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Professional Postgraduate Diploma in Marketing

64 – Strategic Marketing in Practice
SPECIMEN ANSWERS FOR JUNE 2008 EXAMINATION PAPER

Note: In an attempt to present an accurate and representative account of a candidate’s piece of work, the answers have been reproduced in their original form and may therefore contain grammatical, terminological and formatting errors and inconsistencies.

© The Chartered Institute of Marketing, 2008

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Examination Papers Each subject differs slightly from the other, and you need to make sure that you are familiar with the style of question and the requirements of the different examinations.

Common Mistakes Reports from examiners are published regularly and are available to students. Even a casual look through these reveals the same concerns and problems coming up time and time again across all subject areas. Most of these common mistakes are caused by a lack of exam technique and examination practice. Not answering the question set The examiners are looking for both relevant content and its application in an appropriate context. You must be able to work flexibly with the material you have studied, answering different questions in different ways, even though the fundamental theory remains the same. Presentation and style Both of these essential business skills are of great importance to a marketing practitioner. The examiners expect work to be presented in a well-written, professional manner. ‘Report’ style, using sub-headings and indented numbering for points etc is not only acceptable, but looks much more commercially credible than academic essays. This approach allows you to break the work up, highlight the key points, and structure your answer in a logical way. Take care with your grammar and use of language; small errors can change the sense considerably. The scarce resource in an examination is time. You must control the allocation of this resource carefully. Read the instructions to the paper carefully, and identify what has to be done and how the marks are allocated. Spread your time proportionately to the mark allocation, ie if the mini case = 40% of marks, allocate 40% of your time to it. Allow a few minutes at the end to read through your work. For example it is no good only completing four questions when you should have done five. It is so much harder for you to pass on just four questions. Have a clock or watch with you and be ruthless in your timekeeping. If you find you are spending too long on an answer, you are probably not answering the question specifically enough.

There are three basic question types: 1. The mini case or scenario or article Part A of all papers (except Strategic Marketing in Practice) has a mini case, scenario or article, with compulsory questions. This represents only part of the paper, but students are required to make marketing decisions based on the information given. Spend time evaluating the material given in the case, but do not rewrite this for the examiners. You will gain credit for the decisions and recommendations you make on the basis of the analysis, but nothing for the analysis itself. This is a compulsory part of the paper designed to evaluate practical marketing skills. Make sure you allocate enough time to it, but do not ignore the other part of the paper. 2. The straightforward exam question You are expected to make a choice from a number of questions. There is some skill necessary in selecting the questions which you are best prepared to answer. Read the questions through carefully before making your choice. Think about how you will tackle the question. Check you are answering the question in the context in which it has been set, then make a rough plan before you start writing. Remember that examiners are interested in quality answers.

3. Strategic Marketing in Practice (Professional Postgraduate Diploma in Marketing) The Case Study is sent out 5 weeks before the paper is sat. Students should complete their analysis and preparation before the examination takes place. The questions asked will include extra information about the case which will have to be used to obtain best marks.

The examiners expect relevant theory to be illustrated with practical examples and illustrations. These can be drawn from your own marketing experience, or observations, or your reading. A theory paper without evidence of practical application is unlikely to be successful.

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Introduction
The specimen answers provide examples of answers that can be reasonably written within the allocated time. The answers demonstrate what is required to achieve a good pass 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 to the question set. These answers should be indicative of the content and format that the examiners expect to see. To give you the best chance of passing your exams, these specimen answers can be used in conjunction with the examiners’ reports, in which the senior examiner for each subject outlines best practice. The examiners’ reports are available from CIM Direct and on the CIM student website, www.cim/learningzone.co.uk. We hope you find these specimen answers useful and informative. Although we cannot enter into correspondence, we would welcome comments or feedback, which should be sent to cimdirect@cim.co.uk or to CIM Publishing at the Moor Hall address.

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CIM SPECIMEN ANSWERS PROFESSIONAL POSTGRADUATE DIPLOMA IN MARKETING STRATEGIC MARKETING IN PRACTICE – JUNE 2008
This particular case study looks at the construction sector and attempts to understand how marketing works within a highly competitive and basic industry sector. Tool hire is a difficult business and companies have to find distinct ways to develop a strong presence in the market. This case study explores the way in which Speedy creates a differentiated service proposition. The specimen answers below are indicative of well developed arguments and should not be construed 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 tool hire 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 and equipment hire sector, highlighting potential areas where Speedy Hire could expand 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 should build on the current strengths that the company has developed over the last 10 years in the UK market. It has become a market leader and created a special strategy encompassing safety and quality testing of equipment. Candidates should distinguish between the plant hire sector, which is mainly determined by civil engineering projects, and the tool hire sector which is within housing construction and 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 potential growth within the sector in the countries. Many of the potential opportunities are already given within the SWOT analysis that the students should pick up on.

