for over 60 years.
1.2
Market Segmentation means breaking the total market down into different segments. In each segment the customers will have the same characteristics. There are a range of such characteristics that can be used to divide a market. Three of the main headings are:
- Geographical segmentationis when a business divides its market according to This can be done by area, such as cities, counties, regions or countries. A market can also be divided into rural, suburban and urban areas.
- Demographic segmentationis dividing the market according to age, race, religion, gender, family size, ethnicity, income, and education.
- Socioeconomic segmentation is dividing the market according to characteristics such as income, occupation and education.
Examples of segmentation relevant to CDP are:
Geographical, the vast majority of the customers live or are near to where the business is based, Manchester.
Demographic, most of the customers of the printing business are male and middle aged. Whilst customers of the design service come from a wider demographic they tend to share the same socioeconomic group
Socioeconomic, most customers of the design service manage or are setting up new businesses. They, or their business have relatively high disposable income
1.3
The marketing mix is the process of combining the main elements of marketing together in a way that best suits the market segment that the business is targeting. The main elements are the 4Ps; Product, Price, Place and Promotion.
- Product. A business must have the product that consumers want to buy; it is why it is important to undertake market research to fully understand how the characteristics of a product meets the wants and needs of customers. Plus how it is different from a competitor’s product. Furthermore demand for a product changes over time and so there is a life cycle for each product. A successful business will have a mix of products at different stages of the life cycle. The key question that a marketing department has to ask is: “What can I do to offer a better product than other firms in this market”.
CDP has two distinct products. Firstly printed materials. Most of this output now takes the form of promotional leaflets; the volume of printing has declined in recent years. Leaflets are a non-differentiated product, the final output will look the same regardless of who printed it. Secondly a design service, where the designs are sold to larger companies, the number of design commissions is growing year by year. The product is highly differentiated; designs produced by different designers will look very different
- Price. The price the customer is asked to pay is possibly the most important element of the marketing mix. Changing the price of a product directly impacts on the demand and sales revenue of the product. Furthermore the price can also affect the customer’s perceptions of the product. A price lower than one charged by a competitor means an inferior product in the eyes of some consumers.
The market for printed materials is very price sensitive, so there is little scope for increasing prices: customers would be most likely move to another printer. In contrast the prices charged for design work are less price sensitive.
- Place. Where the products are sold or how they are distributed to customers is an important part of the marketing mix. The product must be easily and conveniently available for customers.
Nearly all the printed output is for businesses in the Manchester area. It is either delivered to the customer, for a small additional charge, or collected from the printing shop. In contrast commissions for designs are coming from a diverse range of companies and individuals, many from the Manchester region but also from across the UK and even two from Holland and Belgium. Recently several designs have been produced for small craft companies. The design proofs are either sent electronically or by courier.
- Promotion. Promotion includes advertising and is paid for communication and PR which are typically not paid for communications such as press releases, exhibitions or events. One of the best forms of promotion is word of mouth, where current customers tell others about the product, either directly or through social media. This is why managing a business’s social media reputation is important
Most of the printing jobs are now repeat business, customers who have used the firm for many years. CDP pays to be listed in Yellow Pages and in the past it printed a calendar, with the company name that was sent out to names on a mailing list. Other than that, the printing side of the company no longer advertises or promotes itself. To begin with the designer side of the business paid for advertisements in the house magazine of the Manchester Chamber of Commerce. This generated some work and they still attend monthly meetings of the Chamber where they meet and socialise with other local businesses owners.
The 4Ps has been summarised as: “Putting the right product in the right place, at the right price, at the right time”. No one element is more important than the other, each element combines to make a product different from competitor’s products. The way the marketing mix is combined makes the Unique Selling Point USB for the product and helps differentiate it.
1M 1
Different tools need to be used to market goods and services. This is because there are some key differences between goods and services. Goods are an actual product – they can be touched and held. In contrast services are harder to define. The service that a plumber gives is very different from the service that an air steward, accountant, or a hairdresser provides. It is therefore harder to standardise services.
Also the level of service that different customers receive can change each time the service is used or over a period of time. This is especially true where there is a high level of face to face contact between the customer and the provider.
