ENTOUCH Telecom: New Service Launch Strategy and Plan - Term Paper Example

?New Service Launch Strategy and Plan New Service Launch Strategy and Plan INTRODUCTION “ENTOUCH” telecom has been operating in the telecommunication industry of New Zealand as telecommunication retailer and has eight stores all over the country. The company is providing the target customers with different latest and new telecommunication products and equipments. There has been continuous innovation and changes in the industry and in order to stay competitive in the industry. It is essential for the organisations in the industry to keep on coming up with new and innovative products and solutions (Budde, Baker, Bibolini, Evans, Hulme-Jones, Kwon, Lancaster, Lange, Tine, McNamara, and Wansink, 2011). Keeping this in view, ENTOUCH telecom has decided to launch electronic online store. This will help the company in the process of attracting and retaining more customers, which in turn will result in increasing the total profits and market share of the company. Background and Relevant Issues: Telecommunication industry is one of the growing industries all over the globe. It has become one of the most profitable and worth investing industry. There is always an increasing need of different products and devices which assist people in the process of communication. Communication has become one of the important needs of the today’s global world. At the same time it is worth considering that there is considerable shift in the shopping behaviour of the customers. More and more people are shifting towards online shopping. Online shopping provides the customers with more convenience and ease. New Service Strategy and Purpose of Strategy: Owing to the increasing trend of online shopping, the company is looking forward to launch a new e-store. This online store will enable the target customers to shop for their favourite telecommunication products over the internet. The company will provide the customers with the opportunity to shop for the products while sitting at home and will deliver the products at their door steps. This in turn will allow the company to increase the market penetration and share in the local industry. At the same time the company will be able to enter into the international market. The purpose behind this strategy is to provide the customers with ease and comfort of shopping from home and at the same time increasing the market share of the company. Business Current Offerings: ENTOUCH telecom offers almost everything which is required to make a phone system in an office or at home. There are several corded and cordless digital phones offered by the company for home and business usage. In addition to this, the company offers several telecommunication products and accessories like headphones, headsets, conferencing equipments etc. Products and accessories from the world’s renowned manufacturers are available which includes Plantronics, Sennheiser, Jabra etc. OBJECTIVES: There are several aims and targets of ENTOUCH which it is looking forward to accomplish with the launch of this new service. Five main objectives in this regard are: 1. To increase the sales of the company by 10 percent within the time period of one year. 2. To increase the market share of the company by 5 percent within the time period of one year. 3. To increase the penetration in the New Zealand market to the level of 60 percent. 4. To enter into international telecommunication market by capturing around 5 percent share in the first year. 5. To improve the market image and reputation. SITUATIONAL ANALYSIS: Before entering into any new market segment and introducing any new product or service, it is important to thoroughly analyse the overall situation of the industry and market. It is essential for the organisation to investigate, explore, and analyse both, internal and external, environment. This is the first step in the process of designing effective marketing strategy and plan (Anderson, 1982). Industry Analysis and Key Trends: The overall telecommunication industry is increasing at a rapid pace. There are several new mobile, internet, and broadband connections all over the world and in New Zealand as well. The telecommunication industry of New Zealand is also reporting considerable growth and profits. The level of mobile penetration has already reached saturation in the year of 2005. It is being expected that in the coming years there will be huge investment in the telecommunication industry of New Zealand and this will help the industry to reach at the point of $ 14 billion by the year 2020 (Budde, 2010). Along with this, there is a considerable increase in the rate of internet penetration not only in New Zealand but also in the international market. There has been an increasing trend of online shopping and more and more customers are looking forward to shop online. In Australia alone around 25 percent of the mobile users are involved in the practice of online shopping through different websites like eBay and Amazon in the year 2011. The industry has reported around $3800 million revenue through E-Payment in the year 2011 (Budde, Wansink, and McNamara, 2011). Telecommunication firms