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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 service • As 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 customer flexibility 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 of the Olympics. Also, it may make sense for the company to cross over into the European sector with their expertise. The Asia Pacific sector would be a longer term growth prospect. It could be that the company may well want to repeat its success in other countries such as Germany, where safety factors are as stringent as in the UK. Analysis of market opportunity Opportunities for expansion Total 10 marks 15 marks 25 marks

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general advertising. sales promotion.Question Two Critically analyse the role that integrated marketing communications has played in Speedy’s marketing success. The Kitchen and Schultz model makes a lot of sense and intelligent students could use this model to develop their answers. and maximum communications impact’. (25 marks) This question is quite straightforward if the candidates can actually weave the IMC theory into their answers. 2007) 6 . • 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 a variety of communication disciplines – for example. direct response. (Ranchhod and Gurau. 1 8 2 7 3 6 4 5 Implementing the IMC concept in eight steps Source: Adapted from Schultz and Kitchen 2000. and recommend how this could be extended to international markets in the future. consistency. and PR – and combines these disciplines to provide clarity.

They should be aware of cultural differences and of understanding the fact that international markets may be at different stages of development from the UK market.Speedy were very good at implementing the IMC concept in eight steps as discussed by Schultz and Kitchen. This an interesting aspect of branding that builds on relationships. (25 marks) Candidates should be able to look at the branding and marketing strategies deployed by Speedy and place them in context with regard to developing a successful strategy. and showed how a company’s customers and suppliers can work together to produce solutions for future industry requirements. Branding relationships are formed through: 7 . Candidates should then be able to discuss the merits of utilising such a strategy in international markets. 1) They undertook market research to establish the customer prospects and understand the value of their new campaign 2) They located the key contact points with suppliers. Analysing IMC in context International issues Total 15 marks 10 marks 25 marks Question Three Critically evaluate how Speedy Hire’s strategic approach to business development and marketing has contributed to its significant financial success. customers and other stakeholders such as HSE 3) They started to build brand relationships through the Speedy logo and the links with health and safety 4) The message was carefully conceived and delivered through multiple channels as discussed above 5) They estimated the return on customer investment (ROCI) and duly spent £2m on buying new equipment 6) They invested heavily in the campaign 7) They instigated marketing metrics and measured the success of their campaign in terms of market growth and return on investment 8) This exercise will have developed their database of customers and will give them a chance to launch other Integrated Marketing Campaigns. The marketing campaign established Speedy as not just a supplier but also a partner.

Good candidates will take this forward and look at the triple bottom line approach as shown below. we will not be looking for right or wrong answers but for good answers that take into account a wide range of issues pertaining to the case. examiners will look for innovation and creativity in the way candidates approach and answer the questions. as shown in the financial performance tables and the graphs in the appendices. 25 marks will be allocated for the prepared analysis of the case and its application to the questions above. strategic thinking and attention to detail. This can then be translated into an understanding of the financial success. The employees of a corporate brand both represent a means of communicating the brand’s attitudes and are an integral part of the brand. 8 . useful analysis of the data will also enhance the answers. As this case contains a lot of data. sales promotion and PR. (25 marks) (Total 100 marks) Summary As usual. Speedy have succeeded in doing this really well. As usual. The employees undergo training and buy into the brand attitude.• • • • 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 the consumer. in that they have set up an industry standard that complies with their brand’s attitudinal stance. Speedy have communicated this through their special logo that is used on all building sites utilising their tools the importance of corporate brands – their communications shift the brands’ attitudes and behaviours back to the people. which should all be consistent with their relationships. Speedy have done this through their emphasis on health and safety and by helping the customers to implement certain standards brand attitudes and behaviours expressed through packaging. The key points that should be considered are coherence of approach. This is reflected in their year-on-year profitability. Marking Scheme Critical evaluation of the Speedy approach Links with financial success Total 15 marks 10 marks 25 marks In addition.

