Delivery in day(s): 5
Unit 2 Assignment on Marketing Principles
This report will highlight the areas like extended marketing mix and the elements under the marketing plan in the context of the telecommunication company EE Ltd. which is a subsidiary of BT PLC. The extended marketing consider the elements like physical evidence, people and process which can create difference among the brands specially in the service sector. Lastly a marketing plan can give a direction by designing the activities and controlling measures for achieving the business goals and targets.
Compare how EE Limited and another competitor of your choice apply the various elements of the extended marketing mix to the marketing planning process to achieve business objectives
Extended marketing mix considers 7 P’s of marketing with an objective to include the product and service areas of an organisation. Generally the nature of the service like perishable, inseparable from the service provider, intangible factors influence the three more P’s in the normal marketing mix that is termed as extended marketing mix (Hollensen, 2010).
The organisation EE ltd is a mobile network provider selling 4G and 3G connections throughout UK whereas O2 is also a mobile network connection provider in UK which can be considered for the analysis in the context of extended marketing mix in the following way:
- Product: Product is the superior value that is provided by the organisations towards the customers in order to satisfy them and to achieve long term profit. Thus meeting the requirements effectively of the customers with the help of product is one of the important parts of the strategic planning. In case of EE Ltd., the 4G service to the customers are mainly focused and nearly 81% is the current coverage which claims the leading position in UK whereas O2 has both the 4G and 3G networks but the popularity is mainly associated with the 3G network that is having the coverage around 92% (Cable UK, 2016).
- Price: One of the essential elements in the marketing mix which ensure revenue generation for the organisation in the terms of price charged to the customers. Thus setting the pricing method and objectives for the particular service is important as it influence the customers heavily. Basically there are two pricing objectives that are Market skimming and market penetration. Market skimming is the objective that the form follows in order to achieve maximum profit by setting a price that is higher whereas Market Penetration is the strategy which allows the firm to increase the market share by setting the price that is lower. In this perspective, the selling price of EE is higher than O2. The starting price is £ 9.99 per month and £ 9.50 for O2. The monthly rates for EE start from £ 14.99 and for O2 it is £ 12.50. The call rate is also cheaper in O2 than EE in UK (Cable UK, 2016).
- Place: Place is the point of the distribution which aims to increase the reach and availability of a product towards the end users. More accessibility will enhance the maximisation of the Customer’s equity of an organisation. The largest network of the 4G service can be observed in EE whereas O2 is also the part of the world largest network provider Telephonic. More than 100 towns and cities are covered with the network of EE and for O2 the places in UK and abroad are also there. Currently EE is dominating in the telecom sector of UK having 90% of the market share.
- Promotion: Promotion is one of vital elements in the marketing mix which ensure awareness among the target audience. Several tools like advertisements, sales promotion, personal selling, internet marketing, direct marketing, public relations are used to aware and inform the people about the product or service of an organisation (Harrell, 2011). The advertisements in the televisions, news papers are mainly used by these two organisations equally during the new launch of the schemes. For example, the launch of iPhone 7 with EE can be observed. In case of O2, the public relation in the form of sponsorship can be observed. The Rugby team of England is being sponsored by O2 with the theme “Make them giants” which reflect the strong connectivity.
- Process: This is a part of the extended marketing mix which determines the quick transformation of the inputs in to a valuable output for the end user. The structured process can only help the organisation to attain the business objectives. The submission of the documents for the new customers is needed to take the plans of EE whereas the existing customers can move to another plan without any documents. The easy submission of the subscription form is also observed in O2 who are focused to provide convenience to the customers. The easiness in the process is due to attract more customers at a time and satisfy the customers by placing the factor convenience and easy availability (EE UK, 2016).
- Physical evidence: The physical evidence is the tangibility factor that is added on the intangible products. For example, the connection of O2 and EE is intangible but the name of the brand on the sim can be viewed which will differentiate with other brand in the same industry. The name of the connection is also highlight on the screen of the mobile phone which will differentiate both the brands. Most important the offices and the stores will serve as elements in the physical evidence which will create the distinction among the brands. Moreover the brand logo will create differentiation among each other.
- People: People are the employees who are responsible to create difference in the service quality and for that effective training is required. The customer’s satisfaction index is linked with the efficiency of the employee’s performance and the organisation having efficient workforce can expect high customer’s equity of the firm. EE has effective customer service executives who are always there to manage the issues of the subscribers whereas in case of O2 sometimes the service differs due to the mismanagement of the organisation. Quick response to the customers is the main objective of the organisations and it is the people whose productivity is needed to attain the objective.
From the extended marketing mix it is clear that every organisation has different aim and goals. The organisation EE has a goal to reach 97% of the people and 67% of the coverage within the year 2020 whereas for O2 it is the superior service that will be focused in order to attract more subscribers. It is the customer’s requirement that is needed to be focused in order to enhance the customer’s satisfaction and retention towards the business. Thus in this perspective extended marketing mix will help to reach and communicate the message of the company towards the people in order to increase the volume of the business turnover.