in the New Zealand have grouped together to make an industry group with the aim to improve the way firms invest in the infrastructure in the country and according to experts this would be very helpful in improving profitability of the companies in the telecommunication industry. Competitors Analysis: There are several firms in the telecommunication industry that might cause threat to ENTOUCH telecom and some of the renowned names in the industry are Vodafone New Zealand, Compass Communications Ltd, TelstraClear, Telecom Corporation of New Zealand Ltd, AT&T Asia Pacific, Two Degrees Mobile Limited, Telesmart etc. Therefore it can be said that there are several competitors in the industry which might cause threats. SWOT Matrix: SWOT matrix is one of the most effective and useful strategic management tools used by organisations. It helps in the process of identifying different internal strengths and weaknesses of the company, along with the opportunities and threats present in the external environment. This strategic tool enables the organisation to overcome the weaknesses, use strengths to capitalise on the available opportunities, and reduce or minimize the threats in the external environment (Haberberg and Rieple, 2008). Strengths: Some of the strengths of the company which will help in the process of launching this new service are: The company already has physical presence in the market with eight stores all over New Zealand. The company has good market reputation and image in the local industry. Company already has a set of loyal customers. Weaknesses: Some of the weaknesses of the company are: It will be first experience of the company related to online store or ecommerce website. The company has no experience of operating into international market. Opportunities: Some of the opportunities on which the company can capitalise on are: Increasing demand of telecommunication products in the local as well as international industry. Increasing trend of online shopping among the consumers. The growing popularity of the online stores and ecommerce websites Threats: Some of the threats which have to be faced by the company are: Different security issues related to online business transactions and the threat of fraud. Increasing rules and regulations regarding the online businesses and ecommerce activities. STRATEGIES: Target Marketing Strategy: This service is being introduced keeping in mind the consumers who prefer to shop online. Hence, all marketing activities and strategies will be devised keeping in mind the preferences and needs of this particular target market. Apart from this, by introducing this new service of online store, company is also targeting the consumers in international market. This in turn will facilitate the company in the process of increasing the global presence and securing considerable market share in the international telecommunication industry. Positioning Strategy: The positioning strategy has been formulated keeping in mind the needs of the target market. Company has come up with a universal positioning strategy in order to target local and international customers at the same time. The tag line which will be used by the company in order to target and attract more and more customers is: “ENTOUCH telecom: one stop solution provider. All your favourite telecommunications products at your doorstop, just at one click.” Marketing Mix Strategy: Marketing mix is also known as 4 Ps of the marketing which are product or service, price, promotion, and place (Borden, 1964). On the other hand in services marketing it is divided into 7 Ps namely, Product or service, price, promotion, place, physical evidence , people, and process (Lovelock and Gummesson, 2004). It is important to come up with different effective and efficient strategies related to these elements in order to capture and attract large set of customers (Kotler, and Keller, 2009). Service Strategy: ENTOUCH telecom will come up with user friendly and attracting ecommerce website, which will not only facilitates the customers in the process of shopping online but will also be pleasing and attractive. In this regard, the company will design and develop the website according to the preferences and needs of the target market. As the company is also targeting the international customers, the website will offer the products listing according to the availability of that product in a particular geographical region. The website will provide the customers with real time experience of the products before making the purchase decisions. There will be 24/7 live support for the customers in order to help them in the process of selecting a product and placing an order. There will be different packages and deals for the customers. Apart from this the website will offer different products for review which will be expected to be launched in coming months. Promotion Strategy: The promotional strategy of the company will be to capitalize on different marketing channels like online advertising, direct selling and marketing, social media marketing, search engine optimization, blogging and viral marketing. This would allow the company to capitalize on different opportunities that each