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Cox Communications is a telecommunications company headquartered in Atlanta Georgia. Its parent company, Cox Enterprises Inc, was founded in 1898 by school teacher and three term governor of Ohio James M Cox. With more than 23000 employees in 15 states, Cox provides its 6.7 million subscribers with award winning services. Among them are: video, with high definition, digital video recorder, digital cable, and analog services; high speed broadband data with multiple speed choices; and digital telephone service. (www.cox.com)
Current procedures require new subscribers to contact the company to set up new service and schedule an installation. This can be costly to both the company and the subscriber. Customers moving in to newly constructed homes already have outlets installed in the home and question the employee about why they must pay a technician to come out to “install” outlets that are already there. Technically inclined subscribers wonder why they must pay someone to complete a job they can do themselves for free. Installation costs start at $29.95 and increase incrementally depending upon the number of outlets the customer needs to have activated and/or installed.
New customers, as well as existing customers who are transferring service to a new home, must call the company or apply online for service then wait for the technician to begin service. These costs along with the inconvenience of waiting for a technician and the lack of choices available in cable channel packages are some of the reasons given for choosing a competitor to provide service instead of Cox. The company’s vision “to be the best company to work for and do business with, improving the quality of life in the communities we serve” along with its mission “to double shareholder value every five years, creating a trusted brand where innovation meets quality execution” are a testament to the companies commitment to its customers and the perfect reason this new service, the Selective Cable On-line Ordering Plan or SCOOP® is perfect fit for Cox Communications.
New Product Description
What would happen if we as consumers went to the grocery store to buy oranges but could only get oranges in an assorted fruit basket, along with apples, lemons, and bananas? Or what would our reaction be if we wanted to purchase a recently released action movie DVD, but were forced to buy a romantic comedy, a foreign language film, and a children’s movie as part of a “special” package deal? Chances are that none of us have ever been forced into either of these situations, nonetheless, most cable and satellite subscribers are usually forced to subscribe to cable packages and pay for channels they will probably never watch just to get the handful they may be interested in watching.
What if an innovating cable company offered a groundbreaking cable service with online account access to add or remove channels from the customer’s account? What if this company offered this service allowing subscribers to choose the exact channels they wanted and only charge for those channels, with an “a la carte” price for each desired channel each month? What if they also offered the option of setting up new service without having to wait for a telephone representative or an installation technician? How many of us would join up?
With new advances in HDTV, pay-per-view, and digital technology, satellite and cable TV suppliers are engaged in a fight for supremacy and market share by offering tailored customer packages that range from the very basic to the most inclusive of channel packages. However, major satellite and cable providers are quickly learning that streamlining customer revenue management and billing processes are critical to supporting a variety of services with different levels of programming, bundled service packages with single bills, personalized services, and real-time subscriber interactivity. In order to maintain its competitiveness, Cox Communications must be able to selectively target those services most utilized by their customer base and charge the appropriate value for those specific services.
Bottom line, Cox Communications must implement new marketing strategies based on flexible pricing options targeting different pricing strategies and programs at different customer sectors based on their needs, requirements, and socioeconomic status. Cox Communications also needs the ability to develop cross-promotional and marketing programs through which premium products and services can be targeted to specific subscriber segments based on actual customer behavior and needs. Establishing the Selective Cable On-line Ordering Plan or SCOOP® will be the first step in the deployment of a service delivery model that allows for a targeted, highly marketable and profitable “pay per use” service model.
Importance of Marketing SCOOP®
The best product or service if unknown to the consumer will never sell and will be unsuccessful. Many factors influence the choices made by a potential customer. Many companies other than Cox offer video, data and telephony services to consumers. Cox Communications must market itself and its products and services to gain the loyalty of subscribers. The selection of a provider for these services is an important decision that is influenced by many variables; the cost of service, the cost of installation, and customer service, to name a few. If the subscriber calls to start new service and is placed on hold for an extended period of time they are likely to hang up and call another provider, if the cost for installation is higher than another a quote received from a competitor they may choose the services of that company, and if the cost of the chosen service is higher than the competitor the subscription for service may be lost. Successful marketing can be the difference between a company making a profit or filing for bankruptcy. To guarantee success, Cox Communications must provide its customers with a reliable competitively priced product. To increase its competitiveness the Selective Cable On-line Ordering Plan will effectively provide a highly desirable, marketable, cost-effective, and profitable “pay per use” service.
