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

Objectives

The objectives are each built around the SMART criteria (specific, measurable, actionable, realistic and timed).

• Increase market share. ASUK Creative Limited currently holds 2 per cent (200 servers) of the UK dedicated server market (approx immediately 10,000 dedicated servers). ASUK should plan to increase this steadily to 16.7 per cent after four years. Since the market share has risen from 0 to 2 per cent in one year without increased marketing, this is a realistic target.
• Streamline ordering processes. The new web site called DediPower.com should incorporate online facilities for order processing, upgrades and support. The development of these features can continue over time but a fully featured site should be ready for launch.
• Increase brand awareness/brand building. By launching a new site, ASUK can take advantage of a fresh start but still use all the advantages of an established company. A brand image of power and quality, yet competitive prices should be established through intensive marketing and excellent CRM. The company plans to have a powerful brand name within six months of launching the site.
• 
• Create self-contained entity for possible initial public offering (IPO) or trade sale.
• ASUK can aim for an IPO within three years, being sold either to a competitor or to a diversifying larger company. The sell value is currently £300,000. A target should be set to have this at £1 5 million within three years.
• Expansion into international markets. The launch of DediPower means that foreign clients will become more accessible. The improved site will have support for international sales.
• Improve CRM and customer support. By improving these fundamentals, ASUK aims to sell additional products to its current clients. Currently, 25 per cent of clients have bought additional services, and the aim is to increase this to 55 per cent within a year.

Strategies by target markets

• Current customers. By rebranding, enforce customer loyalty and improve service level. Also provide an easier product upgrade path. Better support and customer self-service should also be provided.

• Domestic. Build brand as a high-quality service with lower-value pricing. Offer three core incentives to show confidence in the product: thirty-day money back guarantee, UK price matching initiative, no minimumcontract. ASUK will be the first company in the UK industry to offer all these incentives together in a genuine fashion.

• International. Key strengths to marketing include sustainability and experience. The product will be positioned in the market as a high-end service, offering good performance for companies that have interests across Europe.

The marketing mix

• Price. Although prices should be offered on a price match guarantee within the UK, they should be based around a product-line pricing strategy; that is, each customer can start with a basic product and build layers on top to create their custom product.
• Product. The product is to be sold individually, but a discount should be offered for multiple sales and/or prepayment packages. Customer loyalty could be rewarded with additional free services.
• Promotion. ASUK should base the promotion around an online marketing strategy, using online targeted banners and search engines, complemented by increased exposure on the major Web hosting guides. Publication to online and offline trade magazines of press releases and adverts will reinforce the respectability of the brand.

Evaluation and control

• Monitor market share and company growth rate. Frequently obtain market share statistics. An estimate can be made by obtaining the total number of dedicated in the market segment and calculating the percentage of them that ASUK holds.
• Occasional customer surveys to ensure support satisfaction is increasing. ASUK already has the facility to conduct customer surveys online. These should be conducted half-yearly to ensure that satisfaction objectives are met.

• Demographic analysis of buyers and potential buyers. To determine whether ASUK is penetrating all potential markets sufficiently, customer account details should be collated and analysed to produce maps of customer distribution.

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.

Emerging e-Marketplaces

In its traditional sense, a 'marketplace' allows information to be disseminated and activity between buyers and suppliers to be co-ordinated. Before the slump in 2000, many firms took a huge 'leap of faith', investing large sums of money into new forms of technology and the associated business practices, without always fully realizing the implications of doing so. In the B2B electronic marketplace arena in particular, new exchanges appeared overnight, and from a peak of some 8,000 the inevitable shake-out reduced the number to about 2,000 in early 2002 (according to www.ebusiness.uk.corn, February 2002). The e-Marketplace industry is therefore only just beginning to evolve, and a wealth of confusion currently exists as to the optimal strategy for companies to adopt. Many commentators see it as the next wave of the IT/information revolution.

