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Unit 2 Marketing Essentials Assignment - EE Limited
This unit focuses on marketing essentials and marketing concepts that affect the functioning of the organisation. It initiates with the discussion of the basic marketing concepts and nature of marketing. Later, it discusses about the marketing mix of EE limited company that is the market leader in the telecom industry. Last part of the unit is about development of the marketing plan for EE limited with the recommendations to achieve the marketing objectives of the same.
LO 2. Compare ways in which organizations use elements of the marketing mix (7Ps) to achieve overall business objectives.
Marketing is the process that needs to be followed in a systematic manner to create awareness about the product or service a company wants to deliver to its customers. Different marketing techniques and activities have been conducted to make the people aware of the existence of the product. It is very important to market the product so that the organisation can attract the customers that help them to generate high amount of revenue for them. Every organisation has to be making a team that works with other departments of the organisation to take the decision on marketing mix that is the most important component of marketing function. (do Paço, 2011)
Marketing mix is the tool that plays a very important role in marketing of the product. Marketing mix involves the elements that need to be assessed in order to make the marketing plan. It is a set of elements that integrated together to form a base for generating or developing marketing strategies for the product or service that needs to be marketed. Marketing mix results in analysis of the factors that are important to make the marketing plan by the marketing department of the organisation. Earlier, marketing mix consists of 4P’s of marketing but now it extended to 7P’s.
Shift from 4P's to 7P's:
In 1960, McCarthy generated the idea of 4P’s of marketing under marketing mix. He believed that this marketing mix help the marketers to determine the different aspect of the product or service that needs to be offered to the target customers. Later in 70’s marketers find the need to update the elements of marketing mix. (Malhotra, 2007) This lead to development of extended marketing mix with extra 3P's. It was acknowledged by the marketers that 4P’s are not enough to define the whole marketing mix, so they added 3P's that are process, people and physical evidence. The broad discussion of the 7P’s of marketing is given below.
7P’s of marketing:
Product: Product involves the physical goods or the services that needs to be offered to the customers by the organisation who manufactures it. Product can be tangible or intangible in nature. Any product follows the life cycle that is called product life cycle. PLC is the concept that deals with the situation when the product introduces in the market till the removal of the product from the market. The product goes through different stages that involve: introduction, growth, maturity and decline. (Mann and Jha, 2015)
Place: In marketing mix, place can be defined as process of moving of products from initial point to the intended users. All the intermediaries that are involved in the process with their locations are considered in this element. In other words it can be defined as how and where the product has been bought to the end consumers. Correct placement and choice of correct distribution method is very important for the organisation to reach the right customers at the right time.
Price: Price can be defined as the amount a product provider charge in terms of selling the product. It can be calculated by summing up the cost and the profit margin of the manufacturer or the organisaton. Different strategies of pricing are used at different stages of product life cycle. Different in strategies can also be because of the culture and the quality the organisation is serving to the customers. Premium pricing is used by the organisation that already has the brand image in the market and serving the customers with the best quality products. Penetration pricing strategy has been used to penetrate the market by introduction of the new product. Economy pricing is used to sell the product that is not in demands so much and may be of low quality. (Milligan, 2012)
Promotion: Promotion is the activity that focuses on creating awareness of the product in the market. Different promotional activities have been used by companies to position their product in the minds of the target customers. There are there functions of promotion:
- To inform people about the product
- To increase demands of the product
- To differentiate the product
People: People refer to all the humans that are associated with the product. It can involve the employees, leaders, suppliers, distributors, sales staff, customers etc. People play a very important role in marketing of the products. The marketing activities concerned majorly with the marketing team employees, distribution people, sales staff as well as the marketing personal that are engaged in personal marketing.
Process: Process involves all such activities that are conducted in order to reach to the customers. This tool mainly determines the flow of the activities that takes place from manufacturing to the delivery of the product. (Paley, 2005)
Physical evidence: It considers the material part linked with the product or service that act as the evidence of the presence of the product. The physical evidences associated with the product are the elements that generate the feel of the product to the customers.
Marketing planning process:
Situation analysis: This is the first and the very important step of marketing planning process. It involves analysis of the environment that is associated with the business and can affect the marketing practices.
Marketing strategies: Different marketing strategies have been made in order to achieve the marketing objectives that have been set after analysis g the whole situation of the industry and the market.
Marketing mix decisions: Decisions have been made and drafted as the plan. This plan of marketing mix supports the marketers to implement the process in orderly manner and to evaluate the process as well.