The SWOTT analysis is the strengths, weaknesses, opportunities, threats, and trends of Cox
* Meeting customer needs
* Flexible customer service
* Strong competitive advantage
* Strategic initiatives: globalization, modernization, diversification
* Strong commitment to keeping up with technology advances
* Finding effective advertising methods for medium to low income market sector
* Lack of internet access for this particular market sector
* Competitive advantage by satellite providers with respect to the number of channels and the type of services they can offer
* Rapid regional population growth
* Rapid advancements in technology
* Huge market size – there are mote than 100 million television households in the United States (www.nielsenmedia.com)
* Huge targeted sector – 99% of American households watch an average of 4.5 hours of television per day (www.nielsenmedia.com)
* Rapidly growing minorities with less acquisition power
* Dwindling domestic market growth
* Satellite TV competitors
* Improving technology
* Technology savvy consumers
* Increased internet access
* Increased use of interactive TV i.e. Shopping networks
* Increased demand for pay per view and on demand services
Besides manufacturing SCOOP® and placing it on the market to see how many people would buy it, there are two other ways to obtain answers to marketing questions before placing a product on the market and predict its success; directly or indirectly. The direct method to find out if your idea will be a success requires the company to talk to potential consumers to get their opinions. In order to accomplish this we can:
* Use Telemarketers
* Talk to people face-to-face
* Send a survey in the mail
* Gather consumers in a group and talk to them
The indirect way to complete market research is to review products that are already in the marketplace. What companies are making similar products such as SCOOP®? What is different about their product from ours? How is the product marketed? Whichever technique is used for market research, the goal is to ask questions and get back answers to your questions as well as new ideas for products and services. These new ideas are important because we will learn things that we may have never thought. (www.lib.depaul.edu)
To determine if our new product SCOOP® will be successful we will employ a combination of both of these techniques. Directly asking existing customers several questions:
* Is SCOOP a product you would use?
* Would other members of your family use SCOOP®?
* Is SCOOP® user friendly?
* Would SCOOP® keep you from choosing the competitor?
* Would you change SCOOP® in any way?
Indirectly we will look at other cable companies in other markets to see if they are offering any similar products. Comparing their product to SCOOP® as well as reviewing any market research they obtained to estimate the potential success of the product.
Identify the Segmentation Criteria
Identifying the segmentation criteria is the foundation for creating a prosperous marketing campaign. Determining the who and how are the initial components in identifying the segmentation criteria. Building the right relationship with the right customers is essential to the success of SCOOP or any other marketing plan. Because many types of people subscribe to cable television for many reasons – from the stay-at-home mom to the sports fanatic brother – defining market segmentation for SCOOP® is vital. Blanket marketing a product to the general public would most likely be fatal to a company. Segmentation is comprised of several components; geographic, demographic, psychographic, and behavioral. (Anderson 2005) Both demographic and psychographic elements will be considered when developing marketing material for SCOOP®. Age, family life-cycle, and income will be analyzed in the demographic category and social class and lifestyle will be considered from the psychographic category. Younger more technologically advanced consumers, those that feel the need to “keep up with the Jones’, frequent travelers, and those on a fixed income will all find benefits in this innovative product, though they may be drastically different. A target market is a group of buyers with common needs or characteristics. (Armstrong 2005)
Target groups for SCOOP® would be:
25-40 year old working professionals who are technologically inclined
55-70 year old retired residents who travel 3-4 weeks or more at a time possibly several times a year
18-30 year old techno-geeks who want all the newest gadgets on the market
Identifying the segmentation and target market and putting the time and effort into creating a marketing plan for SCOOP® will increase sales and decrease the risk of failure. Cox communications plans to target the right markets and follow through with individualized plans for consumers. Without a loyal client base there can not be a successful and profitable outcome.