In addition different tools will need to be used at different stages in the product or service life cycle, so something which is new to the market will require different tools compared to something which is established. It is also the case that different organisations depending on their size and profitability will use different marketing tools. A small business in start-up phase may have a higher marketing budget for a period of time and may use a range of different tools to inform customers that it is trading. Some of these tools might include use of the internet but they may also be low tech such as leaflets posted through the front doors of houses or the name of the business on the delivery vans. A public limited company may have a recognised brand and marketing will be geared to reinforcing that brand image e.g. a high street bank.
And of course the marketing tools will be influenced by the nature of the product or service. For example a Rolex watch compared with a Swatch. Rolex is an exclusive product which is sold at a high price. The marketing strategy is to use celebrities to endorse the product and the advertising is in glossy, up-market magazines or prime time television. Insurance companies and airlines use comparison websites to advertise their services.
1.D 1.
The Marketing Mix is one of the most important tools in business decision making. Within a business there are different levels of decisions that need to be made,
Strategic decisions: These are made by senior managers; they affect the future direction of the business and as such impact on everyone who works for the business. By their nature they are complex, non-routine decisions. An example would be to decide to introduce a new product or to start selling the product in a new international market.
Tactical decisions: These are made by middle managers, they are concerned with how to implement the big strategic decisions and meet medium term objectives. So they are less complex decisions. An example would be how to reach an agreed sales target for a product.
Operational decisions: These are the day to day decisions required to run the business. Examples would be setting a staff rota or ordering supplies
There are different models exploring how businesses make decisions. Below is the IDEAL framework for decision making
- Identify the P This can be harder than it would first appear: if sales are falling is it because the price or the packaging is wrong, or is it that new products from competitors have made the product obsolete?
- Define or describe the problem. It is most important to ensure that all levels of management have a clear and shared understanding of any issues. It should then lead logically to the proposed actions to be taken
- Explore possible solutions and their impact on the business. If sales are falling and it is because the price is too high in comparison with competitors then the solution will be to change the price. However if it’s because a better/newer product is being produced then the actions required are very different.
- Action to tackle the problem. This is the implementation stage, when the agreed actions are put into place and all managers are involved with making sure they work
- Look back and review progress in dealing with the problem, this is really important to evaluate the actions and the outcomes in order to learn for the future
Each element of the Marketing Mix is relevant and applicable within the IDEAL decision making model, which can be used at the strategic, tactical and operational level of business decision making.
Stages 1, 2 and 3 are strategic decision and the focus will be on which element, or elements, of the Marketing Mix is not working and hence causing the issue. Is it that the product does not meet the needs of customers, or is at the end of its life cycle? It may be that the price is out of line with the positioning of the product within the market. Or is that the promotion of the product is wrong given market conditions?
Stage 3 is when strategic and tactical decision makers must work together to ensure the agreed actions are the best and are understood by everyone.
Stage 4 is a tactical decision. This is focussed on which combination of elements of the mix can be used to achieve the planned outcome. Reducing the price may lead to a short term increase in sales that allows longer term development of new products.
All the variables of the Marketing Mix are within the control of business but are interlinked. This means that strategic and tactical decision makers can change any aspects of the Marketing Mix but when it does so other elements of the marketing mix will change.
2.1
The purpose of gathering market research is to gain a more detailed understanding of:
- Current customers – what are the views and feelings of existing customers towards the existing range of products and services offered.
- Changes in the size of the market – is the market growing or shrinking, are there new product developments that will change the size and future growth of the market
- New customers – are there new groups of customers that could be purchasing the product but either are not or are using a competitor
- New markets – are there new products or services that could be sold to existing customers
Collecting this information will improve decision making. Although there are costs involved with gathering the data, good market research should also help reduce some of the risks involved with making decisions
2.2.
There are two main types of research:
- Secondary Research. This is also called desk research uses existing data and information. The business does not gather the information. The prime advantages of this approach are that it is a more convenient and cheaper than paying to gather one’s own research. Secondary research can come from published marketing reports, newspapers or magazines. The disadvantage is that it has not been specifically commissioned by the business so it may not be specific to address their key marketing questions, plus the information will be older.
- Primary Research. This is where a business commissions the gathering of new data. There are various ways of doing this:
- This involves watching customer in order to understand their behaviour and motivations
- These can be conducted using different approaches. They could be survey forms posted to a selected group of customers or target customers. A cheaper alternative could be to use online surveys – although this would limit the range of potential responder
- Face to face or telephone interviews will give more detailed information, but both are labour intensive and therefore expensive
- Focus groups Groups of potential customers are brought together to discuss their feelings about a product. Focus groups are a good way of getting detailed information about the tastes and preferences of customers
Primary research can take two forms:
- Quantitative Research. This generates hard statistical data that can be analysed, evaluated to help make informed decisions. To be accurate it involves gathering information from a large number of respondents.
