Marketing Communications

13 Pages   |   2,607 Words
Contents
Introduction/Background. 3
Review and Analysis of the Communications Mix. 3
Consumer Promotion. 4
Public Relations. 5
Sponsorships. 5
Customer Service. 6
Advertising. 6
Loyalty Schemes and Pricing. 7
Point of Purchase (POP). 7
Push & Pull Strategy. 7
Direct Marketing. 8
Recommendations and Conclusion. 8
References. 10
Appendix. 11

Introduction/Background

The purpose of this report is to study and analyze the marketing communication mix of The Carphone Warehouse. This report would tend to brief about the Carphone Warehouse, elaborate and analyze its communications mix, and shall also suggest recommendations for future communications activities for Carphone Warehouse.
Carphone Warehouse is now a public limited company which originated in the United Kingdom in the year 1989 as a mobile phone retailer (About Us- History, n.d.). A small mobile shop to begin with, the company has since then become one of the most successful telecom businesses. Carphone today has massive operations in Europe, owing to mergers and acquisitions throughout the company’s history. For such a large organizational setup, the marketing communications mix becomes increasingly important to highlight the vast range of activities being performed by such a giant. The company is now  one of the biggest telecom and mobile phone retailer in Europe (Home, n.d.).
 

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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.

Review and Analysis of the Communications Mix

To start with, let’s review how Carphone Warehouse presents itself to its shoppers- that is, how its store premises look like. Below is an image of a Carphone Warehouse store situated in Westfield UK.

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).
Now the communications mix will be discussed and analyzed below which Carphone Warehouse has followed so far.

Consumer Promotion

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).

Public Relations

Publicity and public relations today are recognised as amongst key tools of marketing communication (Keller, 2001). Public relations for Carphone Warehouse have been in the form of its campaigns involving the general public. For Carphone, this is Corporate Social Responsibility (CSR); however, it is also some very useful public relations campaigning. Through its CSR initiatives, Carphone Warehouse tends to build customer confidence, and it serves as an image-building exercise for the retail marketer.

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.).

Sponsorships

Carphone Warehouse has spent quite a large amount on sponsorships of television programmes. These include Big Brother and X Factor. It must also be mentioned that Carphone tries to understand and relate to its customers by studying them, their behaviors, attitudes, and lifestyles. Carphone also entered into a partnership with Virgin Mobile to improve its range of products and services.

Customer Service

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

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.).

Loyalty Schemes and Pricing

Carphone Warehouse introduced loyalty programmes for its customers, which helped to reduce customer attrition. As part of the loyalty programme, free trials and personalized service from trained staff have been offered by Carphone.
The pricing strategy of Carphone has been competitive as it stays in touch with the activities and communications strategy of its competitors. It is in line with such communication strategies that Carphone then devises its pricing strategies and tries to offer the best deals to its customers. As discussed previously, Carphone’s pricing strategy has involved discount schemes, even on newer products. This is a practice which Carphone’s competitors would think many times before jumping into due to it causing a dent in their revenue streams.

Point of Purchase (POP)

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).

Push & Pull Strategy

Carphone has been aggressive and has many times followed a pull strategy due to its nature of communication. The company tends to pull the customer to itself through its retail business as it keeps coming up with newer products to display and sell. Hence, as for any other electronic or telecommunications business, Carphone also majorly follows a pull strategy.   

Direct Marketing

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). 

  1. Company Overview
 
Carphone Warehouse PLC, with the aid of its associated companies in Europe and North America, launched its business of telecom products and communication equipment. Due to its large number of associations, Carphone was able to launch in many European countries besides the UK, and also launched in the United States.  The company’s retail stores also offer fixed line telecommunications and broadband internet. The public limited company’s headquarters are based in London.
 
  1. SWOT Analysis

Strengths
 
 
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.
 
Weaknesses
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.

Opportunities
As the consumer electronics market in Europe rebounds, market penetration of Best Buy Europe will drive top-line growth. In partnership with Best Buy UK, the company aims at establishing a strong presence in the consumer electronics retailing. There is high trend for smartphones presently and the craze for them is likely to go further up as more exciting applications keep getting introduced. Hence, the presence of smartphones shall help to expand sales in mature and saturated markets for mobile phones. The number of consumers in Europe switching to smartphones is rising rapidly and this poses a great opportunity for a player in the telecom retail market, such as Carphone Warehouse.
 

 Threats
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.

 

Recommendations and Conclusion

To stay in the minds of customers as a reliable partner in telecommunication products, Carphone Warehouse needs to keep modifying its marketing communication mix to respond to changing market and customer requirements. Customer orientation today requires being open and flexible to newer outlets of marketing communication.  

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.    

Lastly, it is essential for success in telecommunications retailing to keep ahead of the competition by utilizing an appropriate mix of communication tools available to marketers.. This involves exploring newer avenues of marketing communications and having a customer-centric organization. Mobile network retail outlets have lately been giving tough competition to Carphone Warehouse, and also the competition is coming from supermarkets such as Tesco. According to the director of marketing communications of Carphone Warehouse, Julian Diment, quality service is critical to business performance. He further added: “There is intense competition from the mobile market, and service will become more critical. It’s our role to help customers get the most out of their technology” (Baker, 2011).
Carphone has done well previously with its mix of communication tools; however, it needs to be more proactive to continue the good work of its past and present.

References

About Us- History, [Online], Available: http://www.cpwplc.com/about-us/history/ [23 March 2013].
Baker, R. (2011) Carphone Warehouse Puts Focus On Service, 7 April, [Online], Available: http://www.marketingweek.co.uk/carphone-warehouse-puts-focus-on-service/3025276.article [23 March 2013].
'Carphone Warehouse Boosted By Tablet Sales', Daily Mail (25 January 2013), p. 75.
Carphone Warehouse, [Online], Available: http://www.ukessays.com/essays/marketing/carphone-warehouse.php [23 March 2013].
'Carphone Warehouse Offering UK's Lowest Prices on Tablets This Christmas ', Newspaper Source Plus (28 November 2012).
Get Connected, [Online], Available: http://www.carphonewarehouse.com/corporateresponsibility/getconnected [23 March 2013].
Home, [Online], Available: http://www.cpwplc.com/ [23 March 2013].
Image Library, [Online], Available: http://pressoffice.carphonewarehouse.com/image_library/category/C4/?phpMyAdmin=AHBslJMinbQ440hrdN48U9K1ZO9 [23 March 2013].
Keller, K.L. (2001) 'Mastering the Marketing Communications Mix', Journal Of Marketing Management.
Keller, K.L. (2001) 'Mastering the Marketing Communications Mix', Journal of Marketing Management.

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