Produce a marketing plan to meet EE’s marketing goals and objectives
Marketing plan is generally a blueprint that set the outline of the marketing activities and efforts in order to achieve a desired goal in the coming year. In the context of the EE ltd. the marketing plan consider several aspects that are as follows (Mc Donald and Wilson, 2011):
Executive: The marketing plan for EE ltd will be prepared by evaluating all the internal and external factors affecting the business environment. The integration of the extended marketing mix will be considered in order to aware the customers towards the product value and service. The plan will also consider the grouping of the buyer with a differentiated targeting strategy in order to attract the target audience effectively.
- Company Overview: Everything Everywhere (EE) ltd is a division of BT Group and recognised as a network operator in UK. The organisation EE is formed with the collaboration of T-mobile and Orange in the year 2010. The advanced technology that is the 4G service is started by EE at very first in UK. Around 81% of the coverage is currently for the EE ltd. More specifically the 4G service reaches 97% of the population which is significant for the company. The headquarter of EE Ltd. is located in Hatfield and it is having their offices at Bristol, Leeds, London, Darlington etc. In UK, EE is the market leader having more than 700 stores with connectivity around 100 towns and cities (EE UK, 2016).
- Marketing situation analysis: The marketing situation considers the internal and external factors that influence the decision makingprocess of the organisation. PESTEL analysis, SWOT analysis and internal analysis can be considered in order to determine the marketing situation.
The political environment is mainly associated with the Government’s initiatives and role in the industry that is related with the organisation. The issues are there in the national coverage where the Government has to interfere. The problem in the connectivity especially in the urban areas drops the customer satisfaction index from 79% to 76%. The Government in UK and Ofcom jointly invest around £150m for developing the infrastructure in both the urban and non urban areas.
The economic stability can be observed in the country UK due to the reduction in the inflation rate from 0.5% to 0.2%. The monetary policy of the Bank of England has reduced the bank rate which will provoke the people to consider the purchase. On the other hand the increase in the taxation like VAT rate up to 20% will gear up the cost of operation for EE Ltd.
The behaviour of the customer segment is needed to be determined in order to position the service effectively in the mind of the customers. More specifically it is the youth segment that uses the smart phone maximum that is around 80% of the population. The strong connectivity will be focused in order to reach the business goal. The improvement in the education sector also attracted several overseas students who will be the potential customers of EE Ltd. Thus targeting them is needed to be considered.
The development in the technology can be observed from the free movement of trade across the boundaries. The latest 4G network is the unique selling proposition of EE Ltd and the people will like to access the connection which is strong and gives better speed. Around 90% of population in UK access the internet and thus innovation is needed to be considered.
The environmental concern is there by the radiations from the mobile phone which are affecting the health of the human. The increase in the mobile usage will enhance the electromagnetic radiation. The increase in consumption of the internet usage will require permits from the Government (Gov. UK, 2016).
It is the Ofcom which controls the broadband, wireless services of UK. The basic objective of this body is to ensure that the people get best services and protected from price discrimination. Any changes in the price are needed to be informed to this body and also to the customers before one month (Ofcom, 2016).
The growth rate in the revenue of EE Ltd. has shown an increase around 0.4%. Additionally 79% of the broadband net connections have increased. Currently the revenue at the end of 31st March 2016 was 19,042m pound and the increase in the investment is around 8% for developing the infrastructure (BT PLC, 2016). The rise in the demand of the broadband services will increase the growth opportunities of EE Ltd in the coming year.
Value chain analysis
Omni channel trading system will be followed in order to expand the selling operations throughout UK. All the types of stores will be consider that includes online and brick and mortar. The inbound logistics will be managed by the network administrator. The team will look after the dealings with the mobile manufacturing companies as well as suppliers of the chip. The R and D team will take care of the entire operations of EE Ltd. Thirdly; the outbound logistics will be managed by the retail stores, online stores. Fourthly the marketing and sales team will manage the distributors and retailers in order to maximise the reach and availability of EE Ltd services.
The employees are considered to be the important part of the organisation that is responsible to deliver quality service in all the areas. The management of EE Ltd. must consider the work life balance of the employees in order to understand the boost the performance level of the employees (BT PLC, 2016). The flexibility in the working environment supports the employees to stay with EE Ltd as per the Accreditation for Workplace Engagement report. The difference in the performance level can enhance the productivity level of the organisation and the management consider this area by engaging and controlling the employees.
d)Objectives:The market of the telecommunication industry is growing rapidly and currently the value is around 15.8B pound. The increase in the growth rate that is around 8% can be reflected within the year 2018 as per the market research. The reasons are due to the popularity of the smart phone and development in the technology by increasing the usage of the internet. Currently the organisation EE Ltd has 81% coverage with 27 million customers. The objective of EE ltd will be to deliver best performances in order to retain the leading position in UK and to work upon 4G services by upgrading in order to increase the customer’s database. Secondly the distribution system is needed to be strengthened for maximising the reach and availability of the services.
e) Strategy:Integrating all the elements in the marketing mix is needed to be considered for communicating the messages of EE ltd towards the customers effectively. As it is a service providing organisation thus extended marketing mix is to be considered in the following way:
- Product: The product will be the best 4G service and the broadband service. The requirement for the internet is growing and the company has to focus on the connectivity, network coverage and other facilities to the customers in order to satisfy their needs and wants. The best value proposition can only increase the customer’s equity of EE ltd.
