Marketing mix - National Trust

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BUSINESS CASE STUDIES

Marketing mix - National Trust

The National Trust is a registered charity that looks after special places. It has over 4 million members and every year welcomes around 19 million visitors to its properties and special places, which are open to everyone. As a not-for-profit organisation managed by a small Board of Trustees, it is completely independent of government. Its funding is generated entirely from membership fees, donations, legacies and revenue raised from its commercial activities such as its National Trust shops and catering business.

The marketing mix (the four Ps) is a means of assessing how an organisation can balance the four key elements of Product, Price, Place and Promotion in order to meet customers’ needs an achieve its sales objectives. Even with the best product in the world, if a business promotes it to the wrong audience, overprices it or distributes it in a way that is inconvenient for consumers, then the business will not generate sales. For the National Trust, the relationship between product, price, place and promotion is highly integrated:

• The Trust’s ‘product’ is a mix of the tangible, such as events or craft goods in shops, and the intangible - the experience people enjoy from National Trust places. Visitors and customers can choose to add value to their m’embership over the year through a wide range of other activities. This might include, for example, the opportunity to have a camping or cottage holiday on Trust land or learn new skills with Trust experts - anything from bird-watching to archaeological digs.

• As a non-profit making organisation, the price of National Trust membership fees, entrance to sites and sales through its shops and website need essentially to cover costs rather than make profit. As the National Trust has to maintain its special places for ever, it incurs significant costs of repair or upkeep. Membership and visitor fees cover only a third of the Trust’s costs. Its fundraising and commercial activities are vital to fill the gap. Keeping membership numbers high is therefore essential. Lower than expected income could result in the Trust not being able to fulfil its mission. Membership fees need to remain competitive to demonstrate good value for money in order to attract visitors and keep members. The National Trust therefore has to budget carefully to ensure that expected income from predicted memberships will cover its costs.

• ‘Place’ reflects the means for distributing a product or the channels through which it reaches customers. For the National Trust, like many other organisations and businesses, this is increasingly through the internet. For example, Trust memberships can be bought online or at visitor locations for individuals or to be given as gifts for others. The National Trust website also has an online shop from which anyone can buy gifts as wide-ranging as farm produce, cards and craft items or even ‘virtual’ gifts such as helping to restore a painting or save a squirrel.

• Promotion covers all the tools and techniques by which an organisation markets its products and services. For example, this might include traditional methods such as advertising in papers, as well as the use of social media (like Facebook and Twitter), websites and online networks.

BUSINESS CASE STUDIES

Above-the-line promotion - Hi-Tec

Founded in 1974, Hi-Tec Sports is a privately owned British company. Its products are sold in over 100 countries worldwide. It is the global number two outdoor brand in terms of sales value. In the past, Hi-Tec shoes were only associated with sport. However, today its shoes are promoted as an outdoor brand associated with a leisure lifestyle.

Above-the-line promotion is based on advertising in mass media, such as newspapers, television, radio, cinema and the internet. This type of promotion reaches a wide audience, but it can be difficult to measure and assess its impact. It can be used both to inform the audience and raise awareness of a product or service, as well as to persuade people to buy.

Different media outlets can be used to target audiences in specific-market segments. For example, an advertisement in The Times newspaper or one shown on MTV will reach very different audiences. The readership of The Times tends to be mature and relatively better-off, while MTV attracts a much younger audience.

Hi-Tec’s advertising emphasises the USP for its brand and its core values. The imagery chosen to represent the brand values focuses on people in action - running, hiking, walking - in order to capture the fun element. Hi-Tec’s above-the-line activities include:

• television advertisements for raising awareness with the wider public, for example in key TV advertising slots during peak programmes, such as sports, in order to attract relevant viewers

• press advertisements in trade or consumer publications. Hi-Tec deals both with retailers and directly with consumers through its online shop

• bannen-advertising on selected websites - this form of paid-for advertising allows the business to measure responses through ‘click-through’ rates

• billboards at locations relevant to the chosen audience, for example, a sports track.

Advertising can be costly. It is therefore important for Hi-Tec to analyse the cost-effectiveness of each activity. This can be done in several ways. For example, it might monitor the numbers of visitors to a website or the numbers responding to a sales promotion. It will track the increase in sales following a promotional campaign.

BUSINESS CASE STUDIES

Ansoff’s Matrix - Enterprise Rent-A-Car

In 1957, Enterprise was founded by Jack Taylor, an entrepreneur, in Missouri, USA. Starting with just seven cars he invested his money and ideas into Executive Leasing, which later became Enterprise. Since then the company has become the largest car rental company in North America, and arguably the world. One way of analysing the various strategies that an organisation may use to grow the business is with Igor Ansoff s (1965) matrix. This considers the opportunities of offering existing and new products within existing and/or new markets and the levels of risk associated with each. This matrix suggests four alternative marketing strategies:

a) Market penetration - involves selling more established products into existing markets, often by increased promotion or price reductions or better routes to market, for example online.

b) Product development - involves developing new products or services and placing them into existing markets.

c) Market development - entails taking existing products or services and selling them in new markets.

d) Diversification - involves developing new products and putting them into new markets at the same time.

Diversification is considered the most risky strategy. This is because the business is expanding into areas outside its core activities and experience as well as targeting a new audience. It also has to bear the costs of new product development. Enterprise has focused most of its growth strategies on market development, product development and diversification.

• Market development - Enterprise locates its branches as close as possible to its customers.

The convenience of this service gives Enterprise a competitive advantage. However, in response to customer needs, Enterprise opened its first on-airport location in 1995. The demand for this service was so great that by 2005 Enterprise had over 200 on-airport branches. This meant that Enterprise kept ahead of its competitors and increased its market share.

• Product development - Product development strategies have helped Enterprise to develop services in a market where it was already an established and profitable business (medium risk). Examples of Enterprise’s product development include its unique ‘Pick-up’ service. This helped to lead the market in this product offering. Enterprise’s Flex-E-Rent service (a long term vehicle rental solution designed to meet the growing needs of today’s businesses) and its Business Rental Programme (offering customers a bespoke programme with special pricing) are examples of product developments.

• Diversification - Diversification strategies involve widening an organisation’s scope across different products and market sectors. It is associated with higher risks as it requires an organisation to take on new experience and knowledge outside its existing markets and products. Car Sales was established by Enterprise in 1962. This business involves selling used cars to both the public and businesses. It is now one of the largest sellers of used cars in the USA. In 1977 Enterprise invested in Mexican Inn Chili Products. However, the company had little experience of both the packaged goods industry and the packaged food business. Poor sales and a guaranteed buy-back arrangement with retailers meant that the business did not make a profit. Therefore the company sold the business but learned a lot from the experience. This last example illustrates the risk that diversification poses. Just because a business is successful, like Enterprise, it can never guarantee success in every venture it undertakes.

Дата добавления: 2015-08-28