Marketing Plan

Executive summary

Over the course of the last year, there has been a reduction in sales of consumer electronics. There was a decline of about 1% compared to the previous year occasioned by a sluggish economic growth in the UK of approximately 0.7%. This did not translate into any increase in the disposable incomes of most UK citizens meaning that very few bought additional devices. The fact that credit supply and interest rates went unchanged also contributed in the decision by consumers to refrain from purchases.

There has been a rapid expansion in the features that are available on the devices currently present in the market. Almost all sectors have new additions. For example, convertible laptops that could double up as tablets when the screen is removed owing to integration of a touchscreen into the laptop function have been introduced. There was also a significant growth in TV functions with the introduction of internet smart TVs which received a considerable reception in the UK (Czinkota, 2012). Emphasis has not only been in the improvement of device functions and designs but also in their compatibility with others across the board. The area that perhaps recorded the most significant growth was the smartphone market with companies like HTC and Samsung introducing quad-core processors into the market.

It is worth noting that of all the improvements made in the consumer electronics sector, the largest growth was recorded in the portable computer and tablet segments. There was a remarkable growth of 87% in retail volume in 2012 in this sector. This increase has been related to the growth in the social media and the increased need to stay connected wherever a person is. Therefore, the popular trend in the UK is mobile connectivity which continues to expand rapidly almost unabated by the current economic realities. It is recorded that a significant percentage of the UK citizenry spend considerable time travelling between home and their places of work. Therefore, private time accorded by trams, trains, and tubes gives these consumers the opportunity to catch up on TV, films, music and books which are provided by portable devices. Tablets are now fitted with 3G internet which allows people to stay connected wherever they are; on social media and video chats.

The convenience of products to consumers, including the use of the internet, will be a major determinant on the sales volumes that will be realized. There was a total of 16% sales revenues realized as a direct result of internet retailing in 2012. Therefore, collaboration between this mode and sophisticated delivery systems that will guarantee prompt delivery of products to customers could be a major determinant of the sales volumes realized in the future.

Current marketing situation

The consumer electronics market is performing very poorly. There are many indicators including: the collapse of Comet and the decision by Phillips to completely withdraw from the market. Other manufactures like Japanese’s Panasonic are trying to cut their considerable losses due to the turbulence in the market at the moment. Other statistics indicates that the flatscreen TV market has reached its saturation point in the UK with each household having an average of two. This, coupled with consumer confidence being at an all time low, has increased the replacement cycle of the TVs to nine years currently, up from six in 2008 (Clough, 2013). The bad performance of the economy has ensured that consumers are cash strung meaning that they have resulted to holding on to their TVs for much longer.

However, and with these gloomy statistics, a total of 7 million TV sets were sold last year alone which is representative of a drop of 1 million from 2010. The sales have increased as the world transited from the CRT technology to flatscreens which has led to over 60million sets being sold since 2005. Statistics reflect that 56% of all TVs sold were Full HD which overtook the sale of the HD TVs already in the market. Similarly, 50% of the sales represent smart TVs that have internet connection (Clough, 2013). The promising bit for manufacturers is that the LED sets are increasing in popularity meaning that they are the next frontier for competition. There is also a high demand for larger screens that are 40+ inches.

Another area of great opportunity is the tablet market. Everyone nowadays requires a tablet which was reflected by the 6 million units that were sold in 2012. It is estimated that of the 73% of adults who do not own a tablet, around 26% admitted to planning to buy one. This means that there is a large market for tablets in the UK. The time that people spend online is variable with those on the tablet spending longer followed by PCs and lastly by smartphones. These devices continue to present numerous opportunities for market capitalization.

TCL has a variety of devices that fit in this category. Presently, the company’s LED HDTVs are performing very well in USA and Australian markets. The difference between the products that competitors like LG and ASUS produce and those of TCL is that the latter’s are cheaper and have the same quality like those of their peers. The company has also performed well in the smartphone and tablet market. However, the only place that it seems to be lacking is in the PC market where its products have been limited to Asian markets due to saturation in markets elsewhere.

Objectives & issues

TCL aims at selling 1 million units of LED HDTVs, 500,000 units of tablets and around 500,000 units of smartphones within its first year of operation. The company should expect to break even at the end of the second year and start realizing a 10% increase in profits for every quarter of operation.