Organizational Buyers and Consumers
Organizational buyers are those customers who purchase a large amount of a product for its company. Consumers are those individuals who purchase a product for their own use or consumption. SCOOP® will be marketed to both organizational buyers as well as consumers. Organizational buyers such as; extended stay hotels like Budget Suites, senior residences that provide cable for their residents, and apartment complexes will find increased convenience with this new innovative product. Consumers will opt to have SCOOP® for installed into their privately owned homes or condominiums. SCOOP® will allow the individual to change their cable channels and internet speed in a moments notice. Based on individual needs, consumers can add and delete cable channels in order to have access to stations that are playing movies or sporting events that the customer wants to watch. Retail stores like Best Buy and Fry’s are also potential outlets for our product. By offering SCOOP® both Cox Communications and the retailer benefit. The retailer benefits by being able to offer another service to its customers, possibly at a promotional rate thus enticing the consumer to purchase new electronic equipment; Cox benefits by the additional promotion and selling of its new and existing products and services.
Many factors influence the purchasing decisions of both organizational buyers and consumers. Some of these factors are the same in both groups and some of them vary.
Organizational buyers look at factors like:
the price of SCOOP®
the ease of installation
the cost of installation
the value to a potential home buyer
the value to a potential renter
Consumers consider factors such as:
the price of SCOOP®
the ease of installation
the cost of installation
the convenience it provides
the ease of use
Impact on Marketing Strategy
Common factors influence both organizational buyers and consumers. Price, ease of installation, and cost of installation are considered by both types of buyers. Therefore, we will incorporate these issues into our marketing strategy. Print ads, TV and radio commercials, and flyers will all point out the price vs. value of SCOOP® , the ease of installation and the low cost of the installation compared to the potential benefits SCOOP® will provide. An organizational buyer marketing strategies, we will also focus on the value to a potential home buyer, or renter. In consumer marketing we will highlight the convenience the product provides by allowing the consumer to turn on and off services as needed, add channels in a moments notice, and start or stop service at the last minute.
We will also focus on the simple operation of the device. Another marketing strategy will be to appeal to the consumer’s behavioral habits. Many customers purchase service at the last minute because they discover a sporting event or other special programming is about to be shown. By having this service they will no longer have to miss the event just because they found out it was playing at the last minute. All they will have to do is order the service or channel in the comfort of their own home without having to wait on the telephone for a customer service agent.
Analysis of Current Competitors
Competitor analysis in marketing and strategic management is an assessment of the strengths and weaknesses of current and potential competitors. (wikipedia.com) Steps to competitor analysis include:
define the industry
determine who your competitors are
determine who your customers are
determine what benefits they expect
Indirect competitors include other cable providers. Although in most cities only one major cable provider exists there are some markets that have multiple cable companies offering service and there is always the potential that another cable provider will enter the market. Other cable companies include Adelphia, Comcast, and Time Warner.
Direct competitors of Cox Communications consist of: satellite providers like DirecTV and Dish Network; telephone and DSL internet providers like Sprint, SBC, MPower, Vonage, and AT&T; and dial up internet providers like AOL, EarthLink, and Net Zero. These provider offer similar products and services to Cox Communications:
Equipment – rental and purchased
The differences are found in the number of channels offered, the speed of the internet, the security of the phone lines, the cost of the equipment, and the cost of installation and repairs. None of Cox’s competitors can offer a free professional installation without charging for it somewhere else in the product line. This cost must be incorporated into another portion of the customer’s service, usually the monthly fee. By offering a Selective Cable On-line Ordering Plan option that can be installed in a home or apartment once increases the value of the dwelling and makes it easier for the subscriber to purchase the service.
