Implementation of a Marketing Plan

Implementation of a Marketing Plan EXECUTIVE SUMMARY INTRODUCTION The present financial crisis has negatively affected not only the US market but also International markets with economies experiencing negative global growth in Gross Domestic Products (GDP) and decreases in global consumption levels. Now more than ever, companies (in Trinidad and Tobago) are faced with reformulating their business strategies in order to boost sales volumes by attracting customers through promoting traditional products but providing additional services not previously offered. Companies have to revisit their marketing strategies and implement new marketing plans that will not only create competitive advantage but also experience sustainable competitive advantage. As such the aim of this research is to identify and develop a marketing plan to strengthen Dhookups competitive advantage in Trinidad and Tobagos industry to viably survive in these current situations. Background Origin The company, now known as Dhookup, was originally formed by Mr. Kedelle Greaves in April 2008 to satisfy the growing needs of the working population by providing quality electronic products at a low costs compared to the Trinidad and Tobagos current market where such goods and services were seen as being very costly by customers. Currently, the company is operating at an adhoc basis with no formal marketing structure and Business plan. The Electronic products presently offered by the company are Laptops and Accessories, Desktop Computers, Cellular Phones, Digital Storages Devices, Games and Accessories, Electronic Accessories and Digital Cameras. In May 2009, the founder realise the need to restructure the operations and strategic planning of the company due to the present economic and financial global crisis in order to be remain competitive and viable in Trinidad market. A decision was made to reform the business from a sole proprietor to a partnership by inviting two investors to contribute equal amounts of capital, along with the founder, into the business which will be used to fund any additional investments and strategic future market plans. Snapshot of the Business The company was managed solely by the founder and now is managed equally by all investors with no other employees mainly because the present workflow was not demanding and did not require additional personnel. At present the company operates using a just in time system where, only when a customer wants an item, then the item is sourced and delivered. The customer makes a down payment (usually 50%), and then the order is placed for the item which approximately takes 2-3 weeks to be delivered. At the end of this period the customer collects the item by paying off the balance of the item. Mission Statement Dhookup will continue to be one of the premier electronic product and service provider within Trinidad and Tobago with an emphasis on Customer Relationship Management and timely satisfaction of consumer needs. Strategy Statement The Hook up will pursue a strategy of growth aimed at position the company as one the leading best costs electronic products and service providers in Trinidad and Tobago. SWOT analysis of the company Product and Services The company offers high quality products at an affordable price which is very competitive to the other similar suppliers in the market. Apart from providing competitive prices, consumers are well informed about the technical features and benefits of their desired purchases before any business is conducting by providing detailed information of the products specification, its capabilities and also similar products in the market. The company ensures that the customer is purchasing the correct product to suffice their desired needs and wants. Also, the company provides excellent after sales service customer support that is very unique to Trinidad and Tobagos industry. Customers have a luxury of after sales assistance, at no extra costs, in terms of trouble shooting of products and minor repairs. Any major repairs of electrical items are directed to an external partner who will automatically grant discounts on any services rendered. DHookups Product Mix is as follows: Laptops and Accessories Desktop Computer Cell Phones Digital Storages Devices Games and Accessories Electronic Accessories Digital Cameras Product Line RESEARCH OBJECTIVE Problem Statement The industry In the era of increasing technology advancements, the industry has seen a decrease in barriers to accessing products and services in regional and international markets by individuals and corporations. The public can now access these markets through various tools such as obtaining skyboxes and liaising with various import and export companies. The issues arising from this is that both individuals and companies are faced with the uncertainty of additional costs and risk incurred for importer these items to the local market. More and more companies either shift both the costs and risks involved in such transactions to consumer causing a strike in prices of these goods and services as compared to the international markets and/or an overall decrease in the level of customer service. Costs such as customs duties are not easily predicted due to the fact that as at present there is no formal costing structure on imported goods and services, thus values are determine by the customs department at the point of entry (please see appendix II for excerpt receipt statement). Customers engaging in acquiring skyboxes may be wary due to the uncertainty of the duties imposed on the items and also the risks involved in purchasing items on the internet. This acts as a deterrent to customers leaving them to rely on the local market, where