1. heights and power products has already presented . changes and key drivers. and continues to present.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 Speedy’s marketing communications internationally and evaluate how the strategic approach to date has contributed to success. and are translated into ways Speedy might leverage their strengths and competencies to exploit these opportunities in Figure 2. PART 1: Potential UK and international opportunities There are a number of factors driving the UK tool hire. Figures 1. 1 Health and Safety The increasing concern regarding health and safety in the industry and the tightening of legislation. This report will highlight the most appropriate and significant changes and address ways to exploit them. each presenting a range of opportunities for Speedy Hire to pursue. particular with regard to lifting. Having already 9 . attractive opportunities for growth.1 and 1.2 highlight some of these trends.

such as establishing a health and safety training centre/academy. Speedy Hire currently has resources in place to strengthen their focus on health and safety – Figure 6. and so such initiatives would not require huge investments. becoming official health and safety accreditors (their existing strong links with the HSE provide an in-road into gaining the support to do this). enhance their service offering through customised health and safety training. 10 .7 highlights its superior contacts with external health and safety bodies and expertise. In order to protect their share in this sector (see Figure 3. identify unmet needs that might arise. This would involve reviewing sites.established itself as a leader in health and safety. rather a directed focus on these opportunities. have also started to recognise the benefits of investing in this sector. such as Hire Station and A-Plant Tool Hire. Further initiatives. or even becoming health and safety specialists in the industry.5). needs and specifying particular products for projects. 3 Building Speedy Brand The current issue regarding health and safety is that competitors. Key Account Management and a more focused approach to selecting valuable accounts and adding value would help Speedy to understand customers’ needs. 2 Key Account Management The industry is increasingly seeing a shift from transactional marketing to relationship marketing. 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. and ultimately improve the profitability of these accounts. Speedy have the opportunity now to build on this competitive advantage and first-mover advantage.

However. my recommendation would be to investigate a move into plant hire on a low-risk.e. mobile decontamination units) would complement Speedy’s focus on safety. The fact that they have already begun to do this puts them in good stead to develop this area even further. 11 .. as illustrated in Figure 4. e. 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.2 highlights potential areas which Speedy might choose to go into. 4. joint venture or strategic alliance.g. low commitment basis. Of these.1.1 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.1) and the shift seems to be toward the more ‘heavy end’ of the market.4 Product Development The previous recommendations have been based on a strategy of market penetration. As Speedy is currently highly geared. there are opportunities to develop Speedy Hire’s product range in light of the current trends. emergency safety showers and eyebaths.. Figure 4. 5 Plant Hire The plant hire section of the industry is showing real prospects (Figure 4. it is recommended that a move into the emergency safety equipment market (i.

complex trading barriers.6 ICT Development Developments in ICT are providing opportunities for hire companies to reduce their costs by restructuring. Europe. 12 . which would enhance flexibility and customer service and encourage cross-selling. construction output/likely demand. and of course. tariffs and entry requirements make it a less attractive market. and the forecast for construction output looks positive. customs. I would recommend that Speedy Hire start to restructure their current. and in particular Western Europe (with particular attention to France. the distance. 7. similar outlook on health and safety contractual obligations.4 highlights some of these issues the company needs to consider. Spain and Italy – see Figure 4. culture gap. there are numerous negative implications. It is also less likely to prioritise health and safety as in the UK. using the 12Cs model.5) presents a relatively high growth market. I recommend that Speedy look in the next few years at creating an international presence.1 Selecting foreign markets In selecting foreign markets we need to assess the opportunities available to us. Considering Speedy Hire’s lack of experience in international marketing.6 percent by 2011. rather fragmented businesses into a ‘hub and spoke’ network. on the other hand. culture. in terms of its proximity. Figure 4. Whilst the Asia-Pacific requirement for tool and plant hire is likely to grow by 29. 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. and an attractive market. language.

I would recommend that Speedy look to enter these Western European markets (primarily France and/or Spain) through an indirect international strategy. They will also need to be aware of the competition’s reaction to Speedy’s entry. These methods of market entry provide a quick way into the market.7. Conclusion There are numerous opportunities facing the industry. All the key areas such as branding and relationship marketing have been covered well. often the benefit of local market knowledge. and take this into account when developing communications strategies. All the discussions are supported well by the analyses. By pursuing the recommendations outlined in this section. they need to be aware of the presence of existing suppliers. and impact it has had on interest rates and gearing (see Figure 2. and less capital investment than direct methods..2 for analysis). joint venture. However. The second part looks at the potential opportunities available to Speedy. Comments This answer is well constructed and looks at why Speedy has succeeded in the marketplace. Speedy can remain at the forefront of the industry and stay true to their growth strategy and core values. 13 . franchising or licensing.2 Entering foreign markets In light of the increase in Speedy’s borrowing over recent years.e. i.

