A Situation Analysis and Clearly Defined Objectives - Case of My Sofa - Essay Example

?My Sofa Contents Introduction 3 A situation analysis and clearly defined objectives 4 Defined target audiences/stakeholders and a positioning strategy 5 A clearly identified Internet value proposition for identified audiences 8 Clearly defined digital marketing mix and relationship management tactics 8 An illustration of how offline and online strategies will be integrated 10 An implementation plan including evaluation and control mechanisms 11 An indication of where revenue/benefits will be achieved and where costs incurred 12 References 13 Introduction In the today’s world, companies can successfully expand their reach with the help of technology and internet. With the help of digital marketing platform companies can take their products and services much faster to their domestics as well as international customers. However, there are a few areas that need attention when a business plan is created. For instance, supply chain, good local distributor or franchise selection, aggressive competitors, market volatility, and most importantly government restrictions. These are some of the most critical aspects that have the potential to bring critical challenges in the company’s expansion plan. Among these factors some are controllable or manageable (like selection of local vendor, supply chain and logistics) while others are uncontrollable (like government restrictions). In the present situation we are required to create a digital marketing plan for the brand “My Sofa” by the renowned sofa company of UK, Stokers. Sofa reflects the taste and preference of the users and thus it makes significant furniture among others. Whenever a visitor steps into the house, he or she faces the drawing room first where they are offered seats. These seats leave an impression in the person’s mind about the owner of the house as well as about the other members of the house. Thus it is of utmost importance to place a suitable sofa in the drawing room that would help the outsiders to have an impressive inkling about the people staying within the house. My Sofa is a luxury brand that aims at capturing the attention of the aged generation who mostly prefer a traditional, classic and sophisticated look in their drawing room. The digital marketing plan would create an online platform for the buyers and sellers where the customers will be able to choose the perfect sofa for their house without even visiting the store. The main aim of the website is saving the time and effort of the modern customer base that mostly remain busy with their professions. The online platform would also prove to be helpful for the sellers since the transactions will get recorded automatically that would save their time and effort and this platform will also provide the sellers with the opportunity to offer customized products and service to their customers. A situation analysis and clearly defined objectives The furniture and furnishings sector of UK is a significant industry. It accounts for ?9.4 billion to the nation’s GDP, which is equivalent to 1.7% of the manufacturing yield, and provides job opportunities to almost 116,000 people inside 8,180 firms. In addition, the business recruits 17,000 people in dedicated furniture and furnishings wholesale and retail, 7,000 in leasing, 2,000 in repair and a section of the 42,000 listed professional designers (The British furniture Confederation, n.d.). The Sofa Market is estimated to be worth ?2.8b annually by industry insider reports. Of this it is thought that 30% (?850m) are ‘quality seekers’. These are aspiring consumers who are proud of their home. This group of consumers can be split into 3 sub-groups according to their family, age, income status and their relationship with children: 1. Young established shoppers within the age group 25 to 35. These shoppers mostly do not have kids. The audience size is 3.4 million. The sofa market size is 230 million pounds. This group is basically considered to be the youngest among the three groups with urban lifestyle and modern outlook. Their choice for sofa is mostly driven by comfort, style, price, size and quality. 2. Style conscious families within the age group 30 to 55. These shoppers mostly have one or more kids. The audience size is 3.4 million. The sofa market size is 230 million pounds. This group is basically considered to be family oriented and responsible parents where in majority of the cases both the husband and wife hold important positions at work and spend much lavishly towards meeting their and their kid’s needs. Their choice for sofa is mostly driven by luxury, comfort, store location and implementation of reach. 3. The mature dreamers whose age group is 50 years and above. These shoppers mostly have grown up and settled children who stays separated from their parents. These are the shoppers who have reached their old age or at the early stages of old age. The audience in this sector forms almost 5.8 million. The sofa market size is 390 million pounds. This group is basically considered to be leading a luxurious lifestyle with all their savings and they are considered to be most wealthy group among the other 3 groups who have earned throughout their younger days and now they have reached their old age with a proper planning of leading an affluent life. Their choice for sofa is mostly driven by tradition, comfort, style, price, size and quality. The objectives of the company are- Developing a loyal customer base Tapping the luxury seeking markets Applying the strategy of “Skim the Cream” where premium products are offered at premium prices so that the initial revenue and profit of the firm reaches the highest level (Lamb & et. Al., 2008) Defined target audiences/stakeholders and a positioning strategy Stoker’s core market is Mature Dreamers. We have been established since 1895. The turnover is ?40m and there are 10 stores in total. Store brand names include Christopher Pratts, Doorway to Value, Stokers and Annetts and these stores account for 80% of turnover. On a positive note our brands are trusted and loved. However, we are also viewed as expensive and old fashioned by some. Stoker’s strategy is to attract new customers i.e. ‘style conscious families’. We want to go on a journey whereby SCF go from thinking that ‘Stokers is for people I don’t really have anything in common with’ TO ‘Stokers