Posted: August 6th, 2015
Marketing Managemnt Report writing
Each student will work on a single case study that has been allotted to them. The questions are given at the end of the case study. Dates for individual coursework submissions will be provided by the programme administrator
Marketing strategy for growth
Businesses must respond to change to remain competitive. Developing appropriate strategies which allow them to move forward is essential. Wilkinson is a prime example of a business that has responded to changing customer needs throughout its history. It is one of the UK’s long-established retailers of a wide range of food, home, office, garden and health and beauty products.
Growing the business
James Kemsey (JK) Wilkinson opened his first Wilkinson Store in Charnwood Street, Leicester in 1930. After the Second World War, the 1950s saw a rise in the use of labour-saving devices and DIY. Wilkinson responded by making this type of product the focus of its sales.
In the 1960s customers wanted more convenience shopping. Wilkinson started selling groceries and supermarket goods and created the Wilko brand. In the 1980s Wilkinson extended its range of low-cost products to include quality clothing, toys, toiletries and perfumes.
In 1995 it opened a central distribution centre in Worksop, serving stores in the north of England and in 2004, a new distribution centre opened in Wales. In 2005 Wilkinson launched its Internet shopping service, offering over 800,000 product lines for sale online. Wilkinson currently has over 300 stores, which carry an average of 25,000 product lines. 40% of these are Wilko ‘own-brand’ products. The company’s target is to see this element grow and to have over 500 stores by 2012.
Wilkinson’s growth places it in the top 30 retailers in the UK. Recently it has faced increasing challenges from competitors, such as the supermarket sector. Wilkinson needed to combat this and identify new areas for growth.
Over two years it conducted extensive market research. This has helped it create a marketing strategy designed to continue growing by targeting a new market segment – the student population. This case focuses on how Wilkinson created and implemented this strategy, using the findings of its market research to drive the strategy forward.
To grow, a business needs to give consumers what they want, at a price they are satisfied with, when they want it and make a profit for the company. Wilkinson commissioned market research which identified key potential for growth in the student sector. It had to develop a strategy for growth that not only covered the specific requirements of this target group, but also linked closely with the company’s overall aims and objectives.
The key elements that need to be in place for business planning are:
• aims – describe the overall goals of a business
• objectives – are steps which managers decide need to be taken in order to achieve the overall aims
• strategy – is a plan which outlines all the medium and long-term steps that need to be taken in order to achieve a given target
• tactics – are what the business does in the short-term – these respond to opportunities and threats identified when preparing the original strategy
Strategies may be to combat competition, to improve the position of the company in the market or to grow the business. The type of strategy required will depend upon several factors but the main influences include:
• number and power of competitors;
• company strengths;
• size of business;
• financial position;
• Government influences.
Marketing strategy aims to communicate to customers the added-value of products and services. This considers the right mix of design, function, image or service to improve customer awareness of the business’ products and ultimately to encourage them to buy.
An important tool for helping develop an appropriate marketing strategy is Ansoff’s Matrix. This model looks at the options for developing a marketing strategy and helps to assess the levels of risk involved with each option.
Marketing strategies may focus on the development of products or markets. Doing more of what a business already does carries least risk; developing a completely new product for a new audience carries the highest risk both in terms of time and costs.
Based on its research, Wilkinson committed to a market development strategy to sell its products to a new audience of students. This is a medium risk strategy as it requires the business to find and develop new customers. It also carries costs of the marketing campaigns to reach this new group.
The main focus of the strategy was to increase awareness of the brand among students and encourage them to shop regularly at Wilkinson stores.
Market research is vital for collecting data on which to base the strategy. Market research takes one of two main forms primary research and secondary research.
• Primary research involves collecting data first hand. This can take many forms, the main ones being interview, questionnaires, panels and observation.
• Secondary research involves collecting data which already exists. This includes using information from reports, publications, internet research and company files.
Both methods have advantages and disadvantages. The advantages of primary research are that it is recent, relevant and designed specifically for the company’s intended strategy. The main disadvantage is that it is more expensive than secondary research and can be biased if not planned well.
Secondary research is relatively cheap, can be undertaken quickly and so enables decision-making sooner. However, secondary research can go out of date and may not be entirely relevant to the business’ needs.
Wilkinson undertook primary market research using questionnaires from students across the UK and secondary research using government and university admissions data. The statistics revealed that there were three million potential student customers. They had a combined annual spend of around £9 billion per year.