- Qualitative Research. In contrast qualitative research is about understanding how customers feel and what they think about a product or business. It gives a business an insight into the minds of the customers. Face to face interviews, or focus groups are usually used to gather this information
Types of market research appropriate for Crystal Design + Print (CDP)
- CDP could begin by analysing its own sales records for the past few years to identify trends in: the nature of customers, the location of customer, how much each customer spends on a job, the type of job.
- CDP could introduce a customer satisfaction feedback form
- CDP could contact existing customers to seek their views on their level of satisfaction with the price, quality of the products.
- CDP could access specialised information available from the British Chamber of Commerce or the Federation of Small Businesses. This might include planned business development in Manchester. Or they could do general internet searches for information and data that is open and available.
- CDP could attend Chamber of Commerce meetings not to promote themselves but to listen to the views and ideas of firms who may be potential customers.
- CDP could start a competitor analysis by looking at competitor’s websites, looking at the range of products and services and possibly the pricing structure used.
2.3
At the micro level a business must understand its own strengths and weakness. To do this a SWOT analysis is used.
At the macro level the business must understand the external factors that impact on the whole market that it operates within the market. To do this PESTLE, or competitor analysis is used
SWOT Analysis. This looks at the: Strengths, Weaknesses, Opportunities and Threats facing a business:
- Strengths, are internal positive factors that that make the business good and are within the control of the business
- Weaknesses, are internal, negative factors: things that are not operating at their best but can be changed by the business.
- Opportunities, are external factors that are beyond the control of the business. They represent a possibility for the business to do better in the future.
- Threats, are external factors that may put a business’s marketing strategy in jeopardy. A business cannot control these but must have a plan to cope with them
PESTEL
PESTLE analysis is a tool that looks at 6 factors that are external to a business; they cannot be controlled by the business. However it is important that a business is aware of changes that may take place in them so that they can anticipate and plan to either take advantage or lessen the impact of them
The 6 elements of PESTEL are:
Political. Changes to Government policy can have a huge impact on a business. Recently a business that used to produce plastic bags for supermarkets went bankrupt after the government introduced a 5p charge for such bags
Economic. The state of the economy will also have a big impact on individual businesses. Housebuilding is particularly affected by the level of income, consumer confidence in the future and the level of interest rates.
Social. Business should be aware of changing demographics, lifestyles and attitudes. The aging population of the UK has opened up many opportunities for selling products and services to retired people.
Technological. The rate of technological change has increased making some products redundant. Videos, CDs and DVDs have all been replaced by downloadable content
Environment. Changes to waste disposal regulations need to be implemented. Some customers are prepared to change brand if they feel that a company is damaging the environment
Legal. Changes to the law can have a big impact- both positive and negative. Changes to employment law – the national minimum wage, changes to paternity benefits and leave can have big impact on small businesses. Likewise changes to Health and safety regulations can have a significant cost impact on a business
Competitor Analysis
Competitor analysis is a tool that looks at the strengths and weakness of both current competitors and potential competitors. Doing a competitor analysis will help a business to find what makes it unique from its competitors. It can also identify possible gaps for growth and development or threats that they should defend against.
To complete a competitor analysis a business asks itself key questions:
- Who are your competitors?
- What products do they sell?
- How do they advertise/promote their products or services?
- What are each competitor’s strengths and weaknesses?
- What potential threats do your competitors pose?
By doing this they will develop a clearer picture of the competition and their position relative to them.
2.D
There are a large number of ways in which a business can conduct market research. Obviously cost is an important factor. A multinational corporation will have a much larger budget for undertaking research and to set against that the consequences of getting market research wrong is far greater for a multinational business – there have been examples of the name of a car that when exported to another country meant something rude in that language. However for a small business to make a major decision and commit a large amount of money based on no or poor market research is equally risky.
Furthermore the amount and type of market research that should be undertaken will depend on how much research the company has undertaken in the past and hence how good is its existing knowledge and awareness of the market .
Crystal Design+ Print is a small business that has not undertaken market research before. What marketing has happened has really been based on guesswork: there is no tradition of doing market research – the owner of CDP doesn’t know what he does not know. Furthermore there is no budget for market research or specialist person appointed to do market research.