there is limited variety. The Company Dhookup currently advertises based on referrals and recommendation by existing clients and there are no formal marketing strategies in terms of communicating the services provided by the company to the public. A lack of both strategic business and marketing plan has seen the company experience a lot of difficulties that hinders the growth of the business in the industry for both the short and long term. A lack of marketing strategies has contributed to low and inconsistent sales level. Due to the fact that business in generated solely on the referrals, the company does not presently have a huge clientele base and relies on existing customers for repeat purchases. This strategy has proven to be unreliable and needs to be addressed immediately to improve profit levels Brand awareness is one of the key issues and areas that need to be resolved and improved. Customers are unaware of the range of products and services offered by the company and there are no branding strategies initialise in the beginning in the incorporation of the company. Also, a more focussed should be placed on analysing the current and prospective product distribution channels available to the company. The company does not focus in any particular market in terms of advertising and distribution but instead provides products and services where necessary. By not focusing on any one particular target market the company cannot identify what their customers needs are and also what their purchasing patterns are like. Knowing your customer base is one the key areas that should be focused on when looking at what distribution channel is most effective. Objectives The main objectives of this marketing plan are to: Define the Target Market Identify the customer base Improve Brand Awareness. Identify the main competitors Outline a strategy for attracting and keeping customers Outline a financial plan to maintain consistent profit levels and growth As such the purpose of this practicum, in order to accomplish the set companys objectives, is to: Outline the importance and roles of Customer Relationship Management in sustaining competitive advantage Identify the Roles of Branding Identify the Importance and roles of Advertising LITERATURE REVIEW CUSTOMER RELATIONSHIP MANAGEMENT What is CRM Customer Relationship Management or CRM, according the Ellen Gifford, is focused on the relationship between the firm and its customers. Successful firms build customer relationships by: Satisfying goals between firms and customers, Both Consumers and the organisations has a set of conditions. Establishing and maintaining a positive customer connection Producing positive outcomes for the organisation and the customers. Jill Dyche states â€Å"CRM is defined as the infrastructure that enables the delineation of, and increase in customer value and the correct means by which to motivate valuable customers to remain loyal and indeed buy again.† In todays current marketplace, companies have to focus on the needs and wants of the customer which entails providing excellent customer service to gain competitive advantage over its competitors. Excellent Customer services focuses on providing 24 hour service to customers before, during and after a service has been delivered. According to Turban and Efrain, (2002), â€Å"Customer Service is a series of activities designed to enhance the level of customer satisfaction that is, the feeling that a product or service has met the customer satisfaction.† Customer relationship Management has evolved from a simple market concept representing a refocus of marketing with a greater emphasis on the creation of customer value. The main emphasis has shifted from satisfying customers needs to building long term relationship through value creation process (Evans Laskin, 1994). Improvements in Information Technology in the marketplace has empowered customers with greater and broader knowledge and facilitated the constant exchange of information between buyers and sellers. Firms are now focused on moving closer to customers, understanding their needs and allowing customers to actively shape their own expectation by co-creating value obtaining a strategic customer focus. Buttle (2002), states that CRM is â€Å"the development and maintenance of mutually beneficial long term relationships with strategically significant customers.† It is â€Å"an IT enhanced value process which identifies develops, integrates and focuses the various competencies of the firm to the voice of the customer in order to deliver long term superior customer value, at a profit to well identified existing and potential customer,† (Plakoyiannaki and Tzokas, 2001). Determinants of CRM In order to achieve these synergies between the customer and suppliers (firms) we must highlight what the underlying determinants of CRM are Trust and Value: Trust is defined as the willingness to rely on the ability, integrity and motivation of one company to serve the need of the other company as agreed upon implicitly and explicitly Value is defined as the ability of a selling organisation to satisfy the needs of the customers at a comparatively lower cost or higher benefit than that offered by competitors and measured in monetary, temporal, functional and psychological terms In addition to providing high quality levels of both trust and value, companies must also: Understand Customer needs and problems: This is an ongoing process and should take place before, during and after the sale is completed. Meet their commitments Must be honest: The company should also make sure the customer is always told the truth about the information provided for goods and services provided Have a long term perspective. Focus should be placed on establishing