Outline marketing plan for Asuk Creative Limited a B2B provider of Internet services

This subsection was kindly supplied by Craig Martin and Spencer Tarring, ASUK Creative and Brunel University respectively.

Background

ASUK Creative Limited (www.asuk.com) was formed in 1998 to provide a complete set of services, from consultancy to hosting, in the business-to-business Internet industry. After introducing a small range of low-cost dedicated servers in 1999, this small Internet design company began to make an impact on the market. Its servers were the cheapest in the UK, and potential clients flocked to find the catch. At first, progress was slow, but Web-hosting guides and directories quickly picked up on the low prices, and market penetration began. Although ASUK Creative manages to compete successfully on price, it struggles to compete with the big players and the more established brand names such as Fasthosts (www.fasthosts.co.uk) and Dellhost (www.dellhost.co.uk) in the field of support and reliability. Growth over the first two years was steady, but at the end of 2001, ASUK faced a declining growth rate. ASUK's corporate Web site focuses on other parts of the business, such as Web integration consultancy and database programming, that are in decline. This is stunting the growth of the dedicated server product, while the market is growing rapidly. ASUK Creative Limited needs to take advantage of this growth by improving its marketing output.

Audit

Initially, an analysis of where ASUK stands can be achieved through a SWOT and PEST analysis as shown below:

SWOT

Strengths

• competitive pricing on products;
• no minimum contracts, whereas other competitors demand 12 months minimum;
• quality and performance;
• flexibility in product variations;
  
• friendly service;
• offers twenty-four hours, seven-day support;
• existing loyal customer base;
• recognized brand.
• Weaknesses

• small company in comparison to competitors;

• low capital;
• lack of product resilience;
• poor support response times;
• budget network operations centre;

• only the English language supported by the sales and support teams;

• online documentation thin and outdated;
• under-staffed.
• Opportunities
• * fast-growing international markets;

• poor competitor services, bad reputations;
• large growth in dedicated server market;

• partnership opportunities with automated administration developers, opening the market to less experienced users.

Threats

• competition increasingly dropping prices;
• market saturation: many companies are trying to take advantage of the increase in market worth;
• technological advances cause hardware to devalue quickly;
• failure of suppliers to deliver mission-critical services;
• decrease in bandwidth costs means more companies can afford in-house operations, eliminating the need for hosting companies.

PEST

Political

• law in regard to copyright: since dedicated servers are not controlled by ASUK, it must ensure all users understand the law;government actively encouraging use of Internet.

Economic

• worldwide recession looms;
• introduction of the euro;

• fraud: the increase of credit card fraud has had two effects. First, ASUK receive more fraudulent orders; and second, real customers are less willing to give out card details.

• Social and cultural
• Language barriers: ASUK supports only English.

Technological

• bandwidth usage; that is, easier access by users means that bandwidth levels are increasing;
• speed of hardware redundancy (depreciation).

After carefully assessing ASUK's position and its strengths and weaknesses within its existing market, the owners came to the conclusion that it would be in ASUK's best interest to differentiate the dedicated server market from the other services it provides. This would entail establishing a separate entity, which in effect would require the building of a new brand. After they had conducted a survey of existing clients, it became apparent that the following features were needed:

• the ability to manage services online;
• the ability to upgrade services online;
• more reliable technical and telephone support;
• easier server management software for inexperienced users.

In order to build this brand, ASUK must eliminate these weaknesses identified by the survey, and add additional value to the service under the new brand. To encourage consumption and recognition of the new brand, the company needs to offer some value-added incentives. After assessing the existing market, ASUK identified three fundamentals employed by the industry that could also help obtain a competitive advantage;

1. thirty-day 100 per cent money back guarantee (risk reversal program);
2. UK price match;
3. no minimum contract.

With the newly developed brand, ASUK will have the mechanism to penetrate fresh high-growth market areas such as Asia. For example, in India, dedicated server sales will hit $43.1 million by 2004; together with an annual growth rate of 146 per cent for the Application Service Provider (ASP) market, this gives opportunity and potential for ASUK to diversify into new market sectors.