is for people like me’. We are aiming for this consumer because their drivers of choice are very similar to the market we currently serve which implies that the amount of change required by the business is minimal. The target audiences of the new brand My Sofa are the Style conscious families. It has been analyzed after studying the market trends that there exists a huge demand for factors like Quick Service, Modern Designs and Shopping at the comfort of home which has come up eventually with the change in promotional approaches and with consequent changes in the consumer’s taste and preferences. In the recent years, with the advent of technology, the consumers became more and more accustomed with the concept of online shopping and the worth for traditional shopping experience is decreasing rapidly. Online shopping provides a sense of ease and comfort against traditional shopping which requires running through the streets and hunting for the things required. The difference between traditional and online shopping can be truly understood on stepping into a mortar and brick shop especially while making shopping during the season of holidays. This requires struggling through the crowds of people, waiting in queues for making purchase and moving from one store to another for finding the item required. These are the main issues from which the traditional shops suffer. For a particular item, there are only limited choices. Due to the limitation of shelf space, mortar and brick shops cannot provide huge varieties of products. It makes their economic sense in filling their shelves holding limited space with the items that are mostly sold. These products are not necessarily the best, but are marketed as the best (Dholakia, 2002, p.131-133). On the other hand, the online stores are not incorporated with the issue of limited of shelf space. The virtual shelf space is limited by the storage capacity of web server. Therefore, an online store has innumerable varieties of a particular item. This could use space in hard drive which is negligible. The shipping facility is provided by the suppliers on the same day so, the virtual stores are not required to carry the stock of all items. Thus, it requires no shelf space for warehousing. The online shelf spaces are cheap and plentiful so, the niche markets can also be catered by the online shops. For example, it is possible for an online store to sell the intercom systems like wireless intercoms, video intercoms, and wireless infant monitoring systems which can’t be possible for a mortar and brick retail store. Even if it is located in a large city, where intercom systems can be sold, the sale could not recover the expenses of overhead which is involved in mortar and brick stores (Qin, 2009, pp.489-491). Thus it is of much importance today that how a firm adapts the ongoing changes and how exclusively it positions itself among the other competitive firms. The brand called mysofa.co.uk has been created recently by Stokers to appeal to the ‘style conscious families’. There are 10 styles in the range and it is currently displayed in our Christopher Pratts (Leeds) and Stokers Chester stores. In the subsequent year the distribution will be extended to Doorway to Value (Chorley), Southport Stokers and Annetts Furniture World (Hereford). Before we launch we must keep note that, we are going to: Create a 21st century website that goes live early December. Create an in-store look and feel to display the ranges. Implement features such as posting fabric samples to consumers. Understand what ranges work before we go to the expense of colour mapping the products. Launch the product range on the 1st of March. Add a special feature of Colour mapping that allows the customer to see a picture of the sofa in various fabrics. A clearly identified Internet value proposition for identified audiences Since the target market belongs to the age group 30 to 55 years and therefore it is recommended that their internet experience should be pretty simple and free of all complications. Moreover the design of the website and the navigations should be precise and to the point. This group of consumers remains busy throughout the day and therefore he would love to buy their favourite things online that doesn’t consume much of their precious time. Moreover written ads would prove to be more appealing to them than the audio visual aids. Discounts and offers are good options but are not mandatory for this group of buyers. However they must get variety and touch of modernity in the products intended for them. Clearly defined digital marketing mix and relationship management tactics The digital marketing mix would include the 4Ps that are discussed below- Products- The sofa of this range should be quite stylish, light and must possess colors that would match with any other furniture within the room. Moreover the sofa must be comfortable enough that would allow the families to spent some quality time cuddling on the couch. Price- The price range of the product should be very high since it aims at those families that lead a luxurious lifestyle. Promotion- Next year the budget to advertise mysofa.co.uk is: First 6 months ?25k Second 6 months 50k Third 6 month 75k Other/ additional promotion for the sofa range is principally aimed at our existing customer base and will include: Family and friends discount email sent in spring 2014 to 15,000 of our core customers (mature dreamers). The plan is that they will pass to their children who will buy from the “my sofa” range. 