marketing channel provides. The promotional budget allocated by the company would increase with the passage of time as the target market becomes aware about the company. The marketing budget is allocated on quarterly basis and the management would be reviewing the marketing and promotional budget of each marketing channel after every quarter. Thus, any marketing channel which is more productive, the management would increase its budget. In this way, the overall promotional activities would become more productive as management will be reviewing the effectiveness of each marketing channel every quarter and thus allocating resources according to the effectiveness of marketing channel. The main idea of the company is to increase customer awareness in the initial periods of the business and to make the customer aware about the offerings of the company and how beneficial these products can be for the customers. Company will also make use of direct selling and direct marketing and for this the company will be hiring sales personnel and their main responsibilities would be to improve sales of the company. These sales personnel will be given fixed salaries along with commissions and bonuses depending on their performance. The company will be motivating these sales personnel not only with monetary benefits but with non-monetary benefits as well. Company will be promoting the products on different occasions and on different events as well as it will offer discounts to special customers to attract more customers. Different exciting packages will be offered by the company from time to time to attract more customers. Pricing Strategy: The prices of the products will be same as being offered through physical stores. The shipping charges will be additional according to the location of the customer and will be mentioned beforehand. ENTOUCH telecom has implemented the strategy of penetrating pricing in order to attract more customers and increase the market penetration. Also the company will be keeping an eye on the prices offered by competitors and it would try to win the competition on different factors and one of these factors would be the price as the management understands the response of people towards prices in telecommunication industry. Place Strategy: The company will offer the services of online shopping all over the world and will provide shipping of the products at the doorstep of the customers. Physical Evidence Strategy: Company is headquartered in New Zealand and have eight stores all over the place. This will facilitate the company in the process of wining the trust and confidence of the customers. For the success of any online business it is necessary to have a strong physical evidence support (Lovelock and Wirtz, 2011). People Strategy: The customer support representatives will be provided with different training and development courses. This will facilitate the company in improving the image and reputation among the customers and in return attracting more people. Process Strategy: The process of online transaction will be smooth and will involve minimum steps in order to provide the customers with ultimate experience and convenience. Apart from this the process will ensure that customers are provided with high security and the personal information of customers is not misused or mishandled. EVALUATION AND CONTROL: In order to ensure that all marketing strategies and tactics are implemented effectively and all associated objectives and targets are met, it is important to properly evaluate and control the overall process (Kotler, and Keller, 2009). Performance Indicators: The company will be analyzing the performance on several factors and it has set targets that it would like to achieve. If the company is not able to achieve these targets, then its performance was not up to the mark whereas if it is able to exceed the targets, then performance of the company was better than expected. The targets set by the company are: Improving Customer awareness by 50% within 2 years Improve Customer relationship and increase the customer satisfaction level by 10% in two years Improve Sales of the company by 20% in two years Effectiveness of promotional campaign – Achieving a return on marketing investment of at least 30% The company will be reviewing effectiveness of each marketing channel and thus it will be analyzing the performance of the company on quarterly basis to make the marketing campaign effective. Control Mechanism: The company will not be spending too much money in the first year and the management would first like to see and analyze the response of the customers and then expand its marketing budget. The company would be increasing its marketing budget with the passage of time however more budget would be allocated on activities yielding more profits. So company will be analyzing the performance of each marketing channel on the basis of returns it would yield to the company. Head of Marketing Department would be responsible for evaluating the performance of the marketing activities and ensuring that the marketing budget is allocated in different marketing channels to make the most of investment the company is making in its promotional