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The main competitors are other pick-packers operating locally which people hire for moving their stuff.

Even some of the courier companies provide this facilities so they are the main obstacle to the business.

A global value chain analysis of the ‘regional strategy’perspective.

How to create products and services customers want.

Developing superior value propositions: a strategic marketing imperative.

Segmenting Targeting and Positioning in Global Markets. In Global Marketing Strategy.

Background

This report will discuss the marketing promotion plan for a home delivery service at a local town.  The report is based on marketing theories and digital communication concepts for increase the chances of sustainability for a hypothetical organization. “Drag & Drop” is the hypothetical organization taken for the project. The report will describe the background of the organization, which includes vision and mission. It will also consist of situational analysis, which comprises of macro environment analysis, competitor analysis, microenvironment analysis and internal analysis of the organization. The report will develop the marketing strategy for the organization that will include concepts such as segmentation, targeting, positioning, BCG matrix and marketing mix. The report will conclude by providing the marketing budget of the organization including generation of forecasted sales figures for the organization.

Drag & Drop is an organization, which can be considered as a part of supply chain management, and they act as intermediaries between suppliers and consumers. The organization uses simple steps to provide fast service to their consumers. The organization receives orders for delivery of products, prints the orders, picks, and packs and ships the products for delivery. They are an integral part of logistic for large-scale companies and work in layers between the consumer and the seller. Moreover, the organization deliver’s goods locally to the consumers and have tied up with few large-scale organizations.

Mission Statement

“We have aimed to fulfill the goals and objectives of our share holders through profit maximization.”

Vision Statement  

  • To provide excellent service to our consumers at low cost
  • To take safety as a priority while delivering the products
  • To offer best service to our clients and consumers
  • To provide customers with excellent satisfaction level by using Real Time Transmission protocol

The main competitors for the organization are local companies and courier services offering similar services to the consumers in the market. There are other companies providing heavy discounts to their consumers. Thus, the Drag & Drop is facing tough competition from the market due to these competitors that have been able to acquire significant share in the local market.

Segmentation

Targeting

Positioning

·  Customers of all age

· Social classes having high disposable income

· Bulk order purchases

· Frequency of purchases

· Offices

· Institutions

· Residential buildings

· Commercial buildings

· Positioning by price and service quality

Table 1: Current marketing strategy

(Source: As created by author)

The segmentation, targeting and positioning shows that the Drag & Drop has chosen a particular set of consumers as their client. They are shipping products for large organization by being a part of their logistics unit. On the other hand, they are delivering products to the local market, which consist of consumers with high disposable income and order in bulk. As the competitiveness in the market has increased significantly, Drag & Drop will have to develop a new marketing strategy for maintaining their long-term sustainability and improving their competitive advantage (Schlegelmilch, 2016). Moreover, as the organization is a startup, availability of funds in the market is limited so innovation has to be incorporated within the business model for improving operational efficiency. Drag and Drop has been using holistic marketing approach, which considers all business processes as a single entity for enhancing the overall consumer experience. The organizational processes will have to be integrated and building an effective brand image is essential (Osterwalder et al., 2014). Thus, the organization will have to make changes to their marketing strategy to develop synergy among all the organizational processes. The organization has focused on conventional marketing strategies more so digital marketing strategies will have to be developed for increasing market penetrating and reducing marketing cost.

Current Marketing Strategy

The different methods used for analyzing the information about the consumers and target market are PESTLE, Porter’s Five forces, SWOT,  Porter’s value chain analysis and competitor analysis.  PESTLE analysis is used to analyze the macro environment of the organization in which they operate. Macro environment factors focuses on the external factors upon which the consumer has no control. The political, economic, social, technological, ecological and legal factors are same for all the companies operating under the same environment. These factors are crucial factors for any organization, as they will have to adapt to changes in the corresponding environment they are working in (Hollensen, 2015). Porter’s Five forces is used to analyze the microenvironment of any organization and includes factors such as bargaining power of the buyer, bargaining power of the supplier, threat of substitution, entry barriers and competitive rivalry.  The factors are within the control of the organization and they can change their strategy to use these factors for their own advantage. Internal analysis will consist of SWOT, which identify the strengths, weaknesses, opportunities and threats of the organization (Armstrong et al., 2015).  The macro and microenvironment will facilitate in identifying the above-mentioned factors for Drag & Drop.  Competitor analysis will consist of above-mentioned models, which will consist of competitor identification, identification of strengths and weaknesses of competitors. Porter’s value chain analysis will identify the current value of the products and processes. It simply means that the model will identify the processes that are adding value to the overall organization.