14 . As illustrated in Figure 3. relevant and effective.1 Integrated Marketing Campaign Success Marketing research Before developing the campaign. and the needs that were not being met. As a result. displayed to Speedy Hire’s customers its dedication to them. companies need to excel in one of three ‘value disciplines’. is down to their recent integrated marketing communication campaign. Such a customer-driven marketing campaign demonstrated Speedy’s ability to excel in ‘customer intimacy’.3. 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. thereby adding value to the customer and strengthening their position. Speedy Hire undertook extensive research into the needs of their target customer groups. Treacy and Wiersena argue that to truly be a market leader. the campaign was targeted. 1. This helped them to identify exactly what it was that customers needed and wanted. 1 1. Such insight then enabled them to develop the campaign specifically targeting endusers/site level and with the view to communicating new health and safety regulations. both financially and in terms of customer commitment and retention.2 Customer-led The relevance of the campaign and the highly targeted nature of communications.PART 2 Part of Speedy’s success. its willingness to develop solutions with and for them. and an interest in customers’ businesses and business environments.

.5. 2 How the Campaign Contributed to Success As a result. Speedy need to pursue a strategy of brand stretching. in terms of message. tangibles and branding. As a result. products and markets). 1. they shifted from being seen as ‘no different to other tool hire companies’ to differentiating themselves as the number one choice in health and safety. to the extent that major customers such as Carillon and Morgan Sindall have requested dual branding on communications packs. In line with Speedy’s current use of a corporate brand (i. Customer referrals will be more likely and awareness has been built within the industry that Speedy Hire can offer the most relevant solutions to meet current needs and legislative requirements.e. a supplier of the highest quality. customer loyalty has been increased. the ‘Speedy’ name 15 . This concept was further developed in that the promotional methods worked hand in hand and complemented each other. attributes and values behind the Speedy Hire brand.1. ensured a strong. effective campaign.4 Core values/branding Perhaps one of the most important contributions to Speedy’s success in terms of the campaign was that it established and communicated the benefits. the tool box talks encourage users to refer back to communications packs.3 Integrated communications options Consistency across the communications options employed by Speedy Hire. 3 Extension into International Markets In order to extend this current success into international markets. ‘Speedy’ name extended across all divisions. compliant products and a 100 percent customer-driven company. for example. as outlined in Figure 5.

3. employee attitudes. This is illustrated in the Brand Iceberg (Figure 5. along with culture. 3. and adapt their current communications accordingly. Speedy will need to focus on how best to ‘translate’ its values and vision (see Figure 5.. an analysis of the environment 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. values and vision need to be extended to new markets. the company needs to not just address customers.6. It is also imperative that operations in foreign markets. It may be that health and safety is not as much of a concern as in the UK. 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. I recommend that regardless of the current situation regarding health and safety in the country.4). In addition.g.1 Strong branding In order to remain consistent.and brand image is flexible and translates well in foreign languages. in which case Speedy’s communications may first look to creating awareness of the issues and therefore creating the demand for their differentiated services.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. but also influence markets (e. equivalent to HSE) and governmental bodies. 16 . and where to position the brand in light of local competitors’ positioning and strategies. and to avoid damaging the brand. Brand Onion) into new markets. giving the company mileage to create a ‘global brand’.6. The need to address these various markets is highlighted in Figure 6. Therefore.

