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Professional PostgraduateDiploma in Marketing64 Strategic Marketing in Practice
SPECIMEN ANSWERS FOR JUNE 2008 EXAMINATION PAPER
Note: In an attempt to present an accurate and representative account of a candidatespiece of work, the answers have been reproduced in their original form and may thereforecontain grammatical, terminological and formatting errors and inconsistencies.
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Introduction
The specimen answers provide examples of answers that can be reasonably writtenwithin the allocated time. The answers demonstrate what is required to achieve a goodpass mark, unless otherwise indicated in the Comments.
Remember when revising from these examples that there are no right or wrong answers.The examiners are looking for you to apply your own marketing knowledge and skills tothe question set. These answers should be indicative of the content and format that theexaminers expect to see.
To give you the best chance of passing your exams, these specimen answers can beused in conjunction with the examiners reports, in which the senior examiner for eachsubject outlines best practice. The examiners reports are available from CIM Direct andon the CIM student website, www.cim/learningzone.co.uk.
We hope you find these specimen answers useful and informative. Although we cannotenter into correspondence, we would welcome comments or feedback, which should besent to [email protected] or to CIM Publishing at the Moor Hall address.
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CIM SPECIMEN ANSWERSPROFESSIONAL POSTGRADUATE DIPLOMA IN MARKETING
STRATEGIC MARKETING IN PRACTICE JUNE 2008
This particular case study looks at the construction sector and attempts tounderstand how marketing works within a highly competitive and basic industrysector. Tool hire is a difficult business and companies have to find distinct waysto develop a strong presence in the market. This case study explores the way in
which Speedy creates a differentiated service proposition. The specimenanswers below are indicative of well developed arguments and should not beconstrued as being perfect answers. Both answers will give differing viewpoints.
ANSWER SCHEME
Answer all questions
In your role as an independent researcher and marketing consultant in the plant and toolhire industry, you have been asked to write a report based on the following tasks.
Question One
Critically assess the UK and international opportunities available to the tool andequipment hire sector, highlighting potential areas where Speedy Hire couldexpand their service offering.
(25 marks)
This question requires candidates to thoroughly analyse the data given and to spot
opportunities for expansion within the tool and equipment industry. This answer shouldbuild on the current strengths that the company has developed over the last 10 years inthe UK market. It has become a market leader and created a special strategyencompassing safety and quality testing of equipment.
Candidates should distinguish between the plant hire sector, which is mainly determinedby civil engineering projects, and the tool hire sector which is within housing constructionand DIY. Candidates will rely heavily on the analyses of the various sectors and the data
given. With regard to the international sectors, they could look at GDP and potentialgrowth within the sector in the countries. Many of the potential opportunities are already
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OPPORTUNITIES With more companies seeking to outsource equipment, plant hire companies can gain
stability by introducing long term contracts Large plant and tool hire companies with national coverage can afford national
advertising campaigns Improvements in IT systems and communications between plant hire operators and a
centralised plant hire location would assist greatly improved customer serviceAs large consumers of plant equipment, plant hire companies are in a better position
generally to negotiate good prices for buying plant PSF and government-funded initiatives provide opportunities for big construction
projects such as building hospitals or government buildings Public sector construction and infrastructure projects provide opportunities for
expansion Tool hire companies can seek to introduce stability by entering long-term contracts
with larger companies There is a move towards preferred single supplier agreements Continued improvements in inventory control can gain a tool hire company a
competitive advantage, through centralised hire centres and offering the customerflexibility about where tools can be hired or returned
Periodic regional growth opportunities, reflecting the impact of climatic factors (e.g.flooding)
Whilst the market is becoming more concentrated with acquisitions and mergers etc,opportunities still prevail with the expansion of builders merchants
These opportunities can be tied to the various growth sectors and the potential impact ofthe Olympics. Also, it may make sense for the company to cross over into the Europeansector with their expertise. The Asia Pacific sector would be a longer term growthprospect. It could be that the company may well want to repeat its success in othercountries such as Germany, where safety factors are as stringent as in the UK.
Analysis ofmarket opportunity 10 marksOpportunities for expansion 15 marks
Total 25 marks
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Question Two
Critically analyse the role that integrated marketing communications has played inSpeedys marketing success, and recommend how this could be extended tointernational markets in the future.
(25 marks)
This question is quite straightforward if the candidates can actually weave the IMCtheory into their answers. The Kitchen and Schultz model makes a lot of sense andintelligent students could use this model to develop their answers.
