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WHSmith PLC. Strategic Marketing in Practice Case Study June 2006. Scenario. You are Gary Ross marketing consultant. TASK: Re – establish authority in the High Street Establish presence online in its natural sectors Develop new and creative approaches to retailing

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whsmith plc

WHSmith PLC

Strategic Marketing in Practice

Case Study

June 2006

© CMC 2005

scenario
Scenario
  • You are Gary Ross marketing consultant.
  • TASK:
    • Re – establish authority in the High Street
    • Establish presence online in its natural sectors
    • Develop new and creative approaches to retailing
    • Devise strategies to drive profitable business year on year

© CMC 2005

where are we now

Where are we now ?

Audit of current situation

© CMC 2005

whs today
WHS today
  • High Street Retailer, household name, new CEO has revived fortunes recently, faces intense competition from all sides, both traditional and online retailers
    • Established 212 years
    • 70% of U.K. population visit each year
    • 438m visits pa
    • Sells 78m magazines pa
    • Sells 1.1bn pads of A4 paper pa
    • 542 High Street shops
    • 200 Travel shops
    • Like for like sales dropped 2% in 2004-2005
    • What does the future hold for WHS ?

© CMC 2005

slide5

SUPPORT ACTIVITIES

MARGIN

FIRMS INFRASTRUCTURE - Customer focused, Marketing taken on and understood

at every level, core function - strong internal communications .Staff.reward scheme- V.I.P.

HR MANAGEMENT - Retain technical and knowledge based employees and recruit

marketing and sales experts - Project/consulting expertise. 360degree feedback

TECHNOLOGY DEVELOPMENT – Partnership with Fujitsu has saved money and

freed up staff to concentrate on core retail issues

PROCUREMENT - Combined buying power, U.K and Far East

  • INBOUND
  • LOGISTICS
  • Intranet
  • JIT for
  • suppliers
  • OPERATIONS
  • JIT
  • Efficient ethical
  • Product sourcing
  • (closely
  • monitored)
  • OUTBOUND
  • LOGISTICS
  • E- Order
  • handling
  • JIT
  • MARKETING
  • AND SALES
  • Investment in
  • CSR
  • Relationship
  • marketing
  • Key Account
  • management
  • SERVICE
  • Customer
  • service
  • paramount
  • Online
  • services
  • Partnerships
  • Alliances

MARGIN

PRIMARY FUN CTIONS

© CMC 2005

brand issues
Brand issues
  • BRAND DOMAIN (brand’s target market)
  • BRAND HERITAGE (how it has achieved success)
  • BRAND VALUES (core values and characteristics)
  • BRAND ASSETS (what makes brand distinctive)
  • BRAND PERSONALITY (character of brand)

© CMC 2005

whs swot
Strengths

Established over 200 years ago

Household name

Has presence in 399 out of top 400 High Streets in the U.K.

Brand is well known

Staff are experienced

Large customer base

Has an online presence www.bookshop

Strong ethical trading stance

Highly regarded for social responsibility

Generous giver to Charity (Children in Need)

Strong Environmental strategy

Weaknesses

Less than 50% of customers recommend them

Less than 50% of customers are satisfied

No Online Director

No co-ordinated marketing for all Stores

Lack of presence on air

(T.V. and Radio)

Smaller stores have insufficient range and depth (SKU’s)

Brand indistinct

No discernible USP

Opportunities

To drive more business within the U.K. especially online

To target potentially lucrative markets elsewhere in Europe where retail competition is less intense

Educational issues – national literacy initiatives

Environmental issues

To rationalise store portfolio

To forge strong strategic alliances (Post Office)

To develop better services for customers

(e.g ATM machines)

To position WHS in the mind of the consumer

To be first choice retailer in several key categories.

Threats

Growth of free newspapers

Growth of online new and G3 phone news/podcasts of books

Online stores – Amazon etc.

Supermarkets

Spiralling costs

Specialist stationery stores – Staples

Specialist book chains – Borders Ottakers

Specialist music retailers – HMV , Virgin

Specialist card retailer - Clinton

Barriers to entry for core products is low

WHS SWOT

© CMC 2005

map of competition
Map of competition

Specialist

Online

Amazon

Most retailers

HMV, Virgin, Borders, Ottakers

Waterstone

Clinton cards

High Street

Newsagents

Independents

Woolworths

Tesco Express

Category killers

Staples, Tesco, Asda/Walmart

© CMC 2005

the business environment
The Business Environment

More than SLEPT!

