Marketing Management: W H Smith

2993 words (12 pages) Essay in Marketing

27/04/17 Marketing Reference this

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Introduction

From WHSmith establishment in 1792, the company has become one of a reputable retailer in publishing, music, newspapertravel industry, stationary and books. However, the sales were decreased in the beginning of this century by several factors such as the company’s marketing strategies and marketing mix. This decline might be a threat to the successful growth of WHS in the future.

1. Marketing management issues and general solutions

1. 1 Products

One of the biggest problems faced by WHSmith today is a huge range of products which includes books, stationary, cards, newspapers, magazines, CD’s and so forth, which make it difficult to maintain inventory and even it complicates the brand image of the company. Thus to form a clear-cut brand image and to maintain inventory level at all times, the company should emphasize more of those products which has a larger share in their profit including stationary and books and pay less attention on other products, such as CD’s, cards and newspapers. Perhaps it generates a clear brand image to the company as well as contributes to maintain inventory level at all times which in return retain their customers loyal and satisfied.

1.2 Place

WHSmith has one of the best places to lay out its products such as High streets and the main train stations. Despite there were problems with piling the products in stores and creating competitive advantages among its competitors.

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Due to the wide range of products in WHSmith stores, this causes products hard to find. Therefore it is recommended to organize the shelves properly as both the sellers and customers would be able to find products conveniently. It would save time and increase the loyalty of the costumer. In addition, ‘reading atmosphere’ or suitable place for reading can be created where customers could borrow the books, have coffee and even have discussions with other readers about read books. This may be the best way to attract customer evangelists.

1.3 Promotion

Comparing to other competitors WHSmith spends less money on its advertising which can bring to the loss of some market share and subsequently decrease the income of the company. The first thing that company can do is to redesign its promotion campaign and use wider methods of increasing the brand awareness. Currently, although WHSmith runs some commercials on TV, it may also use social networking channels, such as Facebook and Twitter where people can share their opinions unconsciously promote the brand, make suggestions. Another solution to consider is to change the mono coloured advertisings of the company to the bright but precise one by making a good positioning in the minds of customers with specific colours which will be associated with the brand. Moreover, there can be made a proper work on encouraging customers to purchase products from the company’s web page and be competitive in Internet market at the same time, also distribute more special offers and discounts with clear prices to attract customers.

1.4 People

In achieving the purpose of high customer satisfaction, one of the most important roles is played by staff, who are somehow involved into sales process. The service level and the staff attitude in common are perceived as overall appearance of the company. Attitude toward consumers, high qualification, goodwill of people are key factors in achieving customer satisfaction. Thus creating a strong corporate image and maintaining that image can be the effective marketing tool.

The following recommendations can be considered in making some significant improvements of customer service: 1) Revising the existing system of stuff motivation. Development a system of rewards for the most distinguished service level employees, as an example. 3) Developing the atmosphere of team spirit in the company and clarifying the objectives and goals of company for all staff members.

1.5 Environment

Marketing environment has significantly impacted the performance of WHSmith. Firstly, as quite a long time development, UK retail industry has stepped into a mature stage. The weakness of the overall retail market influences the WHSmith’s retail business, which is the dominant business for WHSmith. Meanwhile, the changing competitive environment generates the pressure on sales and margins for WHSmith. Both the national and local retailers fiercely fight against WHSmith as well as the Internet shops, an emerging business, tends to take numerous customers away. Moreover, consumer behaviours may vary frequently in response to the fashion trends, more alternatives of products and changing lifestyles.

In conclusion, it can be seen that WHSmith market share in some categories has decreased by its competitors such as Waterstones, supermarkets, online retailers and specialists. It is expected by Verdict’s reports that this declining might be increase by non-specialists supermarkets which have a mix of products such as Tesco, Asda and Sainsbury (Datamonitor 2010). Therefore, it is recommended that WHSmith should redesign its marketing mix to compete the competition.

2. Segments assessment and recommendation

The nation-wide presences of the highstreet and travel stores extremely enhance the retailing business of WHSmith, which provides the broad range of the products including stationery, adult and children’s books, news and magazines, entertainment, gifts and cards, and so forth. Among those products, books, stationery, news and magazines occupy the dominant market share in each category segment respectively, which attract the children, middle aged women, family gatekeepers or middle class and upper middle class of typical target customers. Thus, other products may not capture the major target customers due to the ambiguous product portfolio and positioning.

2.1 Product and customer segments assessment

2.1.1 Children’s books

In the current situation WHSmith has a strong market share for children’s books (18.7% of the value sales of the total books market) over its main competitors which make it the most preferred retailer in the UK. The company’s key product categories in the following segment are: personalized children books, categories by ages – 0 to 5, 5 to 7, 7 to 9, 9 to 11 and over, children’s fiction, general interests, special book types. By providing wide sort of products for children WHSmith attracts certain types of customers who are mostly family gatekeepers and browsing husbands.

