The Social Expression Industry In The Uk Marketing Essay

Carte Blanche, a renowned player in the social expression industry in the UK and worldwide, is set to introduce a new product, e-greeting card, on January 1, 2011. This report therefore covers the new product and brand development strategy and their associated activities that may ensure the success of the brand from development up to the first 3 to 4 years of its life cycle. The strategy is broken down into 3 objectives, namely: to develop a new social expression product to the selected target market; to develop new area of brand strategy toward achieving set sales target; and to position Carte Blanche through the activities above to deliver excellent growth rate. The product shall serve young people and their families and shall be distributed intensively on the internet while employing competitive pricing to ensure market penetration.

Table of Contents

Introduction

Carte Blanche Greetings Ltd is one of the key players in the social expression industry in the UK, and globally. The social expression industry is associated with greeting cards, notes and stationery, gift wrap, “and other socially expressive products” (Berkowitz and Hill, 1996, p. 41).

The best seller of all the products produced from the social expression market is the greeting card. It accounts for a sizeable portion of the over $4 billion worth of the social expression market, globally (Berkowitz and Hill, 1996, p. 41).

The global annual growth rate of the industry is estimated to be an impressive 7 percent (Berkowitz and Hill, 1996).

The developed countries including the UK and other Western European countries, North America, New Zealand, Australia, and Japan account for a disproportionately high percent of the market demand (Berkowitz and Hill, 1996).

Carte Blanche Greetings was founded by Stephen Haines over more than twenty years ago and he still serves as its Chairman (Carte Blanche, 2010).

Carte Blanche is a global player in the social expression industry with a reputable brand and product portfolio which span the different available categories of the industry (Carte Blanche, 2010).

Carte Blanche currently boasts of recognized brands and a reputable product portfolio. The products are currently published in 14 languages, and distributed in more than 60 countries employing multiple channels of distribution (Carte Blanche, 2010).

The social expression industry is characterized by constant change (Berkowitz and Hill, 1996) and cultural sensitivity (Keegan, 1969).

This report is necessary in defining a path for ensuring the growth of Carte Blanche in the highly competitive, constantly changing, and culturally sensitive social expression industry over the next three to five years.

Audit

SWOT and PEST analyses will be carried-out here as “models are particularly valuable in ensuring logical consistency and exploring the subtle interactions involving a limited number of variables” (Porter, 1991, p. 98).

SWOT analysis

SWOT framework that encompasses the strengths and weaknesses, opportunities and threats of a company in relation to its internal and external environment respectively, and it is a reliable process for strategy selection (Barney, 1996; Novicevic et al., 2004). The framework as applied to Carte Blanche is as below:

Strength

Carte Blanche boasts of recognized brands and a reputable product portfolio that the consumer is already familiar with and trust.

The Carte Blanche products are currently published in 14 languages worldwide taking into cognizance the cultural sensitivity of the social expression industry.

The company already has global presence as it is found in over 60 countries and ensures effective distribution through multiple distribution channels.

Carte Blanche employs the use of local licensee to reap such benefits as “minimal asset commitment in physical assets such as inventory and human resources” (Berkowitz and Hill, 1996, p. 46).

Weaknesses

Limited global coverage.

Lack of financial muscle.

Opportunities

Carte Blanche possesses good prospects for product transfer to other countries not presently covered. The prospect for product transfer is said to be greatest for nations with characteristics similar to that of the originating countries (Berkowitz and Hill, 1996, p. 42), whereas the UK, Carte Blanche’s home country, shares a lot with many of UK’s former colonies such as India.

There is great potential for further internalization of Carte Blanche products as only 60 of the many countries in the world are currently covered.

Threats

The industry is characterized by heavy weight competitors both in the UK and abroad with global outreach such as Hallmark, American Greetings, and Gibson Greetings (Berkowitz and Hill, 1996, p. 40).

