C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 Staples Strategic Marketing in Practice Case Study June 2009 David Kilburn

© CMC 2005C A M B R I D G E M A R K E T I N G C O L L E G ES

Staples

Strategic Marketing in Practice Case Study June 2009

David Kilburn


Scenario

• You are employed as a very experienced (20 years) marketing professional and are

expected to advise the client TASK:

– Prepare a report on the current state of the business

– Implications for Staples’ international marketing strategy development

– Possible branding and strategy development– Possible marketing communications– Possible international expansion/consolidation– Critical analysis of the office supplies, stationery,

furniture, equipment technology, printing and mailing services


Where are we now ?

Audit of current situation


The office supplies and stationery industry

• The global office supplies industry is a fragmented market with many providers

• Staples’ share of the $177 billion global market is 10.73%

• Competition comes from not just specialist operators but also large Retailers such as Walmart, and specialists in printing, mailing services, office equipment, furniture and technology

• Internet and catalogue sales are additional channels of distribution


Brand issues

• BRAND DOMAIN (brand’s target market)

• BRAND HERITAGE(how it has achieved success)

• BRAND VALUES (core values and characteristics)

• BRAND ASSETS (what makes brand distinctive)

• BRAND PERSONALITY (character of brand)


Global stationery, office supplies SWOT

Strengths• Product lines are sought after • Rise and rise of education

globally raises demand for home study, paper, equipment, etc.

Weaknesses• Fragmented market• ‘Me too’ products

Opportunities• Global reach• Underdeveloped countries• Distance learning/virtual campus• Faster growth in Europe currently

Threats• Crowded marketplace-winners and

losers• Buy outs, consolidation• Saturated market in developed

world• Barriers to switching are low• Customer loyalty low• Global recession• Litigation- IP etc.


Staples - SWOTStrengths Weaknesses • Global operator Undifferentiated position• 2,000 stores in 22 countries Overstretched resources

in an economic downturn

• Nimble, agile, innovative• Quick decision making• B2B and B2C markets• 22% of sales are proprietary branded products, including Staples and Quill

Opportunities Threats

• Training and consumable product sales Decline in consumer confidence

• Expand centres of excellence nationwide Other companies may out innovate Staples

• Increase sales by greater focus on Global credit crunch customers and markets

• International expansion- acquire competitors via mergers and acquisitions


Map of competition

National chains

WHSmith Rymans Computer World (DSG)

International chains

Best Buy, Office MaxOffice Depot Corporate ExpressAvery Dennison Corporation

Leading global retailers

CostcoWalmart

Local providers

Numerous independent companies serving local needs


PESTLE

Political• Governments and regulatory bodies

may block any attempts at further industry consolidation


Economic

• Credit crunch in the U.K. has dampened consumer spending – has hit all industries

• Global credit crunch has impacted consumer spending all over the world

• Disposable income has been badly hit• Consumer confidence has hit rock bottom• Difficult times ahead• Possible deflation in U.K. and inflation in

USA


Sociological

• Greater need for social housing• Greater need for single units for

households – less marriages, older people living longer, divorce rates high

• Greater interest in environmental issues, ethical trading, reduction of carbon footprint


Technological

• Technology is ever changing• Opportunities are endless• Sophisticated database marketing

techniques now possible • Rise and rise of internet sales


Legal/EnvironmentLegalLegal action can be taken against

companieswho flaunt safety regulations, non compliance offences punishedEnvironment• C.S.R.- companies will have to use more

biodegradable fuel, lessen impacts on environment, ethical sourcing,

• Growing need for companies to target environmentally aware target segments


Consider Staples’ positioning

• Use either BCG or PLC


Brand Equity

• Bonding –----How does it retain itself with me

• Advantage – --Does it offer something different

• Performance- -Can it deliver

• Relevance – Does it offer something I want

• Presence- Do people know it


Where do we Want to be?


Objectives

• Decide• Objectives

– For U.K. and International

• Deliver• Outcomes


Segmentation

• Described and Profiled for each sector


Segmentation

B2B B2C


Targeting

Target and penetrate existing markets B2B

and B2C and also new market segments globally


Positioning

• Clear and defensible– Set out USP and Positioning for each

sector.– Are there any commonalities or Single

Brand options

• Vision• Values


USP and Positioning

USP – socially responsible, proactive regarding environment, strongethical trading stance

Positioning – number one in world for stationery and related products, leading

the global industry in terms of ethical sourcing, environmental issues, health and safety, staff training and development


SegmentationSegment – B2B

B2C


Targeting, USP, Positioning

Target and penetrate existing markets in theoffice supplies industry and also new markets internationally USP – leading the industry for ethical sourcing

andtrading, protecting the environment andstaff development

Positioning – number one office supplies company in the world for environmental protection, quality service and customer intimacy


How do we get there?


Action

• Decide• Objective• Deliver• Outcomes


Strategic Development

• Product– Sector Selection– Core/ Physical/Augmented Proposition– Branding

• Pricing• Distribution• Promotion• People • Process


Implementation and Control

• Budgeting Areas• Metrics• Balanced Scorecard• McKinsey 7S


Comms Strategy for Speedy Hire• Audiences –Internal and External, domestic

and international, and Corporates

• Media• Messages• Timing/Budget• Stakeholders

• Investors• Suppliers• Partners • Customers• Media• Regulatory Bodies e.g.• Who else ?