4 page feature in the September brochure that is posted to 100,000 customers. Place- The place of availability of the product is the nearest franchisee stores that promises to deliver the product within 24 hours of placing the order online. Marketing activities that are aimed at managing and developing the client base, trusting the consumers and maintaining a long-term relationship with the affluent customers are often termed as relationship marketing. In relationship marketing, consumer summary, purchase outline, and record of contacts are kept in a sales database, and an account executive is appointed for one or more most important patrons to accomplish their requirements and sustain the association. Relationship marketing is a strategy intended to promote customer loyalty, communication and long-term connection (Baron & et.al, 2010). The customer relationship management (CRM) practice focuses more on consumer retention than customer creation. Relationship marketing is devised to form strong associations with the consumers by offering them with data directly well-matched to their interests and needs and by allowing open interaction. The approach frequently ends up in enhanced word-of-mouth function, customer’s willingness to provide information to the organization and repeat business. Relationship marketing is just the opposite of transactional marketing, which is a practice of focusing on the increasing amount of individual sales. In most of the organization the elements of both relationship marketing and transaction marketing strategies are combined to obtain effective result. CRM is an advanced form of business intelligence system that is widely used in the field of handling customers and it is a set of business tactics and often it is considered as a bundle of distinct software techniques and equipments, with the objective of cost reduction, enhancing revenue, recognizing opportunities, offering customer value and retaining customers (Grant & Anderson, 2002). An illustration of how offline and online strategies will be integrated Consumers have always appreciated suggestions expressed in a straight line to them. A marketer may expend millions of dollars on ornately conceived advertising operations, yet frequently what actually makes up a customer's mind is not only uncomplicated but also free of charge: a word-of-mouth commendation from a reliable person. As consumers besieged by product selection tune out the ever-developing bombardment of conventional marketing, the tool of word of mouth cuts through the chaos effectively and quickly. Word of mouth is the process of passing on information from one person to another. In case of commercial occurrences, word of mouth (WOM) communication is applied by the consumers for sharing facts, their views or reactions about the market, products or services with other individual (Kumar & et.al, 2007). Certainly, word of mouth is the main factor behind 20% to 50% of all decision regarding consumption. Its regulation is the utmost when consumers makes a first time purchase or when the commodity is comparatively luxurious, which indulges customers to perform more research before making the purchase, seek more advices, and think about their alternatives longer than they otherwise would. And its impact will possibly grow: the digital revolution has accelerated and amplified its reach, for word of mouth is no longer an act of close, one-on-one communication. In the modern era, it also functions on a one-to-many basis: product review is posted on sites and views are circulated via social networks. Some consumers even generate blogs or web sites to admire or reprimand brands (Bughin & et al, 2010). An implementation plan including evaluation and control mechanisms Building a digital marketing platform or website is a disciplined and systematic process that requires keen understanding of the technology a particular business uses as well as related social issues. Today more sophisticated tools are available and one does not have to be eBay or Amazon for creating successful digital marketing platform (Loudon, 2011, p.199). However, an actual website is built on the concept of both logical and physical design and choices ranges from in-house building to outsourcing. In-house development of digital marketing website requires participation of existing staffs and building everything yourself and bear all risks and costs associated with such investment. This option requires operating or hosting the digital marketing website with the company’s own server. On the other hand outsourcing refers hiring a third party or an outside vendor who will provide services involved in developing the website which cannot be performed with the existing personnel of the organization (Mclvor, 2005). However, the decision of building a website in-house involves significant risk and responsibilities. For instance, in the retail sector, inventory management, shopping carts, processing of credit card, purchase orders, etc. involves high costs. Also if the interface is not user-friendly then there are chances that fewer customers would be interested in company’s products. All efforts may waste in vain if the staffs face a long delaying and difficult learning curve from experience. Hence, from the above discussion it can be said that it is better not to leave the future of business on chances and let professionals who are expert in respective domain to handle such case. Also, outsourcing is also is cost efficient process that will reduce initial cost of investment required for building website in-house. An indication of where revenue/benefits will be achieved and where costs incurred Revenue will be achieved when the inventory management services and delivery services will be outsourced while cost will be incurred in the promotional parts which will be mainly done through the means of email as the target market belongs to an age group that remains busy with their professional and family life getting little time for social networking and gaming. References 1. Grant & Anderson, 2002. Customer Relationship Management: A Vision for Higher Education. Available at [Accessed 7th December] 2. Loudon, K. C. 2011. E-Commerce: Business, Technology, Society. 4. New Delhi: Pearson Education India. 3. Bughin, J, Doogan, J, & Vetvik, O 2010, 'A new way to measure word-of-mouth marketing', Mckinsey Quarterly, 2, pp. 113-116, Business Source Premier, EBSCOhost, viewed 7th December 2013. 4. The British furniture Confederation, n.d. ABOUT THE FURNITURE INDUSTRY. Available at < http://www.britishfurnitureconfederation.org.uk/about_furniture_industry.php> [Accessed 7th December] 5. Lamb, C.W. and ET. Al. 2008. Marketing. USA: Cengage Learning. 6. Dholakia, N., 2002. Global E-commerce and Online Marketing: Watching the Evolution. United States: Greenwood Publishing Group. 7. Qin, Z., 2009. Introduction to e-commerce. New York: Springer. 8. Baron, S. & et.al, 2010. Relationship Marketing: A Consumer Experience Approach. London: Sage Publications. 9. Kumar, V. & et.al, 2007. How Valuable Is Word of Mouth? Available at < http://hbr.org/2007/10/how-valuable-is-word-of-mouth/ib> [Accessed 7th December] 10. Mclvor, R. 2005. The Outsourcing Process: Strategies for Evaluation and Management. UK: Cambridge University Press. Read More