The division of markets by spatial competition is now evaporating because of the scalability and virtual geographical nature of the Internet. The emergence of B2B e-Marketplaces is leading to more open collaboration among buyers and suppliers, and the rise in information-based products and services on the Internet has led to the circumvention of traditional intermediary business and information brokers. As evidenced by the travel industry, traditional market structures are being transformed and are giving rise to new forms of intermediaries and business models. With the introduction of new technologies that take advantage of this e-Marketplace phenomenon, markets can perform transactions on a glob scale, and thus grow exponentially.

Some of the most notable early impacts on market structure have been i the financial services industry, where online brokerage services such as E*Trad have stolen market share away from many of the established brokerage firm such as Goldman Sachs. Each user of E*Trade benefits from a larger network, since online booking enables a larger number of transactions to be made. It facilitates the exchange of 'investor tips' and the usage of discussion forums on the membership Web pages. As a result, more and more traders are willing to in the E*Trade 'community' and thus use the E*Trade platform for trading. An optimum e-Marketplace entry strategy must take into consideration a umber of factors:

• the estimated lifespan of the market;
• the degree of change required to existing business processes;
• the costs of imitating the pioneer;
• the extent of financial resources available;
• the likely cost of customer acquisition.

At present, despite the ongoing shake-out, many marketplaces are striving each critical mass. The initial focus has been on transactions, with only a -term view taken towards collaboration. Some, particularly independent marketplaces such as Chemdex (chemicals) and Opitmark (equities), have already been forced to close down. Transactions are limited and costly at this stage, and there is little incentive for many industry participants to take advantage of what is currently available. Moreover, creating an online catalogue remains complex process, and the willingness of many companies to use marketplaces a medium of exchange has been less than enthusiastic. Some prefer to keep prices confidential and negotiate closely with their customers. In addition, most of the FTSE 100 and Fortune 500 companies are locked in to existing electronic technologies such as EDI, which represents an expensive point-to-point trading network.

Despite current low usage levels, the potential for e-Marketplaces is evidenced by many recent studies. For example in a research report conducted by Forrester Research (2001), more than 75 per cent of companies envisaged trading online by 2004, and at least 50 per cent expect to participate in four or more e- Marketplaces by 2004. According to Durlacher (2000), B2B e-Commerce is estimated to account for almost 20 per cent of GDP in the UK and approximately 12 per cent of GDP in all of Europe by 2004. Forrester Research (2001) notes that while industries are moving at different speeds in order to take advantage of B2B initiatives, the automobile industry is leading the way with a forecast spend of almost 200,000 million euros by 2005. For example, Covisint, owned by Ford Motor Co., DaimlerChrysler AG, General Motors Corp., Renault SA, Nissan Motor Co., Commerce One Inc. and Oracle, plans to reduce supply chain costs and bring efficiencies to its owners' business operations. As a result, many B2B e-Marketplaces are incorporating a variety of value-added services in their offering in order to attract participants and differentiate themselves from competitors, and thus create a sustainable revenue model that is also profitable. These services vary across different industries and products, but some of the most common features include:

• auctioning;
• collaborative planning, forecasting and replenishment (CPFR);
• improved knowledge management, reporting and visibility;
• e-Procurement;
• supply-chain management;
• e-Logistics services.

The Catalog Market - Catalogs That Sell Catalogs

Along with other cataloging techniques, we'll cover the five "Ps" of cataloging:

1. Positioning
2. Presentation
3. Production
4. Personalization
5. Persistence

Understanding these will give you insight into how the industry operates and the unique advantages that catalogers have built for their companies.

A catalog, in retail terms, is a "shelf' that relies on direct marketing techniques. It can encompass education as well as entertainment. This is not just due to the inherent nature of the catalog—the fact that it's a portable picture book. It's also due to the diligence the industry has given to effective presentation including compelling artwork and persuasive copy. Even several business-to-business catalogs have created interesting dynamics in their books and have added significant value over the years. Trade catalogs may include sidebars explaining specific techniques or procedures and are often perceived as reference materials as well as sales vehicles.

Because the catalog industry is so dependent on repeat sales, it has been critical to develop a rapport with customers by mailing frequently and using effective promotional techniques. Due to these techniques, catalogs have gained perceived value that other shelves have not. Customers often keep catalogs even when they are out of date.