The American Association of Advertising Agencies: IMC is a concept of marketing communications planning that recognises the
added value of a comprehensive plan, that evaluates the strategic roles of avariety of communication disciplines for example, general advertising, directresponse, sales promotion, and PR and combines these disciplines to provideclarity, consistency, and maximum communications impact.
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Speedy were very good at implementing the IMC concept in eight steps as discussed bySchultz and Kitchen.
1) They undertook market research to establish the customer prospects andunderstand the value of their new campaign
2) They located the key contact points with suppliers, customers and otherstakeholders such as HSE
3) They started to build brand relationships through the Speedy logo and the linkswith health and safety
4) The message was carefully conceived and delivered through multiple channelsas discussed above
5) They estimated the return on customer investment (ROCI) and duly spent 2mon buying new equipment
6) They invested heavily in the campaign7) They instigated marketing metrics and measured the success of their campaign
in terms of market growth and return on investment8) This exercise will have developed their database of customers and will give them
a chance to launch other Integrated Marketing Campaigns.
Candidates should then be able to discuss the merits of utilising such a strategy ininternational markets. They should be aware of cultural differences and of understandingthe fact that international markets may be at different stages of development from theUK market.
Analysing IMC in context 15 marksInternational issues 10 marks
Total 25 marks
Question Three
Critically evaluate how Speedy Hires strategic approach to business developmentand marketing has contributed to its significant financial success.
(25 marks)
Candidates should be able to look at the branding and marketing strategies deployed bySpeedy and place them in context with regard to developing a successful strategy.
The marketing campaign established Speedy as not just a supplier but also a partner
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marketing to customers one at a time articulating the desired relationship with consumers by providing a guide to the
appropriate behaviour for the brand in its various transactions with theconsumer. Speedy have done this through their emphasis on health and safetyand by helping the customers to implement certain standards
brand attitudes and behaviours expressed through packaging, sales promotionand PR, which should all be consistent with their relationships. Speedy havecommunicated this through their special logo that is used on all building sitesutilising their tools
the importance of corporate brands their communications shift the brandsattitudes and behaviours back to the people. Speedy have succeeded in doing
this really well, in that they have set up an industry standard that complies withtheir brands attitudinal stance.
The employees of a corporate brand both represent a means of communicating thebrands attitudes and are an integral part of the brand. The employees undergo trainingand buy into the brand attitude. This can then be translated into an understanding of thefinancial success. This is reflected in their year-on-year profitability, as shown in thefinancial performance tables and the graphs in the appendices. Good candidates will
take this forward and look at the triple bottom line approach as shown below.
Marking Scheme
Critical evaluation of the Speedy approach 15 marksLinks with financial success 10 marks
Total 25 marks
In addition, 25 marks will be allocated for the prepared analysis of the case and itsapplication to the questions above.
(25 marks)
(Total 100 marks)
Summary
As usual, examiners will look for innovation and creativity in the way candidatesapproach and answer the questions. The key points that should be considered arecoherence of approach, strategic thinking and attention to detail. As this case contains alot of data, useful analysis of the data will also enhance the answers. As usual, we will
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Specimen Answer One
Strategic Marketing in Practice
6 June 2008
Executive Summary
This report will aim to identify and critically assess the opportunities driving the tool and
equipment hire sector and identify potential areas where Speedy Hire might develop their
service offering in order to maintain and strengthen their position as the number one hire
company.
The following two parts of the report will make recommendations for extending Speedys
marketing communications internationally and evaluate how the strategic approach to
date has contributed to success.
PART 1: Potential UK and international opportunities
There are a number of factors driving the UK tool hire, each presenting a range of
opportunities for Speedy Hire to pursue. Figures 1.1 and 1.2 highlight some of these
trends, changes and key drivers, and are translated into ways Speedy might leverage their
strengths and competencies to exploit these opportunities in Figure 2.1.
This report will highlight the most appropriate and significant changes and address ways
to exploit them.
1 Health and Safety
h i i di h l h d f i h i d d h i h i f
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established itself as a leader in health and safety, Speedy have the opportunity now to
build on this competitive advantage and first-mover advantage.
Further initiatives, such as establishing a health and safety training centre/academy,
becoming official health and safety accreditors (their existing strong links with the HSE
provide an in-road into gaining the support to do this), or even becoming health and
safety specialists in the industry. This would involve reviewing sites, needs and
specifying particular products for projects.
Speedy Hire currently has resources in place to strengthen their focus on health and
safety Figure 6.7 highlights its superior contacts with external health and safety bodies
and expertise, and so such initiatives would not require huge investments, rather a
directed focus on these opportunities.
