1. C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 Staples Strategic Marketing in Practice Case Study June 2009 David Kilburn

2. C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 Scenario You are employed as a very experienced (20 years) marketing professional and are expected to advise the client TASK: –Prepare a report on the current state of the business –Implications for Staples’ international marketing strategy development –Possible branding and strategy development –Possible marketing communications –Possible international expansion/consolidation –Critical analysis of the office supplies, stationery, furniture, equipment technology, printing and mailing services

3. C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 Where are we now ? Audit of current situation

4. C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 The office supplies and stationery industry The global office supplies industry is a fragmented market with many providers Staples’ share of the $177 billion global market is 10.73% Competition comes from not just specialist operators but also large Retailers such as Walmart, and specialists in printing, mailing services, office equipment, furniture and technology Internet and catalogue sales are additional channels of distribution

5. C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 Brand issues BRAND DOMAIN (brand’s target market) BRAND HERITAGE(how it has achieved success) BRAND VALUES (core values and characteristics) BRAND ASSETS (what makes brand distinctive) BRAND PERSONALITY (character of brand)

6. C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 Global stationery, office supplies SWOT Strengths Product lines are sought after Rise and rise of education globally raises demand for home study, paper, equipment, etc. Weaknesses Fragmented market ‘Me too’ products Opportunities Global reach Underdeveloped countries Distance learning/virtual campus Faster growth in Europe currently Threats Crowded marketplace-winners and losers Buy outs, consolidation Saturated market in developed world Barriers to switching are low Customer loyalty low Global recession Litigation- IP etc.

7. C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 Staples - SWOT Strengths Weaknesses Global operator Undifferentiated position 2,000 stores in 22 countries Overstretched resources in an economic downturn Nimble, agile, innovative Quick decision making B2B and B2C markets 22% of sales are proprietary branded products, including Staples and Quill Opportunities Threats Training and consumable product sales Decline in consumer confidence Expand centres of excellence nationwide Other companies may out innovate Staples Increase sales by greater focus on Global credit crunch customers and markets International expansion- acquire competitors via mergers and acquisitions

8. C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 Map of competition National chains WHSmith Rymans Computer World (DSG) International chains Best Buy, Office Max Office Depot Corporate Express Avery Dennison Corporation Leading global retailers Costco Walmart Local providers Numerous independent companies serving local needs

9. C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 PESTLE Political Governments and regulatory bodies may block any attempts at further industry consolidation

10. C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 Economic Credit crunch in the U.K. has dampened consumer spending – has hit all industries Global credit crunch has impacted consumer spending all over the world Disposable income has been badly hit Consumer confidence has hit rock bottom Difficult times ahead Possible deflation in U.K. and inflation in USA

11. C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 Sociological Greater need for social housing Greater need for single units for households – less marriages, older people living longer, divorce rates high Greater interest in environmental issues, ethical trading, reduction of carbon footprint

12. C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 Technological Technology is ever changing Opportunities are endless Sophisticated database marketing techniques now possible Rise and rise of internet sales

13. C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 Legal/Environment Legal Legal action can be taken against companies who flaunt safety regulations, non compliance offences punished Environment C.S.R.- companies will have to use more biodegradable fuel, lessen impacts on environment, ethical sourcing, Growing need for companies to target environmentally aware target segments

14. C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 Consider Staples’ positioning Use either BCG or PLC

15. C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 Brand Equity Bonding –----How does it retain itself with me Advantage – --Does it offer something different Performance- -Can it deliver Relevance – Does it offer something I want Presence- Do people know it

16. C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 Where do we Want to be?

17. C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 Objectives Decide Objectives –For U.K. and International Deliver Outcomes

18. C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 Segmentation Described and Profiled for each sector

19. C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 Segmentation B2B B2C

20. C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 Targeting Target and penetrate existing markets B2B and B2C and also new market segments globally

21. C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 Positioning Clear and defensible –Set out USP and Positioning for each sector. –Are there any commonalities or Single Brand options Vision Values

22. C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 USP and Positioning USP – socially responsible, proactive regarding environment, strong ethical trading stance Positioning – number one in world for stationery and related products, leading the global industry in terms of ethical sourcing, environmental issues, health and safety, staff training and development

23. C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 Segmentation Segment – B2B B2C

24. C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 Targeting, USP, Positioning Target and penetrate existing markets in the office supplies industry and also new markets internationally USP – leading the industry for ethical sourcing and trading, protecting the environment and staff development Positioning – number one office supplies company in the world for environmental protection, quality service and customer intimacy

25. C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 How do we get there?

26. C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 Action Decide Objective Deliver Outcomes

27. C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 Strategic Development Product –Sector Selection –Core/ Physical/Augmented Proposition –Branding Pricing Distribution Promotion People Process

28. C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 Implementation and Control Budgeting Areas Metrics Balanced Scorecard McKinsey 7S

29. C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 Comms Strategy for Speedy Hire Audiences –Internal and External, domestic and international, and Corporates Media Messages Timing/Budget Stakeholders Investors Suppliers Partners Customers Media Regulatory Bodies e.g. Who else ?

