BT Direct marketing Essay

This essay has a total of 5968 words and 32 pages.

BT Direct marketing

1.0 Executive Summary

The proposals that we are going to depose are a planning of continuous action in order to
confront the challenges, which BT confronts. The most important factor is considered to be
the fact that the marketing environment changed rapidly after the deregulation of the
telephone industry. Up to then BT was operating as a monopoly, ignoring the competition
and ways to face it.

Our intention is to achieve the already given targets and also prepare BT for an opening
to new horizons. In addition, in order to face the fast changing environment we have to
introduce within the companies activities like cross selling and e-marketing.

A new era is at about to start, where BT will become one of the leaders within the global
telecommunications industry starting from its dominance in the UK.

2.0 Preface of our Potential Marketing Plan Strategy

Marketing is considered to be the most visible functional activity of profit-seeking
organisations . However, for the appliance of a new Marketing Strategy, many changes have
to be done as far as it concerns the complete infrastructure of an organisation, as well
as the corporational beliefs and values.

Our suggested strategy emphasizes on our effort to launch BT as a potential ¡¥active
member¡¦ in the economical and social life of the country, in contradiction to the
characterisation of the past as a ¡¥public enemy¡¦ from the press. Our planning is
based on an analysis of the customer¡¦s future requirements, as well as the current
needs in comparison to the past. Major role at this planning plays the succession process
from one time sector to the other. The philosophy of our strategic business plans is to
bridge the gaps between past, present and future, having as a result a limitation of
available time to our competitors to attack to our market share while we remain idle. Our
proposals include a ¡¥bouquet¡¦ of changes, improvements and alternative solutions
(segmentation planning, direct marketing campaigns), targeting in the creation of a
competitive advantage through Relationship Marketing and flexible Marketing Strategy with
the wide use of Direct Marketing techniques, in order to attribute to the loyalty strategy
of BT and also create some barriers which will protect the BT¡¦s market share and
leading positions building ¡¥iron walls¡¦. This tactic aims not only to secure the
existing customers, but also to attract a respected percentage of customers who were
disappointed and finally abandoned BT for another attractive competitor.

The code name we gave to our project is ¡¥Low Bap¡¦: the sound of boots of an army
when is marching in the battlefield. With this name we compare the business corporations
of the present with the huge armies of the past. In this way, we could consider BT as a
big army of the past, which has to be kept in a continuous march so as to meet our targets
both in short and long-term. Regarding the number of the consumers that are involved and
the size of funds, which are going to be used, BT¡¦s strategy will be an example that
may have both a positive or negative effect to the Global business field in the future. It
is up to us to build BT¡¦s fame as an innovative strategic planner or another
bureaucratic plodding giant.

3.0 Situation Analysis.
Before giving our proposals and suggestions, we are going to highlight the key aspects we
observed when we were analysing the current situation. These can be mentioned as the most
important factors that determine our strategy and their presentation will help you to
comprehend the status quo as we estimated it from our own experience.

3.1 Market Summary.
The market in which we are going to be activated is defined from the borders of the UK.
However, Britain is considered to be one of the most developed countries in the world, so
it is really difficult to study examples of other companies and other countries in similar
situations. Moreover, as an undoubted market leader, BT has, in most cases, to introduce
an innovation, in order to familiarise the customers with it. This means that BT will pay
higher cost than the market followers, who will find the market ready for their entrance.
In such cases, most of the times, the pioneer proves to be less competitive than the

The British telephone industry changes fast according to the way telephone services are
offered. In our days, were cross selling is in growth and it is a commodity the companies
to be involved in various activities, in order to secure their profitability, it is
expected that even more companies will try to enter the market by offering alternative
services, coming especially from the sector of new technology.

It is thought that ¡¥the best defence is the attack¡¦. As certainly opportunities will
be given in the sectors of mobile phones and Internet services, BT will meet the challenge
to enter. The participation of the UK in European Union may lead to further evolution in
the sector of telecommunications within the Community. Moreover, it is expected that in
the near future alternative technologies will transform the way telecommunication services
were offered till now. For instance the future coming of Web phone may cause a complete
change to the market.

3.2 SWOT Analysis
The following SWOT analysis captures the key strengths and weaknesses within the company
and describes the opportunities and threats BT faces.

3.2.1 Strengths
The following are accepted as the main strong points of BT¡¦s structure:
,X Access to respected amounts of capital, which will fund the new strategy.
,X Cash flow that is continuous and predicted enough to support a long-term project.
,X Coverage of the complete market, existing distribution network that covers the
complete geographical altitude of the market.

