Marketing Communication Master - Assignment Example

Marketing Communication - Microsoft hi-fi system Launch Table of contents Introduction Electrical industry has shown tremendous growth in the lastfew years in UK. Though most of the retail segments have been showing a moderate growth rate in the last decade, the electrical retail division, more specifically the household Television and DVD markets have been growing rapidly. This has displayed a growth of more than 97% in retail sales of electrical goods compared to all other sectors at 28% during the same period of 1995 to 2001. This rate of increase is attractive enough for further forage into the market. This rate has been continuing to grow much beyond this period. A stable housing market and a stable growth in the industry and economy, usher in a stable requirement for the electrical, both brown and white goods in the market. The over all requirements in the market have been tending towards a growth that is both uniform and stable. Secondly, in UK audio visual products sell the maximum among all European countries. Research indicates that the hi-fi mini and micro systems have replaced the midi stacking systems in the audio visual industry (Geoffrey A Moore, Aug 1996). In addition to this, it also indicates that the future course of work is in the direction of micro systems and people will prefer these. In the audio-visual sector price has been the major consideration for most of the buyer decisions. However, the manufacturers tend to add value by providing additional features. Based on all these market situations, it is congenial to get into micro hi-fi systems and would be compatible with the existing product line of Microsoft's mp3 players. This should add value to the hi-fi systems already in place; will be a micro player and will be compatible with other Microsoft products already in the market. Structure of the Paper Marketing communication is based on the planning efforts taken in line with Paul Smith's(2003) SOSTAC structure (P R Smith & Jonathan Taylor, June 2004). Many corporations and businesses around the world make use of the SOSTAC structure to plan their marketing approach. In line with this paper, the plan and the approach for the launch will be based on SOSTAC. The SOS of the SOSTAC is conceptual or a visualization while the TAC is the action plan and implementation that would help to reach the SOS. Situational Analysis, Objectives, Strategies, Tactics, Action and then control make up the SOSTAC model of business planning. In line with this model, this paper will also address the situation in which the launch of the product is going to take place, including competitor information, their products and the markets that they are dominating in. Based on the competition information and on the information pertaining to the various requirements in the market, the objectives for the exercise are set. The strategies and tactics to reach these objectives and targets are then worked out, indicating the action plan for the same. This would help in achieving the targets that were originally set. Appropriate design of control is essential in order to ensure that the company meets its targets without fail. In general the steps of the SOSTAC model mean the following: S Situation Where are we now O Objectives Where do we want to go S Strategy How do we get there - Broad view T Tactics What tools do we use to implement the strategy A Action Detailed Action Plan for each tool / tactic C Control How do we track our progress and know when we have reached the goals (Business Services Agency, 2006). Situational Analysis Audio visual industry in UK has gone through major upheavals. However, the market in UK is more oriented towards listening to lots of audio for most part of the day. While Digital Audio Broadcasting is a major attraction for people who tune their radio in, the other is the tendency towards listening to audio replays. 90% of the UK population listens to 23 hours of music. This takes the form of either the radio or the pre-recorded music on CDs or mp3 memory recordings. Microsoft is planning to launch the mp3 compatible micro hi-fi system. Today the market for portable audio is dominated by iPod. iPod is the defacto standard for anything that is portable and is in the audio industry. Music listening in UK is next only to television. There is almost no competition and getting an inroad into the micro hi-fi and portable player market is becoming tougher with the indomitable hold that iPod has. However, the traditional strong players like Panasonic, Sony and others have a minor share in the portable audio market after the onset of iPod. During situational analysis the following questions are answered: 1. How are we performing Microsoft is yet to launch its micro hi-fi systems though the mp3 player is in the market and is doing well. The major competition is from iPod whose market share is over 85% of the total portable audio market and a share of this market is what Microsoft is aiming at. This would necessitate a product that is technically superior or at least on par with iPod. Secondly, the trend in the market is to produce audio portable devices that look like iPod rather than anything that is different. Now, Microsoft could give an alternate look and feel that is not found in iPod. 2. What are our distinctive competitive advantages Microsoft has a unique name for distinctive product launches that are both technically superior and makes use of the operating systems on computers whether that is for a laptop or palmtop or a portable to the best advantage. Since most of the systems run Microsoft's operating system, it is easier and is expected out of Microsoft to produce a system that would be maximizing the efficiency of the operating system. The public and the customers expect Microsoft to produce a product that is the best in the market. Though of course, there is no major price advantage is expected out of Microsoft products, it is always expected to be a trend setter on price front too. 3. How effective is our marketing mix With mp3 players already in the market and operating systems that maximize the working of the products are already in place, it is only logical that Microsoft comes up with something that is as good as iPod or better. Apart from this, since there is an array of products that Microsoft has already put in place, the line up is not fully complete for portable products. The customer is able to identify products that would meet his needs though of course on the audio and on the video range, the products that are currently in place at Microsoft is not comprehensive. Microsoft is also not trying to bring in all audio devices. Instead it is catering to those requirements which come about the computer systems. 