William Hill Marketing Management - Case Study Example

Assignment –Marketing Management Nature of the business William Hill is a UK based company founded in 1934. It is a leader in bookmaking services “offering odds and taking bets on a wide range of sporting and other events” (William Hill: Annual report a accounts 2004). Today, William Hill relies chiefly on an efficient technology innovation system and on-line services. This is one of the most important infrastructure requirements, which is essential for the expansion of opportunities and plays an important role in making or breaking the competitive positioning. Last year annual sales of the company was about $8,287,700,000 (William Hill PLC. Annual report and accounts, 2004). Mission Statement The mission of William Hill is to reach wider target audience and expend internationally. The potential markets of William Hill include Scandinavian countries where competition will be less than in other European countries. In UK, William Hill’s marketing strategy can be based on students target audience. Service quality is used as a strategic weapon and the aim of William Hill is to maintain high quality standards at costs lower than competitors'. Market Overview Betting industry has maintained high-speed growth through continuous optimization of its product/service mix and constant technological innovation. It has also realized rapid expansion through capital injections. Present day situation in betting industry is marked by two factor - specification, which is to do with the 'design quality' of service, and conformity, which is to do with the 'process' quality which is achieved are of particular importance to customers. Recent years UK has become a new centre of world gambling. “The major firms, Ladbrokes, William Hill and Coral (the "Big Three"), who dominated the old world, now look like dinosaurs in the new landscape” (UK Betting Industry, 2004). This expansion is closely connected with Internet facilities and WWW which opens international markets for these companies. “Spread betting firms have been increasing their share of the total betting market over the past three to four years eroding the high end phone/net business” (UK Betting Industry, 2004). Be in one of the most highly rated industries for stability and success, betting industry offers an opportunity to everyone who wants to earn a high return. Recent years, a special attention has been paid to the law regulating gambling in order to secure customers and competitors in the industry (William Hill takes online betting further overseas, 2005). Segmentation (Johnson, Scholes, 1998) allows William Hill to divide up its market into customer groups or segments. Customers within a segment are similar to each other and dissimilar to other groups of customers in other segments. Consumer segmentation is: Non-user; Competitor's customer; low-value customer; high-value customer. Today, William Hill orients on the particular geographic area. In general, UK market represents an individual geographic market that offers great opportunities. Increasingly market researchers are turning to lifestyle analysis as a means of generating a clearer picture of their customers' behaviour and thus their tendency to purchase different types of product. SWOT (strengths, weaknesses, opportunities, threats) An examination of how strategy is formed gives useful insights into the nature of strategy itself. SWOT helps to analyze the position of a firm at a particular moment in time. The strength of William Hill airlines is that it’s goods obtained a very competitive position on the UK market. The brand has a hard core of loyal supporters. It develops lines of services to satisfy the needs of wide audience, low-cost of the services. William Hill has maintained high-speed growth through continuous optimization of its service mix and constant technological innovation (on-line services). In general, the UK betting market shows the highest rate of economic growth around the world. The opportunities of William Hill include: high potential to growth and profitability of the company; international expansion, promotion to other services; high service standards; “strengthen development and support capabilities” (William Hill, Annual Report and Accounts, 2004). Another important feature of William Hill is the non-price competition which takes form of branding, advertising, promotion, and additional services to customers and product innovation (William Hill Bookmaker, 2005). The threat is local competition and “potential threat of increased competition from US style “super casinos” is waning, but at the same time, potential synergies between the casino and betting sectors are decreasing” (William Hill, Annual Report and Accounts, 2004). Another threat is that future taxation of betting and gaming has not been accepted yet. The main threats are demographics and raising taxes and transfer fees (bank interest charges, policing equipment), authority refusing planning permissions, and low market share). The weakness is caused by a legislation initiative which reduced “potential synergies between the betting and gaming sectors (William Hill, Annual Report and Accounts, 2004; Gambling and Racing, 2005). Competitors of William Hill are Ladbrokes and the "Big Three". The strength of "Big Three” is starting prices which are the key determinant of the profitability” (UK Betting Industry, 2004). For Landbrokers its strengths are successful HR policies and high commitment to work by staff, and excellent services provided by call centers, and brand name Regulatory uncertainty and high competition among world leaders are the threats for both companies. In contract to Williams Hill, "Big Three" technical support and investments is lower, which becomes a weakness of the company. The weakness of Ladbrokes is lack of promotion campaigns aimed to attract new customers, and absence of competitive advantage. Opportunities for Ladbrokes and the "Big Three" include new markets (Asian market and post-Soviet Union countries), and new services. PESTLE There is a danger of ignoring the environment, as customers and their needs, competitors, changes in technology, etc., can play an important role in determining competitive success. PEST analysis stands for political, economic, social and technological factors from the macroenvironmental point of view. The technological advances is aimed to maximize security of customers and fasten the process of informational