,X A brand name, which is easily recognised and familiar to the consumers.
,X A historical background, which, with the appropriate promotion will be gain back
the lost shine of the company to the eyes of the consumers.

,X Clear picture of the problem.
,X Experience on the local telephone industry more than any current competitor.

3.2.2 Weaknesses
,X The structure of the company, which was initially made to offer pure telephone
services now it is vital to combine it with other services, which are more demanding.

,X A prohibition, as far as it concerns the quality of service and respect to the
customer against BT from a major share of the consumers¡¦ society, which includes the
most profitable segments of the market.

3.2.3 Opportunities
A major task that may be considered as an opportunity is the chance to enter into new
markets, something that will support the current activities. These new fields may include
opportunities for high profits and may also lead to a glide consecution of the
product-oriented profile of BT from telephone industry to telecommunications.

3.2.4 Threats
,X Continuous price pressure will reduce BT¡¦s profits, something that will have as
a result poor profit per share and decline of the share price.

,X Strong competition will lead to the parental corporations of the cable companies as
well as the new entrants which will squeeze the share of BT.

,X A dramatic change in the telecommunication industry with BT to confront
difficulties to participate in the evolution due to lack of knowledge as far as it
concerns New Technologies.

,X Reengineering of the operational structure, which may lead to the conflict of the
relationship between employers and employees, affecting their performance and the success
of their project.

3.3 Competitive Status via Five Forces Analysis
Within the telephone industry (except from the implications of relative markets), BT does
not confront strong competition. Therefore, the considerations and reactions of a part of
the management maybe considered as limited, due to the lack of stimuli. However new
entrants and substitutes are now encompassing the nature of telecommunications industry
from what was known in the past.

The governmental and political factors that influence the BT have to do with the antitrust
and monopolisation regulations and try to enforce healthy competition and protect the
interest of the consumers. Though we do not expect more pressure concerning the opening of
telephone services, as it is already considered as a free market, we may confront
difficulties if we try to launch combined services 3 in 1 like: wire phones, mobile phones
and internet. As an example, we could mention Microsoft vs. Netscape case.

BT¡¦s labour force is consisted of employees, who work for the company (in most of
cases) for many years. It is expected that the work force must be experienced, but also
well paid, according to the years within the company. However, the high cost of wages is a
disadvantage for the company and the skilled workers have the ability to shift to a job
(maybe to a competitor) if they receive a more attractive offer. Suppliers of equipment
have now the option to deal with more than one client within UK market. But BT always
remains the client with the bulk of turnover, which has the strength to demand better
prices and benefits.

Selling points and intermediaries, have now the option to choose from a variety of
telecommunications products. They observe their position to become more powerful, as they
can enhance more than one brand and they have the opportunity to negotiate with
telecommunications providers asking for privileges.

Five Forces Analysis of BT

Figure 1. Five forces analysis (Porter E., 1980)

Substitute products are a threat to BT as they enter the market, carrying a lot of
advantages. Some of them are expected to affect the market in long term, for instance
Internet phone.

Last but not least, the consumers are now in powerful position, as they can test and
compare products and finally demand more. In addition, they are receivers of multiple
advertising and promotion campaigns, a fact that makes them suspicious to any kind of ad
or direct marketing approach from any company. Moreover, the pricing issue is nebulous, so
there is a conflict to their mind.

Our Direct & Relationship strategy targets in building barriers to new entries and
enforcing the position of the company, by using the most modern and suitable methods of DM
to establish the loyalty and devotion to BT, as the unique national telephone provider
with extensions to other profitable sectors.

3.4 Product Offering
BT¡¦s product offering is focused on telephony in national level. Our differentiation
policy must emphasise on the fact that BT was the first telephone provider and still has
the greatest experience and is willing to offer qualified services to the Age of
Electronic Time in multiple sectors. Services and products offered by BT must give the
customer the sense of security, as well as the confidence that they worth their price per

As basic elements in product offering we have to consider:
,X Access to the local, national and international telephone network.
,X Supply of telecommunications equipment.
,X Telephone Services of information and entertainment, access to data.
,X Tele-marketing.
,X Mobile phones.
,X Internet
,X Intranets, Digital Information Networks
,X Ability to scan and enhance new products and services
Our marketing strategy is going to help in the development of all the above activities,
including the preparation for the opening to new horizons.

3.5 Keys to Success
As keys to success, we admit the following parameters:
,X Transformation of the inertia that keeps the customers to pure loyalty.
,X Differentiation of the services, enhancing new technologies and innovative
services, which will reinforce the position of BT in the market.

,X Long-term relationship with the consumers, which will allow cross selling and
prospects for expansion in other profitable sectors.