Being able to complete a self installation that was once only available by a professional technician at a charge provides significant savings to both Cox and the customer. By offering multiple products, satellite companies comprise the largest competition to the cable company. Because a satellite dish must be mounted on the home and a specific directional signal contact must be attained it is almost impossible even for the technologically advanced customer to self install a satellite system let alone the average consumer. Therefore, the introduction of SCOOP® will give Cox Communications a competitive advantage over the other satellite providers.
When beginning a marketing plan each piece of research and data, and each phase of implementation are very important. The old saying that “you are only as strong as your weakest link” holds true for marketing also. If you have inaccurate or inappropriate data or compromised information, you might as well start over from the beginning. Marketing for a company like Cox Communications is not only a numbers game, but a game where you must gain the interest of your consumer and retain it for years to come.
Attributes of Selective Cable On-line Ordering Plan or SCOOP®
Establishing the Selective Cable On-line Ordering Plan or SCOOP® is the first step in the deployment of a service delivery model that allows for a targeted, highly marketable and profitable “pay per use” service model. SCOOP® is a USB device that connects to an existing cable box and automatically configures the cable box as an on-line programmable device. SCOOP® is both a product and a service. It is a device that the customer rents and is also a service that they must to subscribe to as part of the Cox Cable subscription program. Subscribers are then billed each month for services they select at the beginning of each billing month.
The mission of Cox Communications is to offer the easiest and most complete home entertainment experience. SCOOP will enable subscribers to order a mix of different cable channels each month and will only be responsible for paying for channels they order in advance. Subscribers can also choose to revert to the basic cable package if they will not be at home during certain parts of the year. SCOOP® works by facilitating access and subscription of cable channels by displaying the channel’s name, content description, and prices in the subscriber’s TV screen. SCOOP® will then allow the subscriber to select their cable packaging from the comfort of their home. SCOOP® enables Cox Communication to give full ownership of the selecting process to the subscribers and eliminates any requirements for interaction between consumers and salespeople.
Cox Communication’s key marketing objective is to provide a flexible pricing option that will target a varied segment of the consumer population and one that will provide different pricing strategies and programs at different customer sectors-based on their needs and likes. At first glance it would appear that variable pricing option may not be a winning proposition to Cox Communications, however; this initiative is sure to attract new subscribers. Cox communications marketing will be directed at convincing people that SCOOP® is a cheaper alternative to pre-set cable packages. Once consumers sign up for SCOOP®, they will be allowed to make changes to their subscription plans. Once consumers subscribe to the new plan and experience how good and efficient the product is, SCOOP® will become a popular product. The single most difficult marketing barrier is getting consumers to try SCOOP® and to figure out that it is not difficult. Most consumers may not want to take additional time to learn how to operate another form of technology, therefore; Cox Communications must make the product appear easy and fun to use while promoting all the savings and benefits.
Product Life Cycle
The product life cycle describes the stages a really new product idea goes through from beginning to end. The life cycle is divided into four major stages: (1) market introduction, (2) market growth, (3) market maturity and (4) sales decline. During the market introduction of SCOOP® stage we anticipate sales to be lower. Consumers will be introduced to SCOOP® via direct marketing campaigns, television and print ads, and by customer care representatives when a subscriber calls in to the call center. We predict the introduction stage will last six to eight months. During the market growth stage we anticipate that sales will take off as customers become aware of the new product and want its convenience and value. As sales plateau we will enter the market maturity stage. The market growth stage should last from one to two years. As competition rises the need to promote SCOOP® will also increase. We will need to develop a marketing strategy that will allow us maximum profitability while staying within a budget. As sales decline new technology will be tested and marketed and the life cycle will begin again.
The product life cycle is concerned with new types of products in the market, not just what happens to an individual brand. The marketing mix usually changes over a product life cycle. One reason would be the change in customers’ needs or attitudes during the life cycle of the product. As customers’ needs change we may need to change our product, SCOOP®, to fit a marketing mix. As our society changes so will our customers’ needs. As our product moves through its life cycle, our marketing strategy for SCOOP® will change accordingly.
