Marketing

                                                                                        Contents Introduction 3 Micro Environment 4 Macro Environment 5 Segmentation 9 Targeting Strategy 10 Buyer Behaviour and its affects on Arriva 11 Positioning 13 Conclusion 15                                                 Introduction In order to identify Arriva’s opportunies and threats, the company muct begin to understand the marketing environment in which it operates. Although Arriva needs to look at its marketing environment, the opporunties and threats will also comprise of factors outside of marketing that allow Arriva to maintain a successful relationship with its target customers. This is generally known as the Macro and Mirco envrionment. Using pestel anlysis can help with this   Micro Environment   This is commonly known as the near or internal environment.   Within Arriva there are six Mirco environments that affect the ability to fulfil its aims to its target market   * The first force is Arriva itself – Manging directors are responsible for making sure that all aspects of Arriva’s marketing stragegy are in uniform. This can anything from employees to commication.                   Macro Environment   Political Both Kodak and WaterCo are significantly influenced by political factors in terms of organisational change although it can be argued that the influence on WaterCo has been more pronounced. The political context of globalisation though is a main consideration for Kodak but it is diffuse and spread over other factors as discussed subsequently. However WaterCo’s existence as an independent private company can be attributed to changes in the political environment of the UK favouring privatisation under the prevailing economic ideology of the time which saw a large number of public utility companies privatised and/or broken up into smaller and more efficient companies. WaterCo itself was privatised in 1989 and is one of the major water companies in the UK with over 400 employees. The main responsibilities for this firm are providing fresh water and treating waste water for their UK based customers thus maintenance work forms a core component of the services they provide, (Cooke, 2002). Economic Kodak has been significantly impacted upon by changing externalities in the economic environment. This has been as a result of processes of globalisation opening up more markets and bringing more competition for the company. A socio-economic consideration for the company has been the influence of changing demographics in terms of the customers it services (Tan & Tiong, 2005). Increased wealth and increased disposable income coupled with increased access to novel technological developments for a larger amount of people have radically altered certain parts of Kodak’s market forcing it to adapt and adopt changes which make it a much more successfully competitive organisation. Economically also globalisation has increased the number of and size of competitors which threaten Kodak thus economic considerations in organisational change for Kodak have occurred at micro and macro levels. For WaterCo the principal economic concerns have been related to the cost of investment in personnel and technology it has had to make in response of the changes brought about in the company by the influence of these factors. The success of such strategies will also arguably be determined by the cost-benefit calculations arising out of the economic costs of pursuing these strategies in managing change successfully for the company.  Sociological  Linked to the economic factors above social changes have significantly impacted Kodak in relation to changing demographics in terms of the customers it targets. As such then changes in customer’s needs and preferences for high-tech imaging products and changing life styles has increased the pace of organisational change in Kodak in terms of meeting these needs. Increased globalisation arguably has led to customers demanding faster responses to their needs creating much more competitive business fields attempting to satisfy these desires. According to the CEO of Kodak the company’s business is not about technology but about pictures illustrating the company’s attempt to relate to the lifestyles of consumers, (Macher and Richman, 2004). This is because customers have become more service sensitive as well as technique and quality orientated as a result of higher educational levels and income levels creating much more discerning customers in relation to these. For WaterCo the sociological context of human resource has been a major influence. Flexibility in terms of labour in British firms has been mainly achieved by enlarging the scope of tasks (Poole and Jenkin, 1997) and a relaxation of organisational boundaries, (Geary, 1995). As a result employees in WaterCo have become more flexi-skilled and multi-skilled following training which focuses on their own core knowledge for certain positions and more self-management in task performance flowing from and contributing to a flatter organisation architecture. In response to these developments WaterCo developed a computerised management information system in order to produce a more effective communication channel with employees responsive to their concerns as well as providing training courses about health and safety to improve the performance of maintenance workers in relation to new regulatory procedures. It has been argued that due to the historical nature of conflict-orientated relationships with trade union organisations in such industries rates of investment in employee development have traditionally been low, (Sparrow & Hiltrop, 1994). As such then due to the significant impact of external forces organisations such as WaterCo have sought to survive in a changing competitive environment by the incorporation of changes gradually to its organisational structures and operations.  