4. Are we focusing on the right segment with the right type of customer The segment that is being addressed by Microsoft so far has been the computer savvy customer who uses the Microsoft operating system and along with this uses some of the other Microsoft products that would enlarge his scope of operations. On the entertainment front, most of the software and the hardware sold by Microsoft continue to cater to the same segment that uses these for entertainment and for home purposes. The same segment is the one that will also be using the portable hi-fi micros. Therefore, Microsoft will continue to address the same market segment where it has a good presence. The economic strata it addresses is the middle class and above. The same type of customer is the kind of people who will also buy this product. 5. Are we using appropriate channels for communication and distribution The users of the portable hi-fi audio systems would also be the people who will be using computers and the internet more extensively. Therefore, the kind of marketing communication that has to be done will go through the internet and the electronic media much more than any other media or methodology. This would also be sold through the appropriate channel. Retailers are dominating the marketing scene and people buy mostly from the retailers. Retail sales of audio visual equipment are much more than the other equipments and goods on the retail network (Please see Figure 1 in Appendix I). DVDs have replaced TVs as the most selling retail product during the period 2000-2001. While the radios and the audios are back in the reckoning because of the iPod launch. Now with the increase in the interest levels on audio products catching up, the micro hi-fi is also expected to sell well. The channels that need to be adopted for this purpose will be as in the case of other Microsoft products, through a distribution-retail network. Retail itself has taken on a different platform in the last few years. While mass merchandisers or supermarkets have taken over along with online retailers, department stores etc., have taken over from the regular specialist retailers and increased the sales of these brown goods in UK. It is also important to note that the fixed and specialist marketing or retailing networks are dwindling and in the year 2000-01, it has reduced by nearly 20%. There is an overall consumer preference for large supermarkets across the country. It is particularly attractive for all audio-visual equipment marketing, to go through the large supermarkets and mass merchandisers. Please see Figure 2 in Appendix I. Non-specialist multiples have increased their share in the audio-visual market. Catalogue store, Argos, was used by GUS to sell general merchandise in high streets. But today, they are having noticeable share in the sale of audio-visual goods. Departmental stores like Tesco and Ada have also made substantial gains in selling audio visual equipment. Whereas on the other end, the family owned specialist stores for audio visual equipment are not really doing well. About 80% of all retailers are such specialist stores. But then, they do not even account of 20% of the overall turnover of the audio visual equipment. One of the major reasons for growth of generalist stores is because of the large volume they deal in. The buyer not only gets variety but also gets substantial discounts on the marked price. This means that the buyer gets best price without really negotiating for it and also is provided with the chance to compare products from multiple manufacturers and accordingly rate them to meet the needs of the clients. In addition to this, the dynamism of the online retailers and the kind of facilities that people get out of it from their homes on the online retailers add more charm to this kind of market place. In most of the cases, such retail outlets are the ones where the young with the purchasing power to make light to heavy purchases crowd. It is therefore, important that the retail outlets of this type are appropriately organized and targeted. The crowd that would make the decision to buy immediately has to be the addressed. 6. What uncontrollable events or trends can impact our business Every retail business is affected by events that are beyond their radar. This could happen in the form of changes in taxation structure and technological innovation. Every change in technology brings in a new set of products that are better than the previous ones and changes of this kind replace the existing products en masse (Tom Griffin & David N MacArthur, 1997). Taxation increases the cost of the products in the market and is a change that hurts every producer though technology change might not be so. There could be some products which might be benefiting out of the events where as there are others which might not be matching up to the changes in the technology and slowly tend to slackened performance in the market place. In the current scenario in the UK market, the taxation laws are firmly entrenched and there may not be any new taxes that