Success in the International market is difficult and what works in the UK does not always work well elsewhere. and ‘warn’ competitors. The candidate should have explored the problems cultural values and communication. in order to strengthen their brand both in the UK and globally. above-the-line campaign may also be required to support this in order to build awareness of their presence in the market. attract interest. it is imperative Speedy’s communications and branding strategy align with their current values. e.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. road shows. Conclusion Whilst adaptations to the current communications model will clearly be required. tool box talks. This would have tied down the holisitic nature of IMC that is required for success. 17 .2). However the answer would have benefited from a good venture into a theoretical model such as the one shown in the marking scheme.1) with the view to encouraging their climb up the ladder of loyalty (Figure 5. Comments This answer looks at the key Integrated Marketing issues that are of importance to the organization. helps to understand customers’ needs and starts to build a relationship with potential customers (Figure 5. The analysis is good and relies heavily on appendix. site visits. as this opens up two-way dialogue..g. An offensive.

market and product development. The following part of the report will critically evaluate how their approach has achieved this. and diversification (as in Figure 4. cross-selling and an augmented service offering.PART 3 Speedy Hire appears to be a company who are doing everything right. 1 Market Sensing By implementing tools for environmental scanning and recognising its importance. SMART objectives enables the company to compare performance to what was set out at the beginning of a year/plan/strategy. Having clear. widen their range of both hire and complementary non-hire services and gain further expertise. and power equipment). Speedy’s strategic approach to business and marketing development has led them to ultimately become the number one company in its industry.1) over the years which has helped them to increase sales from existing customers (through KAM. 18 . 2 Clear Objectives Clear. But their success has not happened by accident. 3 Strategy The company has pursued a strategy of penetration. move into new markets (such as lifting. defined corporate and marketing objectives allow Speedy to continually measure whether they are on track financially and in terms of marketing objectives. This has ensured they remain at the forefront of legislation and customer trends in demand/concern. Speedy have been able to understand the environment it is operating in and predict/plan for changes and opportunities as and before they emerge.

As the saying goes. 4 Management of Strategic Business Units (SBUs) Speedy has effectively managed its SBUs.e. by concentrating on building its brand and strengthening its differentiated position. ‘turnover is vanity.2) suggests that the company’s approach may have been to discount products. integrated IT system. This could become a concern to shareholders and will undoubtedly impact share price. health and safety/training). Lifting.5. 5 Differentiation Strategy In a competitive. a decreasing Gross Profit Margin (Figure 2. profit is sanity’. Whilst discounting increases turnover. saturated market.Such a strategy. In order to increase Gross Profit Margin the company may have to shift its focus to premium pricing.2. 19 . identifying where investment for growth is required (i. as highlighted in Figure 3.g. where it is becoming increasingly hard to create customer loyalty based on product/service offering alone. the company has accumulated increased borrowing and is consequently highly geared. Health and Safety. as illustrated in Figure 3.e.. having grown both organically and through acquisitions to date.4.. and has identified the means on which to most effectively do this (i. with a gearing ratio of 109 percent (Figure 2. Speedy has recognised the need to pursue a differentiation strategy. Power) and managing tool hire for cash to invest. 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.. Training. it is profit that shareholders are interested in. In addition to this. has led them over the years to ‘close their strategic gap’. an organisation-wide. However. This concept is illustrated in Figure 3. combined with identification of opportunities to reduce costs (e.2).

The excellent analyses back up the reasons for Speedy’s financial success. and not just customers (Figure 6. allows them to pursue a strategy of goal setting – performance measures – performance diagnosis – corrective action. Conclusion To continue growing successfully.6 Strategic Approach to Marketing A strategic approach to marketing has allowed Speedy to effectively manage relationships with all key market stakeholders. Speedy must continue to take an organised. such a strategic approach to the marketing campaign ensured the significant investment made was not wasted. addressing the wider needs of the community (influence markets). In addition.6).. and this assessment if their approach to date should offer good insight into the appropriate ways to do this. strategic approach to both business and marketing development. and also the development of environmentally friendly products. It has also ensured the effectiveness of their marketing campaign. and if not. 7 Control Measures The implementation of control measures. This ensures continual control and regular ‘checks’ that they are meeting objectives. This has led to third party endorsement that has been critical to their success. 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.g. cumulative sales for SBUs. to rectify the situation. sales of new products responses to advertising and health and safety measures. e. It would have 20 . Comments This answer covers all the main reasons for Speedy’s strategic marketing success.

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. 21 . overall this a good answer to the question set. However.