Drag & Drop‘s main value proposition is providing customer with better experience.  The new value proposition will try to make the brand more appealing by providing the consumers with their changing needs and wants.  The organization will aim to provide fast service to the consumers and deliver the products according to the client needs. Yield management is an essential strategy that is important in this respect. The management of inventory is essential in this context, which has to be done by using business intelligence and data mining (Payne & Frow, 2014). Data analysis is essential for identifying the preferences of consumers and the most popular products in the market. Thus, maintaining inventory depending upon the products in demand will reduce the shelf size of the organization.  Moreover, the organization will be incorporating technology in to their business model and incorporate digital marketing into their promotional strategy. The use of digital media will balance out the cost incurred due to the use of research and development. The organization will launch an application, which will provide explicit details about their products and their time of delivery.

Research Method

The current value analysis will consist of Porter’s value chain model, which determines the different activities that are adding value to the organization. This will consist of primary activities and support activities. The primary activities will consist of inbound logistics, outbound logistics, operations, service, marketing and sales. The support activities will include procurement, human resource management, infrastructure and technology.  These activities are essential for adding value to the products offered by the organization. The second part will consist of competitor analysis, which will compare the value proposition of Drag & Drop with that of its competitors in the market.

Figure 1: Value Chain Analysis

(Source: Smartsheet, 2018)

The organization is trying to create more value from the inputs within the organization by developing output that is of higher value than the cost of the products .

Primary activities

The primary activities of the organization are divided into five elements and they are as follows:

  • Inbound logistics
  • Outbound logistics
  • Operations
  • Marketing and sales
  • Service

The organization is planning to improve their relationship with the suppliers by providing them with offers at prices lower than other rival companies (Gereffi & Fernandez-Stark, 2016). Drag & Drop will reduce their operational cost and other costs to improve their profit margin. This will enable them to offer better prices to the suppliers. Moreover, the organization will install SAP based ERM (enterprise resource management systems) so that all the internal processes can be monitored and improved continuously.

Outbound logistics

The organization will deliver the products at minimum prices and provide them with excellent support services by letting them track their products at all times (Mudambi & Puck, 2016). The new application that is being launched by the organization will enable them to provide the consumers with better experience.

Operations

The packing of the products will be done with eco friendly materials, which is easy to dispose. The products will be packed with utmost care to protect it any sort of mishaps or accidents.

Drag & Drop will be using digital marketing as their marketing strategy. They have been using holistic marketing approach, which aim to enhance the consumer experience as much as possible (Gereffi & Fernandez-Stark, 2016). This will consist of promoting their services at social networking sites such as Facebook and Instagram, micro blogging sites such as Twitter and video sharing websites such as YouTube. The firm will also use SEO (search engine optimization) so that whenever any consumer is looking any relevant information in this regard the company websites pops in the first page of Google search.

New Value Proposition

Service

  The firm is aiming to provide customized service to the consumers by letting them choose the data of delivery, letting them track the offer and enabling them to be in contact with the delivery captain (the person in charge of the delivery). Moreover, Drag & Drop will not be charging any extra for fast delivery and the consumers does not have to pay extra for the earlier deliveries.  The products and their destinations will be crosschecked several times to prevent errors.

Support activities

As the name suggests the support activities will support the primary activities and each of them may a crucial role in fulfilling the primary activities.

  • Procurement
  • Technological development
  • Infrastructure
  • Human resource management

The organization has expanded their warehouses by renting warehouses at every possible location. The number of vehicles and the capacity of luggage they can carry has also increased which will enable them to deliver more products at even faster rate. This will support the outbound logistics of the organization (Mudambi & Puck, 2016).

Infrastructure

The infrastructure of the organization will be improved even further by acquiring capital for foreign investors and local investor by showing them the quality value of the organization. The organization is expected to increase their profit margin by reducing their cost structure and increasing their delivery volumes.

