Marketing communications are all those measures related to a product or service which help to enhance the products or service’s image and ultimately help to improve sales. It is important to select the right combination of communications mix, as each medium of communication has a price tag attached. However, this becomes a challenge for organizations and marketers because of the large range of the communication plan options available (Keller, 2001). The various communications tools include, but are not limited to: sales promotion, advertising, public relations, direct marketing, personal selling, jingles, trade marketing, point of purchase etc.
Image source: http://pressoffice.carphonewarehouse.com/uploads/galleries/storeimages/UK.jpg?phpMyAdmin=AHBslJMinbQ440hrdN48U9K1ZO9 (Image Library, n.d.)As can be seen in the image above, the Carphone Warehouse present a luxurious look and are aimed at shoppers from the higher income groups. The retailer has invested heavily in its showrooms to attract more and more shoppers. However, even with its elite display in showrooms, the retail giant keeps coming up with low-price offers and deals. In the year 2012, Carphone Warehouse came up with a Christmas campaign with UK’s lowest price on tablets. While tablets are known to be very expensive, Carphone Warehouse offered some great deals to its shoppers for the gadget (Carphone Warehouse Offering UK's Lowest Prices on Tablets this Christmas, 2012).
Carphone has always tried to stand apart from its competitors by taking the first-mover advantage. Carphone retail showrooms have known to display the newest and the finest of telecommunications equipment- having it there for the customer before anybody else. Consumer promotion has been an area of intensive activity for Carphone Warehouse since many years. The consumer promotions are mainly in the form of discounts. Since Carphone deals with new and up-coming telecommunication gadgets and equipment, such new products, if offered with a discount, are a main attraction to potential buyers.
The discount offers by Carphone Warehouse have mainly been on tablet computers and smartphones- two hot-selling items. The discount offers as part of Carphone’s consumer promotion have led to increased sales and revenue. The third quarter revenue forecasts for 2012 were beaten and overcome due to such a consumer promotion (Carphone Warehouse Boosted by Tablet Sales, 2013).
Under the name of corporate responsibility, Carphone Warehouse enjoys useful public relations due to its charity activities. ‘Get connected’ is Carphone’s chosen charity partner. The objective of the charity is to support and connect with all children and young men in the UK who could require support anywhere and anytime. Fundraising campaigns conducted for ‘Get Connected’ by Carphone Warehouse are really good for image building of the company as a responsible corporate citizen of UK. The fundraising campaigns have been made more interesting as Carphone conducts fundraising with events such as adventure treks, auctions, and daredevil skydiving stunts (Get Connected, n.d.).
Customer service has been a highlight of Carphone’s communication to its customers. Being in the technological industry, it is important for Carphone to explain the products to potential customers. The company employs specialists for service maintenance and provides training to its staff who can then be advocates for the company and offer a better service and experience to the customers (Carphone Warehouse, n.d.). The staff is trained to facilitate the customers in the best possible manner and satisfy them with the functionality of the products. On-site repair facilities are also provided to customers in case they have come up with a problem with a previously bought product. Employee bonuses at Carphone are now based on standard of customer service, as opposed to the previous policy of commission on sales.Moreover, Carphone took customer service concept to a much higher level by introducing ‘Walk out Working’. This is a concept which Carphone has borrowed from its sister concern ‘Best Buy’. The service focuses on demonstration of equipment and making customers and potential customers understand how technology works (Baker, 2011).
Advertising is one of the most conventional tools of marketing communications and has been a part of many campaigns throughout history. For Carphone, advertising has been in the form of television advertisements, radio broadcasts, posters, print magazines, and flyers. Since different media of advertising are present to choose from, based on a company’s business requirements and its financial standing, Carphone also makes a selection from the available advertising tools.
Press releases, posters, flyers, and magazines have been amongst the key sources of advertising for Carphone Warehouse. Although the company has had fewer advertising campaigns on television, the ones that it did launch were actually quite useful and helped to grow the company’s sales (Carphone Warehouse, n.d.).
Being a retailer, point of purchase becomes critical to the successful marketing communications of Carphone. The entire shopping experience for the customer can be enhanced with the kind of display that a company offers. Carphone specifically takes advantage of being in the business of selling new telecommunication products and keeps its point of purchase very attractive. This comes with pleasant staff handling customers and answering their queries, effective product display, well-lit and clean showrooms, and greetings by the staff to the customers that are coming in (Baker, 2011).
Direct marketing, being very similar to personal selling, has been limited to in-store sales promotion and information that is provided to the customer by Carphone Warehouse’s trained staff. The company has so far not explored direct marketing or personal selling intensively. Mass advertising or mass communications is many times seen as a necessary condition for personal selling (Keller, 2001).
Strong market positions across businesses to provide scale to weather economic downturns. Carphone Warehouse in its present form enjoys strong market position across its entities. The company has a stake in Best Buy Mobile of the US and also Best Buy Europe. It is the world’s largest electrical retailer, which has seen off almost all of the significant mass-market specialist competition it faced in the US. Both Carphone Warehouse and Best Buy have strong reputations for offering good service; a rarity in UK electrical retailing, but increasingly essential, in the UK specialist electrical stores given that Argos and several other supermarkets are concentrating on the attractive price positioning through low service.
Carphone Warehouse as a result of a disagreement with Research in Motion (RIM) lost out to Phones 4u on RIM exclusives. The company and RIM’s relationship are coming under increasing strain, with the manufacturer prioritizing Phones 4u for exclusives. Carphone Warehouse is understood to be buying a larger proportion than usual of its BlackBerry stock through distribution rather than directly from the manufacturer as it looks to persuade RIM to trade with it on its own terms. The move comes amid reports of RIM stock shortages across the board. Tensions are thought to lie between the company’s trading team and RIM.
This has given rise to negative publicity for Carphone and also because the lucrative partnership between Carphone and RIM has come to a standstill. Carphone needs to find more business avenues for collaboration and for expansion.
In a market where growth is constrained, intense competition will lead to higher customer attrition and the related costs. The low price and convenience proposition of the internet and the high customer base of grocers is difficult to replicate. Rising competition further may lead to high customer attrition and price wars impacting revenues and profits adversely. The UK market for specialist retailers could be saturated especially considering there is limited possibility for specialists to grow amid the popularity of internet retailers and mass merchants. There will shortly be five retail chains Best Buy, Currys, Comet, PC World and John Lewis all positioning themselves as service-oriented specialists, and there is limited scope for all of them to succeed.
Moreover, technology gets obsolete very quickly and consumers also get bored with their new and fancy devices. Hence, there would be pressure both on the retailers as well as manufacturers to come up and keep offering new and enhanced quality products to the tech-savvy consumer. In the mobile retail business, price factor and convenience are perhaps two most important deciding factors for consumers in purchase. The prominence of these two factors does not give much room to play to the retailers and they are in a state of battle against each other on a very small front.
In the near future, specifically in the next twelve months, Carphone should become more active on social media platforms and should also get involved in mobile marketing. Social media is a cheap, yet effective source of marketing communications. This is more so for a company like Carphone because it can effectively display its products’ images and specifications using the social media such as Facebook and Twitter.
Secondly, LinkedIn can be used to promote corporate profile of Carphone. LinkedIn is a website which holds profiles of individuals as well as organizational entities and is considered a reliable source of information on the World Wide Web. Moreover, Carphone has not utilized personal selling as much as it could have (Baker, 2011). In the next few months, trained sales staff could become direct marketers and promote the company’s product offerings and any discount schemes at a personal level.
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Keller, K.L. (2001) 'Mastering the Marketing Communications Mix', Journal of Marketing Management.