2.1.2 Adult books

The main buyers for adult books category in present time obviously are women (63% of all buyers), men get 39 % which is rather less. By socio-economical diversity it is ABs who likely to buy adult books from WHSmith more (63%), DEs stand on second place (30%). Based on it we can say that the overall market segment of WHSmith for adult books is middle-aged women and men with average income and above average income.

2.1.3 Stationery

Out of WHSmith’s gigantic product line, the stationery products have a key role to play with 21% of profit share in the market, which simply indicates the strong sales of stationery products in the market by WHSmith. The main customers that the company aims to sell their stationery items are the students or other individuals related to education field. Moreover, because of its strong brand image and the high street and travel locations of the WHSmith stores, the middle and upper class groups of the society are more probable to buy the products.

2.1.4 Newspapers and Magazines

Newspapers and magazines are also the major impulse products of WHSmith. Although, a strong rivalry from WHSmith’s competitors such as newsagent and supermarkets, the market share of selling newspapers and magazines remained steady in 2008/9 (Datamonitor 2010). It has diverse varieties of magazines in different demographic segments such as children, women, men, education and business magazines. All of these target different types of customers. On another hand, elderly consumers especially from upper and middle class are the main targets of newspapers.

2.1.5 Entertainment

The lists of the product categories offered by WH Smith are CD-s, video, computer games and other entertainments. As the result of low-margin products the company continues to cut down its presence in this category. There is a poor penetration for all segments in WHS entertainment commodities. In general all age group consumers are active in this sector, however pre-family and people older than 45 are least likely to buy from WHS. The company’s share of video is more significant for children (almost 9%) comparing to adults. In addition, a number of consumers (under 35) prefer to purchase CDs than the rest products of this category.

2.1.6 Gifts and Cards

In the retail market of gifts and cards, WHSmith provides a number of products for invitation, appreciation and Christmas greeting to the drop-in customers rather than the typical target consumers. However, the comparative narrow range of gifts and cards can not satisfy the major target customers as the 85% women and family gatekeepers dominate in this consumer market. Conversely, Clinton cards plc, the leading cards company in UK, supplies the most extensive portfolio of quality greeting cards and gifts for all the holidays and occasions use, which effectively approaches almost all the demands of target customers. Hopefully, WHSmith’s gifts and cards business still follows Clinton closely and defeats all the other cards company.

2.2 Recommendation

Due to the rapid growth of the children market, it is recommended that WHSmith pay more attention to penetrate the children market. To begin with, increase the number of video designed for the children and make competitive advantage among its competitors, as the demand of children for this product category is growing increasingly. Secondly, children’s magazines also offer a significant opportunity to develop and increase the company`s market share. Therefore, by using line extensions strategy which expands its existing magazines category to new collections of children’s magazines such as children’s fashion and children’s games magazines. Finally, according to the current target market of WH Smith which is basically consists of males, the company can add new services in the future such as playgrounds, reading places, provide different free toys for children to attract the potential market segments.

Consequently, the promotion strategy can be adjusted to approach the children market segments. WHSmith had a cooperation to promote its products by working with the leading famous company McDonalds which has driven the sales up for the children’s segment. Concentration on promotional aspects as launching educational games for children will give to the company a big opportunity to stay ahead.

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According to the considerably well performance of the stationery, adult books, entertainment and cards business, the substantive recommendation may be a strengthening the current position on the market using promotional and advertising strokes. Meanwhile, revising the current books range in order to find less or not covered by main competitors books categories and their further expansion in the stores will allow WH Smith to get its niche.

3. Marketing Communication

According to the analyzed information on WHSmith advertising strategy, the company spends about 10.3 million pounds per Christmas quarter for different communication mixes. More than half of this amount was spent on TV advertisings including advertising campaign called “Bookworm and friends”. Mailing, which covers Christmas club cards programme, leaflets dropping, catalogues and press are also sufficient parts of current communication mix of the company.

By analyzing the situation with a case study, the following is revealed:

absence of outdoor advertisement

absence of internet advertisement

mono colour ads are not effective for children’s book and gift ideas

Although WH Smith focuses on enhanced promotion over the Christmas period, it is limited by fairly poor campaigns as proliferation of simple leaflets to the doors instead of providing expensive catalogs and gift ideas. Back to customer’s feedback, company needs to concentrate on the clarity of pricing and give more information about sales promotions in stationary products.