When evaluating the different possible types of market research for CDP it is a matter of beginning at the beginning and doing it with minimum time and cost. The initial objective of the research will be to get a better understanding of its own position within the existing market and understand how the market is changing.
Once CDP has done this basic research it will probably realise how important and effective market research can be to increasing profitability. At that stage it may commit to undertaking more detailed, precise and costly research
The key criteria for a small business such as CDP that has not done market research before when evaluating possible approaches to research are going to be: Cost of research. Time and ease of collection of information and the skill required conduct the research.
- Analysing its own sales records for the past few years to identify trends in: the nature of customers, the location of customer, how much each customer spends on a job, the type of job. This is a straight forward task and relatively low cost task that can be completed in stages. It may reveal trends over time and hence allow CDP to anticipate future changes.
- CDP could introduce a customer satisfaction feedback form. This would give broad information regarding levels of satisfaction, it would be lower cost than the next method
- CDP could contact existing customers to seek their views on their level of satisfaction with the price, quality of the products. This could be done by phone or an online survey. Conducting telephone interviews would be more labour intensive but it may reveal a greater depth of information that an online survey. Either approach would cost more than the other options.
- CDP could access specialised information available from the British Chamber of Commerce or the Federation of Small Businesses. Or conduct more general internet searches for information and data that is open and available. This could give a both statistical data and market insights and a task that can be completed in stages
- CDP could attend Chamber of Commerce meetings not to promote themselves but to listen to the views and ideas of firms who may be potential customers. Listening rather than promoting will be a new skill that has to be practised. But it may help to secure new customer or it may generate ideas for new CDP products
- CDP could start a competitor analysis by looking at competitor’s websites, looking at the range of products and services and possibly the pricing structure used.
Conclusions
CDP is a small business and does not have a large budget for undertaking market research. Therefore I would recommend that as a starting point it begins with a combination of approach 1 and 5.
Looking at their own data will give an overview of the changes that have happened recently within the business.
Whilst talking and listening to Chamber members will give depth and an outsiders perspective on both the business and the changing market.
However CDP should be aware that the basic information gathered may reveal different aspects to the issue and prompt the managers to undertake further, more costly types of market research that they may not be able to be do in house. This may require the use of specialist market researchers
3.1
There are a range of approaches to E- marketing:
- Search engine marketing. (SEM) is a generic term that involves making a website more visible in search engine results, so increasing the amount of people visiting the website. There are several ways of doing this.
- Pay per click. (PPC) this is a form of SEM and involves advertisers paying a fee each time one of their advertisements is clicked. In effect it buys visits to websites.
- Search engine optimisation. (SEO). This is also a form of SEM and involves a range of tactics to ensure that a website is highly placed in the results page of a search engine (SERP)
- On line advertising. Also called web advertising uses the internet to deliver initial customers.
- Email marketing. This is when a business send out emails, either to attract new customers or to retain existing customers
3.2
Management of on line reputation and image (ORM) is a form of PR. On line reputation is formed from within the business by the website and news feeds that are generated within the business. But the growth of social media and online reviews means that stories and comments about a business can circulate very quickly. Adjusting to the speed and reach of social media has been a challenge for many businesses in recent years. The best businesses manage their online reputation by following simple guidelines, including:
- Monitoring reviews and comments of their products.
- Try to ensure there is a flow of positive reviews about the product
- Responding to stories and comments quickly before they “go viral”.
- Do not resort to legal action unless all other approaches have been considered and rejected and the case is overwhelmingly strong that a law has been broken
- If mistakes have been made and are in the public domain a business should acknowledge them truthfully and openly.
There are many more examples of where businesses and individuals get online PR wrong, examples of which include:
- The singer Prince tried to close down tribute websites created by his fans as he wanted to protect his copyright. Fans were angry and it led to lots of negative publicity both online and in traditional media.
- Samsung were fined for hiring professional writers to produce good reviews of their products.
- A professional footballer was dropped from the team when he tweeted that it was the fans lack of support that led to the team playing badly
- Nestle is the target of an online campaign to boycott its baby foods. Campaigners say this was caused by Nestle breaching International Marketing Standards when selling its products in developing countries
3.M.