,X Continuous monitoring of the evolution in telecommunications industry scanning for opportunities and threats.

3.6 Critical Issues
BT is still in declining stage as a telephone provider. Moreover, there is a negative
background, which is necessary to be reversed before we introduce any new services and
offers. Therefore, the use and the results of the Direct & Relationship Marketing Plan are
essential for the success of the entire Business Plan and Strategic Design of BT.

3.7 Macroenvironment
Major macro environmental trends and issues, which impact the performance of BT, are as follows:
,X As key factor we estimate the National Economic Health of British economy. It is
expected BT to do better when UK faces growth in economy.

,X The evolution in New Technologies sector is vital for the future plans of BT.
,X Shifts in consumers¡¦ habits and cultural background.

4.0 Presentation and Analysis of our Direct & Relationship Plan for Action
Our Direct & Relationship Marketing Plan is going to give a complete set of short-term as
well as long-term proposals of BT. The core of our DM planning is the creation of a
reputation and fame that will enforce the differentiation strategy, which targets to
enforced the scheme of loyalty. The target of our strategy is to create confidence and a
sense of superiority to BT¡¦s customers regarding the services they receive from their
telephone provider. Furthermore, social responsibility and concern for the interests of
our customers will add extra value to the BT¡¦s profile in the consumers¡¦ eyes.

4.1 Mission
As BT¡¦s mission is recognised the complete coverage of UK with telephone services, in
national level. As the first and historical provider of Great Britain, BT has the duty to
serve the citizens with the best services.

The mission of our Direct Marketing Plan is to bring and keep in touch the customers
within UK with BT, establishing a strong relationship both in strengthening their loyalty
and keeping them using BT services.

4.2 Marketing & Financial Objectives
The main marketing targets as they are setted by Mick Harbour, Head of Consumer Market Defence are as follows:
a. To stop 1 of 2 customers who are going to join cable companies.
b. The return of 100,000 customers from Mercury to BT
c. To choke up the goal of cable to half, meaning that BT will continue to control the 90% of the market.
Our proposals with the code name ¡¥Low Bap¡¦ covers all the aims above and includes
the additional target of creation of DM network, able to cover cross-selling activities
and expansion to new horizons.

4.3 Our Direct Marketing Plan presented for BT in details

Our primary DM campaign will have as ¡¥flagship¡¦ the establishment of a museum
dedicated to telephony. This museum will mainly describe the history of telephony
highlighting slightly the importance of British Telecom and the inheritance of BT.

A massive advertisement campaign will follow via TV, radio, newspapers and magazines. This
campaign will inform customers for first time for the Historical Museum of
Telecommunications, which will be financed and supported by BT.

The next step is the target clients to receive through Direct Mail an application form. By
completing this form they will receive an invitation for free entrance to our Museum.
Using this application form we will gather fresh information from our customers. Therefore
it is essential to make them respond. We can increase the percentage of people reply by
including a lottery or a competition. This approach has to be in a really friendly way, in
order to build a strong relationship between customers and BT.

In order to meet these expectations, BT has to reengineer a part of the Customer Care
Department to a pure Direct & Relationship Marketing Department. The role of this
department will be to operate as a Revenue Assurance Dept.

Regarding the Outbound and Inbound contact with customers, we would like to present an
aggressive tactic on behalf of the Customer Care Human Resources.It is of vital importance
for the success of our project to upgrade phone sets and launch vouchers in such a way, so
as to be considered from the consumers as ¡¥suretyship¡¦ on behalf of BT and not
another bonus of to logic that ¡¥I pay a lot I deserve a lot¡¦, which is something
that is expressed by the consumers when they receive bonuses (in most of cases).

Due to the fact that we accept the appliance of Parretto Rule to our target market, we
have to reconsider the introduction of a Club, which will include the most profitable
segments of the market. Due to the nature of our potential customers and the differences,
which are presented to each group, we have to split our Club to subcategories. These
subcategories will operate as independent Clubs, which will be devoted to the target group
of customers.

4.3.1. Brief Picture of our DM & Relationship Plan

To the following picture is briefly described the structure of our proposals in order to
present a complete view of our project. An analysis of each sector will follow to the next
chapters. Our project has multiple objectives and targets. It is a common belief that in
advertisements the best way of advertising is by ¡¥word of mouth¡¦. We are seeking to
find ways to build a profile of ¡¥social responsibility¡¦ and respect to the customer,
who will turn our existing customers to BT¡¦s ¡¥ambassadors¡¦. We will also have to
defend against the aggressive policy of cable companies, in order to stop their expansion
Continues for 16 more pages >>

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