Technological development is essential for improving the processes within the organizational business model. The technological factor will help in improving the business model of the firm by improving the operational efficiency of the processes (Gereffi & Fernandez-Stark, 2016). The organization will spent a large sum of capital on technological development, which includes the incorporation of ERP based systems into the organization to ease the workload and smoother processing and dispatch of orders.

Workforce of any organization is crucial as they assist in maintaining the long-term sustainability and achieving competitive advantage in the operating market. Therefore, the organization conducts regular performance measurement sessions so that the faults o he employees can be rectified. Moreover, they are provided with training sessions at regular intervals, which will enable to develop their personal and professional skills.

Elements

Drag & Drop

Rival organizations

Strength

Weakness

Threat

Opportunity

Political, legal and Economic

The political, legal and economic environment is good for the organization as the trade barriers are low (En.portal.santandertrade.com, 2018). The political environment is stable. The economy is growing and even though there are strict, environmental laws the operating conditions are favorable.

The operating environment is similar for the other rival companies in the market

ü 

Technology and Social

The disposable incomes of the people living in Australia are high and this provides them with the opportunity of working with classes that are willing to pay the price for quality service (En.portal.santandertrade.com, 2018). Technological development is also rapid which has increased the use of online media much more than before.

The operating environment is similar for the rival organizations.

ü 

Environmental

The environmental laws in the country are strict and the organization will have to work within the environmental laws set by the government

This is same for the rival organizations.

ü 

ü 

Bargaining power of the buyers

The bargaining power of the buyers in the market are moderate as there are large number of companies providing similar services. However, the organization will be able to gain competitive advantage due to their technological advantage and operational efficiency they will be able to retain existing consumer and acquire new consumers.

The rival companies are using similar strategies but some of the companies are large scale having better infrastructure and consumer base with more recognized brand. Thus, the buyer powers for the local companies are moderate but for the large scale, companies are low.

ü 

ü 

Bargaining power of the suppliers

The bargaining power of the suppliers are low for the firm as there are large number of suppliers available in the market

This is similar for the other rival companies in the market.

ü 

Threat of substitution

The threat of substitution is high as there are large numbers of companies providing similar facilities such as courier services. This will affect the local companies more than the large scale organizations in the market

The other local companies will be facing similar affects. However, the larger companies will not be effected due to the brand they have been able to generate.

ü 

Competitive rivalry

Most of the companies in the market are using similar strategy. However, the new value proposition of the organization will change the scenario by providing them with competitive advantage in the local market.

ü 

Table 1: Competitor Analysis

(Source: Chen & Miller, 2015)

At this present situation, the firm has been able to generate good reputation in the market and consumers have a good opinion about the firm. However, there is no extra feature, which could provide the organization with added value. They have similar operational strategy as the other local companies and the large-scale companies have a large competitive advantage. The service rating of the organization is good but they will have to improve their service quality if they want to acquire a large share in the local market. Moreover, there are large number of consumers still unaware of the organizations services which can only be improved by improving their market penetration.

Current Value Analysis

The organization has adapted to holistic marketing orientation so use of digital marketing is one of the major factor of gaining competitive advantage and maintaining their long-term sustainability (Oladepo & Abimbola, 2015). The promotional mix will consist of both digital and traditional marketing media, as there are certain target consumers that are still not adapted to the technological advancement.

Digital marketing strategy

The digital media marketing strategy will consist of social media marketing and online marketing. Social media marketing will consist of social media websites such as Facebook, Twitter and YouTube. The online marketing tools will consist of email marketing, online display advertisements and promotional campaigns on the online medium. Social media marketing will consist of interacting with consumers at social networking platforms to identify their changing needs and wants (Ryan, 2016). They will also promote their services they offer on this websites to make consumers aware of the different types of services they offer to the consumers. The  firm will be able to directly communicate with the customers to identify the type of customized service they prefer. This is a great approach of improving their holistic marketing approach as the consumer behaviors are best identified on the social media websites. Facebook and Twitter are the most popular website consisting of large number of users and this will provide great exposure to the organization. They will be able to compete with the large-scale organizations in the market by identifying the issues the consumers are facing and mitigating the m with effective strategies. YouTube is a social sharing website, which has large number of users, and providing advertisements on this site will guarantee increase in consumer base.