There are many challenges that South-East Asian companies encounter in their bid for expanding business in Europe in general and in the UK in particular (Rurigimbana & Iwankwo, 2003). The objective of this analysis is to determine these challenges so that they can be eliminated or minimized. These challenges are broadly categorized as those encountered by decision makers, operational and strategic challenges. In particular, entering the UK market requires that TCL has a thorough analysis of the potential in investing in this market and gauge it against company expectations. This should be then followed by crafting an appropriate market entry strategy that will consider the risks involved as well as the general business environment. TCL must consider the human resource availability in this market bearing in mind that the cost of labour is much higher here than in its traditional markets of operation. The reality is that this new market has more costs attached to it than those in Asia meaning that the company has the challenge of assessing and overcoming costs associated with market entry and make sure that operations are cost effective.

The target market is profoundly different in the UK than it is in Asia. One of the main challenges that TCL has to deal with is crafting smart ways of ensuring that it arouses the interests of the market which is already saturated with consumer electronics. Here, there is need for thorough market research to determine the buying habits and preferences of this market in order to ensure that the right strategy is adopted. The other equally important factor is the attainment of enough human resources to adequately articulate the company’s vision. Europeans have been known to be sceptical of Asian products and this has created a challenge for multinationals looking to invest in the continent; not only with customers but also with attracting and maintaining the best work force.

There is need to contract excellent consultants that will ensure that the company is protected from the risks associated with a new market. This is so as to counter the volatility that is characteristic of the European markets especially considering the euro crisis which has profound impacts on companies’ baselines and increase risks associated with investment. In the long run, the profitability of the company will be based on the cost efficiency of operations meaning that all aspects have to be weighed against their cost-benefit ratios.

Target markets, segmentation and positioning

TCL is regarded in some spheres as the ‘greatest brand that you have never had’. This is because since the company’s launch in 1981, it has been primarily based in china (Levitt, 1983). However, the company has since then spread into 80 other countries and regions most notably the US and Australia. The latter two countries have been chosen as the benchmark for target market analysis because they are similar to the UK in many ways. In the US, TCL products were launched in 2011 and have seen their sales volumes skyrocket assisted by the aggressive market strategy adopted. TCL sells household appliances, mobile phones and television sets in addition to it being the distribution of Alcatel mobile phones and Thomson televisions. The latter are primarily found in the UK. The major brands associated with TCL are 3D TVs, LED TVs, LCD TVs and CRT TVs. The company also produces tablets, PCs and smartphones.

These clusters of products, with some products having different designs and features, point to diversified target markets. TCL will aim to direct its products to different segments of the UK market. Smartphones and tablets are usually aimed at the younger generation whose main focus is style and connectivity. This group is attracted by more functions in already existing devices and therefore form a formidable base for repeat business. There are phones and tablets aimed too at the older generation although the needs of this cluster are mainly focused on convenience.

TCL is establishing itself as a major global player in the LED HDTV market. Currently the company has TCL L40FHDP60 which is the cheapest in the market compared to other players like LG and Samsung. Most of the TCL products are much cheaper than their competitor equivalents meaning that they are aimed at attracting different target markets that have been constrained by the economy. Currently, the UK economy has stagnated meaning that there has been no improvement in the disposable incomes of the employed meaning that they have to result to cheaper products. However, TCL guarantees its customers that quality and not price is its greatest driver pointing to its prices as being a smart way of marketing.

Marketing strategy

There are four types of target market strategies that TCL can adopt to ensure that the UK audience is aware of its products. The most common one is mass marketing where products do not have a particular target. This has worked well for the launch of the most traditional products like older technology TVs, mobile phones etc. Here the company chooses to approach the market as is. The major tool used to reach such a wide market is persuasion. This is the most common marketing strategy as it reaches a wide audience through such media as newspapers, TVs and radio.

The second strategy that TCL can consider is differentiated marketing. Here, the company will have many segments with each having a commonality that will warrant a different strategy from the other. The major tool of reaching the different segments is the use of different benefits that are uniquely crafted to appeal to the targeted segment. The advantage of this kind of differentiated marketing is that it increases sales (Keillor, 2007). However, its downside is that it has additional costs that are associated with using different media for different segments.

As TCL has a number of specialized products that are targeted at specific segments of the population like smartphones for the young, it can apply concentrated marketing where the main aim is to get to that audience only and to maximize sales there. This kind of marketing usually has high returns as it exhaustively communicates the benefits of its products to specific and interested groups.