activities. He would also be responsible to evaluate the effectiveness of each marketing channel and then he would be allocating the budget accordingly. Budget and Financials: The company has allocated $150,000 for marketing budget for the first two years. In the initial year the company has estimated $61,500 to be spent on marketing activities and then this marketing budget would be increased to $88,500 in the second year. The aim of the company is to utilize its marketing budget in different marketing channels so that company is able to attract customers from different channels as well as capitalize on opportunities from each marketing channel. Marketing strategies and tactics will be formulated by the management of the company which will also include the marketing manager. The company plans to initially outsource some of the marketing activities like Search engine optimization, social media marketing and viral marketing as this would allow the management to focus on the main areas of the business and outsourcing firms can handle these marketing tasks efficiently. Company will also be using direct marketing and for this purpose the company will be hiring individuals that will be given permanent jobs in the company. The responsibilities of these individuals would be to mainly improve sales of the company. Marketing manager will be supervising these sales personnel directly. The marketing budget of the company for first two years is as follows:   Y1 Y1 Y1 Y1 Year 1 Total Y2 Y2 Y2 Y2 Year 2 Total Total Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Online Advertising 3,000 3,000 3,000 3000 12,000 3,500 3,500 4,000 4,000 15,000 27,000 Database Marketing 1250 1,250 1,500 1,500 5,500 2,000 2,000 2,250 2,250 8,500 14,000 Direct Mail 2,000 2,000 3,000 3,000 10,000 3,500 3,500 4,200 4,200 15,400 25,400 Blogs 1,500 1,500 2500 2,500 8,000 2,500 2,500 2,500 2,500 10,000 18,000 Social Media 3,500 3,500 4,000 4,000 15,000 5,000 5,000 6,000 6,000 22,000 37,000 SEO 500 500 750 750 2,500 1500 1500 1500 1500 6,000 8,500 Viral Marketing 500 500 750 750 2,500 1000 1000 1500 1500 5,000 7,500 Other 1500 1500 1500 1500 6,000 1500 1500 1800 1800 6,600 12,600 Total   61,500   88,500 150,000 RECOMMENDATIONS: Company has planned to make customer aware and create customer awareness programmes throughout the first year. Also the company will be relying on direct sales, internet market and social media marketing throughout the first year to improve sales of the company. In addition to this, the company has planned to schedule two events in the first year and in these events there would be promotional packages and discounts offered to the customers buying products of the company in these events. The Gantt chart of the marketing activities of the company is as follows: Some of the recommendations for the company are: The company needs to interact more with the customers in order to identify their needs and wants and what kind of modifications they would like to see in the current offerings of the company. Thus, by modifying the products according to the needs of the customers the company can improve customer satisfaction level as well as improve its sales. The company should focus on core areas of the business and it can outsource some of the marketing activities like social media marketing and search engine optimization. The company needs to make the most of its resources and ensure that all resources of the company are utilized as this would help in improving overall profitability of the company. Company should also evaluate the marketing strategies adopted by competitors and take actions accordingly. REFERENCES Anderson, P. (1982). Marketing, Strategic Planning and the Theory of the Firm. The Journal of Marketing, 46 (2), 15- 26. Borden, N. (1964). The concept of marketing mix. Journal of Advertising Research, Retrieved November 29, 2011 from http://www.commerce.uct.ac.za/managementstudies/Courses/bus2010s/2007/Nicole%20Frey/Assignments/Borden,%201984_The%20concept%20of%20marketing.pdf Budde, P. (2010). New Zealand – Telecoms – Market forecasts 2010, 2015, 2020. Australia: Pual Budde Communication Pty Ltd. Budde, P., and Wansink, K. (2010). Key telecoms, mobile and broadband statistics. Australia: Pual Budde Communication Pty Ltd. Budde, P., Baker, L., Bibolini, L., Evans, P., Hulme-Jones, L., Kwon, P., Lancaster, H., Lange, P., Tine, L., McNamara, S., and Wansink, K. (2011). World Digital Economy: mass adoption of e-commerce and m-commerce channels. Australia: Pual Budde Communication Pty Ltd. Budde, P., Wansink, K, and McNamara, S. (2011). Australia: E-commerce, marketing and advertising. Australia: Pual Budde Communication Pty Ltd. Haberberg, A., and Rieple, A. (2008). Strategic Management: Theory and application. New York: Oxford University Press. Kotler, P., and Keller, K. (2009). A Framework for Marketing Management. New Jersey: Pearson Prentice Hall. Lovelock, C., and Gummesson, E. (2004). Whither Services Marketing? In Search of a New Paradigm and Fresh Perspectives. Journal of Service Research, 7 (1), 20 – 41. Lovelock, C., and Wirtz, J. (2011). Services Marketing – People, Technology, Strategy. 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