Table of Contents
The role of strategic marketing in the organization ...........................................................3
Process involved in strategic marketing ...........................................................................4
Links between strategic marketing and corporate strategy ................................................7
Tools and models used to develop a strategic marketing strategy ......................................8
Segmentation, targeting and positioning for Wilkinson ...................................................11
Importance of relationship marketing ...........................................................................13
Growth opportunities in the market .............................................................................14
Wilkinson marketing plan Executive summary ............................................................ 14
Introduction ...........................................................................................................14
Objectives, values and vision ....................................................................................14
Financial situation ...................................................................................................14
Situation analysis ....................................................................................................15
Market analysis.......................................................................................................16
Competitors' analysis............................................................................................... 17
Marketing strategy ..................................................................................................17
Marketing objectives...................................................................................................19
Marketing strategy option ........................................................................................... 19
External environment..................................................................................................19
Strengths and weakness in the marketing strategy .........................................................20
Proposed Marketing responses to key emerging themes.................................................21
Bibliography ..............................................................................................................22
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Being present at fresher's fairs- and giving free goody bags with sample
products.
Direct mail flyers to homes and student halls
Advertisement with fun theme
Offering discounts of 15% with first purchase using online store.
Give vouchers
Free wall planners.
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Planning phase.
Implementation phase.
Evaluation or Control Phase.
The need of situation analysis is to know where the organization is now, and where it
will be in order to develop an overview of the organization strategic situation, this can
be achieved using one of the following tools:
o SWOT analysis, which is used to match corporate skills and resources
with forecast market opportunities and threats, by studying the internal
positive factors (Strength), internal negative factors (Weakness), external
positive factors (Opportunities) and external negative factors (Threats).
o PEST analysis, "an analysis of political, economical, social and
technological factors in the external environment of an organization which
can affect it activities and performance."
o Market research is the process of collecting and analyzing information
about a target markets and potential customers; market research is an
integral part of marketing planning process, strategies like market
segmentation and product differentiation cannot be developed without
marketing research. (encyclopedia:entrepreneur)
o Ansoff Matrix, is strategic planning tool that help organization in
determining its products and market growth, this is usually determined by
focusing on whether the products are new or existing and whether the
market is new or existing.
Within each strategy there is a differing level of risk. The four strategies
are:
1. Market Penetration: by pushing existing products in their current
market.
2. Market development: by developing new markets for the existing
products.
In this step the organization shall set its goal for being in the business, have a vision
and a mission statement, set measurable marketing objectives to be achieved for a
specific market.
Focus on its product and market by determining which product will be directed to
which customers, based on market segmentation, this step is an essential for
developing an effective market strategy.
After determining who are the customers and what are their requirement in the
previous step, it's time to develop the how aspect (marketing program) of the planning
phase.
This step includes developing the program's marketing mix by determining the
product strategy, price strategy, promotion strategy and place (distribution) strategy in
order to produce a cohesive marketing program.
The implementation phase:
This is the second phase of the strategic marketing process, it involve execution of the
marketing plan that resulted from the planning phase.
There are four components of the implementation phase:
1234-
Obtaining resources
Designing the marketing organization.
Developing planning schedules.
Executing the marketing program.
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The evaluation and control phase of the strategic marketing process intend to keep the
marketing program moving according to the plan, this need to compare results with
the plans in order to identify deviations and act on these deviations, exploring the
positive deviations and correcting the negatives.
Wilkinson applied this methodology in developing its marketing strategy as follow:
In the planning phase Wilkinson applied the Ansoff matrix tool for helping develop
an appropriate marketing strategy and chooses to apply a market development
strategy by finding or creating new markets, this is a medium risk strategy as it
requires the business to develop new customers and carries costs of the marketing
campaigns to reach this new segment.
Wilkinson also conducted a market research to explore new potential segment in the
market, the research used questionnaires from students across the UK (primary
research) and also used government and university admission data (secondary
research)
The outcome of the research showed that there were three million potential student
customers in Uk that had a combined annual spend of around 9 million pound
annually.
The next step for Wilkinson is to focus on this market segment, the student
population, so Wilkinson undertook further research to identify how to reach student
and convince them to start shopping at Wilkinson stores and developed its marketing
strategy that aimed to ensure the student population began shopping at Wilkinson
stores early in their student years and maintain their customer loyalty after university.