There are enormous benefits to e-marketing, these include:
- The internet is live every minute of every day around the world, so the range of any business is potentially worldwide, regardless of time zone
- The costs of getting messages out and communicating with potential customers is low
- It is easy and quick to update lists of customers and records of their purchases and even recent internet searches
- Selling online can reduce the importance of Place in the marketing mix, providing it is relatively easy and low cost to post items to customers. It is therefore possible to sell around the world.
- People are increasingly using the internet for all sorts of different purchases
However there are disadvantages to e-marketing that must not be overlooked:
- There are costs. Initially there are costs to designing and building a website with the required functionality. Then there are ongoing costs required to update and refresh the website and information
- Search engine optimisation and Pay per click cost money and in a crowded market it may be an ongoing expense to maintain internet visibility
- Live interaction and advice are not available on line. Likewise it can be difficult to gauge the texture of materials or ensure exact fits. Dispatching the items and then dealing with returned items is a cost to the business.
Likewise we should not overlook traditional approaches to marketing.
- Traditional marketing still works – the evidence is all around us the amount of TV, radio, billboard and magazine advertising clearly shows that many businesses still believe it is an efficient way of reaching their target audience
- Furthermore there are some segments and target audiences that are best reached by traditional marketing media,, it reaches segments of the population that do not regularly access online information, the very young and the elderly.
In conclusion. E- Marketing is new and hence exciting; it is growing as people start to understand its potential. It is a new way of reaching a target market and it could be creating new market segments. However there are costs involved and these have to be planned for.
In contrast traditional marketing is a tried and tested approach that has over many years proven itself to be effective.
So despite the disadvantages it appears that the overwhelming majority of businesses use a combination of traditional marketing and e-marketing approaches.
What changes from business to business is the mix of the two approaches. At one extreme is Amazon whose whole business model is based on e-marketing, through to a local plumber who does not sell from their website but still feels they need a visible online presence.
3.D
On line marketing and management of reputation is the process of influencing and controlling what comes up when the name of a business is put into a search engine (Googled). Businesses will want to have positive content and reviews at the top of the search results whilst negative comments or names of competitors should ideally be much lower down rankings.
The first stage is to establish what the world sees when they Google the name of the business. Forbes Magazine estimate that 93% of Google searches never get beyond the first page of results.
The next stage is to evaluate whether the comments towards the top of the list are: positive, negative or related to your competitors rather than your business?
The final stage is the establishment and ongoing management of seen reputation.
The process of diagnosing your own on line reputation is straightforward and is relatively unskilled. In contrast the establishment of a more positive reputation and the management of that reputation is an ongoing and skilled task. As such it has cost implications for the business. Staff with the right skills and training need to be employed, websites and news feeds regularly updated and social media monitored.
- The online image needs to be an accurate reflection of the business and there must not be any claims or statements that are not true
- When monitoring reviews and comments of their products businesses should not attempt to remove them, doing this can make customers more angry
- Getting the tone and speed of responses right, they need to be in the right tone, they should not be aggressive and attack the original comment or writer, nor should it be overly defensive. Replies need to be skilfully written.
- Taking legal action against bad comments can lead to worse PR.
- Companies should not pay to generate positive reviews. If this was discovered it would damage the reputation of the business and could lead to legal action if the claims were not accurate.
- If mistakes have been made and are in the public domain a business should acknowledge them truthfully and openly. The business should address the specific issue, not give a bland generic message. The business must then ensure the same mistake is not repeated
Conclusions
The first approach must be vigilance with constant and close monitoring of online media. Responses should be considered rather than knee jerk, but be timely. Managing on line reputation will have a cost implication for the business, but given the growth of social media it is essential expenditure.
4.1
To show how the theory of marketing can be applied to CDP I will undertake some market research and used the Boston Matrix to analyse our products and options.
Market research
A Google search for “Designers in Manchester” generated 77,800,000 results. Looking at some of their websites showed that many of them featured the web design aspect and on line marketing services, rather than design as a pre- printing option.
A separate Google search for “Printers in Manchester” generated 1,360,000 results. Their websites revealed a small number of very large printers. Where prices were quoted these were comparable to CDP.
Working through the list of customers who have used the business in the past two years there has been a decline. But another Google search showed that many of the lost customers are still trading.
A further Google search showed lots of websites offering self-build website service. Where anyone with no technical or design experience could create their own website.