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Specimen Answer Two Strategic Marketing in Practice 6 June 2008 Speedy Hire Report 6 June 2008 To: Steve Corcoran. Speedy Hire plc From: Marketing Consultant Overview Section 1: Section 2: Section 3: Appendix Assessment of UK and International opportunities Assessment of the role of integrated marketing communications Evaluation of Speedy Hire’s approach to business development and marketing 22 . COO.

plant and equipment hire are blurred) due to many players in the plant hire space. 23 .2. It has rightly earned its position as a premier player in a difficult market which faces intense competition and consolidation (see fig 2. Whilst Speedy Hire serves a mix of B2B (Business-to-Business) and B2C (Business-toConsumer) markets. page 2 – Target Markets). The aim of this Report is to address questions raised at the last meeting in sections 1-3.3.OVERVIEW Speedy Hire is the UK’s number one tool and equipment hire company. Speedy Hire operates in a dynamic market place and it must protect its position and market share. The company has grown rapidly through both organic growth and acquisitions. page 2 – Porter’s Five Forces). 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. This Report commences by making an assumption that: Speedy Hire’s primary B2B customer is the construction industry Speed is not considering plant hire (although the distinctions between tool.

New market development will help Speedy Hire to: protect its position as its fortunes are currently too over-reliant on construction expose Speedy Hire’s extensive range of under-utilised equipment and tool hire to new. 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. equipment asset utilisation rates have fallen. 24 . Financial analysis (fig 5. I have revised the Ansoff matrix and extended it to new markets (see diagram below). page 5 – segmental analysis) shows that since the acquisition of LCH generators and lifting gear in 2006. construction. and potentially very profitable markets. coupled with the fact that Speedy is relying on one major B2B market.1.SECTION 1 Assessment of the UK and International opportunities i) UK market development The UK market for tool and equipment hire is nearing saturation. page 4 – Ansoff matrix – shows Speedy Hire’s current products and the markets which it services.1. This.

Diagram: UK market development for Speedy Hire plc EXISTING PRODUCT RANGE Training Consumables Speedy space Speedy engineering Speedy generators Speedy compressors Speedy pumps Speedy lifting Speedy tool PRIMARY MARKETS √ √ √ √ √ √ √ √ √ Civil engineering √ √ √ √ √ √ √ √ √ private industrial construction SECONDARY MARKETS √ √ √ √ √ √ √ √ √ √ √ √ √ √ Warehouse and distribution Business storage facilities √ √ √ Freight terminals Removal firms √ √ √ NEW MARKETS NEW MARKETS I also recommend that Speedy targets organisations that have national coverage. 25 . This will help it to exploit its national network of depots and allow the cross selling of the items in Speedy’s portfolio.

3. such as warehousing and distribution. I suggest Speedy Hire begins marketing intelligence gathering regarding market size (should all be inputted into the marketing information system). For example. 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. Secondary markets have great opportunity too. the industries listed could all benefit from lifting gear to prevent manual handling injuries. Browns Group and Palletline. I then analysed each country against Speedy Hire’s compatibility to do business: 26 . The research showed that the amount spent on construction overseas as a %age of GDP is rising faster overseas. it is natural to focus on just Europe. ii) International development The initial research highlighted that there is huge overseas growth in construction. I have analysed the construction output figures in depth (see fig 5.Initial analysis suggests focusing on primary UK markets such as civil engineering and private industrial construction as the markets are sizeable (see fig 2. 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). Existing material from the ‘Safety from the Ground up’ campaign can be updated from the new markets at a low cost and co-branded where appropriate. With harmonisation across the EU on health and safety.3 – target segments) and similarities in conducting business such as construction (Speedy’s traditional market).

Some considerations on acquisition at the time of producing this Report. This is summarised in fig 6. With a strong track record in successful acquisitions. Liquidity is also falling. 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). These factors combined may make it difficult for Speedy Hire to secure additional funding (situation made worse by the current credit crunch: see fig 1. With harmonisation across the EU on health and safety. Spain is currently experiencing high levels of growth and we need to capitalize on this so speed of market entry is key. This method will allow Speedy Hire to purchase instant market information.2. 27 .1 – Macro analysis). Speedy has a high gearing ratio (as a result of a £150million debt facility) and a cash collection issue (fig 4. page 4 – Evaluation of Speedy Hire’s financial performance). page 6 (Business Portfolio matrix).2. Speedy Hire is well positioned to consider this course of actions. market share and channels of distribution. My recommended method of entry into Spain is via the acquisition route as it is the fastest route to market. we have a real opportunity to target the Spanish market.1) 2) 3) Whether Speedy Hire could enter market and use health and safety as a differentiator Geographic proximity Cultural considerations. It is also the most profitable as Speedy will not be sharing the profits. with health and safety as our core value proposition.