The industry is laced with cultural sensitivity and could lead to “lost sales and considerable corporate embarrassment” (Ricks, 1983 as cited by Berkowitz and Hill, 1996, p. 40) for an industry player who commits a cultural blunder.

PEST analysis

Political

Legal regulations require different methods of packaging for the social expression products in different environments (Berkowitz and Hill, 1996).

The government and its regulatory agencies often regulate the type of different materials that may be used in product manufacturing, and this may vary from one country to another (Berkowitz and Hill, 1996).

Government regulations may also place restrictions and set standards for product labeling (Berkowitz and Hill, 1996).

For advertising, PR, and trade promotion with their associated financial cost are often highly regulated by the government (Berkowitz and Hill, 1996).

Export to other countries may be restricted or hampered by inter-government relations, trade accords, and policies (Berkowitz and Hill, 1996).

Environmental

Variations in climate and/ or weather of the Carte Blanche home country from its export countries may requires product adaptation(Berkowitz and Hill, 1996). For example, the tropics do not experience snow fall during the Christmas season.

Workers or employees in the target countries for internationalization may generally possess lower expertise than in the UK and hence may require some training with its associated cost (Berkowitz and Hill, 1996).

To take full economic advantage of new markets, products should be developed to meet the different occasions, celebrations, and festival found there (Berkowitz and Hill, 1996).

Social

The different social celebrations such as festivals found in different environments often necessitate the need for different customize products and may lead to increased revenue (Berkowitz and Hill, 1996)..

The industry is laced with cultural sensitivity and could lead to “lost sales and considerable corporate embarrassment” (Ricks, 1983 as cited by Berkowitz and Hill, 1996, p. 40) for an industry player who commits a cultural blunder. But, it is also a huge opportunity to meet need demands.

Technology

The industry players require relatively extensive investment in technology in improving on their efficiency, effective, and general performance (Berkowitz and Hill, 1996).

Carte Blanche makes use of innovative supply chain associated technology in ensuring effective and efficient distribution of its productive for a competitive advantage (Carte Blanche, 2010).

SMART objectives

To give concrete direction and make the success of the new product development measurable at the end of the day, we have set the following SMART objectives.

To develop a new social expression product to be launched by January 1, 2011 to the selected target market;

Develop new area of brand strategy toward achieving sales target of £500,000 by December 31, 2011; and

Position Carte Blanche through the activities above to deliver excellent growth rate of 10% per annum and market share of 40% over the next 3-5 years.

The objectives above contain elements of long-term strategy although they have been set for the first 12 months of the new product life cycle, but their achievement may ensure that the long-term objectives are realized. Huan et al. (2007, p. 277) citing Doyle et al. (1985), Hooley and Lynch (1985), Shaw (1995), Siu (2000), Baker and Leidecker (2001), and Siu and Liu (2005) argues “that successful companies set longer term strategic objectives (i.e. short-run profits are not sought at the expense of longer run strategic objectives)”.

New product and strategic brand development plan and implementation

Considering a brand development plan for Carte Blanche is critical as many researchers such as McWilliam (1993), Tauber (1981), Economist (1990; 1991), and Ambler and Styles (1996) recognized that brand and line extensions is now a popular growth strategy, especially noticeable in saturated fast-moving consumer goods industries. However, “developing brand or line extensions is one type of new product development (NPD)” (Ambler and Styles, 1996, p.13).

The new product development process shall follow that which was outlined by Kotler (1991). The eight point sequence that will generate the NPD plan is as discussed below:

1. Idea generation

A thorough process of idea generation that involved contributions from the different stakeholders resulted in the birth of a variety of ideas concerning the new products that may be developed and how these may individual strengthen the market position and profitability of Carte Blanche.

Some of these ideas include the extension of the current and different product lines, the extension of the current Carte Blanche brand(s), and the creation of a new product and brand altogether. With respect to the categories of ideas mentioned above, unique product offerings were also generated.