Product SCOOP® is lone entry into the market, competitors may enter at the end of the stage
Place Selective distribution, direct sales
Promotion Build primary demand, introduce SCOOP® attributes
Price Penetration pricing
Product Competitors enter the market, we must build brand familiarity
Place Build channels, increase distribution – retailers
Promotion Build selective demand, move from informing/persuading to persuading/reminding advertising
Price Match competition prices
Product All brands are perceived as the “same”
Place Intensive distribution – direct sales, internal sales reps, retailers
Promotion Build selective demand, move from informing/persuading to persuading/reminding advertising
Price Match competition
Product Competition begins to drop out
Place Continue intensive distribution
Promotion Persuading/reminding advertising
Price Match competition, price cutting
Firms that identify breakthrough market opportunities create exciting growth, but over time that growth is also what attracts competitors. Competition puts pressure on price levels and ultimately on profits. As market maturity ends and sales begin to decline we must consider ways to re-invent our product to meet customers’ needs and maximize sales. As technology grows SCOOP® will also have to grow and evolve. (Perreault 2005)
Positioning and Differentiation
Positioning a product in the market creates a real or perceived difference between competing products or services. Cable television is a service and SCOOP® is Cox’s product that allows subscribers to tailor that service to their individual needs. With a product such as SCOOP® and the other products that Cox offers we must be very precise with the marketing that we proceed with. “Differentiation means that the marketing mix is distinct from and better than what is available from a competitor”. (Perreault 2005) With the products and services that Cox is offering it will be very easy to accomplish this task.
Cox is offering tailored service packages allowing the consumer to pay only for those channels that he or she wants. With this advantage Cox will rise above competitors that offer expensive massive packages that contain unwanted and unused programming. Marketing this niche service will be a simple task compared to going head to head with other cable providers offering the same packages. By offering small inexpensive packages along with large movie, sports, news and entertainment filled packages Cox will have the opportunity to increase its client base by providing their services with a range of prices attractive to a broader income range instead of just the well off.
The positioning strategy for Cox will be offering a high quality product for a fair price. By beating our competitors with fair pricing and a high quality product we will be following a similar positioning plan as Pepperidge Farms’ s has followed for years. By remaining aware of what our customers are wanting and needing in a cable company we will continue to be one of the top companies in the market. Pricing, service, and new technology will lead our company to very successful future. Many companies can offer cable and internet service but offering both to a customer on one simple bill is very uncommon. Cable and broadband internet is a niche market for Cox Communications. When customers can receive one bill for both services we achieve satisfaction and convenience for everybody.
Price represents the value of a product to its potential purchasers. It indicates that a product has the kind and amount of benefits expected from that product at that price. Before determining the price itself, the organization must establish a pricing objective compatible with the goals for the organization and its marketing program. How important is price to the target market? Pricing objectives include profitability, volume, meeting competition, and other objectives.
Product-mix strategies include product line pricing, optional-product pricing, captive-product pricing, by-product pricing, and product bundle pricing. The price variance among the different steps of service should take into account cost differences between the products in the line, customer evaluations of their different features, and competitor’s prices. We will use competitive pricing which is employed when marketers wish to concentrate their competitive efforts on marketing variables other than price.
A penetration pricing policy involves setting prices of products relatively low compared to those of similar products in the hope that they will secure wide market acceptance that will allow the company to later raise its prices. Such a policy is often used when the firm expects competition from similar products within a short time and when large-scale production and marketing will produce substantial reductions in overall costs.
The low price must help ward off the competition, and the company must maintain its low price position. The market must be highly price sensitive and production and distribution costs must fall as sales volume increases. Penetration is appropriate when demand is elastic. For example, Sears used penetration pricing to enter the crowded credit card field with the Discover card. The retailer obtained as many customers as possible through a low price, and established a position in the market.
We will use discount pricing in the stores that will sell SCOOP®, because it rewards customer who responds to product promotions. Quantity discounts are given due to economies of purchasing large quantities. The cost savings are passed on to the buyer.