Economy

Politics

Legal

Porter’s 5

Pollution

Suppliers

Organisation

Product

Labour

Wages

Capital

Profit

Materials

MICRO

Society

Technology

MACRO

PHYSICAL

© CMC 2005

pestle
PESTLE

Political

Concern over decline of the High Street

Economic

Healthy economy/low unemployment

Social

Growth of in-home entertainment

Growth of education concerns

Geographic changes – new housing

Time shift – longer active hours

Social - aging and cultural diversity

Technology

Growth of internet access

Growth of mobile presence

Change to 3G

Legal

Deregulation of Postal market – greater supply of cheap couriers

Distribution of magazines/Newspapers by OFT – favours Independents

Environment

Concern over ethical trading and environmental impacts

© CMC 2005

consider whs s positioning
Consider WHS’s positioning
  • Use either BCG or PLC

© CMC 2005

brand equity
Brand Equity
  • Bonding –----How does it retain itself with me
  • Advantage – --Does it offer something different
  • Performance- -Can it deliver
  • Relevance – Does it offer something I want
  • Presence- Do people know it

© CMC 2005

objectives
Objectives
  • Decide
  • Objectives
    • For U.K. and International
  • Deliver
  • Outcomes

© CMC 2005

segmentation
Segmentation
  • Described and Profiled for each sector

© CMC 2005

targeting
Targeting
  • Specific and Justified for each sector

© CMC 2005

positioning
Positioning
  • Clear and defensible
    • Set out USP and Positioning for each sector.
    • Are there any commonalities or Single Brand options
  • Vision
  • Values

© CMC 2005

action
Action
  • Decide
  • Objective
  • Deliver
  • Outcomes

© CMC 2005

strategic development
Strategic Development
  • Product
    • Sector Selection
    • Core/ Physical/Augmented Proposition
    • Branding
  • Pricing
  • Distribution
  • Promotion
  • People
  • Process

© CMC 2005

implementation and control
Implementation and Control
  • Budgeting Areas
  • Metrics
  • Balanced Scorecard
  • McKinsey 7S

© CMC 2005

comms strategy for whs
Comms Strategy for WHS
  • Audiences –Internal and External, domestic and international, Consumers and Corporate, private and public
  • Media
  • Messages
  • Timing/Budget
  • Stakeholders
      • Investors
      • Suppliers
      • Partners
      • Customers
      • Media
      • Who else ?

© CMC 2005

internationalisation
Internationalisation
  • Where, when and how
    • GE/ Harrel and Keiffer

© CMC 2005

implementation and control24
Implementation and Control
  • Budgeting Areas
  • Metrics
  • BS
  • McKinsey 7S

© CMC 2005

critical success factors
Critical success factors
  • Create a sustainable brand image and position amongst competitors
  • Change management (PLC,BCG)
  • Internal marketing (stakeholder management, CRM)
  • Funding (Borrowing/J.V/Debt)
  • Constraints – Overstretching

- Competitive landscape

- Attempted takeover by larger company

© CMC 2005

vision
Vision

For WHS to be the first destination for any

customer who is seeking a value

for money, ethical, environmentally

proactive retailer with a broad product

range and friendly, informative staff.

© CMC 2005

mission statement
Mission statement

To become first choice for any customer who demands high quality standards and exceptional customer service from convenient locations on the High Street across the U.K. and a comparable service online.

© CMC 2005

critical questions
Critical Questions
  • What is WHS’s USP when targeting the vast majority of customers in the U.K. and competing with many other retailers who are offering the same products, often in a more specialised way?
  • Why should customers shop at WHS?

© CMC 2005

values
Values
  • Committed to providing a wide range of products in convenient locations across the U.K.
  • Committed to developing staff to give superb customer service to all customers.
  • Committed to sourcing products ethically and maintaining a strong environmental approach in all its activities.