2 Key Account Management
The industry is increasingly seeing a shift from transactional marketing to relationship
marketing. Key Account Management and a more focused approach to selecting
valuable accounts and adding value would help Speedy to understand customers needs,
identify unmet needs that might arise, enhance their service offering through customised
health and safety training, and ultimately improve the profitability of these accounts.
3 Building Speedy Brand
The current issue regarding health and safety is that competitors, such as Hire Station and
A-Plant Tool Hire, have also started to recognise the benefits of investing in this sector.
In order to protect their share in this sector (see Figure 3.5), Speedy need to differentiate
themselves and strengthen their brand to remain the number one choice for health and
safety in the mind of the consumer
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4 Product Development
The previous recommendations have been based on a strategy of market penetration, as
illustrated in Figure 4.1.
However, there are opportunities to develop Speedy Hires product range in light of the
current trends. Figure 4.2 highlights potential areas which Speedy might choose to go
into.
Of these, it is recommended that a move into the emergency safety equipment market
(i.e., emergency safety showers and eyebaths, mobile decontamination units) would
complement Speedys focus on safety, work together with other products in its offering
and fit strategically with its decision to move into such markets as petrochemicals and
utilities, where concerns regarding hazardous substances are high.
4.1 Environmentally friendly products
The tightening of emissions\energy legislation and increasing concerns among businesses
create an opportunity for safety to integrate these values into their offering and their
positioning. The fact that they have already begun to do this puts them in good stead to
develop this area even further.
5 Plant Hire
The plant hire section of the industry is showing real prospects (Figure 4.1) and the shift
seems to be toward the more heavy end of the market. As Speedy is currently highly
geared, my recommendation would be to investigate a move into plant hire on a low-risk,
low commitment basis, e.g., joint venture or strategic alliance.
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6 ICT Development
Developments in ICT are providing opportunities for hire companies to reduce their costs
by restructuring. I would recommend that Speedy Hire start to restructure their current,
rather fragmented businesses into a hub and spoke network, which would enhance
flexibility and customer service and encourage cross-selling.
7 Market Development International Opportunities
While there are still opportunities within the UK to move into non-construction markets
such as the oil and gas sector or emergency services/disaster recovery sector, I
recommend that Speedy look in the next few years at creating an international presence.
7.1 Selecting foreign markets
In selecting foreign markets we need to assess the opportunities available to us. Whilst
the Asia-Pacific requirement for tool and plant hire is likely to grow by 29.6 percent by
2011, and the forecast for construction output looks positive, there are numerous negative
implications.
Considering Speedy Hires lack of experience in international marketing, the distance,
culture gap, language, complex trading barriers, tariffs and entry requirements make it a
less attractive market. It is also less likely to prioritise health and safety as in the UK.
Figure 4.4 highlights some of these issues the company needs to consider, using the 12Csmodel. Europe, on the other hand, and in particular Western Europe (with particular
attention to France, Spain and Italy see Figure 4.5) presents a relatively high growth
market, and an attractive market, in terms of its proximity, culture, customs, similar
outlook on health and safety contractual obligations, and of course, construction
output/likely demand.
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7.2 Entering foreign markets
In light of the increase in Speedys borrowing over recent years, and impact it has had on
interest rates and gearing (see Figure 2.2 for analysis), I would recommend that Speedy
look to enter these Western European markets (primarily France and/or Spain) through an
indirect international strategy, i.e., joint venture, franchising or licensing.
These methods of market entry provide a quick way into the market; often the benefit of
local market knowledge, and less capital investment than direct methods.
However, they need to be aware of the presence of existing suppliers, and take this into
account when developing communications strategies. They will also need to be aware of
the competitions reaction to Speedys entry.
Conclusion
There are numerous opportunities facing the industry. By pursuing the recommendations
outlined in this section, Speedy can remain at the forefront of the industry and stay true to
their growth strategy and core values.
Comments
This answer is well constructed and looks at why Speedy has succeeded in the
marketplace. All the key areas such as branding and relationship marketing have been
covered well. The second part looks at the potential opportunities available to Speedy.All the discussions are supported well by the analyses.
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PART 2
Part of Speedys success, both financially and in terms of customer commitment and
retention, is down to their recent integrated marketing communication campaign.
This part of the report will analyse what has made the campaign successful and how these
findings can be used in developing an international marketing strategy.