could affect the way the business is done in the audio-visual industry. Even if there is a change in the tax structure it might not affect the products unduly. Technology changes are very much expected in this area of business and go in for a overhaul once every 2 to 3 years. Many early economists have said that the change or growth in every industry will see products three to four years old to see the end of their product lifecycle. Objectives and Targets Every business mission has to be set with clear objectives. These objectives should fit into the SMART test for objectives. The objectives should be Specific, Measurable, Actionable, Reasonable and well Timed (Chris Fill, 31 Oct 2001). Based on these principles of creating objectives and targets, the following objectives and targets are created for the business of micro hi-fis: 1. Mission: Produce a product that will employ the state-of-art technology and be the leader in the segment. 2. Business Objective: The product on micro hi-fi should be taking up the major share in the market in UK. 3. Marketing Objectives: From zero percent market shares to over 50% share of the market in a record time of one year. The product should be a leading brand setting the market price in its own niche. In this case the product could be set to capture 50% of the market share currently held by its competitors. 4. Marketing communication Objectives: The communication should do the following: a. Develop adequate interest in the distributors and the retailers to pick up the product and promote its sale. b. Develop market response by highlighting on specific USPs of the product to highlight and rope in the product. Methodology to reach the Targets Strategy The market is divided into appropriate segments and targets are chosen before fixing the product in the market. The ideal target segmentation for this product will be the young and to some extent the middle aged. This would appeal to both the male and the female in this age group. In addition to this, the product is more of a style statement as much as the utility factor. Therefore, the stylishness of the product would result in a better roping in of the target segment. Secondly, in addition to this division, the target market will also be with the needed purchasing power. In this case, this rests with the people who are mostly in the middle class and above. The target market should be this group in the teens to their early thirties maximum and should have the capability to spend the money for this buy; either by themselves or through their parents. The specific areas where these groups throng needs to be identified to target the market accordingly. The market is today towards multiples and large departmental stores that sell all the products that a person might like to take home. This would also help him in comparing and drawing out conclusions on competitive products. It is important to know that target these market segments and specific locations / areas where a larger number of people of similar attitudes remain. It could also work to target the institutions were such things are more discussed and programs that might catch the fancy of young men and women need to be taken up. One of the other major contributing factors is the tendency of the youth in today's world from childhood days to listen to music. This is a major promoter for buying hi-fi devices. Appropriate education in listening to music would help parents to appreciate the fact that their kids would not be mislead by music since many of the parents feel that today's music misleads youth and could possibly damage their future. This negative thought about music is to be set right if there has to be larger market share and market creation is to be done. But for the parent's negation for everything connected with music, the purchases of music systems would have sky rocketed to a much higher figures than what it is today. This understanding of the music by the youth as well as by their parents would enable these people to buy more and thereby create a larger market. This would also move the product from a music based industry to an ethical music based industry. This would also enable the company to create a niche by itself and position the product accordingly. Tactics Tactics in marketing communication would involve identifying the tools for the communication; working out the methodology to employ them efficiently; tactics should also ensure that the communication is uniform across all media; they should be implying and reinforcing the same. Of course, it is essential that a proper budget is allocated for the expenses and the financial takes care of this (The Chartered Institute of Marketing, 2004). Marketing communication tools include brochures, mail shots, web sites, advertisements on various media and the others. In this case, communication on the features of the product needs to take the form of brochures, mails and web sites. Appropriate tools have to be identified for the purpose and then accordingly employed. In this case, Microsoft is a well known brand and the equipment that it is going to sell would make enough market space open to receive the product. However, the unique selling proposition in the product has to be highlighted and the same should be reinforced through all the media that are being employed. Communication tools adopted are: media advertisements to create reasonably enough hype about the product to turn the public attention. Since the target market is more hip, it is good to communicate over the internet; emailing and websites would create enough hype about the product enabling them to reach the target sector. This segment is largest user of internet browsing and emailing applications for non-commercial purposes. In order to use these tools appropriately, a clearly laid down information campaign should be spearheaded. One, there should be information about the product, its features