The other forms of online media marketing include use of email marketing and online display advertisements.  The penetration of this marketing strategy is more than the traditional form of media and it is cost effective. The organization will have to focus fully on their digital marketing aspect as the use of online media is more for the majority of the populations.

Traditional marketing strategy

The traditional marketing media will consist of print media, visual media and billboards. Print media consist of newspapers and magazines where specific users will be targeted that are daily readers.  As one of the target consumers, in the market are offices print media is an essential strategy for the organization. Similarly, business magazines are for those companies that are looking for logistic companies for their effective supply chain management. Television is still a popular media for users that prefer it to online platforms (Baker, 2014). Billboards are placed at prime locations such as business centers and residential complexes so that they can grab the attention of majority of their target consumers. However, the cost of using traditional media is much more than digital marketing strategy. However, if the digital communication strategy is a success then the organization can slowly reduce their expenditure on tradition marketing media.

Promotion Tools

Amount

(in $)

Digital Media Marketing Tools

Facebook

$5,000

Twitter

$4,000

Youtube

$7,500

Total Social Media Marketing expenses

$16,500

Other Online Marketing Media

E-mail Marketing

$25,000

Online Display advertisements

$11,000

Other Online promotional Campaigns

$28,000

Total Budget for Online Media

$64,000

 Traditional Marketing Media

 Newspapers

$15,000

 Magazines

$25,000

Total Print Media

$40,000

 TV Channels

$70,000

 Billboards

$35,000

Total

$105,000

Total Required Budget for Promotion

$225,500

Table 2: Promotional budget

(Source : As created by Author)

Conclusion 

Thus, it can be concluded from the report that Drag & Drop is a promising organization capable of expanding their business. However, the new proposition developed by the organization may not work so they will have to develop back up strategies. Moreover, as the organization is relatively new, they definitely need a backup plan in case of failure. Therefore, use of technology and digital marketing should provide them with better market penetration and operational efficiency. This will enable to position their brand in effective way and improve the awareness about their brand to the consumers. The conclusion drawn from the report is that digital communication and adding value to the organization is essential for gaining competitive advantage.

References 

Armstrong, G., Kotler, P., Harker, M., & Brennan, R. (2015). Marketing: an introduction. Pearson Education.

Baker, M. J. (2014). Marketing strategy and management. Palgrave Macmillan.

Chen, M. J., & Miller, D. (2015). Reconceptualizing competitive dynamics: A multidimensional framework. Strategic Management Journal, 36(5), 758-775.

En.portal.santandertrade.com. (2018). Economic and political outline Australia - Santandertrade.com. En.portal.santandertrade.com. Retrieved 22 January 2018, from https://en.portal.santandertrade.com/analyse-markets/australia/economic-political-outline

Gereffi, G., & Fernandez-Stark, K. (2016). Global value chain analysis: a primer.

Hollensen, S. (2015). Marketing management: A relationship approach. Pearson Education.

Mudambi, R., & Puck, J. (2016). A global value chain analysis of the ‘regional strategy’perspective. Journal of Management Studies, 53(6), 1076-1093.

Oladepo, O. I., & Abimbola, O. S. (2015). The influence of brand image and promotional mix on consumer buying decision-a study of beverage consumers in Lagos State, Nigeria. British Journal of Marketing Studies, 3(4), 97-109.

Osterwalder, A., Pigneur, Y., Bernarda, G., & Smith, A. (2014). Value proposition design: How to create products and services customers want. John Wiley & Sons.

Payne, A., & Frow, P. (2014). Developing superior value propositions: a strategic marketing imperative. Journal of Service Management, 25(2), 213-227.

Ryan, D. (2016). Understanding digital marketing: marketing strategies for engaging the digital generation. Kogan Page Publishers.

Schlegelmilch, B. B. (2016). Segmenting Targeting and Positioning in Global Markets. In Global Marketing Strategy(pp. 63-82). Springer International Publishing.

Smartsheet. (2018). Everything You Need to Know About Value Chain Analysis | Smartsheet. Smartsheet. Retrieved 22 January 2018, from https://www.smartsheet.com/everything-you-need-to-know-about-value-chain-analysis

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