and retaining a long term relationship with the customer Developing customer relationship Successful management of the development process between the firm and the customer would lead to superior long-term performance of the organisation through improved customer retention. Ford et al suggested a relationship development model that consists of five stages: The pre-relationship stage: this is the event that triggers a buyer/supplier (customer/firm) to seek a new business partner The early stage: This is where experience is accumulated between buyer and supplier although a great degree of uncertainty and distance exists The development stage: This is where increased level of transactions lead to a higher degree of commitment and the distance is reduced to a social exchange. The long term stage: This is characterised by th e companies mutual importance to each other. The final Stage: This is where the interaction between the parties becomes institutionalised. According to the model in the early stages both parties are distant from one another but as time goes by the relationship is characterised by increased commitment and cooperation whereas in the later stages interaction decreases as the relationship is institutionalised. As with the life cycle model, the time span of each stage varies and it is difficult to predict how long both parties will remain in that stage before moving on or decide to not move at all and relinquish the relationship. As seen in the both models when the relationship enters the decline phase, both cooperation and the level of commitment and cooperation drops significantly. Firms are now faced with the task of attracting and retaining new and existing customers by ensuring that they maintain their positive relationship with customers through effective customer relationship management. Functions of CRM The functions of customer relationship management can be direct and indirect. Direct functions of CRM refer to profit, volume and safeguard as opposed to indirect functions which includes innovation, market, scout and success. In terms of CRM, direct functions are the basic requirements of the company that are necessary to survive in the competitive marketplace and the indirect functions are actions necessary to convince the customer to engage or participate in various marketing activities (Earl D. Honeycutt et al 2003) Profitability This distinguishes between the profitable customer who provides the firm with a positive cash flow and a high volume customer who helps the firm achieve economies of scale Volume this secures the necessary breakeven position of the firm and enables the firm to operate on a profit making basis Safeguard This improves the costs efficiency of a supplier and provides stability and control in sales in a dynamic marketplace. Innovation This allows products and processes to be developed together in order to improve the value of the offering to the customer. Market This wins customer support through referrals/recommendations when entering new markets and establishing new commercial and personal relationships Scout This results in market information gathered by customers and communicated to the supplier earlier than would have be known Access This refers to the help received from customers experience and networking when the firm interacts with authorities and trade associations. (Earl D. Honeycutt et al 2003) Though the functions of Customer Relationship Management is clearly outlined above, firms have different prospective on CRM on the whole. Some firms focus on CRM because they are driven by gaining competitive advantage as opposed to others who are view CRM as an opportunity to improve the relationship with another company to minimise the effects of market volatility. No matter what the firms objectives and goals are in utilising CRM tools, the models they choose must support these objectives by improving the overall relationship between the firm and the customer. This is accomplished by adding value to the customers experience. Evan and Laskin 1994 introduced a model of relationship selling that evidently differentiates between three underlying and fundamental components: Relationship inputs, relationship outcomes and assessment. According to the model, effective relationship management is understanding customer expectation, building service partnership with customers, empowering employees to fulfil customer needs and providing the best quality to customers to satisfy their respective needs (introduction of Total Quality Management (TQM). If implemented in the most effective manner these inputs would lead to positive outcomes such as improved customer satisfaction, loyalty, and increased customer perception of the firms product and services, which in turn would affect the firms profit. Of course the opposite applies if these inputs are not successfully implemented. The assessment state integrates two components, customer feedback and integration. Firms should engage in customer feedback mechanism to ensure at all times customer needs are being addressed and met. The firm should ensure that the relationship marketing processes is integrated into the strategic planning framework in order to align it to the firm s overall goals and objectives. Smith and Barclay 2003 identified a standard model for building effective customer relationship based on some key factors; Interdependence, Cooperation and mutual trust. The model highlights that both the customer and supplier perceive interdependence as the channel to cooperate and also the motivation to exchange a level of trust and commitment. Mutual Trust and Cooperation contribute significantly to the effectiveness of the relationship creating relationship dynamics. As the relationship grows