Whilst attending the latest Chamber of Commerce meeting the growth of self-build websites was confirmed for new and small businesses as two attendees asked questions about their website functionality – they had used a self-build approach. Interestingly both were frustrated that the website had not delivered what they had hoped for and the website had never appeared on the first page of a Google search for their company.
The Boston Matrix
The purpose of the Boston Matrix is to help businesses understand how the market in which they sell their product or service is changing in relation to their own share of that market. It works by measuring two variables: Market growth and Market share. Businesses place themselves into one of the 4 sectors
A Question Mark (or Problem Child)
This sector is where the market is growing but a business only has a small share of that market. This is a good sector to be in as there is scope for the business to grow, although it will require marketing expenditure for the business to fully establish itself
Dogs
In this sector a business has a small share of a market that is not growing. A business in this sector should be planning a strategy to move out of it, either by entering new markets or by introducing new products.
Stars
The business has a big share of a growing market. This is a good sector to be in, the business is successful in a growing market and so should be able to generate profits now and in the future.
Cash Cows
This is a mature market – it has grown to it full size and is unlikely to grow much more. The business has a large market share. So little advertising is required to maintain the position, and it generates surplus cash. Business in this sector will use product life cycle extension strategies to extend their product or service
4.2
Applying the Market Research and Boston Matrix to Crystal Design + Print
It quickly emerged from the market research that:
- Businesses require much less externally printed material than before
- The market for website design has also changed very quickly and it is now possible for people to self-build their own websites much cheaper than CDP.
- Self-build websites are basic, there is no flexibility in their design elements
- Self-build websites have very limited functionality
- People who opt for self-build websites have not thought through all the complexity and elements of online marketing
- Most of the other design companies focus on web design and on line marketing services
Historically the owner of the business saw CDP as a printer that had diversified into a design service. But for the past 12 years the design element has generated the greater part of the profit. But more recently the market has changed again. With the growth of online business then web design is the growth element of the market
Applying the Boston Matrix to the separate elements of CDP
The printing side: the original part of the business is a mature market: the market is not likely to grow in volume or profitability. Within the Manchester business area CDP has a healthy market share, in relation to its competitors. It generates some profit but as margins are tight not a large profit. It is not generating lots of surplus cash. So it is not a cash cow, rather it is in the Dog sector
The design side: when the design aspect of the business was introduced in 2001 the market was growing and CDP enjoyed a growing market share. However in recent years as the amount of competition has increased CDPs share of the market has fallen, although the actual volume of work they are doing has increased. CDP are still getting lots of design commissions and as they are costed per job they are still profitable. Therefore design is in the cash cow sector.
In contrast to the “pure” design side of the business, there has been growth in website design requests. The freelance web designers are now working nearly full time for CDP.
The market for web designing is a growth market, CDP has a small market share but importantly it has a track record and examples of web sites, some with complex functionality.
It is in the Problem Child sector
4.3
Content of the marketing presentation to the owner of CDP. The presentation is a PowerPoint, that contains the key headings. During the presentation each heading will be explained in detail. Paper copies will be available that contain all the information
The key findings of the market research and market analysis are:
- Smaller businesses cannot always afford the expenditure of a dedicated marketing person.
- Web design is a growth market CDP has some experience in this market and so should seek to expand it
- E-marketing in small businesses is not always well understood again CDP has some experience in this area so should seek to expand it
CDP should market itself as providing a range of E-marketing services to smaller business. These will include:
- Writing Copy
- Managing Pay per click ad campaigns
- Email marketing
- Search Engine optimisation (SEO)
- E- Marketing planning
More detail about each of these services and the content of the presentation is included in Appendix 1
4.M
From the market research and analysis several clear conclusions emerge
In terms of the range of Products:
- CDP should continue to offer printing – the market is not going to grow but with established customers marketing expenditure will be low and it does contribute a small amount of profit
- Likewise with the design service. There is unlikely to be much growth in the market and it require some marketing expenditure but it will generate profits.
- The web design offer should be actively promoted, this is a market growth area
In terms of Price:
- The printing market is competitive and an undifferentiated product, it is a price sensitive market, so there is little scope for changing the prices
- Design jobs are individually priced, depending on the size and complexity. Price is not such a significant factor in whether customer choose to use CDP, so it is less price sensitive and there may be some scope for increasing prices
- Web design is like the design side. Each job will be quoted for and the quote will depend on the level of functionality that is required
In terms of Place
- One of the major advantages of E-marketing is that it is not bound by physical location, so the customer base can be expanded
In terms of Promotion
- The pitch should be based on CDPs design heritage. The fact that layout, content and functionality can be individualised is the major advantage of CDP over self-build options.