2. Idea screening:

The generated ideas were further screened to isolate those that may most closely support the stated objectives of the new product and brand development strategy, and the overall Carte Blanche strategy (Kotler, 1991).

Both line and brand extension have the advantage of reduced cost and risk as opposed to developing a totally new brand (McWilliam, 1993; Tauber, 1981; Economist, 1990; 1991).

Also because the line and brand extensions have the advantage of standing on the foundation of an existing brand positioning, the risk of their failure is also minimal (Boush and Loken, 1991; Sunde and Brodie, 1993) compared to establishing a totally new brand.

Hence, the strategy to be adopted is brand extension. According to Aaker and Keller (1990), brand extensions may be defined as entry into a new product category using an brand name that is already firmly established.

The new product is electronic greeting cards that the customer may order for, be supplied with, and he may forward to his contact, all through the Internet. This is because consumers of social expression products are uniquely younger in many country like in the UK where record number of cards are given for 21st birthday celebrations (Berkowitz and Hill, 1996, p. 45).

Furthermore, there is enormous growth potential in the internet world dominated by young people and in countries such as India and China with teeming young internet users. (ITU, 2010)

This new product line may also benefit from the ubiquitous nature of the internet for easy commerce and widest distribution (ITU, 2010).

3. Concept development and testing

A sample of what the online greeting card will be like and how it may be ordered for and received was developed. The concept having been tested with a randomly selected representative group of the target market gained favorable interest and commendation indicating possible product approval and adoption by the overall target market (Kotler, 1991). This way, the attitude of the target market to the new product was ascertained before embarking on any expensive and time consuming further product development (Kotler, 1991).

4. Marketing strategy development

The new product(s), electronic greeting cards, is targeted at the families, especially the young people in the UK and abroad.

Young people are easily accessible through various electronic media and channel, especially the Internet, and are quite savvy in its use for many activities such as for purchases and communications (Marketing Teacher, 2010).

Products in the fast moving category such as social expression products like greeting cards and food if supported by appropriate and effective advertisement have been shown to be successful with this target market (McDonald’s, nd).

Statistically for the UK, 19% of the population is made up of age 16 and below; 14% of the population is made up of age 16 to 24. Furthermore, 63% of the UK children live with their parents; 6% of age 20 to 24 are married; and 19% cohabit or live with their parents (UK Office for National Statistics, 2007A; 2007B). These represent a huge market of Internet savvy individuals.

5. Business analysis (¬nancial)

Such factors as cost and demand projections; level and impact of competition; required investment; and the profitability of the new brand have been carefully considered.

Figure 1 below represents a graphical representation of how the target market of the e-greeting card brand of Carte Blanche is envisaged to position the new product/ brand. However, the graph is based principally on personal perception derived from experiences and knowledge of the social expression industry.

Key:

blue bar: Carte Blanche current product offering;

Red bar: e-greeting card;

Green bar: competitors’ products

Figure 1 A Market Positioning Map illustrating the position of the e-greeting card brand against competitors.

Cost of production is expected to be much lower than in the production of hard greeting cards as there will be no expenses associated with purchase of materials such as card board and printing. However, significant initial investment will be required in the acquisition of IT infrastructure and training of designers in their use.

Demand is expected to soar as there is a huge waiting market to exploit based on the statistics of the target market offered earlier.

Also, the high return on investment that is associated with e-commerce is also anticipated in this case (ITU, 2010).

6. Physical product development (includes branding decision)

Product

Core-product: the core product represents the benefit of the new product to the consumer. It is in the category of social expression. It feels emotional needs and provides pleasure to both the sender and receiver.

Tangible product: This represents the tangible or physical product but it is in the electronic form in this case, and primarily refer to the electronic or e-greeting cards.