Dish network and Direct TV are the most popular satellite television providers. They offer packages of channels for one price. Other than these preset packages, there is no flexibility in the choice of their programming.
TOTAL CHOICE® – Over 155 Channels, $41.99/mo
Over 155 quality channels of movies, sports, family and music programming, plus you’ll get your local channels.
TOTAL CHOICE® PLUS – Over 185 Channels, $45.99/mo.
Over 185 quality channels of sports networks, a variety of news and entertainment channels, commercial-free music stations, your local channels
TOTAL CHOICE® PREMIER – Over 250 Channels, $93.99/mo.
Over 250 quality channels of sports networks, a variety of news and entertainment channels, commercial-free music stations, your local channels
Dish Network Offers:
America’s Top 60 – 60 channels for $39.99
Including the best in entertainment, sports, news and children’s programming
America’s Top 120 – 120 channels for $ 79.99
Including the best in entertainment, sports, news and children’s programming
America’s Top 180 – 180 channels for $99.99
Including the best in entertainment, sports, news and children’s programming
In addition to the above programming offerings, newly released movies, special events, and other programming are available on a Pay-Per-View basis. The pricing for each movie, event, or programming block are generally $5.99 each.
The suggested value for SCOOP® per channel in PPV is $29.00 for the first 20 channels and $1.00 per extra channel – premium movie channels will be available at an additional cost. The traditional bundling of channels and packages will still be available for the consumer who wants a package with a large number of channels and services. However, being able to offer a smaller, more individualized package such as SCOOP® will give Cox the advantage over other providers.
We predict that nearly 50% of all subscribers will opt for the SCOOP® package over the standard package. Besides the additional video channels, the 30+ no-commercial music stations are attractive to this demographic. With aggressive promotion, we predict more than 50% of current subscribers to the most basic package will subscribe to SCOOP®. This product will allow low income and fixed income families to subscribe to more programming at a more affordable rate thus providing entertainment that is tailored to their individual needs. This new service will provide added value and it will produce a happy and loyal customer who will promote our product, SCOOP®, to all his or her friends and family by word of mouth.
Sales Promotion Schedule
Initial Promotional Schedule
February 24 – 26 Home Show – Demo SCOOP® and give free PPV coupons
February 26 Run Newspaper article about new Cox Communications’ SCOOP®
Run 1st commercial with two month free equipment rental
February 27 Drop 1st mailing with two month free equipment rental 100,000 pieces
March 1 Drop 2nd mailing with two month free equipment rental 100,000 pieces
Run Nightly news interview
March 6 Second telemarketing campaign
March 8 Drop 3rd mailing with ½ off 20 channel package 100,000 pieces
March 13 Third Telemarketing campaign
Drop 4th mailing with ½ off 20 channel package 100,000 pieces
March 18 Drop 5th mailing with two month free equipment rental 100,000 pieces
March 20 Fourth telemarketing promotion
March 28 Drop 6th mailing with ½ off 20 channel package 100,000 pieces
With a well laid out advertising plan we will be able to target the correct market and reap the rewards of new customers from the dollars that we invest. Our marketing team is going to follow some basic steps to create an effective and profitable advertising plan for SCOOP®. These initial steps are as follows:
Set advertising goals and objectives
Set advertising strategies, both media and creative
Each of these steps is very important to a successful adverting plan, and they must be followed in the correct order to ensure that each step has a solid foundation to be built on. Our goals from the advertising campaign are simple, to bring new customers into the company and have the opportunity to turn them into long-term client’s. Our strategy will include a variety of advertising options including television commercials, billboards, news paper ads, direct information on our web site and door knob flyers. The use of multiple advertising tools will pay off well; it will give the customer a chance to learn about this new innovative product and our specials and prices more than just once.
To determine if our advertising plan for SCOOP® is on the mark we will track our sales weekly and see which marketing venue is receiving the most response. Also we will assign campaign numbers to each strategy making easier to keep track of the different campaigns. The budget will be very precise for this advertising plan. We will begin with 200,000 thousand dollars to get the process started and feed it for the first month, after this we will use a portion of the increased sales revenue to keep the campaign going for an additional month. This way we will not dip into company savings except for what we have budgeted for.