and develops into a partnerships (maturity stage) both parties shares similar and agreed objectives and visions maximising the effectiveness of the relationship. Apart from the models highlighted above aimed to improving the relationships between both parties through CRM, Parasuraman et al (1996) also introduced the â€Å"GAP† model of service quality by identifying five major gaps that face organisation to meet customers expectation of the customers experience. BRANDING ADVERTISING AND PROMOTION METHODOLOGY Market Research is an objective, systematic collection and analysis of data representing a particular target market, environment and competition incorporating some form of data collection, either primary or secondary. The following key areas would be focused on in this section: Research design Target population and Sample Data Collection Technique Validity and reliability of the research Research Design The research design of the practicum depends on the extent to which the theory highlighted is derived. There are two types of research design; Deductive approach: Where you develop a theory and hypothesis (or hypotheses) and design a research strategy to test the hypothesis or Inductive approach: Where you collect data and develop the theory as a result of your data analysis (Saunders, Lewis and Thornhill, 2007), For the purpose of this research a deductive approach will be used. According to Robson (2002) there are five sequential stages through which deductive research will progress: Deducing a hypothesis from the theory (a testable proposition about the relationship between two or more concepts or variables). Testing the hypothesis in operational terms (i.e. indicating how the concepts or variables are to be measured). Relationships between two or more specific concepts or variables are proposed. Testing the operational hypothesis. Examining the specific outcome of the inquiry (confirming the theory or indication modification is needed) If necessary, modify the theory. Though the deductive approach is usually affiliated with the quantitative research design, this practicum would utilise a mixed approach design, focusing on both quantitative and qualitative approaches in gathering data through discussions, observations and questionnaires. The research design will be a descriptive study in order to portray an accurate profile of events and situations and to gain deeper insights into the main topic highlighted. The descriptive study, also known as the statistical approach, describes data and characteristics of the population being sampled by answering the questions who, what, where, when and how. The research was also designed in such a way to determine the spending habits of the targeted population with respect to age, gender and social disposition by gathering primary data. It also tested the participants knowledge of the industry and the perceived factors affecting Demand and Supply for the electronics products locals and internationally. Research Techniques As stated previously, the information gathered from the research was primary data, using research techniques such as Surveys and Observations of consumers and similar suppliers in the domestic market. The Survey was conducted through Eighty five (85) Questionnaires distributed and returned from a random sample of a targeted population. The questionnaire allowed the researcher the opportunity to answer who, what, where and how through various questions posed to the participants therefore using the desired descriptive research design. The survey would also allow the researcher to collect quantitative data to be analysed quantitatively and also collecting the data to suggest possible relationships between two or more variables which can be explored through existing models. The questionnaire tested the participants on various areas such as: The knowledge of customers in the market The online shopping awareness of customer The factors that affect the demand for products and services in the said market. Customer satisfaction Etc. Both techniques were also considered to be highly economical due to the constraints of the project both in time and financing as it can be quickly administered at low cost to the researcher. Sample and Population A random sample was taken from a population consisting of both UWI and Authur Lok Jack Students. Each participant was randomly selected and approached face to face by the researcher at different locations of the respected campuses. At the University of West Indies, St. Augustine Campus, random samples were taken from students entering the food court at lunch time to capture the heavy influx of students and also at the pickup area in the afternoon. At Arthur Lok Jack Graduate school of Business candidates were approached at the front desk during the evening sessions to capture the majority of students from different disciplines. Arthur Lok Jack Graduate School of business and the University of the West Indies students were chosen as the population mainly because they were seen as the ideal target market based on past and current purchases and demand trends. Credibility and Validity of the research Participants had a clear understanding of the purpose of the questions posed in the questionnaire and its objectives. Each questionnaire was distributed by the researcher in order to prepare for in any unforeseen problems arising from misinterpretation of the questions and as well explanations of the various terminologies used. It was felt that the researcher would be best person to answer any of these questions at any moment notice. Also, the questions were structured in order to facilitate the ease of completion of the form by ensuring that all questions were concise and straight to the point.