The market strategy for growth that was applied by Wilkinson is also aligned with the
company mission and vision which is "to give consumers what they want, at a price
they are satisfied with, when they want it and make a profit for the company" and
with the goals for the company to have over 500 stores by 2012.
To implement this strategy a marketing campaign was launched which focused on a
range of promotional tactics like being present at fresher's fair and giving free goody
bags with sample products, direct mail flyers, advertisements with fun theme, web
banners, gift vouchers and free wall planners.
To evaluate and compare results of the marketing strategy to indentify deviations
from the planned, Wilkinson used qualitative data (received from questionnaires
collected from the first year undergraduates) as well as qualitative data (received from
redemption rate of discount vouchers, sales analysis and footfall in stores analysis).
The collected data identified motivation factors for student to encourage future
purchase like product being cheaper than competitors, location of stores to be near
university and stores layout. The awareness of the brand was significantly increased
from 77% to 95 %.
Further interview with fresher students showed that from various marketing tactics
implemented by Wilkinson like being at fresher's fair and distributing flyers and
brochures had the greatest impact on students awareness with a value of 79% and
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50% respectively while TV, radio and online advertisement banner have less that 7%.
These results permitted Wilkinson to plans for future marketing campaigns.
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As it is noted that the corporate strategy guides and direct the marketing strategy of
Wilkinson for developing a strategy for growth that not only covered the specific
requirement of the targeted group, but also linked closely with the company overall
aims and objectives.
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SWOT analysis
SWOT analysis is used to match corporate skills and resources with forecast market
opportunities and threats, by studying the internal positive factors (Strength), internal
negative factors (Weakness), external positive factors (Opportunities) and external
negative factors (Threats).
The outcome of the SWOT analysis shall be translated into specific actions to help the
organization grow and succeed by using its strengths, working on its weaknesses,
benefits from the opportunities and avoiding threats.
Organization can use a strength to maximize an opportunity ( Maxi-Maxi Strategy) or
improving capability to maximize an opportunity (Min-Maxi strategy) or minimizing
a threat with a strength (Maxi-Min strategy) or minimizing weakness and threats at
the same time ( Min-Min strategy).
For Wilkinson the use of tools and models available is important to develop the
company marketing strategy in order to achieve the company goals and objectives.
It is clear that the using of PEST analysis is not useful tool for Wilkinson case as the
PEST analysis is most commonly used to measure a market or a new market
development in other country which is not the case, on the other hand the use of
SWOT analysis can be useful because it measure business unit or a preposition or idea
or the current company situation.
When evaluating Wilkinson situation the most useful tool should be the Porter's Five
Forces Model as it concentrates on the forces that affect the industry- the retail
industry- by analyzing the following:
The power of suppliers, Wilkinson has a large number of suppliers, we need to
identify the cost for switching to other suppliers, for some product we have a few
substitutes, take consideration that some suppliers can squeeze our profitability if we
are unable to recover cost increase.
The power of buyers, as long as the switching cost is low costumer are searching for
good quality and low cost so Wilkinson need to have a differentiation by its own
brand products and focus product quality and low cost
The threat of new entrants, need to be studied carefully, as profitable markets attract
new entrants that can take a market share from Wilkinson.
Threats of substitutes, as similar products exists in a market, it increases the
possibility of switching to alternatives by customers in the favor of prices.
Competitive rivalry, Wilkinson needs to study carefully their competitors, what are
their strategies, future plans and objectives, their capabilities and how we can deal
with that.
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disadvantage is that competitors may market to niche segment and hence reduce
market share.
Wilkinson applied a concentrated targeting strategy that focused on students in 60
universities and targeted the new students and student in years 2 and 3 to ensure the
student population began shopping at Wilkinson stores early in their student
experience. This would help to maintain their customer loyalty to Wilkinson through
their student years and also to develop them as future customers after university.
Positioning of a product or brand "is the way the product is defined by consumers on
important attributesthe place the product occupies in consumers' minds relative to
competing products" (Kotler; Armestrong;, 2012). Marketing mix should be
developed in order to create a position that gives the products the greatest advantage
in the selected target market.