The last strategy that could greatly benefit TCL is direct marketing. This is through the use of mail and phone or home visits using information sought in customer databases. The Direct Marketing Association in the UK is an important partner in this endeavour as it has customer databases that can be used according to the law and not infringe on customer privacy. Regardless of the strategy adopted, it is prudent that the cost and benefits be considered. However, a combination of the strategies would work to reach a wide audience while conveying specific messages to specific targets.

Marketing programmes

The 7 Ps of the marketing mix are the focus of coordinated actions that will eventually culminate in the realization of the plan, objectives and strategies. The first P represents the product. Here, TCL must have a team of experts who look at their products from the perspective of outsiders. It is prudent to ask whether the product or range of products that will be offered will be the right ones for the UK market. Market consultants will be important here so that they can give their perceptions of the products from the point of view of the market and drawn from experience of operating in those markets (McCarthy, 1975). Customers today are much more knowledgeable in addition to having divergent needs. As has been the norm in TCL entering similar markets in the USA and Australia, a wide range of products for different customers should be availed. In this way, the slow performing products will be eventually phased out leaving the most acceptable to customers. TCL will avail high quality products in the market that will easily compete with those of established companies.

The second P represents price. The prices that TCL will offer will be in continuation with what the company has achieved in other similar markets. For example, while LG offers an LED 4K television for $6,499, TCL offers the same for $999 (Evangelho, 2013). There is a massive difference in pricing considering this example. The fact that TCL offers lower prices for the same quality products as other companies in other markets is an advantage for it can apply the same model in the UK. However, there will be price reviews to ensure that additional costs that are associated with operating in the UK are factored in. Barriers to entry will also be considered as they pose significant risks which may endanger profitability. The company will initially offer lower prices for its products in order to stimulate purchases given that the economy is recovering and not many customers have large disposable incomes. Then after gauging the reception, the company can increase its margins by gradually raising the price of its products while improving them. It is prudent to continuously review the prices in order to ensure that they are reflective of current market trends and cover the costs of production and other additional costs.

The third P stands for promotion. This entails all tactics and methods within which a company avails its products and information to the consumers (Kotler & Armstrong, 2006). This includes advertising, copywriting and development of a company image. TCL will result to a mix of mass marketing and differentiated marketing. The former will entail all the products bearing the company’s logo and which are targeted for the mass audience. The latter will focus on specialty products that are directed towards a specific group of people. For example, the company has teamed up with Google TV to produce a device that can make an ordinary TV into a smart TV. This device is portable and one can connect to the TV from anywhere in the house. Such devices are made for people who prefer increased functionality and compatibility between devices especially the young middle class.

Place, the fourth P, refers to the physical localities that the products will be available. In other terms, the location where individual stores will be located, warehousing facilities or manufacturing hubs. In this age, it is increasingly important for companies to have a visible presence in online stores so as to conveniently serve customers. Whereas that is the new frontier, the traditional store, where customers would go to sample different products are still important. Therefore, TCL will choose locations with visibility in the major cities of the UK. The customers will also access the products when they are contacted by the sales personnel. In Australia, for example, TCL has been very active in trade shows where the next generation devices are showcased. Such exposure is good for the company and should be replicated in the UK. TCL has been working with a number of distributors in other markets. The company should vet prospective distributors with good track records and extensive knowledge of the UK market in order to make sure that the products reach their destinations in a timely and safe manner.

Packaging is another important aspect enhancing the attractiveness of a product. It is the fifth P in the mix and deals with the aesthetic beauty of a product. People have been found to base their perceptions about a product and company after the visual impressions they get after 30 seconds. TCL has continuously worked with a group of qualified designers to ensure that the visual impressions of the products are always pleasing to the customers’ eyes. Continuous improvements aided by advances in technology and feedback from various stakeholders have helped the company better its packaging and should continue to do so in future (Svend, 2013). TCL packaging also entails every single aspect of the company starting with its logo, offices, employees, brochures, waiting rooms and correspondence.

The sixth P represents positioning. This is how the products are continually being perceived by customers. How customers think about the products when consuming them away from the point of sale. The concept is representative of the standing of a company within a certain market. TCL has an unavoidable problem as it enters the UK market. This is because products that are usually ‘made in China’ are considered inferior to those produced elsewhere. Therefore, the company has the task of ensuring that its products are of the highest quality. There are numerous initiatives that have been undertaken to guarantee this quality. The most notable is the investment in technology where TCL has a network of R&D centres located in various places around their manufacturing bases (Kerin, 2001). These centres continuously work to ensure that the products that are produced are competitive and are representative of the newest and best technology. This initiative in itself guarantees that the tag of inferiority associated with Asian companies will not apply to TCL. Customers usually consider products as either being good or bad according to the attribution theory (Hunt, 2010). Some global brands like Mercedes have built a reputation around quality which guarantees them repeat business through customers’ loyalty. This model will be replicated by TCL where the company’s products will eventually be synonymous with quality and thus give it a competitive edge.