- Price: The objective of the pricing will be Market penetration that can increase the market share of EE ltd. Market penetration can be done by reducing the price for attracting the people towards their service. Secondly, the offers need to design by considering the customer’s convenience factor. The pricing method will be value based pricing where all the expenses and benefits will be considered in order to fix the scheme prices.
- Place: Currently there are 700 distribution centres for EE ltd and 100 towns are covered by the network of EE Ltd. Online stores are needed to be focused in order to attract more customers towards the company. The reach is to be maximised in order to make the people closer towards the brand.
- Promotion: The basic objective will be to promote the values of the EE Ltd to all the people of UK. Thus for the promotion, the elements like advertisement, internet marketing, public relation and sales promotion are needed to be considered. Advertisement by using the mediums like newspaper, televisions can be considered for getting the maximum traffic. Sales promotion by reducing the price or giving extra benefits to the schemes are needed to be implemented for increasing the interest of the people towards the service of EE Ltd. Internet marketing using the Google Adwords can be done in order to make the people aware about the schemes and offers.
- Physical Evidence: The distribution stores, service centres, dresses of the employees will serve the physical evidence factor. The customers can relate the brand with their requirements and they will be motivated to consider the purchase (Jain and Haley, 2015).
- Process: The process for the enrolment should be simple. The verification in the documents should be handled by a team who will take care of the documents and enrolment process. All the employees must be aware of the work process in order to bring coordination and smooth flow of the performances.
- People: The people are the employees who are responsible for enhancing the service quality. Thus focus is needed to be given on the training and development in order to increase the level of competency. Acknowledging the employees for his performances or sharing the feedbacks for the improvements are needed to be done frequently in order to motivate them towards productive performance.
f) Segmentation, Targeting and Positioning: Segmentation in the market is needed to be done in order to group the buyers having similar needs and requirements. There are generally four bases of segmentation which are demographic, geographic, psychographic and behavioural. Demographic segmentation will be considered with the parameters like age group and profession (Taghian, 2010). The youth, above 50 plus, teens will be identified and design the offers based on the requirements for these groups. In case of professions, the utility of the network connections will be different for a professor, businessman, corporate professionals etc. Thus it will be consider for attracting all the groups of people towards the service of EE ltd. Targeting the people with differentiated targeting strategy will be implemented in order to attract all the people with a different age group. The teen offers or student offer can be introduced which can attract the overseas students coming in UK for the education. Positioning is placing the service in the mind of the customers by creating a differentiation. The quality network connections, strong signals will be considered for differentiating with other brands. The below positioning map will show the rich for attracting the customers (Lancaster and Massingham, 2010).
(Figure 1, Positioning Map of EE, Source: Self)
g) Tactics and Action: In order to design the action plan and tactics, the tools like Balanced Scorecard can be implemented in order to integrate the financial areas, business process, learning environment and customers (Solcansky and Simberova, 2010).
The turnover of the business will be analysed by focusing 6 month turnover.
The fulfilment of the requirement will bring customer’s satisfaction and for that feedbacks are needed to be drawn for measuring the customer’s satisfaction index.
The creativity and innovation is highly required which will needed to be monitor for enhancing the customer’s delight factor.
Internal Business Process
All the process will be integrated and adequate training will be given to bring coordination among the employees
Collecting the 360 degree feedback from the employees in order to measure the performances. Along with that observation will be done to monitor the performance level of the employees.
h)Budget:The budget will give direction to the management about the investment decision and expenditures in order to achieve high profitability. The revenue earned was around 19, 042m Pound and the profit before taxation was 3, 029m pound which can be utilised for investing in the infrastructure and rest to the reserve. The financial strength can underpin the investment of EE Ltd. the acquisition by BT will help to invest around 3bn pound in the fibre broadband service all over the country. Around 95% of the coverage can be possible at the end of the year 2017. Nearly 470m pound can be invested in the area of research and development. For accelerating the social priorities nearly 30m pound can be invested to support the sustainable future.
i) Control: The roles and responsibilities of the employees will be fixed by the middle level management after considering the targets designed by the top management. The team leaders will influence the teams for achieving the target and control the performance level. All the financial activities are needed to be reviewed and monitored by the finance team headed by the Finance manager. There must be integration between the departments in order to bring efficiency in the organisation. After 6 months the current and recent performance level is needed to be analysed in order to bring improvements or change (Kennerley, 2015).
Thus it is the marketing plan that can set the priority which helps the management to follow and implement in order to achieve the desired profitability. Marketing plan integrates all the areas of the business in a single line in order to utilise the resources effectively.
In order to conclude this section of the report has given the essence of the extended marketing mix and marketing plan in order to achieve the desired business goal. As the nature of the service is perishable, inseparable from the service provider, intangible so the elements like physical evidence, people and process is needed to be included for creating difference and impression on the mind of the customers. Secondly the marketing plan has given the direction to the management of EE Ltd. by allocating the resources and designs the controlling process by considering the internal and external factors
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