Wilkinson has applied a differentiation and positioning strategy for its rang of
product (having 25,000 product line where 40% of them are Wilko 'own brand'
products) this distinguish Wilkinson products from those of competitors and give
Wilkinson and advantage over its competitors in the mind of customers.
Wilkinson also positioned its brand by designing and developing a marketing mix for
the selected target market (student's population) this includes being present in
fresher's fairs and giving good bags, advertisement with fun theme, offering discount
of 15% with first purchase from online and gift vouchers aiming the increase of
awareness of the brand, capturing new customer group and securing repeat business.
In 2012 Wilkinson has also rebranded its stores as WILKO in order to reposition is
brand name to be more easy and familiar with customers.
The results for applying segmentation strategy and concentrating on the targeted
segment provide it with special promotion and offers and positioning of the brand are:
This shows that the marketing strategy applied by Wilkinson was successful in
achieving many of the business aims like increased brand awareness and repeat visits.
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Introduction
Wilkinson is one of the UK's long established retailers, opened its first store in 1930.
The Wilko product range concentrates on household essentials, including home wares,
textiles, cleaning products, health and beauty lines, stationery, confectionery, pet
products and kitchen and bathroom goods. A large proportion of the range is made up
of own-label products sold under the Wilko brand; with a total of 375 stores, the
company retained a place in the top 30 retailers in the UK.
Financial situation
Wilkinson more than doubled its profit on it ordinary activities before taxation to
64.9m in 2010 and 60.8m in 2011, theses values fall down to 22.7m in 2012 and
27.5m in 2013 with a reduction of profits that exceeded 37% (Wilkinson Annual
Reports, 2009 to 2012).
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2010
2011
2012
2013
The company is facing an increasing challenges it its business due to the general
depressed retailing markets for the UK in the last years, the tough trading conditions
and the increase in VAT to 20% at the start of 2011 (http://www.retailweek.com.article, 2013), the increased cost of living that have a major impact on
consumer's ability to spend and the increased competition in the market.
Although 7 new stores were being added to the company portfolio, sales had been
declined, Profitability has also deteriorated sharply in recent years and though there
was considerable improvement in 2013, margins remain at significantly lower levels
than they did prior to 2010, the profits are gained from the company policy of
reducing costs and make efficiencies across the business. (Top 30 Retailers Report,
2012)
Situation analysis
Performing a situation analysis for the company by applying the SWOT analysis
Strength
Weaknesses
Opportunities
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Threats
Market analysis
Wilkinson main market is the retailing industry focusing on non food retails, the UK
retailing industry registered positive growth in the past years as it records 1.5 %
growth in 2013 regardless of the fact that the economic climate remained challenging
as consumer spending habits remained under the influence of the economic recession,
Based on a market research and trends published by Conlumino & SAS on December
2013 improving general economic indicators and rising consumer confidence are
having positive impact on retail as the forecast for 2014 will hit 2.4% growth. (SAS,
2013).
The sales of organic product in the UK grew by 2.8% in 2013 with total sales of 1.8
bn after four years of contraction. (Organic market report, 2014).
According to soil association published report four out of five households buy organic
products.
Kantar Worldpanel research shows that people under 34 are much more likely to be
prepared to pay more for organic products. This suggests that young shoppers may
hold the key to accelerating future growth. Levels of disposable income are also likely
to be an important factor, as families with no children spend more per capita than
large families. More than half of all spending on baby food goes on organic products,
reflecting the apparent change in food priorities when feeding a young family.
The sector where organic products are most dominant is baby food, where organic
sales now account for 54.8% of all sales through the supermarkets.
The following chart show the share of the UK organic market in 2013.
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259.9
42.7
193
Catering
1275.6
Other independent
retailers
As observed from the graph that multiple retailers have more than 70% of the market
shares.
Applying a product development strategy by selling new product like organic food
and non food products in Wilkinson existing stores, although this is a medium risk
strategy but it can ascertain growth opportunity and increase profitability.
Competitors' analysis
Sainsburys is the UK's biggest organic retailer, with a 29% market share and a 7%
increase in sales of its own-label organic products followed by Tesco and Waitrose.
The strongest growth was achieved by the online grocer Ocado, the countrys fourthlargest organic retailer, which increased its organic sales by 10.4%.
Common factors in the success of Sainsburys, Waitrose and Ocado include a strong
online presence, extensive organic ranges and a strong commitment to new product
development and marketing.