Public Relations Opportunities
“Public relations help an organization and its public adapt mutually to each other.” (http://www.prsa.org) Our public relations managers will evaluate advertising and promotion programs for compatibility with public relations efforts and serve as the eyes and ears for top management. Public relations managers will observe social, economic, and political trends that might ultimately affect the firm and our new product, and will make recommendations to enhance the firm’s and the new product image on the basis of those trends. Public relations will assist Cox Communication’s executives in drafting speeches, arranging interviews, and maintaining other forms of public contact. They will also respond to requests for information about the company and our new product as well as other existing products and services we provide. In addition, some of our PR managers will handle special events, such as the sponsorship of races, parties introducing our new product – SCOOP®, or other activities that the firm supports in order to gain public attention through the press without advertising directly.
Cox Communications can support community-based projects i.e. a youth sports team or a scholarship program. Cox Communications wants the public to see the company and its products in a positive light. Cox Communications can set up booths at community events to promote our new product and other existing services and take the opportunity to ask the public how we are doing and what we could be doing that would better serve them. Are we meeting their needs at a cost that is reasonable? We can send out a survey with the monthly bills for customers that want to take the time to fill it out. Depending on the responses, Cox Communications may need to explore alternative strategies and make changes.
Public relations personnel also have a responsibility to the organizations’ employees. If the employees are happy it is portrayed to the public in the service they provide to them. We may need to make sure the employees are trained appropriately to handle customer care issues related to the introduction of SCOOP® . We want our technicians to have access to the most up-to-date knowledge and equipment. This shows our public that our employees know what they are doing when we send them out to set up our new product, SCOOP®. Installation done right the first time is crucial, By not having to send a technician back to the customer’s home to troubleshoot basic installation will saves both our company ns our customers time and money.
Impact of Channel Management Decisions
Channel management is defined as the development of policies and procedures to gain and maintain the cooperation of various institutions within the sell-side distribution channel. (www.bitpipe.com) The channels of distribution of a product include such venues as the manufacturer, wholesaler, and retailer. SCOOP® will be issued to subscribers on a rental basis and will be received directly from Cox Communications. It will be available as a self installation service or the consumer will have the option for a professional installation with an additional charge. If the customer chooses the self installation option they will have the opportunity to pick up the equipment directly from any of the payment centers or they have option to have it shipped directly to their home or business. If they choose the professional installation option the technician will bring the equipment at the time of installation.
Another channel of distribution for SCOOP® will be retailer locations. Retailers like Best Buy will have the opportunity to enroll subscribers in this package at the time of sale. As customers purchase new televisions they will see the promotional information about Cox Communications and have the opportunity to subscribe to the services immediately. The cost of promoting SCOOP® through retailers is minimal. Retailers look for the opportunity to provide their customers with the best service possible to gain their loyalty and therefore provide space to Cox for promotional materials at very little to no cost. The other cost involved would be the printing of the promotional materials.
Marketing Plan Budget
$200/30-second ad on a cable station in primetime
$50/30-second ad on a cable station in daytime
$50/spot drive time
$20/spot non-drive time
100,000 pieces @ 0.10 per piece = $10,000
Two month of free SCOOP® equipment rental
Two month ½ off 20 channels
Free PPV movie coupons
Newspaper article about SCOOP®
Nightly news interview about SCOOP®
Monthly Cost Chart
Television ads 17,000.00
Direct Mail 60,000.00
Public Relations 1,000.00
Annual Cost Chart
Television ads 204,000.00
Direct Mail 390,000.00
Public Relations 109,200.00
It is the task of management to ensure that the marketing plan is carefully monitored, evaluated and controlled. Typical controls involve setting standards of performance, evaluating actual performance against these standards and, taking corrective action to improve the performance of those that deviate from the set standards.