specifically the unique ones, its usability features and the hip nature of the product and how this goes with the trend set by the music industry, modern and out going. Two, the campaign should stress on the differentiation of the product from the other contemporary products; primarily, it should indicate the method and means by which it is differentiated. Thirdly, the information campaign should be an educational thing as well. It should start with, ideally, educating the people who use as well as who do not use in the effectiveness of music and the positive effects of music on people and their mental capabilities. This would reduce the negative feelings that are doing the rounds with regard to contemporary music. The message that these campaigns need to promote will be: 1. Music is not detrimental to youth. As a matter of fact, music would help build a resistance to traditional thinking thereby the person would break new grounds. Music would ease the pressure on the young minds. In addition to this, this would also add to the creativity of individuals and would ensure that the person is not unduly handicapped by pressure of work or social pressures. This thought of positive music once it percolates down to the people, it would make the job of the young not-earning youth to get his micro hi-fi much easier. 2. The message should also reinforce mildly but specifically on the USPs of the product and try to impress upon the young minds that this product is not just hip but also brings with it the value for the money. Most of the youth today look at value for money as a major criterion before they make a purchasing decision. 3. The third important message that the communication should ensure that it reaches the public is to say that it is better than other contemporary products with which it is competing. While the messages have to reach across the entire campaign for promoting the product, it is very important that the information percolating down to the public should all reflect the same intonation. It is important that they do not create any confusion or communicate in different tones. Finally, a comprehensive budget is to be prepared for the said communications. The budget needs to be presented and approved by the company to push this campaign forward. Depending on the budget any reworking of the plan, if needed could be done so that the entire campaign is within the budget and also provides the required information to the targeted market. Actions Plan The action plan would require the following steps to be covered: 1. Designating the responsibilities 2. Deciding when the action planned will be taken 3. Once the actions are decided and the plans are put into operation, it is important that the actions are recorded at all levels to monitor the implementation technique adopted and the implementation methodology that would provide the needed results. 4. Once the action is taken, the action plan has to identify the effect of these actions. In order to do this, appropriate measuring techniques should be designated and should be appropriately ascertained to check the effect of the same. Since this product launch is a large one, it is important that every media and the promotional methodology is given to one person who will be responsible for the effective use of that media within the specified budget. For campaigns on the internet one person may be designated; on the television and on the newspapers, there has to be different people to plan and create the needed messages and then manage it till the end of the campaign (Danskin Marketing, Feb 2006). Timing of every campaign is very important. It has to be done at a time when it will be having the best impact on the public mind. Since there is an educational aspect to the campaign there is hardly any negative impact it might have. However, it is important that the environment and the public are in the right frame of mind to take the campaign in the right spirit. The campaign can start once the product is ready and proven. It should not start early lest a delay in product launch could destroy all the positive impact that the communications created in the market. Timing has been very critical in many product launches and therefore timing this launch also can be decided once the product is prima facie ready for the launch. Once this is done, it is important that a clear monitoring mechanism is decided. This will help in recording every aspect of the implementation process for post-analysis of the exercise and to check and ensure whether any course correcting is needed. It is very common that the measures taken might require course corrections as the work progresses. This monitoring mechanism needs to be a feedback arrangement from the market segment that is targeted. The system designed for the launch of the product should also ensure that there is a consistent feedback taken from the market place to measure the progress of the work. There are two sides to this job: one, to monitor whether the information campaign that was planned did go off uniformly all across all the planned media. Second, this should also ensure that appropriate data is collected from the market place to see the effect of the campaign. In order to see the effect of a campaign on the market place, it is important that there are at least two surveys conducted; one, pre-launch of the communication campaign and the other post-launch of the campaign. For projects of this size, it is recommended that there are two or three intermediate feedbacks taken from the market place that will enable the campaign managers to make appropriate changes in the campaign to reach the target. Since a feedback at the end of the campaign could only provide the feedback to change the next launch and will not be in a position to help in the current launch. Such measurements and change in the market place has to be recorded for further analysis and could form