30. C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 Internationalisation Where, when and how –GE/ Harrel and Keiffer

31. C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 Implementation and Control Budgeting Areas Metrics BS McKinsey 7S

32. C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 Critical success factors Create a sustainable brand image and position amongst competitors Change management (PLC,BCG) Internal marketing (stakeholder management, CRM) Funding (Borrowing/J.V/Debt/ Licensing/I.P) Constraints – Overstretching - Competitive landscape - Changes within the office supplies industry

33. C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 Vision For Staples to become an established Group who have a strong and loyal customer base, enabling them to invest in a robust, innovative international marketing plan which will keep them top of mind and in the leading position in the global office supplies industry for the next 10 years

34. C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 Mission statement To become a leading player in the global office supplies, technology and printing business who can sustain and increase its popularity amongst business customers and consumers who recognise quality, service and value, using ethically sourced products from around the globe.

35. C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 Values Committed to providing high quality, technically advanced, reliable equipment to all our customers Committed to providing our customers with products which are easy to use and dependable Committed to continual dialogue with our customers, and to provide excellent service across all our business domains

36. C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 Corporate objectives To ensure that the Group has the correct financial advice and backing to be a leading player in the global office supplies business To become even more successful internationally and leverage the financial benefits of this expansion

37. C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 Strategic management of marketing mix Product Core – office supplies, stationery, technology, printing and mailing services to business and consumer Augmented – durable, environmentally friendly Price Favourable price – value for money

38. C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 Strategic management of marketing mix Place Global presence – but needs to drive more sales by targeting the European and South American markets, (notably Italy, France) plus (notably Brazil and Argentina) Promotion Web site – continually update the content. Positive P.R. ( environmental, ethical). Personal selling, excellent customer service.

39. C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 Strategic management of marketing mix People Train and develop the existing staff and also retrain staff from new acquisitions. Selective recruitment of key sales/marketing/technical personnel. Recruit proven staff in new overseas markets to establish and promote the business. Processes Regular internal/external communication. Long term relationship building. B2B customer involvement with key accounts. Relationship marketing. Customer Lifetime Value. Branding strategy.

40. C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 Strategic management of marketing mix Physical evidence Interactive, informative web site Number of awards won for environmental and ethical approach. Endorsements from satisfied customers The Staples logo and brand ROI table – comparison with other global office supply companies

41. C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 Implementation and Control McKinsey 7S Structure Based in USA, with offices in U.K.,Europe, Asia and possibly South America Strategy Focus differentiated aimed at loyal customer base and potential customers in U.K. and overseas

42. C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 Implementation and Control Systems Develop MKIS and control systems to regularly review and monitor effectiveness of all marketing strategies Develop benchmarking system to monitor against key market indicators and main competitors Staff Continual development of all staff, especially staff from new acquisitions. Advanced product and sales training, inbound and outbound, online and offline, CRM development. Key relationship building with educational and commercial Contractors, businesses, Government departments and key influencers in global markets

43. C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 Implementation and Control Skills Ensure correct training and development programmes are established to keep Staples at the leading edge of technology, systems and processes Shared values Ensure company strategy is shared by everyone in the organisation. Growth strategy and national and international expansion shared with all staff, influencers and key stakeholders.

44. C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 Implementation and Control Style Acquisitive, innovative, agile and nimble. Quick to spot opportunities ahead of the competition.

45. C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 Control – Balanced Scorecard Internal Develop CRM databases for collecting customer feedback and insights into future needs, wants, industry trends, (market intelligence)

46. C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 Control – Balanced Scorecard Innovation and learning Skills training – advanced B2B selling, super deal closers who ‘champion’ the product portfolio. Technological development to ensure quality and environmental issues are paramount to leverage financial benefits.

47. C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 Control – Balanced Scorecard Financial Sales vs. targets in each sector – UK, USA (potentially France, Italy, South America etc.) Profitability metrics, CLV Customer Customer satisfaction surveys – customer feedback. Customer endorsements - web based Brand recall/awareness of brand

48. C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 Possible questions 1 In the light of recent joint ventures, mergers and acquisitions, what branding strategy should Staples adopt to maximise sales and profitability ? 2 Devise an international marketing plan which will enable Staples to expand and maximise its profitable operations overseas

49. C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 Possible questions 3.What branding and positioning strategy should Staples adopt to improve its appeal to business customers? 4.Devise a marketing plan to make Staples a leading player in the global office supplies business

50. C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 Possible questions 5. Prepare a relationship marketing campaign which will effectively increase Staples’ customer loyalty and their lifetime value. 6. Staples is at a critical point in its development and growth. Produce a strategic marketing plan which will ensure increased revenue and negate the marketing strategies of domestic and international competitors.

51. C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 Possible questions 7.Prepare a corporate social responsibility charter for Staples in the light of the growing importance of environmental and ethical issues 8. Prepare a communications plan which will increase sales and profitability for Staples across all its target markets