- E marketing techniques should be used to ensure CDP appears on the first results page of a Google search and managing CDP’s online reputation
- CDP should create a blog of E-marketing hints and advice and email customers to ensure they are up to date with the latest developments and possibilities
- CDP should search for businesses that are currently using a self-built website and contact them
- CDP should look closely at the E-marketing functionality of websites belonging to members of the Chamber of Commerce.
In terms of Target market
- Initially CDP should target those businesses who they are currently working with or who they have worked with in the past 3 years.
- In the medium term they should target businesses in the same sector as those they have already worked for, they have worked with several smaller craft companies selling supplies direct to customers
In terms of Market Research and Competitor analysis
- CDP should do more market research on the websites of existing and old customers to investigate how sophisticated their approach to E-marketing is and identify .
- An individual in CDP should request quotes from a range of other E-marketing companies.
In terms of People
- CDP needs to train one of its existing employees to contact businesses and work as a coach/mentor to help them understand how E-marketing could benefit their company
In terms of Physical evidence
- Being a design company the physical evidence is one of CDPs best-selling points
4.D
Marketing objectives are the goals set by a business when promoting its products or services to existing and new consumers.
Examples of marketing objectives are to: increase sales; grow market share; target new customers. Or, enter new markets; launch new products or services; increase customer relationships, or build brand awareness
The best marketing objectives will be SMART objectives:
- Specific – Are the targets focused on the problem, not a symptom of the issue? Are the targets sufficiently clear and detailed so that senior and middle managers understand what the target is and their role in achieving it.
- Measurable – How will the business know when it has achieved the target? eg a 10% growth in sales
- Achievable – Can the target be achieved within the time frame or will the marketing activities take longer to have an impact?
- Relevant – Can the information be applied to the specific problem faced by the business?
- Time-bound – Can objectives be set for different time periods as targets to review against?
As identified in 4.3 and 4M the marketing objective for CDP should be to promote itself as providing a range of E-marketing services to smaller business that do not have a marketing department.
To make this a SMART target it needs to
- Set a target of how many E-marketing contracts it will attempt to gain during the next 12 months and include an estimate of the value of these contracts
- State who the target market for these contracts will come from
The proposed Strategic level Marketing Target for Crystal Design+ Print is:
To secure 20 contracts for web design and E-marketing services during the next 12 months.
The total value of the 10 contracts will add as a minimum £6K to the turnover of the business
At a minimum 8 of these contracts will be new customers. The other contracts will be either website upgrades to existing customers or the addition of E-marketing services to existing customers
Bibliography
www.businessballs.com
Business Studies. Ian Marcouse
Business and Management. Paul Hoang
AS Business. A Mottershead
Appendix 1. Content of the presentation for 4.3
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Copywriting Online copy needs to be concise, easy to read and have impact. Time is valuable to your readers and they will want to find information quickly. CDP can provide effective copywriting for: · Websites · Emailers
More importantly, your time is precious too and finding the right words, when faced with a blank page on the screen, can be time consuming. Good copy can also help your web pages to be found on the web. Keywords in your content Words on the web have greater importance from a search engine perspective because they will be using your content to rank your web pages. Carrying out accurate keyword research is vital before even writing the first word. Using appropriate software tells CDP which keywords are being used to find your products or services. Identifying how many searches are being made on each keyword gives us the skeleton on which to build your content. |
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| Email marketing
Your customers and prospects are not always in a position to buy from you straight away for a variety of reasons. By maintaining regular contact, you can keep your company in their mind for when they are ready to make a purchase. An effective email campaign is a very cost effective way of communicating regularly with your customers and prospects. We recommend building up a list from your existing customer base. You can expand your list by obtaining email addresses from prospects visiting your website, telephone marketing or direct mail campaigns. Email marketing provides an effective way of:
We provide full reporting on open rates and click through rates. We can also identify the contact names and telephone numbers of the people who have clicked through from the email to your website. From experience, we know that following up on leads in this way increases your chances of converting prospects into customers.
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| Marketing planning
To grow your business, gain a competitive advantage and increase profits you need to employ the most effective marketing techniques. We can offer a range of marketing solutions that will make a huge difference to your profits. Like all effective marketing strategies, CDP starts with research:
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