Control: This is the last step that helps the marketer to check out the gap between the planned process and the actual process that has been conducted. Any deviation can be corrected by taking corrective measures to shift the plan on the right place. (Richter, 2002)
Comparison of marketing mix of two companies:
Marketing mix tools
EE limited is the company that provides telecom network services to the customers. The product of the company involves the network services, internet services like 3G and 4G plans. The company also provides products such as mobile phones and SIM cards to make usage of the services they provide. (EE, 2016)
Vodafone is the company that serves the customers with its one of the best telecom services. The products of the company comes with many features like chats, calling, online billing etc
EE limited is the market leader in the industry. It uses different pricing strategies at different situation and with different products. Firstly company uses penetration pricing strategy to make the position in the market in order to expand its market coverage. Later with the introduction of first 4G services, company uses premium strategy of pricing so as to earn the early profits associated with the new product introduction.
Vodafone generally use penetration pricing methods to compete with the competitors. This is because the telecom industry works with very competitive prices.
Place considers the involvement of the intermediaries and the location where the product is available. EE limited uses different methods to make the product available in the market. This involves direct marketing by using the internet catalogues. The intermediaries play an important role in distribution of the EE products. (Duedil.com, 2016)
There are 300 stores of Vodafone in UK from where it operates. Independent retailers also contribute in selling the Vodafone products to the customers.
Direct marketing and public relations are the two major methods that have been used by the company.
Promotional tools like advertising, magazine ads etc are used by the company. It offers customized services to the customers according to their usage.
In marketing context, the people that are associated with the products are marketing manager, sales staff and the distributers. These people support the company to achieve its marketing objectives.
The company considered is employee as the most important part. It focuses on provision of training to the employees and maintains the relationship with the intermediaries.
Process involves the activities that deal with influencing the customers to buy the product.
IT and data warehousing processes are used for customer services. This helps the company to improve the customer service part.
The physical evidence of EE limited products involves the ambience of the stores, the design of the handsets, design f SIM cards and the logo of the company.
The physical evidence associated with the products the punch lines and the logo of the company. Zoozoo was the very famous mascot that the company has used to personify the image of the brand.
LO 3. Develop and evaluate a basic marketing plan.
This unit discusses about the internal and external business environment of the business that affect the marketing strategies of EE limited. EE limited is the telecom network provider company that aims at increasing the market coverage and brand recognition in the market. This company is considered as the market leader in the relative industry but still lacks brand recognition. Different methods have been used in the unit to analyze the environment of the company such as PESTEL analysis, Porter’s five forces etc. the unit also provides some of the recommendation to the company for its growth. (Russell, 2010)
In 2010, EE limited is formed by merger between Orange and T-Mobile. It is considered as the market leader of the telecom industry. The company introduced in 2010 and covers almost 98% of the market by its business in initial four years. The company has the potential to grow more in the industry but lacks in brand recognition as customers still know it by the name of the earlier merged companies. The telecom industry has a market value of £15.88 in 2013. The industry in very saturated and in the growth stage. The growth is estimated to be 7% by 2018.
External analysis: External analysis refers to the analysis of the company’s external factors that have their impact o the internal marketing strategies of the same. The methods that can be used to analyze the external environment are PESTEL analysis and Porter’s five forces.
PESTEL analysis of EE limited:
Political factors: Government in UK generally have negligible involvement in the working of telecom industry as the regulatory authority that is responsible for functioning of the telecom companies is Ofcom. Government only engages taking some of the major decision like investment decisions of the companies in the industry (EE, 2016)
Economic factors: The current economic situation of the country is very much favourable for the functioning of the telecom companies. Increase in the number of mobile users as well as the technological advancement support the companies in this industry to grow with an immense rate.
Social factors: Social factors are very much responsible for the marketing decisions. Different segment of people with different beliefs and choices need to be served by the company. This leads to use of different marketing strategies to attract different type of customers. It has been observed that the segment of teen customers acquiring the mobile services has risen to 81% from 61% during 2011-2013. Therefore, it is necessary for the EE limited to come up with the schemes and strategies that are in favor of this segment as they form the large customer base. (Ryan and Jones, 2009)
Technological factors: Technological factors have great impact on the telecom marketing strategies. The company needs to opt for latest technological tool to market the products. This is because advanced technology allows the company to reach more and more customers in lesser time.
Ecological environment: ecological environment factors do not have any impact on the marketing practices of EE limited.
Legal factors: Ofcom, the regulatory authority of the telecom industry provides the framework to form the policies for the functioning of the telecom companies.
Competitive analysis: Porter’s five forces
Threat of competitors: High
Threat of the competitors for EE limited is very high. This is because the industry is so much saturated with the companies that do not have so much of differentiate products at the competitive prices. The major competitors of the company are Vodafone, Virgin, and O2 etc. EE limited is the company that is considered as the market leader and covers around 31% of the market share.