1 Integrated Marketing Campaign Success
1.1 Marketing research
Before developing the campaign, Speedy Hire undertook extensive research into the
needs of their target customer groups. This helped them to identify exactly what it was
that customers needed and wanted, and the needs that were not being met.
Such insight then enabled them to develop the campaign specifically targeting end-
users/site level and with the view to communicating new health and safety regulations.
As a result, the campaign was targeted, relevant and effective.
1.2 Customer-led
The relevance of the campaign and the highly targeted nature of communications,
displayed to Speedy Hires customers its dedication to them, its willingness to developsolutions with and for them, and an interest in customers businesses and business
environments.
As illustrated in Figure 3.3, Treacy and Wiersena argue that to truly be a market leader,
companies need to excel in one of three value disciplines. Such a customer-driven
marketing campaign demonstrated Speedys ability to excel in customer intimacy
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and brand image is flexible and translates well in foreign languages, giving the company
mileage to create a global brand.
3.1 Strong branding
In order to remain consistent, and to avoid damaging the brand, values and vision need to
be extended to new markets. Therefore, Speedy will need to focus on how best to
translate its values and vision (see Figure 5.6, Brand Onion) into new markets, and
where to position the brand in light of local competitors positioning and strategies.
It is also imperative that operations in foreign markets, along with culture, employee
attitudes, service quality and commitment are managed and maintained to the high
standards to the high standards required in order to support the image of the brand and the
values it communicates. This is illustrated in the Brand Iceberg (Figure 5.4).
3.2 Marketing communications plan
Speedy will need to invest in some research into the given foreign market in order to
understand what the priorities and unmet needs of consumers in that market are, and
adapt their current communications accordingly. In addition, an analysis of theenvironment will be necessary to identity the most effective and appropriate
communications channels and also understand such things as the health and safety
legislations in that market.
It may be that health and safety is not as much of a concern as in the UK, in which case
Speedys communications may first look to creating awareness of the issues and therefore
creating the demand for their differentiated services.
I recommend that regardless of the current situation regarding health and safety in the
country, the company needs to not just address customers, but also influence markets
(e g equivalent to HSE) and governmental bodies The need to address these various
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3.3 Promotional options
It is likely that a face-to-face method of selling will be most appropriate in the early
stages of the international marketing strategy, e.g., road shows, site visits, tool box talks,
as this opens up two-way dialogue, helps to understand customers needs and starts to
build a relationship with potential customers (Figure 5.1) with the view to encouraging
their climb up the ladder of loyalty (Figure 5.2).
An offensive, above-the-line campaign may also be required to support this in order to
build awareness of their presence in the market, attract interest, and warn competitors.
Conclusion
Whilst adaptations to the current communications model will clearly be required, it is
imperative Speedys communications and branding strategy align with their current
values, in order to strengthen their brand both in the UK and globally.
Comments
This answer looks at the key Integrated Marketing issues that are of importance to the
organization. The analysis is good and relies heavily on appendix. However the answer
would have benefited from a good venture into a theoretical model such as the one
shown in the marking scheme. This would have tied down the holisitic nature of IMC
that is required for success. Success in the International market is difficult and what
works in the UK does not always work well elsewhere. The candidate should have
explored the problems cultural values and communication.
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PART 3
Speedy Hire appears to be a company who are doing everything right. But their success
has not happened by accident. Speedys strategic approach to business and marketing
development has led them to ultimately become the number one company in its industry.
The following part of the report will critically evaluate how their approach has achieved
this.
1 Market Sensing
By implementing tools for environmental scanning and recognising its importance,
Speedy have been able to understand the environment it is operating in and predict/plan
for changes and opportunities as and before they emerge. This has ensured they remain
at the forefront of legislation and customer trends in demand/concern.
2 Clear Objectives
Clear, defined corporate and marketing objectives allow Speedy to continually measurewhether they are on track financially and in terms of marketing objectives. Having clear,
SMART objectives enables the company to compare performance to what was set out at
the beginning of a year/plan/strategy.
3 Strategy
The company has pursued a strategy of penetration, market and product development,
and diversification (as in Figure 4.1) over the years which has helped them to increase
sales from existing customers (through KAM, cross-selling and an augmented service
offering, move into new markets (such as lifting, and power equipment), widen their
range of both hire and complementary non-hire services and gain further expertise
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Such a strategy, combined with identification of opportunities to reduce costs (e.g., an
organisation-wide, integrated IT system, has led them over the years to close their
strategic gap. This concept is illustrated in Figure 3.4.