interchange. Intranets allow industry to react faster delivering customer satisfaction. Technology replaces traditional methods of betting business, and causes growth of on-line operations. From the economic side betting industry has to spend its own resources in order to meet the requirements focusing on technological efforts, security. Legislation has an influence on economic health of the market and reduces its attractiveness for minor companies. Political factors include regulations and restrictions accepted on the government level under which betting industry must operate. Taxation has not accepted yet, but it is presumed that tariffs will be high minimizing income of the companies. Social factors include the demographic and cultural factors of the external environment. Recent years, European integration and globalization processes have changed the lifestyle of many UK citizens “Europeanized” their attitudes and customs which has a negative influence on traditional market strategy. According to SWOT and PEST analysis it is possible to say that environmental policy of William Hill is focusd on safe technolodies and waste unilisation in order to reduce the negative and hazardous impact on environment. Marketing objectives Customers Today, customers of William Hill in UK is male group from 18 to 60. This group is divided on: students, blue collars, white collars, and pensioners groups. As for the income the high side of low income individuals and to all in the middle income bracket are admitted, and the blue-collar worker, and young professionals. As for the educational background, mostly sports graduates and sports fans. Students are also clients of William Hill, but their bargaining power is less than other groups perform. The main motive of William Hill for the customers is to have a really unique chance spending less time and earning more. For the next three years, marketing plan will include aggressive marketing campaigns in the South and sustaining strong market position and competition rivalry with US based companies. The new target audience will include students form the South and pensioners. Also, it will be oriented on traditional group males (18- 60): blue collars and white collars. Traditional target market: In the company will be able to achieve strong position, the next target group can include Southeast of the country. William Hill could not survive just waiting for the customer to come to it. Instead, it must get better at focusing on the specific market segments whose needs match its offerings (Morris, 2004). Therefore, betting service needs to focus the marketing message and its service offerings. The marketing mix consists of the way in which the various component parts and techniques of the marketing effort are combined and varied in order to achieve marketing objectives (Sterman, 2000). The armory of communication techniques at the organization's dis­posal, which might be used singly or in combination, can be blended together into an effective and persuasive communications mix. The choice of communications mix should be the most cost-effective solution for achieving the organization's communication objectives. Call centres and the Internet gives betting industry great opportunities to promote its services. Nevertheless, to attract new customers traditional techniques such as TV and radio advertising, magazines displays and ads in transport should be used. This may allow lower costs or higher margins, thus gaining either a competitive edge or matching the new service. With the Internet the customer will be ”online” with the brand services. Current inefficiencies and thus the cost-burden of sales and distribution systems of the old economy can be overcome. Forecast: Financial data shows that the William Hill will be profitable and will receive high revenue a year (See appendixes 1,2,3). In addition, it will be possible to open new centers in the South region. Existing sales of the company (2004, ml, $) include: turnover - $ 8,287.7, gross profit - $561.4, operating profit - $228.9 36.2, earning per share - $36.2 (William Hill, Annual Report and Accounts, 2004). Related profit for the financial period was $83.2 ml. In 2002, “William Hill stock, was issued at 225p, sprinted to 241p within a few minutes of the market opening, and closed on Monday at 246.5p” (William Hill Shares Race Ahead, 2002). It is possible to conclude that with the changing economic environment, factors such as removal of barriers and increased competition have enhanced the need of aggressive marketing campaigns. It is one of the most important infrastructure requirements, which is essential for the expansion of opportunities and plays an important role in making or breaking the competitive positioning. Furthermore, companies without effective marketing planning systems tend to suffer more serious commercial and organizational consequences when environmental and competi­tive conditions become hostile and unstable. References 1. Gambling and Racing (2005). Retrieved from: http://www.culture.gov.uk/gambling_and_racing/ [Accessed 15 Nov, 2005] 2. Johnson, G., Scholes, K. (1998). Exploring Corporate Strategy. Hemel Hempstead: Prentice Hall. 3. Ladbrokes. (2005). Retrieved from: http://www.ladbrokes.com/jobs/index.php [Accessed 15 Nov, 2005] 4. Morris, D.S. Growing up. (2004). Retrieved from: ttp://www.enpocket.com/wrapper/page/news/inthepress/2004/june24_nma.html [Accessed 15 Nov, 2005] 5. Sterman, J. D. (2000). Business Dynamics: Systems Thinking and Modeling for a Complex World, Irwin McGraw-Hill, New York, 6. William Hill Bookmaker. (2005). Retrieved from: http://www.racing-index.com/bookmakers/william-hill.html [Accessed 15 Nov, 2005] 7. William Hill takes online betting further overseas . (2005). Retrieved from: http://www.e-consultancy.com/newsfeatures/13929/william-hill-takes-online-betting-further-overseas.html?Keywords=betting [Accessed 15 Nov, 2005] 8. William Hill Shares Race Ahead. (2002). Retrieved from: http://news.bbc.co.uk/1/hi/business/2049192.stm [Accessed 15 Nov, 2005] 9. William Hill PLC. Financial Information (2005). Retrieved from: http://ftcom.ar.wilink.com/(ohohokufx3ic4d5501syvz55)/index.aspx [Accessed 15 Nov, 2005] 10. William Hill PLC. Annual report and accounts, (2004). Retrieved from: http://ftcom.ar.wilink.com/(ohohokufx3ic4d5501syvz55)/index.aspx [Accessed 15 Nov, 2005] 11. UK Betting Industry. (2004). Retrieved from: http://www.bettingmarket.com/clientnote.htm [Accessed 15 Nov, 2005] Read More