Marketing planning can be seen as a cycle, which begins with clear objectives that start with what the marketer intends to achieve, and end with a feedback mechanism in order to evaluate the objectives. A course of corrective action can be taken, if there are deviations from plans, and the organization can monitor its usage of resources. Clearly any system of monitoring and control has to be implemented in accordance with organizational structure. That is, if there are divisions or other business units that have a degree of autonomy and responsibility for the development of departmental marketing strategy and plans, then these departments must have their own systems of monitoring and controls in place.
Marketing control involves setting a desired standard, measuring deviations from the standard and taking the appropriate action. In many cases the standard is expressed in terms of budgets and any substantial deviation from budget is investigated. Both positive as well as negative deviations can be a cause for concern. For example, if sales of SCOOP® are far in excess of planned levels then this can over-stretch the company’s production, storage and distribution resources. At the same time, the discovery of deviations from budgeted levels would prove to be an unbearable load on managers. Instead, since not all deviations are significant, parameters will need to be set for “allowable” deviations and only those exceeding these parameters will be reviewed for possible changes or elimination.
We anticipate 4000 initial subscriptions to SCOOP® during the first rollout period. These subscribers will come from new customers looking for cheaper alternatives to cable subscription as well as existing customers currently subscribing to the limited basic service. We must evaluate our marketing strategies to determine their effectiveness and to determine if there is a need to fine-tune individual marketing tactics to improve their success. Strategies for evaluating the marketing plan strategies for SCOOP® include:
1) Sales review: Sales should be going up! But because the sales cycle may be longer we will also need to evaluate the number of new leads being generated and the number of installation appointments being booked. We must also keep in mind that discounts or variances in fees will affect total sales values.
2) Survey subscribers. Ask where they heard about our new product. This information will provide valuable insight into how clients select a service provider.
3) Determine if the advertising and/or promotional activities for SCOOP® have produced a direct response? If we do not know or cannot determine this then we must improve our response rates. There are several ways to accomplish improvement:
a. Ensure we are advertising SCOOP® in the right media. Choose media suited to our selected audience. Avoid rejecting options because they don’t look “exciting”, such as trade journals that might have relatively small readership.
b. Survey the audience to make sure they actually do read the publication. Use a strong headline that asks a pertinent question, or gives a solution-oriented statement.
c. Include a clear call-to-action. Tell people what they should do. For example: Call today for free installation; Ask for our free SCOOP® information brochure. Include multiple methods of contact. Phone, email, and web site are all important. Give prospects a choice of how to contact you.
4) Evaluate the networking activities and determine if they create new opportunities? One of the major principles of effective networking is to “give” rather than “sell”. To measure networking activities we must track the source of incoming enquiries. Then determine if any visible/tangible tactics can be credited with generating the enquiry. If not then we can safely say it was a referral generated by networking.
5) Do the marketing tactics make it easier to sell our new product? Marketing activities and/or material should do the following:
a. Attract qualified prospects.
b. Anticipate and diffuse potential questions/concerns from prospects.
c. Be easy to use when personally selling to prospects. For example: SCOOP® information should be relevant; images/charts easy to understand; and be presented in a format the prospect will be likely to keep.
d. Focus on the client needs and the points of difference from the competition.
6) Review sales conversion rate. Determine whether conversion or closure rate has improved. “Selling” is an important part of the “marketing” function, ensuring success at closing the sale, rather than just focus on generating new leads is essential.
7) Does the plan have a positive return on investment? Is new/repeat business enough to justify the expense? Rather than looking at the marketing budget as one total, we must evaluate the cost-effectiveness of each specific marketing activity. Even though the ROI is acceptable overall, we may be able to improve individual performance of each marketing activity by changing or eliminating unproductive tactics. (www.websitemarketing.com)
Armstrong, G., & Kotler, P. (2005) Marketing: An Introduction, Pearson/Prentis Hall. Upper
Saddle River, NJ
Perreault, W.D., & McCarthy, J. (2005) Basic Marketing (15th ed.), McGraw-Hill/Irwin. New York, NY