The British consumer is becoming less loyal, showing a great tendency to shop
around, as the average grocery, shopper after the recession use now 4.1 stores for their
groceries shopping. This trend mean that spend is being spread more thinly than
before and the battle among grocers is centered on securing the largest share of
customer wallet and establishing loyalty. Linked to this has been a great polarization
of spend with customers looking for value. Larger players, like Tesco and Morrison
are finding their share being eroded. (SAS, 2013).
Marketing strategy
Wilkinson marketing strategy is based on introducing new products to the retail
business which is the organic food and products, a niche market from the food and
grocery retail business, we are targeting younger shopper and families with babies and
children who are interested in organic food because it is natural, unprocessed, less
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chemicals and healthier for the family, this target market may hold accelerating future
growth.
Positioning
Using product differentiation, we are planning to produce our own brand for organic
food "Wilko-organic" to be the most trusted brand for quality and price.
Distribution strategy
The organic food and product shall be available in all Wilkinson stores and through
the web site, aligned with the company strategy for growth by opening new stores for
current retail product portfolio, 20 new convenience stores dedicated for organic
product under the brand name "Wilko-organic" shall be opened.
Product strategy
The organic food shall be sourced from local and foreign suppliers; some of them can
be outsourced directly from organic farmers. Building the Wilko-organic brand is an
integral part of our product strategy. The brand and logo will be displayed on the
department section, packaging and on the new dedicated convenience stores.
Pricing strategy
The pricing of the product shall be competitor; this can be achieved by outsourcing
our product from cheaper suppliers and especially from local organic farmers,
focusing on the supply chain and try to reduce cost of transportation, storage and
handling.
Promotion strategy
Using the most marketing tactics that have high impact on customers (based on our
previous conducted research that showed the most marketing tactics that have greatest
impact on customers) like posters, local and national newspapers, advertisement and
social media.
Encouraging and promoting the idea of using organic food for better life and health by
constructing a web site and a social network page on facebook that contains articles,
interviews and information about healthy and organic food, the web site shall be
linked to our online store.
Sponsoring sports activities in local communities.
Using discount coupons in local newspapers on our organic food and products.
Controls
We shall apply control measures to closely monitor quality of our products and
customers service satisfaction in order to enable us to react quickly to correct any
problems that may occur, the control shall be trough questioners for customers in the
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stores or online with rewarding coupon, feedback from social media like facebook
and twitter.
Other control measure shall be by monitoring monthly sales, expenses and revenues,
in order to find any signs of deviation from the plan and act to correct the deviation.
Marketing objectives
In order to ascertain growth opportunity in the market and to deliver extraordinary
shopping in the heart of the community, Wilkinson marketing objectives shall be:
Introducing the new type of organic product in all stores by the end of the
year.
Opening 20 new convenience stores dedicated for organic product with the
new logo of "Wilko-Organic" in London by the 2nd half of 2016.
Creating a web site for Wilko-organic that is concerned on healthy and
organic food to promote and sell our range of organic products.
Introducing new own label brand of organic food and product under "Wilko
organic".
Reach a market share of 3 - 5 % by the end of 2016.
External environment
Markets are changing all the time, Wilkinson need to take advantages from change in
external environment in order achieve our goals and expectations, this can be realized
by:
The shift from supply to demand may require more focus on the quality and
price of our introduced products and also to promotion and advertising
techniques applied.
Knowing the demography of our customers, their attitudes and lifestyles is an
important factor to sustain growth and profits.
Take into consideration the rising expectation of customer from Wilkinson and
its new introduced brand "Wilko-organic".
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Using technology in social network and the like in order to get customer
feedback and ideas regarding our new introduced products, stores convince
online shopping web site.
The importance of customer services has a great influence on gaining
customer loyalty and repeated purchase.
Weaknesses
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Grocery market share in UK:statista.com. (2014). Retrieved from statista.com:
http://www.statista.com/statistics/279900/grocery-market-share-in-the-united-kingdomuk/
http://www.retail-week.com.article. (2013, 9 9). Retrieved from retail week: www.retailweek.com
Kotler; Armestrong;. (2012). Principles of marketing. Pearson.
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(2009 to 2012). Wilkinson Annual Reports.
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IAARS lecture and presentations on strategic marketing
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