The candidate has done this well in the extended Ansoff Matrix. its position may change in the next few years. 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.2 – Business Portfolio matrix).- 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. but not necessarily elsewhere. I also recommend setting up an International marketing information system (using Doole and Lowe’s 12Cs Framework to capture valuable data on all the primary. Speedy Hire’s excellent ability of market sensing coupled with an updated marketing information system will ensure sound strategic decision making. Speedy Hire has a strong management team so I fully believe that they will make a success of overseas expansion. thereby improving the gearing and liquidity ratios. However. secondary and tertiary markets captured in fig 6. 28 . Please note that whilst Spain is an attractive country at this present time. Comments Overall this is a pleasing answer and the candidate has obviously carried out careful analyses that he knits into the main proposition.

SECTION 2 Assessment of the role of integrated marketing communications Speedy Hire’s 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 Hire’s success. Speedy had first mover advantage (in a largely undifferentiated market) by differentiation in its value proposition on health and safety (see diagram below: Porter’s generic strategies diamond – adapted). Focus Cost leadership Speedy Hire Differentiation CRS (Corporate social responsibility) 29 .

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. partners. By using metrics in this way. etc. The success of the campaign in raising awareness has been largely down to Speedy’s approach of partnering and consulting with all stakeholders. Speedy Hire had marketing metrics for each aspect of the campaign so that response levels (via website) and responses to advertising. 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. In fact. Interestingly. many of Speedy’s competitors are now using health and safety as a differentiator. Since the ‘Safety from the Ground up’ campaign. It was clear from this analysis that Speedy Hire could improve its brand position to make it stand out from a crowed and highly competitive market.This became a key part of its strategy (see fig 1. employees. and marketing was able to deliver on the strategy using the ‘Safety from the Ground up’ campaign. 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. page 1 – McKinsey 7S framework. 30 .1. brand awareness of Speedy Hire and the health and safety campaign was not measured.2. Speedy Hire can evaluate what is working from a marketing standpoint. strategy).3 – Brand identity and brand pyramid). Suppliers. Critical to any campaign is the ability to measure the results to determine success or failure. I conducted a brand positioning audit (see fig 5. sales of new products. some of the analysis on the perceptual map (see fig 6.

but more so in large B2B organisations. Brand strategy and development The new Speedy Hire brand should focus on the following core values: - safety standards assurance quality partnership for success sustainability All factors that would appeal to the target market 31 . I recommend a brand redevelopment for Speedy Hire to help it differentiate itself and therefore increase competitive advantage. Speedy Hire has a positive image but a lack of differentiation and now its competitors are catching up.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.

New Speedy Brand Positioning (Kapferer’s adapted) Commitment to hard work and ‘can do’ culture CULTURE • • • • Trustworthy Caring Responsive Integrity Customer focused organisation PERSONALITY RELATIONSHIP Intrinsic -------------------------------------------------------------------------Extrinsic PHYSICAL REFLECTION SELF IMAGE “Your partner for safety and sustainability” (possible green background for ‘sustainability’ core value). We listen and we act Quickly New Speedy tagline: “Your partner for safety and sustainability” Branding and International markets A strong B2B brand for Speedy Hire will have significant advantages for the organisation: 32 . Customers will see themselves as using an ethical safety-conscious organisation Pioneers: first to market.

iv) Posters Translated posters would need to be supplied with the new Speedy logo (with translated tagline). The tagline explains what the company does.) iii) Training Speedy Hire would need to create material and ‘train’ the local staff (using a translator and translated materials) on new regulations. The current imagery used on the packs could be used universally as they explain the various dangers that the campaign is trying to address. Integrated marketing communications and International markets Now that the branding has been discussed (on its importance in a B2B context to establish trust. what its value and beliefs are. This tagline would be ‘adapted and translated’ for international markets. loyalty and relationships) we need to consider now integrated marketing communications.1 2 3 Encourage new international markets to ‘try’ Speedy Hire By encouraging positive pre-conception it can generate a preference for the Speedy Hire brand abroad. ii) Tool box talks These would have to be tailored to meet local regulations and adapted for any product. v) Road shows 33 . (The tool box talks have been successfully received in the UK by operators whose first language is not English. we can consider the application to international markets: i) Communication packs These would have to be translated into local languages.

taking into account cultural factors. as per the UK campaign. considering all the main issues pertaining 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. etc. it would be able to continually refine its campaign. As Speedy Hire is a learning organisation. This would have to be done face to face. 34 . vi) Marketing metrics Suitable marketing metrics would need to be established. language and literacy issues. Comments This is a well-developed and comprehensive answer.Speedy Hire would need to train local employees on the campaigns to raise awareness internally. There is also good use of relevant theory as well as the preprepared analyses.