The last P stands for people. This represents stakeholders who will be responsible for all aspects of research, production, distribution, promotion and overall management (Kotler & Keller, 2006). It is prudent that the right people be recruited and trained so that they can successfully see the TCL marketing strategy to fruition. There is however a challenge, especially in the UK, with finding the right people and maintaining them in order to guarantee successful implementation of the plan. The perception that the UK citizens have about working for Asian companies is not a great one. However, TCL has been successfully launched in areas with similar cultures like in the US and Australia meaning that this can also be achieved in the UK. The selection, recruitment, hiring and training of prospective employees will be done with the best outcome in mind. The difference between success and failure may be what people a company entrusts to see its strategies through (Jobber, 2008). People with the right skills and who have demonstrated the right abilities and attitudes will be contracted to ensure that the articulated strategies are carried to fruition and guarantee a successful launch of the company in the new market.

Implementation controls

The implementation period is very crucial as it will undertake all the programmes stated in the marketing mix. These programmes must be followed to the letter and management must ensure that the human resources hired are the best to perform the tasks. Senior management and midlevel management must work hand in hand so that the market plan objectives are met through application of the articulated strategies and programmes (Fill, 2007). If one department does not seamlessly work with the other, then the plan will be re-evaluated to address differences arising.

Evaluation will focus on the measurable tenets associated with implementation. All plans must have SMART goals with the possibility for qualitative and quantitative metrics. Numbers or scales can be attached to the expected outcomes to quantify whether they have reached the envisaged levels. For example, the number of clients expected, total sales volumes forecasted and levels of customer satisfaction envisaged. When the collected data is examined, then management can decipher whether the company is performing according to plan (Grunert, 2013). If it is, then, the process leading to those results can be replicated. If not, then re-evaluation will need to de done to correct the mistakes. Evaluation is done by using controls that are set as benchmarks during the initial stages of plan development. They are entrenched in the SMART goals and give a company direction. Budgets and shares are some of the controls that are used in evaluating the performance of a company.

 

 

References

Clough, A., (2013). The state of the consumer electronics market. WhatHiFi. Retrieved from http://www.whathifi.com/blog/the-state-of-the-consumer-electronics-market on 12th Dec, 2013

Czinkota, M.R., (2012). International marketing. London: Cengage Learning

Evangelho, J., (2013). TCL Is Launching A 50-Inch 4K Television For $999, But Should You Buy It? Forbes. Retrieved from 2013http://www.forbes.com/sites/jasonevangelho/2013/07/25/tcl-is-launching-a-50-inch-4k-television-for-999-but-should-you-buy-it/ on 12th Dec, 2013

Fill, C., (2007). Integrated Marketing Communications. London: Butterworth Heinemann

Grunert, J., (2013). Why Are Implementation, Evaluation & Control of the Marketing Plan Necessary? Houston Chronicle. Retrieved from http://smallbusiness.chron.com/implementation-evaluation-control-marketing-plan-necessary-75170.html on 12th Dec, 2013

Hunt, S.D., (2010). Marketing Theory: Foundations, Controversy, Strategy, Resource-advantage Theory. M.E. Sharpe

Jobber, D., (2008). Principles and Practice of Marketing 4th edition. New Jersey: Prentice Hall

Keillor, B.D., (2007). Marketing in the 21st Century. Greenwood Publishing group

Kerin, H., (2001). Marketing, The Core, 4th Ed. New York: McGraw Hill Publishing

Kotler, P. & Armstrong, G., (2006). Principles of marketing 10th edition. New Jersey: Prentice Hall

Kotler, P. & Keller, K., (2006). Marketing and Management. Upper Saddle River, NJ: Pearson Prentice Hall

Levitt, T., (1983). The Globalization of Markets. Harvard Business Review 61: 92-10

McCarthy, J., (1975). Basic Marketing: A Managerial Approach, 5^th edition. Chicago: Richard D. Irwin, Inc.

Rurigimbana, R. & Iwankwo, S., (2003).Cross-cultural Marketing. London: Cengage Learning

Svend, H., (2013). Global Marketing, 6th edition. New Jersey: Pearson

 

 

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