However, having grown both organically and through acquisitions to date, the company
has accumulated increased borrowing and is consequently highly geared, with a gearing
ratio of 109 percent (Figure 2.2). This could become a concern to shareholders and will
undoubtedly impact share price, and so it is probably going to be necessary for Speedy to
take an approach allowing a period of consolidation and organic growth to reduce
gearing.
In addition to this, a decreasing Gross Profit Margin (Figure 2.2) suggests that the
companys approach may have been to discount products. In order to increase Gross
Profit Margin the company may have to shift its focus to premium pricing, by
concentrating on building its brand and strengthening its differentiated position. Whilst
discounting increases turnover, it is profit that shareholders are interested in. As the
saying goes, turnover is vanity, profit is sanity.
4 Management of Strategic Business Units (SBUs)
Speedy has effectively managed its SBUs, as illustrated in Figure 3.5, identifying where
investment for growth is required (i.e., Health and Safety, Training, Lifting, Power) and
managing tool hire for cash to invest.
5 Differentiation Strategy
In a competitive, saturated market, where it is becoming increasingly hard to create
customer loyalty based on product/service offering alone, Speedy has recognised the need
to pursue a differentiation strategy as highlighted in Figure 3 2 and has identified the
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6 Strategic Approach to Marketing
A strategic approach to marketing has allowed Speedy to effectively manage
relationships with all key market stakeholders, and not just customers (Figure 6.6). This
has led to third party endorsement that has been critical to their success, and also the
development of environmentally friendly products, addressing the wider needs of the
community (influence markets). Its recognition of the important role marketing has to
play has also led them to foster a culture of innovation and learning and employee
empowerment.
7 Control Measures
The implementation of control measures, e.g., cumulative sales for SBUs, sales of new
products responses to advertising and health and safety measures, allows them to pursue a
strategy of goal setting performance measures performance diagnosis corrective
action. This ensures continual control and regular checks that they are meeting
objectives, and if not, to rectify the situation. It has also ensured the effectiveness of their
marketing campaign.
In addition, such a strategic approach to the marketing campaign ensured the significant
investment made was not wasted.
Conclusion
To continue growing successfully, Speedy must continue to take an organised, strategic
approach to both business and marketing development, and this assessment if their
approach to date should offer good insight into the appropriate ways to do this.
Comments
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been good to see a little more emphasis on the financial success and to relate this more
closely to the marketing strategies with some justification. However, overall this a good
answer to the question set.
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Specimen Answer Two
Strategic Marketing in Practice
6 June 2008
Speedy Hire Report
6 June 2008
To: Steve Corcoran, COO, Speedy Hire plc
From: Marketing Consultant
Overview
Section 1: Assessment of UK and International opportunities
Section 2: Assessment of the role of integrated marketing communications
Section 3: Evaluation of Speedy Hires approach to business development and
marketing
Appendix
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OVERVIEW
Speedy Hire is the UKs number one tool and equipment hire company. The company
has grown rapidly through both organic growth and acquisitions. It has rightly earned its
position as a premier player in a difficult market which faces intense competition and
consolidation (see fig 2.2, page 2 Porters Five Forces).
Whilst Speedy Hire serves a mix of B2B (Business-to-Business) and B2C (Business-to-
Consumer) markets, this Report will focus on the B2B market as this is the area that has
the largest market size and growth rate (see fig 2.3, page 2 Target Markets).
This Report commences by making an assumption that:
- Speedy Hires primary B2B customer is the construction industry- Speed is not considering plant hire (although the distinctions between tool,
plant and equipment hire are blurred) due to many players in the plant hire
space.
Speedy Hire operates in a dynamic market place and it must protect its position andmarket share. The aim of this Report is to address questions raised at the last meeting in
sections 1-3.
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SECTION 1
Assessment of the UK and International opportunities
i) UK market development
The UK market for tool and equipment hire is nearing saturation. Financial analysis (fig
5.1, page 5 segmental analysis) shows that since the acquisition of LCH generators and
lifting gear in 2006, equipment asset utilisation rates have fallen. This, coupled with the
fact that Speedy is relying on one major B2B market, construction, demonstrates that
Speedy Hire has an opportunity to broaden its horizons and look at new market
opportunities in the UK.
Strategy recommendation for the UK
Fig 4.1, page 4 Ansoff matrix shows Speedy Hires current products and the markets
which it services.
New market development will help Speedy Hire to:
- protect its position as its fortunes are currently too over-reliant on construction
- expose Speedy Hires extensive range of under-utilised equipment and tool
hire to new, and potentially very profitable markets.
