1. Strategic Marketing in Practice Case Study June 2006
WHSmith PLC
Strategic Marketing in Practice
Case Study
June 2006
© CMC 2005

2. Scenario You are Gary Ross marketing consultant. TASK:
Re – establish authority in the High Street
Establish presence online in its natural sectors
Develop new and creative approaches to retailing
Devise strategies to drive profitable business year on year
© CMC 2005

3. Audit of current situation
Where are we now ?
Audit of current situation
© CMC 2005

4. WHS today
High Street Retailer, household name, new CEO has revived fortunes recently, faces intense competition from all sides, both traditional and online retailers
Established 212 years
70% of U.K. population visit each year
438m visits pa
Sells 78m magazines pa
Sells 1.1bn pads of A4 paper pa
542 High Street shops
200 Travel shops
Like for like sales dropped 2% in
What does the future hold for WHS ?
© CMC 2005

5. TECHNOLOGY DEVELOPMENT – Partnership with Fujitsu has saved money and
SUPPORT ACTIVITIES
FIRMS INFRASTRUCTURE - Customer focused, Marketing taken on and understood
at every level, core function - strong internal communications .Staff.reward scheme- V.I.P.
HR MANAGEMENT - Retain technical and knowledge based employees and recruit
marketing and sales experts - Project/consulting expertise. 360degree feedback
TECHNOLOGY DEVELOPMENT – Partnership with Fujitsu has saved money and
freed up staff to concentrate on core retail issues
PROCUREMENT - Combined buying power, U.K and Far East
INBOUND
LOGISTICS
Intranet
JIT for
suppliers
OPERATIONS
JIT
Efficient ethical
Product sourcing
(closely
monitored)
OUTBOUND
E- Order
handling
MARKETING
AND SALES
Investment in
CSR
Relationship
marketing
Key Account
management
SERVICE
Customer
service
paramount
Online
services
Partnerships
Alliances
MARGIN
PRIMARY FUN CTIONS
© CMC 2005

6. 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)
© CMC 2005

7. WHS SWOT Strengths Established over 200 years ago Household name
Has presence in 399 out of top 400 High Streets in the U.K.
Brand is well known
Staff are experienced
Large customer base
Has an online presence
Strong ethical trading stance
Highly regarded for social responsibility
Generous giver to Charity (Children in Need)
Strong Environmental strategy
Weaknesses
Less than 50% of customers recommend them
Less than 50% of customers are satisfied
No Online Director
No co-ordinated marketing for all Stores
Lack of presence on air
(T.V. and Radio)
Smaller stores have insufficient range and depth (SKU’s)
Brand indistinct
No discernible USP
Opportunities
To drive more business within the U.K. especially online
To target potentially lucrative markets elsewhere in Europe where retail competition is less intense
Educational issues – national literacy initiatives
Environmental issues
To rationalise store portfolio
To forge strong strategic alliances (Post Office)
To develop better services for customers
(e.g ATM machines)
To position WHS in the mind of the consumer
To be first choice retailer in several key categories.
Threats
Growth of free newspapers
Growth of online new and G3 phone news/podcasts of books
Online stores – Amazon etc.
Supermarkets
Spiralling costs
Specialist stationery stores – Staples
Specialist book chains – Borders Ottakers
Specialist music retailers – HMV , Virgin
Specialist card retailer - Clinton
Barriers to entry for core products is low
Delegates to Complete
© CMC 2005

8. Map of competition Specialist Online Amazon Most retailers
HMV, Virgin, Borders, Ottakers
Waterstone
Clinton cards
High Street
Newsagents
Independents
Woolworths
Tesco Express
Category killers
Staples, Tesco, Asda/Walmart
Delegates to Complete
© CMC 2005

9. The Business Environment
More than SLEPT!
Economy
Politics
Legal
Porter’s 5
Pollution
Suppliers
Organisation
Product
Labour
Wages
Capital
Profit
Materials
Consider Porter Four External Forces
Impact of Mega Tour Operators v Value Proposition
MICRO
Society
Technology
MACRO
PHYSICAL
© CMC 2005

10. PESTLE Political Concern over decline of the High Street Economic
Healthy economy/low unemployment
Social
Growth of in-home entertainment
Growth of education concerns
Geographic changes – new housing
Time shift – longer active hours
Social - aging and cultural diversity
Technology
Growth of internet access
Growth of mobile presence
Change to 3G
Legal
Deregulation of Postal market – greater supply of cheap couriers
Distribution of magazines/Newspapers by OFT – favours Independents
Environment
Concern over ethical trading and environmental impacts
© CMC 2005

11. Consider WHS’s positioning
Use either BCG or PLC
© CMC 2005

12. 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
© CMC 2005

13. Where do we Want to be?
© CMC 2005

14. Objectives Decide Objectives Deliver Outcomes
For U.K. and International
Deliver
Outcomes
© CMC 2005

15. Segmentation
Described and Profiled for each sector
© CMC 2005

16. Targeting
Specific and Justified for each sector
© CMC 2005

17. Positioning Clear and defensible Vision Values
Set out USP and Positioning for each sector.
Are there any commonalities or Single Brand options
Vision
Values
© CMC 2005

18. How do we get there?
© CMC 2005

19. Action
Decide
Objective
Deliver
Outcomes
© CMC 2005

20. Strategic Development
Product
Sector Selection
Core/ Physical/Augmented Proposition
Branding
Pricing
Distribution
Promotion
People
Process
© CMC 2005