With the increasing competition for the retail market from online providers, it is essential for the company to increase their advertisement expenses and adopt some new and innovative ways to attract potential customers to maintain customer loyalty in the market. Company should use Internet communication channels, displaying commercial link-banners in social networks and other websites, which will provide customers with information on latest deals and products of the company. In addition internet advertising remains one of the cheapest among others.

Another idea to improve the advertising strategy of the company is organization of special events throughout the year, in addition to Christmas. It will attract customers to WHSmith stores since people can be curious and interested. In this case concentration on children segments which is the largest one is strongly recommended. Events can be related to famous and most loved films, books or games, where customers can buy magazines, clothes and related accessories.

TV advertisings have proven to be the most effective way of attracting customers. Despite many costumers had a feeling that the” Bookworm and friends” TV campaign lacked warmth, it had a good feedbacks and was recognized as distinctive, thus it is expedient to run this campaign again taking into account all received recalls from costumers.

Reducing the budget for Press advertising will help to cover other communication channels as online banners and event promotions

Budget for mailing and catalogues are recommended to be at the same level.

4. Sustainability and Corporate responsibility

4.1 Environment

WHSmith considerably emphasizes on sustainability issues as well as implements environmental protection activities in terms of energy consumption management, transport management and waste management. In the aspect of energy consumption management, WHSmith regularly reviews the energy consumed in light and heating to guarantee it under control. Meanwhile, energy management team intimately cooperates with operation team to arrange energy efficient equipments without dissatisfying customer experience. Furthermore, a series of energy awareness campaigns including energy reduction competition, internal workshop and communication are launched to encourage store staff to save energy. However, although many efforts have been made, their objective of reducing 15% energy consumption by the end of 2010 cannot be accomplished.

Reduction of CO2 emission is another major task for WHSmith to contribute for sustainability. They attempt to optimize the logistic operation through efficient store delivery scheduling, which can decrease the number of packages moved. Moreover, WHSmith introduces a new system to enlarge the fill capacity of each store as well as conducting the container consolidation method, successfully reducing 175,000 packages carried to High streets. This brings about 40% reduction of CO2 emission from 2004 to 2009.

WHSmith also implement the waste management aiming to reduce product packaging in forms of the cardboards and the plastic shrink wraps. “Say no to a bag and yes to a tree” of creative campaign is launched to plant 10,000 trees in UK as well as communicating the awareness of reducing bags. Meanwhile, they also establish recycling facilities to help customers return waste and encourage them to use email for receiving product information. Although 700 tons of bags were eliminated, it is only occupies 2% which is far from of their expectation of 4%.

4.2 Community

WhSmith is a valued member of community across the UK and have been an active member in community services and charity. The organisation spends over 1% of their pre-tax profits on charity and community projects. Whsmith makes investment in community through following ways:-

WhSmith Trust: The company in collaboration with the WhSmith trust works for the benefit of the society in number of ways like, the launch of a scheme known as “Summer read” which aimed at maintaining literacy levels and to develop reading habits in children.

Products for Charitable Causes: Company provides charities with a financial contribution, the sales of these products also raise consumer awareness of the work these organisations do and help them to gain new supporters. In year 2009, on Christmas, WHSmith raised £88000 for seven charities by sales of charitable Christmas cards.

Employees support in local Communities-The employees working with WHSmith in various stores are motivated to serve the local communities in the best possible way they can. This can be done by donating Christmas gifts or some food to the needy.

4.3 Workplace

WHSmith has a large number of stores in the high streets and these stores has a huge number staff members working night and day for the organisation, thus the company have a responsibility towards them, which they fulfils in following ways:-

Embedding values within the business culture- The organisation works to embed their values such as Customer Focus, Drive for Results, Value the people and Accountability in all their employees and these values have also been used as a key part in the recruitment and training processes.

Training and Development-There are separate Training and Development team in WHSmith retail which focuses on developing the skills of the employees so that they can attain their personal objectives along with the overall organizational goals.

Health and Safety-The board maintains high standards of health and safety in the business. The management team supported by professional safety advisors, monitors key safety performance indicators.

4.4 Marketplace

The major aim of WHSmith is that meet their customer’s needs. As a result of that the company keen to provide various kinds of products to satisfy their expectations. Moreover, WHSmith conducted a survey twice a year to measure the customer’s satisfaction.

WHSmith emphasized that the product’s materials should derive from legal sources such as forests. They evaluate the forests sources during the year by collecting information from their suppliers. As a result of that, the quantity of material from certified jungles and recycled sources increased by 7% in 2009 compared to 2008. This success is a result of implemented engagement programme with large suppliers which aimed to enhance the forest sourcing. As well as, they will apply this programme for the next three years to improve the forest sourcing of the small suppliers.

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