I have revised the Ansoff matrix and extended it to new markets (see diagram below).
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Diagram: UK market development for Speedy Hire plc
EXISTING PRODUCT RANGE PRIMARY
MARKETS
SECONDARY MARKETS
Training
Consumables
Speedy space
Speedy engineering
Speedy generators
Speedy compressors
Speedy pumps
Speedy lifting
Speedy tool
NEW MARKETS
privateindustrialconstruction
Civilengin
eering
Removalfirms
Freightterminals
Businessstoragefacilities
Warehouse
anddistribution
NEW MARKETS
I also recommend that Speedy targets organisations that have national coverage. This
will help it to exploit its national network of depots and allow the cross selling of the
items in Speedys portfolio
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Initial analysis suggests focusing on primary UK markets such as civil engineering and
private industrial construction as the markets are sizeable (see fig 2.3 target segments)
and similarities in conducting business such as construction (Speedys traditional
market).
Secondary markets have great opportunity too. For example, the industries listed could
all benefit from lifting gear to prevent manual handling injuries, such as warehousing and
distribution. Initial analysis suggests that for this sector there are a number of large
organisations with national coverage for us to exploit such as Eddie Shobart, Browns
Group and Palletline.
I suggest Speedy Hire begins marketing intelligence gathering regarding market size
(should all be inputted into the marketing information system). Existing material fromthe Safety from the Ground up campaign can be updated from the new markets at a low
cost and co-branded where appropriate.
ii) International development
The initial research highlighted that there is huge overseas growth in construction. The
research showed that the amount spent on construction overseas as a %age of GDP is
rising faster overseas.
With harmonisation across the EU on health and safety, it is natural to focus on just
Europe. I have analysed the construction output figures in depth (see fig 5.3, page 5
market attractiveness ranked by size of market opportunity and CAGR). The figure
shows the top nine countries that met the above criteria for market attractiveness
(financial).
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1) Whether Speedy Hire could enter market and use health and safety as a
differentiator
2) Geographic proximity
3) Cultural considerations.
This is summarised in fig 6.2, page 6 (Business Portfolio matrix). The figure suggests
that Spain and the UK have the highest ranking (I have removed the UK from the part of
the Report as we have considered a strategy for the UK in the earlier part of this section).
With harmonisation across the EU on health and safety, we have a real opportunity to
target the Spanish market, with health and safety as our core value proposition.
Spain is currently experiencing high levels of growth and we need to capitalize on this so
speed of market entry is key.
My recommended method of entry into Spain is via the acquisition route as it is the
fastest route to market. This method will allow Speedy Hire to purchase instant market
information, market share and channels of distribution. It is also the most profitable as
Speedy will not be sharing the profits. With a strong track record in successful
acquisitions, Speedy Hire is well positioned to consider this course of actions.
Some considerations on acquisition
- at the time of producing this Report, Speedy has a high gearing ratio (as a
result of a 150million debt facility) and a cash collection issue (fig 4.2, page
4 Evaluation of Speedy Hires financial performance). Liquidity is also
falling. These factors combined may make it difficult for Speedy Hire to
secure additional funding (situation made worse by the current credit crunch:
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- I suggested we implement the UK market development strategy first as it will
increase equipment and tool utilisation ratios and thus increase returns on
assets, thereby improving the gearing and liquidity ratios.
Speedy Hire has a strong management team so I fully believe that they will make a
success of overseas expansion.
I also recommend setting up an International marketing information system (using Doole
and Lowes 12Cs Framework to capture valuable data on all the primary, secondary and
tertiary markets captured in fig 6.2 Business Portfolio matrix).
Please note that whilst Spain is an attractive country at this present time, its position may
change in the next few years. Speedy Hires excellent ability of market sensing coupledwith an updated marketing information system will ensure sound strategic decision
making.
Comments
Overall this is a pleasing answer and the candidate has obviously carried out careful
analyses that he knits into the main proposition. However, there could have been better
justification for the strategies that have been put forward. It is no good just
recommending frameworks because the answer has actually asked the candidate to
analyse the case and put forward opportunities. The candidate has done this well in the
extended Ansoff Matrix, but not necessarily elsewhere.
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SECTION 2
Assessment of the role of integrated marketing communications
Speedy Hires success in part has been due to its excellent marketing and the ability
to respond to the needs of its customers and trends/issues in the markets which it
serves. Integrated marketing communications has played a huge role in Speedy
Hires success.