The catalog industry is segmented into business-to-business (B-to-B) and home- or consumer- focused mailers. The two often differ in the size, complexity, and frequency of publication. The business-to-business market varies depending on the industry it supports. Frequently, the catalogs are large reference books designed to facilitate both routine purchases as well as those, infrequent, hard-to-find product searches. These catalogs are positioned primarily for the businesses they serve, and within an industry, it is sometimes difficult to tell them apart. They are often supplemented with more frequent catalogs featuring specials and promotions.

Home- and consumer-based catalog firms, however, have learned to segment along vertical markets and have flooded the market with specialty catalogs. Many catalog firms have decided to focus on more narrowly targeted catalogs for two reasons. First, catalogers have become more proficient at targeting consumers effectively. Secondly, catalog firms found they could cut costs and deliver more timely and relevant materials by creating smaller but more frequently mailed catalogs.

Specialty catalogs often feature only one category. There are catalogs specifically for popcorn, chocolate, shoes, hams, rings, and T-shirts. Sports and hobby catalogs specialize in virtually every activity imaginable. These catalogs bring new meaning to the term "armchair shopping."

Whether a business-to-business or a consumer catalog, positioning serves the purpose of differentiating in a crowded market. Historically, catalogs have evolved in the following ways:

1. First, some companies have spawned vertical-market catalogs from their larger, more inclusive catalogs. Based on historical sales, they have identified opportunities to specialize and have positioned smaller catalogs to fulfill specific needs. They have, on occasion, separated low-volume specialty goods into catalogs that are updated less frequently and cut costs by removing these from the more expensive, larger book. JC Penney focused exclusively on its large catalog until the company separated several specialty categories into smaller flyers. Bridal, special-size apparel, and home & leisure are a few of the vertical specialty markets they serve.
2. Next, retailers have given birth to catalog businesses, and, just as frequently these days, catalog firms have developed corresponding retail outlets—sometimes clearance houses for overstocks. The stores have pre-defined the business and are often the result of emergence on the web. Office product superstores created their own specialty catalogs for frequently purchased items, and sales are supplemented by larger contract stationer catalogs for hard-to-find items. Spiegel owned a thriving catalog business before opening retail outlets to sell discounted overstocks. True hybrids—stores with catalogs designed from the outset to compete on both fronts, are somewhat rarer because most establish one or the other first.
3. Last, some vertical catalog businesses have been created to function in the specialty realm with only a website as an adjunct. Companies with special expertise in a market or those that have embarked on significant research to understand market opportunities are most likely to enter these niches.

Each catalog needs its own identity to create competitive distinction. This position must be firmly ingrained in consumers' minds and deliver a package of products, services, and promotions that meet their needs. Vertical catalogs—catalogs designed for narrow markets—may satisfy product needs, but they must also appeal to the specific customer segment for which they are intended. Because the catalogs are so specialized, the cataloger must know quite a bit about that particular product segment and the corresponding lifestyle of the consumer.

The personality of the catalog is apparent through the use of copy, images, the quality of the paper, and the quality of the products. Graphics and visuals are critical to convey messages. Customers usually browse catalogs rather than read them. Pictures and captions may provide the only opportunity for a cataloger to communicate with his audience.

Other, subtle characteristics, such as the selection of models in the apparel industry, give signals to your customers. It's difficult to gain credibility with older consumers, for instance, if 20-year-old models don clothing meant for the senior consumer. Relevance is key to positioning—especially in the catalog industry where one-to-one marketing is the name of the game.

Today's catalogs are so varied that the industry has spawned a new phenomenon—catalogs selling catalogs. These flyers list a variety of unique specialty catalogs, and the reader can order any of them for a small fee. They fulfill two needs—they create awareness for specialty catalogs that otherwise would be unable to gain distribution, and the responses feed into a database qualifying consumers based on interest while updating current demographic information. In addition to receiving revenue from the sale of catalogs, these firms also receive advertising revenue from the feature placements and are able to sell their databases to other catalogers.