© CMC 2005

corporate objectives
Corporate objectives
  • To develop the online market by targeting companies and individuals
  • To research the European market aiming to create a niche opportunity in those countries where retailing is not so well developed

© CMC 2005

strategic management of marketing mix
Strategic management of marketing mix
  • Product

Core – everyday products that are always needed – stationery, paper, greetings cards, newspapers, magazines

Augmented – strong online presence needed across all product categories

  • Price

Favourable price – value for money because of bulk purchasing power. A sophisticated pricing strategy could be introduced using micro marketing techniques

© CMC 2005

strategic management of marketing mix32
Strategic management of marketing mix
  • Place

UK based primarily – but needs to drive more sales online. Also needs to target European markets, especially those where retail competition is less well developed

  • Promotion

B2B - emarketing campaigns to selected companies (use SIC lists and professional bodies) to supply bulk purchases to public bodies, large corporates etc.

B2C – use promotional spend wisely and undertake market research to identify optimum target markets

Web site – continually update the content and promote heavily.

© CMC 2005

strategic management of marketing mix33
Strategic management of marketing mix
  • People

Train and develop the existing staff. Selective recruitment of key sales/marketing/technical personnel. Recruit proven staff in overseas markets

  • Processes

Regular internal/external communication. Long term relationship building. B2C customer involvement. Relationship marketing. Customer Lifetime Value. Branding strategy.

© CMC 2005

strategic management of marketing mix34
Strategic management of marketing mix

Physical evidence

Corporate web site

WHS logo and brand

ROI analysis across trading sectors

© CMC 2005

implementation and control35
Implementation and Control

McKinsey 7S

Structure

Single company or J.V.?

U.K. Head Office and overseas subsidiary?

Strategy

Focus differentiated aimed at consumer and Corporate markets in U.K. and overseas

© CMC 2005

implementation and control36
Implementation and Control

Systems

Develop MKIS and control systems to regularly review and monitor effectiveness of all strategies

Develop benchmarking system to monitor against key market indicators

Staff

Continualdevelopment of key staff. Advanced customer service and sales training. CRM development. Key account relationship building with suppliers from the U.K and Far East

© CMC 2005

implementation and control37
Implementation and Control

Skills

Ensure correct training and development programmes are established to keep WHS staff at the leading edge of technology, systems and processes

Shared values

Ensure company strategy shared by everyone in the organisation. Growth strategy and international expansion shared with all staff, suppliers, stakeholders. Compliance regulations (Health and Safety, ethical trading, environmental impacts) understood and accepted by all staff.

© CMC 2005

implementation and control38
Implementation and Control

Style

Commitment top down from CEO and Board. Creative, dynamic, leading edge, probity, commitment, ethical trading stance.

Profit sharing scheme

© CMC 2005

control balanced scorecard
Control – Balanced Scorecard

Internal

Employee awareness, staff turnover, assess staff performance against benchmarks (KPI’s), participation in continuous development (training schemes), develop CRM databases for collecting consumer feedback and insights into future needs, wants, industry trends, (market intelligence)

© CMC 2005

control balanced scorecard40
Control – Balanced Scorecard

Innovation and learning

Skills training – advanced B2C selling, customer ‘champions’, technical, online systems, training and development, critical thinking, project management

© CMC 2005

control balanced scorecard41
Control – Balanced Scorecard

Financial

Sales vs. targets in each trading category – Corporate, consumer – U.K., Europe Profitability metrics, CLV

Customer

Customer satisfaction surveys – customer feedback. Customer endorsements - web based

Brand recall/awareness of brand

© CMC 2005

possible questions
Possible questions

1. What branding strategy should WHS adopt to maximise sales and profitability?

2. Prepare a communications plan which will increase sales and profitability for WHS across all

its target markets

3. What branding and positioning strategy should WHS adopt to improve its appeal to online

customers?

4. Devise a marketing plan to make WHS a leading player in the mid sized retail market in Europe.

© CMC 2005

possible questions43
Possible questions

5. Prepare a relationship marketing campaign which will effectively increase WHS customer loyalty and their lifetime value.

6. WHS is at the crossroads in its development and growth. Produce a strategic marketing plan which will ensure increased revenue from its High Street and online operations and negate the

marketing strategies of domestic and

European predators.

© CMC 2005

possible questions44
Possible questions
  • Prepare a corporate social responsibility charter for WHS in the light of changing

legislation regarding the ethical sourcing of products and environmental impacts.

© CMC 2005