Speedy had first mover advantage (in a largely undifferentiated market) bydifferentiation in its value proposition on health and safety (see diagram below:
Porters generic strategies diamond adapted).
Focus
Cost leadership Differentiation
Speedy Hire
CRS (Corporate social responsibility)
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This became a key part of its strategy (see fig 1.2, page 1 McKinsey 7S framework,
strategy), and marketing was able to deliver on the strategy using the Safety from the
Ground up campaign.
The success of the campaign in raising awareness has been largely down to Speedys
approach of partnering and consulting with all stakeholders. Suppliers, partners,
employees, the Health and Safety Executive were all consulted to ensure an integrated
campaign that would be easy to understand and be delivered in a format that would be
understood by the end user.
Critical to any campaign is the ability to measure the results to determine success or
failure. Speedy Hire had marketing metrics for each aspect of the campaign so that
response levels (via website) and responses to advertising, sales of new products, etc.
By using metrics in this way, Speedy Hire can evaluate what is working from a marketing
standpoint.
Interestingly, brand awareness of Speedy Hire and the health and safety campaign was
not measured. As a result we do not know how much of an impact the success of this
campaign has had on the brand awareness of Speedy Hire.
Since the Safety from the Ground up campaign, many of Speedys competitors are now
using health and safety as a differentiator. In fact, some of the analysis on the perceptual
map (see fig 6.1, page 6 Key players and perceptions of Health and Safety) even
suggest that Hire Station is four times larger than Speedy Hire on the health and safety
message.
I conducted a brand positioning audit (see fig 5.3 Brand identity and brand pyramid). It
was clear from this analysis that Speedy Hire could improve its brand position to make it
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Investment in the brand is critical to achieve brand loyalty (how individuals made
evaluations between alternatives and why they are willing to enter into a relationship with
one supplier).
Branding is important in a highly commoditised market, but more so in large B2B
organisations.
Speedy Hire has a positive image but a lack of differentiation and now its competitors are
catching up.
I recommend a brand redevelopment for Speedy Hire to help it differentiate itself and
therefore increase competitive advantage.
Brand strategy and development
The new Speedy Hire brand should focus on the following core values:
- safetystandards
- assurance- quality- partnership for
success- sustainability
All factors that would
appeal to the target market
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New Speedy Brand Positioning (Kapferers adapted)
Commitment to hard workand can do culture
CULTURE
Trustworthy Customer
Caring focused
Responsive PERSONALITY RELATIONSHIP organisation
Integrity
Intrinsic- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -Extrinsic
PHYSICAL REFLECTION
SELF IMAGE
Your partner for safety Customers will see themselves Pioneers: first to
and sustainability as using an ethical safety-conscious market. We listen
(possible green organisation and we actbackground for sustainability Quickly
core value).
New Speedy tagline: Your partner for safety and sustainability
Branding and International markets
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1 Encourage new international markets to try Speedy Hire
2 By encouraging positive pre-conception it can generate a preference for the
Speedy Hire brand abroad.
3 The tagline explains what the company does; what its value and beliefs are. This
tagline would be adapted and translated for international markets.
Integrated marketing communications and International markets
Now that the branding has been discussed (on its importance in a B2B context to
establish trust, loyalty and relationships) we need to consider now integrated marketing
communications; we can consider the application to international markets:
i) Communication packsThese would have to be translated into local languages. The current imagery
used on the packs could be used universally as they explain the various
dangers that the campaign is trying to address.
ii) Tool box talks
These would have to be tailored to meet local regulations and adapted for any
product. (The tool box talks have been successfully received in the UK by
operators whose first language is not English.)
iii) Training
Speedy Hire would need to create material and train the local staff (using a
translator and translated materials) on new regulations.
iv) Posters
Translated posters would need to be supplied with the new Speedy logo (with
translated tagline)
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Speedy Hire would need to train local employees on the campaigns to raise
awareness internally. This would have to be done face to face.
vi) Marketing metrics
Suitable marketing metrics would need to be established, as per the UK
campaign. As Speedy Hire is a learning organisation, it would be able to
continually refine its campaign, taking into account cultural factors, language
and literacy issues, etc.
Comments
This is a well-developed and comprehensive answer, considering all the main issuespertaining to Integrated Marketing Communications. He/she has also looked at many
of the problems and opportunities of communicating to a wider audience in
international markets. There is also good use of relevant theory as well as the pre-
prepared analyses.
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SECTION 3
Evaluation of Speedy Hires approach to business development and marketing
The research highlighted a key objective in Speedy Hires growth strategy (research:
page 21).