Threat of new entry: Low
Although the industry is very attractive in nature still the treat of entry for the well a settled companies like EE limited is very low. This is because the company needs huge investment to enter the industry. The capital required to enter the industry act as the barrier for the new companies. (Sweeney, Dorey and MacLellan, 2006)
Bargaining power of buyers: High
The telecom industry is very saturated; therefore the customers have wide range of choices available for them. This leads to high bargaining power of the customers. The companies need to offer the products at the competitive prices so as to retain their customers.
Marketing Essentials Referances Moderate
The companies in the telecom industry need to collaborate with other companies that support to sell the services. Huawei ICT is the company that supports the network of EE. The supplier in the telecom industry involves the companies that develop software for the phones.
Threat of substitutes: Moderate
The substitutes for the mobile phone and telecom companies can be the application like Skype and viber that provides the services of calling and texting from data usage. These applications also need network and data services to run. Therefore it is very difficult to substitute the product of EE limited.
It is very important for the company to analyze the internal environment as it affects the functioning of every department of the company. Marketing is core part of the company that is affected by many other functions as all the functions of the company are linked with each other. (do Paço, 2011)
Financial performance of EE limited:
The below figure describes the performance of the company EE limited. The financial position of the company has been clearly described here. It has been observed that the overall revenue of the company has decreased from £6.7 to £6.5. It has also been observed that the cash invested in the company has also increased from 2012 to 2013. This is because of launching of 3G and 4G services in the year.
Value chain analysis:
Value chain analysis is the systematic process of analyzing the internal activities of the company. This help the management of the organisation to know about the relative value of the activities conducted in order to deliver the product to the market. Company is facing poor communication between the departments and this somehow affects the functioning of the departments in negative way. Value chain analysis is done in order to identify the areas that need to be improved or have the potential to improve. The company focuses on opening retail stores that helps in selling more and more products by direct selling method.
Product portfolio analysis:
EE 4G products are considered as the product with high relative growth and market share. Around 816,000 new customers have been acquired by the product in the quarter of 2013. This means the product is covering the high market share in the industry. O the other hand, the 3G products of the company is at stable growth situation but still providing huge revenue to the company without much of the investment. (Mann and Jha, 2015)
Strength: The strength of the company is that this is the market leader in the industry and have great customers base. The company was the first mover for introduction of the 4G services. The level of the performance of the company is very high and the mobile phones of the company come with security apps. These apps help the users to secure their phones.
Weakness: although the company is leader in the market but it still faces the problem of low brand recognition. This is because the company is still known by the names of the company the company lacks in providing 4G services at roaming and there is lack of communication between the different functions of the company.
Opportunities: There are many opportunities available for the companies. The company has the opportunity to come up with the mobile phones of their own brand and company also has the potential to improve its customer service.
Threats: Increase in usage of applications like Skype, whatsapp, and hike etc and threat of competitors due to saturation f the industry are some of the threats for the company.
- The marketing objectives that have been observed after analyzing the environment are:
- Increase in customers base
- Increase in number of satisfied customers
- Improving cross functional communication
- Increase I number of 4G users
There are different business strategy that can be recommended for the company to achieve its marketing objectives. The company needs to improve their communication between the functions of the department so that they can effectively make the marketing decisions with the involvement of some of the other departments of the company. EE limited needs to be ware about the importance of brand recognition. (Paley, 2005) Other than public relation and direct marketing, company has to make use of different strategies to build the image in the market and to reach the large masses of customers. another objective is to increase the number of satisfies customers by improving the customers service, EE limited needs to make investment in the training of the staff that deals with customers directly so that customers can be satisfied with the services they have been provided with.
Segmentation, targeting, positioning (STP):
Segmentation: Segmentation is the process of classification of the market into different segments. There are different basis on which market can be segmented. Some of the bases are demography, geography; behavior etc. segmentation based on behavior of the people should be used by EE limited to serve the customers with the strategies according to their behavior.
Targeting: EE limited has to focus on targeting the customers that are more profitable for them. The most profitable segment for the company is the segment of teenagers as they are mostly using the services and the products that company provides.
Positioning: It is the process of positioning the image of the product in the minds of the customers. The company tries to build the image of the products as premium. This is because the company provides high quality products to the customers. (Russell, 2010)
Controlling is the process of checking the effectiveness of the marketing plan. It is very necessary for the marketing team to control every activity taking place in order to improve or take corrective actions at the right time. (Ryan and Jones, 2009)
EE limited is the company that has been formed after merger of the two companies in 2010. The company has experienced immense growth in the initial period of 4 years after introducing the business. The internal and external environment of the company suggests that the company is the market leaders of the industry but still have some of the drawbacks that affect its marketing practices. Some of the recommendation has been made and full marketing plan has been developed for achieving the company’s objecti