Internationalisation

• Where, when and how– GE/ Harrel and Keiffer



• Budgeting Areas• Metrics• BS• McKinsey 7S


Critical success factors

• Create a sustainable brand image and position amongst competitors

• Change management (PLC,BCG)• Internal marketing (stakeholder

management, CRM)• Funding (Borrowing/J.V/Debt/ Licensing/I.P)• Constraints – Overstretching

- Competitive landscape - Changes within the office

supplies industry


Vision

For Staples to become an establishedGroup who have a strong and loyal

customerbase, enabling them to invest in a robust, innovative international marketing plan which will keep them top of mind and in

the leading position in the global office

supplies industry for the next 10 years


Mission statement

To become a leading player in the global office supplies, technology and printing business who can sustain and increase its popularity amongst business customers and consumers who recognise quality, service and value, using ethically sourced products from around the globe.


Values

• Committed to providing high quality, technically advanced, reliable equipment to all our customers

• Committed to providing our customers with products which are easy to use and dependable

• Committed to continual dialogue with our customers, and to provide excellent service across all our business domains


Corporate objectives

• To ensure that the Group has the correct financial advice and backing to be a leading player in the global office supplies business

• To become even more successful internationally and leverage the financial benefits of this expansion


Strategic management of marketing mix

• Product Core – office supplies, stationery,

technology, printing and mailing services to business and consumer

Augmented – durable,

environmentally friendly • Price Favourable price – value for money



• PlaceGlobal presence – but needs to drive more sales by targeting the European and South American markets, (notably Italy, France) plus (notably Brazil and Argentina)

• PromotionWeb site – continually update the content. Positive P.R. ( environmental, ethical). Personal selling, excellent customer service.



• People Train and develop the existing staff and also retrain staff from new acquisitions. Selective recruitment of key sales/marketing/technical personnel. Recruit proven staff in new overseas markets to establish and promote the business.

• ProcessesRegular internal/external communication. Long term relationship building. B2B customer involvement with key accounts. Relationship marketing. Customer Lifetime Value. Branding strategy.



Physical evidenceInteractive, informative web site

Number of awards won for environmental and ethical approach.

Endorsements from satisfied customers

The Staples logo and brandROI table – comparison with other global office supply companies


Implementation and Control McKinsey 7S

Structure Based in USA, with offices in

U.K.,Europe, Asia and possibly South America

Strategy Focus differentiated aimed at loyal

customer base and potential customers in U.K. and overseas


Implementation and Control Systems Develop MKIS and control systems to regularly

review and monitor effectiveness of all marketing strategies

Develop benchmarking system to monitor against key market indicators and main competitors

Staff Continual development of all staff, especially

staff from new acquisitions. Advanced product and sales training, inbound and outbound, online and offline, CRM development. Key relationship building with educational and commercial Contractors, businesses, Government departments and key influencers in global markets


Implementation and Control SkillsEnsure correct training and development programmes are established to keep Staples at the leading edge of technology, systems and processes

Shared values Ensure company strategy is shared by

everyone in the organisation. Growth strategy and national and international expansion shared with all staff, influencers and key stakeholders.



Style Acquisitive, innovative, agile and nimble. Quick to spot opportunities ahead of the competition.


Control – Balanced Scorecard

InternalDevelop CRM databases for collecting customer feedback and insights into future needs, wants, industry trends, (market intelligence)


Control – Balanced Scorecard

Innovation and learning Skills training – advanced B2B selling,

super deal closers who ‘champion’ the product portfolio. Technological development to ensure quality and environmental issues are paramount to leverage financial benefits.


Control – Balanced Scorecard Financial Sales vs. targets in each sector – UK,

USA (potentially France, Italy, South America

etc.) Profitability metrics, CLV

Customer Customer satisfaction surveys –

customer feedback. Customer endorsements - web based

Brand recall/awareness of brand


Possible questions 1 In the light of recent joint ventures,

mergers and acquisitions, what branding strategy should Staples adopt to maximise sales and profitability ?

2 Devise an international marketing plan which

will enable Staples to expand and maximise

its profitable operations overseas


Possible questions 3.What branding and positioning strategy should Staples adopt to improve its

appeal to business customers?

4.Devise a marketing plan to make Staples a

leading player in the global office supplies

business


Possible questions 5. Prepare a relationship marketing

campaign which will effectively increase Staples’ customer loyalty and their lifetime

value.

6. Staples is at a critical point in its development and growth. Produce a strategic marketing plan which will ensure increased revenue and negate the marketing strategies of domestic and international competitors.


Possible questions

7. Prepare a corporate social responsibility charter for Staples in the light of the growing importance of environmental and ethical issues

8. Prepare a communications plan which will increase sales and profitability for Staples

across all its target markets

Documents

C A M B R I D G E M A R K E T I N G C O L L E G ES © CMC 2005 Staples Strategic Marketing in Practice Case Study June 2009 David Kilburn