This research confirmed that the choice of focusing on the student market as a means of growth was valid. Wilkinson undertook further research to identify how to reach students and persuade them to start shopping at Wilkinson stores. This information was used to formulate a focus strategy. This was aimed specifically at the needs of the student market segment.
Marketing to students
Wilkinson involved 60 universities in research, using questionnaires distributed to students initially in Years 2 and 3 of a range of universities and then to ‘freshers’ (new students) through the University and Colleges Admission Service. This ensured the widest range of students was included to eliminate bias. It also gave a wide range of responses.
From this initial group, students were asked a second set of questions. Participants were rewarded with Amazon vouchers to encourage a good take-up. The research focused on two areas:
1. student awareness of the Wilkinson brand;
2. reasons why students were currently not using the stores regularly.
The market research enabled Wilkinson to put together its marketing strategy. The aim was to ensure the student population began shopping at Wilkinson stores early in their student experience. This would help to maintain their customer loyalty to Wilkinson throughout their student years and also to develop them as future customers after university. Repeat business is the key to sustained growth.
Wilkinson wanted to create satisfied customers with their needs met by the Wilkinson range of products. A marketing campaign was launched which focused on a range of promotional tactics, specifically designed to appeal to university students:
• Wilkinson attending freshers’ fairs and giving free goody bags with sample products directly to students;
• direct mail flyers to homes and student halls, prior to students arriving;
• advertisements with fun theme, e.g. showing frying pans as tennis racquets;
• web banners;
• offering discounts of 15% with first purchase using the online store;
• gift vouchers;
• free wall planners.
The challenge was to get students into Wilkinson stores. The opportunity was to capture a new customer group at an early stage and provide essential items all year round. This would lead to a committed customer group and secure repeat business.
Wilkinson wanted to know what would inspire students to shop at Wilkinson more and what factors would help to attract non-customers. The research provided significant primary information to analyse the effects of the campaign.
Wilkinson used questionnaires collected from the first year undergraduates to gather qualitative data. In addition, Wilkinson obtained quantitative data from various other sources, including:
• redemption rates how many people used the discount vouchers when buying;
• sales analysis how much extra business did the stores handle;
• footfall in stores analysis how many extra people went into stores.
This information helped Wilkinson to develop its plans for future marketing campaigns.
It identified motivation factors for the student audience which would help to encourage future purchase. Key factors included products being cheaper than competitors and easy access to stores. The layout of the store was another major problem affecting repeat visits. 23% of students questioned gave ‘distance from university’ as a reason for not regularly visiting the store.
These findings have been taken on board by Wilkinson in its future planning of store locations and layouts.
Researching students’ opinions after the campaign showed that:
• Awareness of Wilkinson brand had significantly risen from 77% to 95% of those interviewed. This brought it in line with Morrison supermarkets, a key competitor.
• 17% of students who received a goody bag at freshers’ fairs used the 15% discount voucher. A further 58% intended to use the voucher. The campaign had either got students to enter the Wilkinson stores or increase their intention to visit the store.
• Of particular importance to Wilkinson was that the campaign had made the company more appealing to 67% of students interviewed. This fulfilled one of the main objectives of the campaign and was reinforced by figures from existing students. Prior to the campaign 13% shopped at Wilkinson at least once a month. After the campaign this had risen to 33%.
Interviews with fresher students after the campaign shows which marketing tactics Wilkinson used with the students had the greatest impact on their awareness.
Wilkinson marketing strategy began with its corporate aim to grow and increase stores across the UK. It was facing increased competition from supermarkets and needed to identify an area to focus on. To pursue a growth strategy, Wilkinson used market research to identify new target customers. This enabled it to prepare marketing strategies to fit the audience. Primary and secondary research was used to find out customer views regarding its brand. Data indicated the student market segment was a significant area to focus on to achieve market development.
A marketing campaign using data from a follow-up survey was put in place. The campaign showed significant increase in students’ levels of awareness about Wilkinson and its products. It encouraged them either to shop more or to try Wilkinson for the first time. The campaign helped to achieve many of the business’ aims, creating increased brand awareness and repeat visits. It also helped to inform the company’s future strategies for growth.
Market research gathered will help to formulate future plans for new stores in line with a commitment to providing communities with affordable products.
1. What marketing approaches might have been employed, apart from marketing research, for Wilkinson’s to use when examining its future growth strategy?
2. How might the company have applied the TOWS matrix when developing new marketing strategies?
3. Critically evaluate Wilkinson’s decision to base its future plans for new stores on the basis of its student survey.
4. Suggest and justify ways in which Wilkinson can ensure that it retains or improves its position in a fiercely competitive market place.
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