21. Implementation and Control
Budgeting Areas
Metrics
Balanced Scorecard
McKinsey 7S
© CMC 2005

22. Comms Strategy for WHS
Audiences –Internal and External, domestic and international, Consumers and Corporate, private and public
Media
Messages
Timing/Budget
Stakeholders
Investors
Suppliers
Partners
Customers
Who else ?
© CMC 2005

23. Internationalisation
Where, when and how
GE/ Harrel and Keiffer
© CMC 2005

24. Implementation and Control
Budgeting Areas
Metrics BS
McKinsey 7S
© CMC 2005

25. 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)
Constraints – Overstretching
- Competitive landscape
- Attempted takeover by larger company
© CMC 2005

26. Vision For WHS to be the first destination for any
customer who is seeking a value
for money, ethical, environmentally
proactive retailer with a broad product
range and friendly, informative staff.
© CMC 2005

27. Mission statement
To become first choice for any customer who demands high quality standards and exceptional customer service from convenient locations on the High Street across the U.K. and a comparable service online.
© CMC 2005

28. Critical Questions
What is WHS’s USP when targeting the vast majority of customers in the U.K. and competing with many other retailers who are offering the same products, often in a more specialised way?
Why should customers shop at WHS?
© CMC 2005

29. Values
Committed to providing a wide range of products in convenient locations across the U.K.
Committed to developing staff to give superb customer service to all customers.
Committed to sourcing products ethically and maintaining a strong environmental approach in all its activities.
© CMC 2005

30. Corporate objectives
To develop the online market by targeting companies and individuals
To research the European market aiming to create a niche opportunity in those countries where retailing is not so well developed
© CMC 2005

31. Strategic management of marketing mix
Product
Core – everyday products that are always needed – stationery, paper, greetings cards, newspapers, magazines
Augmented – strong online presence needed across all product categories
Price
Favourable price – value for money because of bulk purchasing power. A sophisticated pricing strategy could be introduced using micro marketing techniques
© CMC 2005

32. Strategic management of marketing mix
Place
UK based primarily – but needs to drive more sales online. Also needs to target European markets, especially those where retail competition is less well developed
Promotion
B2B - emarketing campaigns to selected companies (use SIC lists and professional bodies) to supply bulk purchases to public bodies, large corporates etc.
B2C – use promotional spend wisely and undertake market research to identify optimum target markets
Web site – continually update the content and promote heavily.
© CMC 2005

33. Strategic management of marketing mix
People
Train and develop the existing staff. Selective recruitment of key sales/marketing/technical personnel. Recruit proven staff in overseas markets
Processes
Regular internal/external communication. Long term relationship building. B2C customer involvement. Relationship marketing. Customer Lifetime Value. Branding strategy.
© CMC 2005

34. Strategic management of marketing mix
Physical evidence
Corporate web site
WHS logo and brand
ROI analysis across trading sectors
© CMC 2005

35. Implementation and Control
McKinsey 7S
Structure
Single company or J.V.?
U.K. Head Office and overseas subsidiary?
Strategy
Focus differentiated aimed at consumer and Corporate markets in U.K. and overseas
© CMC 2005

36. Implementation and Control
Systems
Develop MKIS and control systems to regularly review and monitor effectiveness of all strategies
Develop benchmarking system to monitor against key market indicators
Staff
Continual development of key staff. Advanced customer service and sales training. CRM development. Key account relationship building with suppliers from the U.K and Far East
© CMC 2005

37. Implementation and Control
Skills
Ensure correct training and development programmes are established to keep WHS staff at the leading edge of technology, systems and processes
Shared values
Ensure company strategy shared by everyone in the organisation. Growth strategy and international expansion shared with all staff, suppliers, stakeholders. Compliance regulations (Health and Safety, ethical trading, environmental impacts) understood and accepted by all staff.
© CMC 2005

38. Implementation and Control
Style
Commitment top down from CEO and Board. Creative, dynamic, leading edge, probity, commitment, ethical trading stance.
Profit sharing scheme
© CMC 2005

39. Control – Balanced Scorecard
Internal
Employee awareness, staff turnover, assess staff performance against benchmarks (KPI’s), participation in continuous development (training schemes), develop CRM databases for collecting consumer feedback and insights into future needs, wants, industry trends, (market intelligence)
© CMC 2005

40. Control – Balanced Scorecard
Innovation and learning
Skills training – advanced B2C selling, customer ‘champions’, technical, online systems, training and development, critical thinking, project management
© CMC 2005

41. Control – Balanced Scorecard
Financial
Sales vs. targets in each trading category – Corporate, consumer – U.K., Europe Profitability metrics, CLV
Customer
Customer satisfaction surveys – customer feedback. Customer endorsements - web based
Brand recall/awareness of brand
© CMC 2005

42. Possible questions
1. What branding strategy should WHS adopt to maximise sales and profitability?
2. Prepare a communications plan which will increase sales and profitability for WHS across all
its target markets
3. What branding and positioning strategy should WHS adopt to improve its appeal to online
customers?
4. Devise a marketing plan to make WHS a leading player in the mid sized retail market in Europe.
© CMC 2005

43. Possible questions
5. Prepare a relationship marketing campaign which will effectively increase WHS customer loyalty and their lifetime value.
6. WHS is at the crossroads in its development and growth. Produce a strategic marketing plan which will ensure increased revenue from its High Street and online operations and negate the
marketing strategies of domestic and
European predators.
© CMC 2005

44. Possible questions
Prepare a corporate social responsibility charter for WHS in the light of changing
legislation regarding the ethical sourcing of products and environmental impacts.
© CMC 2005