Brand name: Brand name selection is a part of the branding strategy and exercises a crucial role in a firm’s overall marketing strategy (Douglas et al., 2001). Many companies that are maintaining excellent growth despite intense competitions often rely on their well established brand in maintaining this revenue and market share growth demonstrating the importance of the choice of a brand name (McWilliam, 1993; Tauber, 1981; Economist, 1990; 1991; and Ambler and Styles, 1996). Hence, two basic categories of brand names were considered for the e-greeting card. They are:

Totally new names such as “Mayor’s” and “Feel me” that does not reflect Carte Blanche or any of its well established brands at all, and

Names that are based on Carte Blanche and any of its well established brands.

However, the name “Carte Blanche e-Card” was chosen. The choice comes with some relative advantages (Kotler and Pfoertsch, 2006) such as:

1. Rest on the good position of the Carte Blanche brand;

2. “Carte Blanche” offers trademark protection;

3. Ease of pronounce, remembrance, and recognition; and

4. It is attractive.

Promotion

A combination of both pull and push strategy will be employed here.

The pull strategy will be designed to stimulate demand from the target market. Active public relations, viral marketing, personal selling, and public interviews will be used to create a visible brand and encourage the target market to seek out the new product.

The push strategy will form the primary promotion strategy to be employed as the product is being introduced to the target market newly. Therefore, an initial push strategy may be effective in creating awareness and familiarity for the new product (Berthon et al., 2003). The push strategy will make use of a media-mix strategy (Ephron, 2000) using paid advert in magazines, newspaper, TV, and radio and outdoor advertising, and on the internet, for maximum impact.

Pricing

Penetration strategy shall be employed. This is because the product is new and its survival at the market entry stage is critical (Penn state University, 2007). The price will hence be kept as low as possible at the market entry stage but shall remain dynamic and respond to the different stages of the product life-cycle and market forces. The rationale behind this strategy is demonstrated in the Figure 2 below:

Economy

Premium

Skimming

Penetration

Low

Low

Quality

Pr

ice

High

Figure 2 Pricing strategy matrix (Source: Marketing Teacher, 2010)

High

Distribution

Intensive distribution of the product shall be the distribution strategy. The product shall be distributed principally over the internet using all electronic gadgets with Internet connection capability. Kotler and Pfoertsch (2006) are of the opinion that revenue generated from similar products is often a function of the intensity of the distribution, and intensive distribution is critical for market recognition and penetration, and gaining market share for a new product.

7. Market testing

Before the full commercialization of the product is carried-out, it shall be offered for sale on Carte Blanche website and other well-known outlets on the internet. This will enable the monitoring of consumer reaction to it; the product’s performance based on the designed marketing plan; and the response of the competitors to it.

8. Commercialization

The final stage of product and brand development. After testing and analysis, the firm finally introduces the product to its target market. This also involves implementing a total marketing plan and full production.

Measurement of SMART Objectives

The realization or not of the SMART objectives shall be evaluated using measures and metrics from Kokkinaki and Ambler (1999) and Kurtinaitiene (2005) that have been validated in literature. There are 6 categories of available metrics under this framework, however, the most relevant shall be applied to the measurement of the SMART objectives in this case. These categories are:

Financial measures (as turnover, contribution margin and profit)

Competitive market measures (as market share, advertising and promotional shares)

Consumer behaviour measures (as consumer penetration, loyalty and customer gained)

Consumer intermediate measures (as brand recognition, satisfaction and purchase intention)

Direct customer measures (as distribution level, profitability of intermediaries and service quality)

Innovativeness measures (as products launched and their revenue)

The performance of the new product shall be evaluated against the above metrics so that effectiveness of the marketing and brand strategy can be determined.

Conclusion

There exist enormous potential in the e-greeting card segment of the social expression industry that the industry players may tap into. This report as shown the challenges of the social expression industry such as cultural sensitivity and constant change. However, Carte Blanche, a well known industry player in the UK with tentacles in most part of the world may ensure continuous growth over the next three to five years by tapping into the opportunity that IT and Internet offers for production and distribution of products respectively. Following the recommendations of this report may help ensure that Carte Blanche position itself and its brand(s) for the prospective steady growth.

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