To increase the range of hire services available, to ensure customers obtain more high
quality, consistent services from fewer suppliers, increasing cross selling and improving
client relationships.
The objective above and Speedy Hires significant financial success demonstrates howthe organisations approach to relationship marketing is paying great dividends.
Let us break this objective down into its component parts to highlight how Speedy Hire
has achieved its goals.
i) increase the range of hire services available
Speedy Hire has taken a highly acquisitive approach to growth by making a series of well
planned and executed strategies focusing on those products that would complement its
existing portfolio and add value to the service offered to its customers.
Speedy has made these products and services readily available using its One Speedy
initiative of an integrated call centre, website, etc. With national coverage as an
advantage, the organisation can offer its customers the products they need, on time,
wherever they are located.
ii) ensure customers obtain more high quality consistent services from fewer
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Speedy Hire has partnered with the right suppliers to ensure that products are of high
quality, and specification, and meet the needs of its customer base (including the new
initiative on sustainability, where Speedy has a range of electric vehicles).
Sustainability in construction has attracted huge focus, given that half the worlds CO2
emissions are as a result of construction. By helping its customers appear ethical, it has
captured a competitive advantage. (Again because Speedy has excellent market sensing
and pioneering spirit for first mover advantage.)
iii) increasing cross selling
The One Speedy initiative allows customers to purchase from two or more product areas.
It can cross-sell (and increase equipment and tool utilisation ratios: see fig 5.1
Segmental analysis). Customers have a one stop shop for both their tool and equipmentneeds.
iv) improving client relationships.
Speedy Hire conducts customer surveys (one of its qualitative measures). The current
feedback from three clients (AMEC, Carillion and Morgan Sindall, on page 28 of the
research) suggests that the company has achieved one of its key objectives.
The future for Speedy Hires business development and the role of marketing
The trend is continuing for preferred sole suppliers as indicated in the research.
Partners are also looking for a hire organisation that can deliver consistency, quality and
add value (see page 14 of the research).
I believe that Speedy Hire can further advance its favourable business development
stance by addressing the add value part of the above equation Speedy Hire can address
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1) Adding online product and safety demonstrations to the website.
2) Keeping promises. Sending the customer a text message to confirm when delivery
of tool or equipment will be made.
3) Online ordering, so customers can select the date, time and location of delivery, and
check availability.
4) Keep accurate records on equipment.
5) Make ordering less time-consuming.
6) Make invoicing faster and less expensive to process (see page 63 of research. This isa key issue that needs to be addressed as it currently costs the hirer 15.00 to process
each invoice).
7) Easier payment system (on account settle within 90 days). This would also in turn
help Speedy Hires worsening average debtor days (the number of days to collect
payments from suppliers. See fig 4.2 - Debtor days in 2007 were 110, compared with
97 days in 2005).
By showing to add value, Speedy Hire is making it easier for its key clients to do
business with them. Reducing complexity in doing business will be critical to Speedys
plans to move forward.
The use of relationship marketing and CRM (integrated) will allow Speedy to better
anticipate and respond to customers needs both now and in the future. This is shown in
the following diagram:
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The customer should be at the heart of the CRM strategy
Call centre
Product
service
ordering
Key
clients
Website
Product
delivery
Accounts
and
processing
After sales service
SUMMARY
Speedy Hire needs to continue to work with those clients who will add high value, low
cost to maintain, and whose investment will bring increased turnover. At this stage,
Speedy Hire has not embarked on a campaign of KAM management. I suggest that
Speedy Hire looks to doing this and setting up a KAM (Key Account Management) team.
KAM is an extension of relationship marketing and involves the careful selection of key
t t d d i d d lti l l l d f ti
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Speedy Hire will need to ensure that it has the right employees to be part of this team. It
may also be an idea to investigate the 14 onsite supported customers and select key
accounts from clients that Speedy is already engaged with.
Speedy certainly has the right customer orientation, and employees are well remunerated
and rewarded. Speedy already overcomes the biggest hurdle as the organisation is
already focused on creating and delivering value.
Comments
This answer tackles and evaluates why Speedy has been successful, but fails to really
get to grips with why and how this is reflected in the organisations financial
performance. Although a good answer this is a glaring weakness. It illustrates theimportance of reading the question and answering all the points raised within it.
SUMMARY
These answers are not perfect but they indicate good ways of attempting to answer
questions for case studies. It is important that candidates continue to address the
questions, justify strategies, use underpinning theories and details from the case
studies. A coherent approach will always be rewarded.
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