an invaluable data for the campaign to succeed. The key performance indices in this case will be the amount of preference the target market shows to the hip in the product. To what extent the target market has shown preference to the product over competitor products; in addition to this, the nature of feeling that the senior people in the family have towards music and to what extent they would welcome youth taking to the music as they do today. These measures would help in identifying the slackness points in the campaigns and would result in correcting them to reach the target that was originally intended. Controlling the performance Controlling the performance during the campaign follows closely with the steps indicated in the last section. In order to do an effective controlling of the performance, the following needs are to be ascertained: 1. The action performance measurements that are designated should relate effectively to the objectives set (Mathew P Gonring, 1994). This would enable the manager of the campaign to ascertain whether the objectives are met and to what extent they are getting met. 2. It is also important that a responsibility to measure this feedback is given to persons who are not involved in the implementation process since that could create prejudices though not open ones. Responsible persons should be designated clearly and the group should have a feedback measuring mechanism laid down in line with the methods indicated earlier. 3. The frequency of measurement of this feedback should also be specified. 4. There should be enough number of people who are to be designated to measure the feedback and the effect of the campaigns. The team should be provided to the person responsible to ensure that he is able to carry out the job on time since the timing is very critical in identifying any lacuna in the process and try to rectify them as the project advances. 5. Measurements made should be reviewed periodically and any inconsistencies should be immediately delved upon. During the course of this launch, a strategic frequency for measuring has to be set. In this case, the effect every week could be taken and analyzed. If there are any correcting actions needed the same may be implemented within the next week. 6. In order to ensure that the analysis is in line with the original expectations, it is better if the parameters and KPIs that are laid down are clearly indicated. The KPIs current value and the expected value need to be noted down. This should be matched at the end of every feedback. Conclusion Based on the points raised in the previous sections, a clear communication can be achieved with the plan that has been laid down. The major conclusions that can be taken in for the planning phase would include: A SOSTAC based approach has been taken and the major steps would include analyzing the current status of the market and the position of Microsoft in it is first analyzed. Based on this a clear strategy to launch the micro hi-fi equipment is decided. The target market is also specified and it was found that the target market is more hip and walks into the departmental stores were all the products are available. Therefore, working out a comprehensive campaign that would differentiate the product from the rest of the crowd and also highlight the USPs of the product, would be the essential part of the market communication. However, since most of the people listen to music on this and they are youth, it has been in the grown up circles that music generally spoils the minds of the youth. This needs to be set right by a campaign that could turn the number of people against music systems to ones for it, then the market could raise substantially. The effectiveness of the communication is to be continuously monitored and corrected if needed during the course of the campaign and communication. Multiple modes of communication need to be made use of for effective communication. It is also advisable that every media has a different administrator who would take care of the changed scenario between media and make full use of the available ones. Feedback should be taken after designating clear Key Performance Indices that has to be measured and the feedback obtained accordingly. This would help in identifying specific inconsistencies in the program and would help in rectifying them. References 1. Business Services Agency, 2006, Developing A marketing Communications Plan Using the SOSTAC Model, available at: http://www.bsamarketing.com/Download/sostac.pdf 2. Chris Fill, 31 Oct 2001, Marketing Communications: Contexts, Strategies and Applications, FT Prentice Hall 3rd Edition, ISBN: 0273655000. 3. Danskin Creative Communication, 3 Feb 2006, Marketing Plans: Better simple than not followed, available at: http://resources.danskincreative.com/index.aspguid=D9CE89F8CC724DDC98535BA1FC4367 4. Geoffrey A Moore, Aug 1996, Inside the Tornado: Marketing Strategies from Silicon Valleys cutting edge, Harper Business. 5. Mathew P Gonring, 1994, Putting Marketing Communications to Work Today, Public Relations Quarterly, Vol 39, Issue:3, pp 45. 6. Paul R Smith, 2003, Great Answers to Tough Marketing Questions, Business Balls, available at: http://www.businessballs.com/pr_smiths_sostac_planning_method.htm 7. P R Smith & Jonathan Taylor, June 2004, Marketing Communications: An integrated approach, Kogan Page. 8. The Chartered Institute of Marketing, 2004, Marketing Communication, 10 minute guide, available at: http://www.cim.co.uk/mediastore/10_minute_guides/10minguide_MarketingCommunication.pdf 9. Tom Griffin & David N MacArthur, 1997, A marketing management view of Integrated marketing Communications, Journal of Advertising Research, Vol:37, Issue: 5, pp 19. Appendix I Data Graphs and Charts Figure 1: Value Chart of Brown Goods in UK. Sales has been increasing steadily. Figure 2: Multiples usage for purchase based on differing family background. Read More