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. “To increase the range of hire services available. to ensure customers obtain more high quality. consistent services from fewer suppliers. website. Let us break this objective down into its component parts to highlight how Speedy Hire has achieved its goals. Speedy has made these products and services readily available using its ‘One Speedy’ initiative of an integrated call centre. the organisation can offer its customers the products they need. wherever they are located. on time. etc.” The objective above and Speedy Hire’s significant financial success demonstrates how the organisation’s approach to relationship marketing is paying great dividends. ii) “…ensure customers obtain more high quality.SECTION 3 Evaluation of Speedy Hire’s approach to business development and marketing The research highlighted a key objective in Speedy Hire’s growth strategy (research: page 21). consistent services from fewer suppliers…” With national coverage as an advantage. increasing cross selling and improving client relationships. 35 .

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. it has captured a competitive advantage. The current feedback from three clients (AMEC. By helping its customers appear ethical. and specification. Sustainability in construction has attracted huge focus. It can cross-sell (and increase equipment and tool utilisation ratios: see fig 5. Customers have a ‘one stop shop’ for both their tool and equipment needs. The future for Speedy Hire’s business development and the role of marketing The trend is continuing for ‘preferred sole suppliers’ as indicated in the research. Speedy Hire can address this by: 36 . given that half the world’s CO2 emissions are as a result of construction. (Again because Speedy has excellent market sensing and pioneering spirit for first mover advantage. and meet the needs of its customer base (including the new initiative on ‘sustainability’.” Speedy Hire conducts customer surveys (one of its qualitative measures).Speedy Hire has partnered with the right suppliers to ensure that products are of high quality. iv) “…improving client relationships. Carillion and Morgan Sindall. Partners are also looking for a hire organisation that can deliver consistency.1 – Segmental analysis). where Speedy has a range of electric vehicles).) iii) “…increasing cross selling…” The One Speedy initiative allows customers to purchase from two or more product areas. on page 28 of the research) suggests that the company has achieved one of its key objectives.

This is shown in the following diagram: 37 . 5) Make ordering less time-consuming. 3) Online ordering. so customers can select the date. 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.Debtor days in 2007 were 110.2 . Speedy Hire is making it easier for its key clients to do business with them. 6) Make invoicing faster and less expensive to process (see page 63 of research. and check availability. time and location of delivery. 4) Keep accurate records on equipment.00 to process each invoice). See fig 4.1) Adding online product and safety demonstrations to the website. Reducing complexity in doing business will be critical to Speedy’s plans to move forward. This is a key issue that needs to be addressed as it currently costs the hirer £15. 2) ‘Keeping promises’. By showing to ‘add value’. compared with 97 days in 2005). Sending the customer a text message to confirm when delivery of tool or equipment will be made. 7) Easier payment system (on account – settle within 90 days). This would also in turn help Speedy Hire’s worsening average debtor days (the number of days to collect payments from suppliers.

low cost to maintain.The customer should be at the heart of the CRM strategy Call centre Accounts and processing Key clients Website Product delivery Product service ordering After sales service SUMMARY Speedy Hire needs to continue to work with those clients who will add high value. 38 . KAM is an extension of relationship marketing and involves the careful selection of key accounts over an extended period and across multiple levels and functions. At this stage. I suggest that Speedy Hire looks to doing this and setting up a KAM (Key Account Management) team. Speedy Hire has not embarked on a campaign of KAM management. and whose investment will bring increased turnover.

Speedy certainly has the right customer orientation. Speedy already overcomes the biggest hurdle as the organisation is already focused on creating and delivering value. A coherent approach will always be rewarded. justify strategies. It illustrates the importance of reading the question and answering all the points raised within it.Speedy Hire will need to ensure that it has the right employees to be part of this team. Although a good answer this is a glaring weakness. Comments This answer tackles and evaluates why Speedy has been successful. 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. 39 . and employees are well remunerated and rewarded. It is important that candidates continue to address the questions. SUMMARY These answers are not perfect but they indicate good ways of attempting to answer questions for case studies. but fails to really get to grips with why and how this is reflected in the organisations financial performance. use underpinning theories and details from the case studies.