Technological Technology from the analysis undertaken here can be argued as being the main factor in the external environment producing organisational change in both companies. Out of the four thousand types of equipment in WaterCo many of them are over twenty years old and not representative of new technological developments designed according to revised and improved engineering standards. This consideration needs to be added to the fact also that rapid development of technology has meant more complex and advanced machines and electronic instruments being produced by suppliers’ which leads to increased competition in this field in terms of companies possessing staff with the necessary skills to deploy such technologies effectively, (Cooke, 2002). Threats from this can be seen in the take-over bid by another maintenance service competitor in 1995 which forced WaterCo to reconsider the importance of their services in terms of balancing quality and total cost in order to maintain its core competence in this industry. As a result a new management group was set up to take charge of investment in technology development within WaterCo in order to meet new long term strategy goals in this respect In contrast to the water industry, the rate of technological development in the imaging industry has been and is even more rapid and has forced both new entrants and established companies to respond and adapt quickly in the face of radical and architectural innovation as defined by Henderson (1996). As a result Kodak which has long held a global leadership in the imaging market had begun to fear that the development of digital technologies might provide vital threats to the company’s core chemical processing business. At this stage technological changes which had occurred in the external environment had largely driven organisational changes within Kodak discussed subsequently below. Environmental Both Kodak and WaterCo are within industries which need to take cognisance of environmental factors. For both companies though the nature of these influences are inextricably linked to social, legal and political factors. In WaterCo’s case the company is subject to intense regulatory scrutiny by Environmental Protection Agencies and Public Environmental Advocacy groups in relation to the conduct of its service in treating waste water and providing drinking water to the British public. Factors of influence here have seen the company be engaged in training programs for its employees and company wide in ensuring the company meets these standards and possesses the knowledge and skills to do so in terms of its human resources. Green issues have also been a concern for Kodak as the nature of its products historically have been ones hard to dispose of and ones which are unfriendly to the environment in terms of for example the chemicals used in the manufacturing process. However change for Kodak in terms of this influence has been clearly linked with developments in technology and a greater emphasis on more superficially friendly digital products. Superficially in the sense that environmental concerns are still expressed in terms of the construction of digital products by some advocacy groups globally. Legal  Legal considerations are again more a concern directly for WaterCo in terms of the regulatory environment it must contend with as being a utility company providing services to the public. Furthermore a distinct process which has led to changes in WaterCo has been the development of new safety standards in relation to the operation of the equipment it uses. Such heavy machinery has seen a slew of legislative developments in the UK raising safety standards within the industry seeking to reduce the number of work related accidents. WaterCo has made a significant investment in educating, training and retraining staff in light of these developments and the organisational change for the company in this regard has been a principal component of its human resource strategy. For Kodak principal legal influences arise out of considering the amount of countries which the company operates in. As discussed below Kodak has responded to these challenges through the pursuit of joint-ventures with mixed success. Thus Kodak can be said to attempt to minimise its exposure as much as possible in being a multi-national company to the influences of national legal environments. Potors five forces Five force framework (illustrated in Appendix 5) helps identifies the sources ofcompetition in the industry (Johnson et al., 2005). Five forces which are not independent ofeach other, draws a connection between competitive forces and the key drivers in the macro-environment. 2.2.1) POTENTIAL ENTRANTS: High Capital Requirement creates a high barrier of entry for newcomers. And more than 70 % of market share is controlled by the top 10 leaders (Appendix 6) and thisred u ces the price retaliation and keeps the economies of scale high. Brand Recognition also acts as a barrier to new entrants. Hence, the threat of new entrants islow . 2.2.2) SUBSTITUTES: Even though TV, games or other social activities can act as substitutes, they willnever be same as travelling. Moreover, there is a low differentiation of products and togetherthere islow threat of substitutes. 2.2.3) SUPPLIERS: Suppliers have high negotiation powers against the companies having a low share inthe market. But in a market where the top 4 market leaders covering more than 50% ofmarket and possessing a threat of backward integration, there will be a power balance.This implies only a moderate bargaining power for the suppliers.  BUYERS: There is a low switching cost to buyers with the emergence of internet and online sales. But the low differentiation of products and lesser number of substitutes limits the bargaining power of buyers to low. 2.2.5) COMPETITIVE RIVALRY: There is a moderate competitive rivalry in the industry. High fixed cost largelyfavours the incumbents. And there is a significant 8% difference in market share between thetop two market leaders (TUI 21% and Thomas Cook 13% - Appendix 6). These huge variations of market shares of incumbents lessen the competiti         Segmentation Segmentation and targeting seek to determine who companies want to reach in order to build brand relationship. Marketing today is in the name of efficiency and effectiveness, becoming more focused on smaller but more profitable segments of the market. (Duncan, 2003) Research has shown that Arriva has three segments, all linked to bus use. The three segments are: * User – Students, commuters * Lapsed user – Weekend users, alternating users * Non user Within these segments, Arriva is able to segment further within the 3 main segments to be able to tailor its marketing mix strategy. Customer perception and journey experience are linked with customer satisfaction Non users may have the tendency to switch their mode of transport depending on the suitability of transport and the type of journey they are taking. With the right incentives Arriva could change non users to users. Alongside this another challenge is to address the perceived barriers associated with bus travel within this segment. Geographical segmentation would also benefit Arriva’s marketing strategy. In a service dominated industry it makes sense to analyse. This would allow tailored made communication and service to areas that Arriva serve. * Rural areas with poor transport links As a result of focusing on challenges to Arriva is aiming to tackle the negative perception on bus transport. With a focus on the following service areas Arriva maybe able to change this perception and successfully fulfill its marketing strategy. With a clearly defined target market and having evaluated the two segments, Arriva could consider two types of targeting in which it operates.     Targeting Stragety The service that Arriva provides reaches a wide and far reaching audience, therefore, the best targeting strategy would be the Differentiated strategy. This appraoch will see Arriva to develop distinct services with different marketing mix strategies aimed at the different segments. This targeting stragegy has taken into account people’s location and socio economic grouping. With this in mind, Arriva will want to attract users such as: * Students * * * Buyer Behaviour and its affects on Arriva There are many factors that can influence consumer buying behaviour. These can include personal factors, such as age and gender; social factors, such as social groups and culture; and psychological factors, such as personality and attitudes. Social groups may be made up of family, friends, social clubs or sporting teams. Each group develops its own set of normal behaviour and attitudes which can dictate their buying habits. For example, surfers tend to wear certain types and brands of clothing, while younger children are interested in toys. While there remain many unanswered questions regarding consumer buying behaviour, there are some fundamental facts we already know. These are discussed below. Consumer needs These are usually a combination of the following: * convenience-position your store location and product range for convenience * satisfaction-client satisfaction is paramount * price-your prices need to be competitive and comparable to the quality of the product or service offered * performance-if possible, try to exceed client expectations * reliability-always stand by your promises and be consistent in you practices * presentation-first impressions are important * desirability-provide a desirable presentation of your products and services. When consumers buy A retailer can determine three periods when consumers buy-the season, the day of the week and the time of day. For example, swimwear is most popular during the summer months, pensioners tend to shop late in the week, and children buy drinks and lollies before and after school. Knowing these buying trends enables you to stock the right product, have the staff levels when most needed and target the right clients. Decision making Retailers recognise that many consumer buying decisions are not simply made in the store. In many instances, clients decide to make their purchase before they go to a store and then make their final decision once in the store. Also, consumers may use the internet for researching their product and price comparisons prior to buying in store. Mode of travel This can also determine what a consumer buys. For example, some clients travel in their own car and shop where parking is convenient. Some are prepared to walk while others are not. And some prefer to use public transport. All of these options can affect whether a client buys light, heavy or bulky goods and the amount they buy. Family decisions Some buying decisions are made by more than one family member, e.g. decisions about houses, holidays and furniture. Taking this into account, the shopping times and days can vary depending on the family mix at the time of purchase. Prior contact Some consumers like to get information before they visit a business. They may search the web or telephone around for comparison of service, price, features and other buying decisions, and then travel to the store with the best information. Being prepared for enquiries can influence the client to consider you as one of the businesses to visit. Further information While the above information has provided some insights into consumer buying behaviour, it is highly recommended you undertake extensive market and consumer research to gather information on your potential clients.                         Positioning Positioning is the art of designing the company’s offering and image to occupy a distinctive place in the mind of the target market. (Kotler, 2003, pg 308). Shaped Alloys must position its two core products: - Xtract: A modular, flexible air/gas extraction system, ideal for industrial fume or dust removal or medium to large commercial kitchens - Diamond: A new range of saucepans for the consumer market with an extremely hard and therefore durable non-stick surface coating. According to Ries and Trout, in an over-advertised society, the mind often knows brands in the form of product layers. The top firm is remembered the best. The number one position can be held only by one brand. The proliferation of new types of media, the growing sophistication of consumers, the wide range of communications tools, messages, audiences and the rise in some media cost, such as television through the 1990’s, makes imperative that companies move towards IMC. (Kottler, 2003) Therefore it is important to develop an IMC approach in order to obtain uniform branding, target the market and seek to position the Xtract and Diamond brands to their respective target markets. The elements involved in IMC are many and they depend upon the perspective an individual might adopt, these elements might range from a simple configuration of the promotional mix through to a fully integrated and culturally driven mission and corporate strategy. (See Table 1) The present report focuses on the explanation of the promotional mix and the marketing mix and business strategy. Table 1. Elements involved in IMC THE PROMOTIONAL MIX Above the line and below the line MARKETING MIX Price, Product, Place and Personal Selling BUSINESS STRATEGY Philosophy, objectives and mission OUTSOURCED PROVIDER Agencies, production material suppliers ORGANISATION Employees, management and overseas division Source; Fill 2002 Table 1 shows the main elements to be considered and managed in developing IMC. Therefore IMC is not just a matter of transmitting uniform marketing communications messages                               References   http://www.marketingweek.co.uk/disciplines/data-strategy/latest-news/arriva-mobile-ticket-app-drives-1-to-1-marketing/3018005.article - Accessed 23rd November 2011 CONCLUSION As credit crunch is expected to be reaching an end, TUI needs to capitalise on thedisposable income of customers. This report analyse the macro environment of the tourismindustry using PESTEL and Porter’s five forces and managed to find out some key drivers ofchange. Then, the report further investigates on how TUI achieved its sustainablecompetitive advantage by identifying the strengths from SWOT analysis and by analysinghow they extended their reach in value chain (also referring to cost leadership anddifferentiation). ANSOFF matrix is used to draw future directions to TUI. As the number ofshort-haul travels is increasing these days, TUI will gain from concentrating a bit more onsupporting this (can enter in road transportation facilities). Alike other leaders in tourismindustry, TUI will also have to tackle their consolidated fixed assets. Moreover, the uses andlimitations of the analytical tools are also listed. The level of success achieved by TUI holdssome important lessons and some much needed inspiration to a business world; that coulduse a little of both right now.