Global MBA Marketing Management Name: Simon D Long Student No.: 7860 Institution: Swiss Business School Unit Word Count: 3237 (excl. executive summary & references) No. Of Pages: 23 (incl. cover page) Date: 3rd May 2018 Table of Contents – Marketing Management TOC o “1-3” Executive Summary PAGEREF _Toc512980986 h 3 Historic & Current Position PAGEREF _Toc512980987 h 4 Group Targets PAGEREF _Toc512980988 h 6 Service for Marketing PAGEREF _Toc512980989 h 9 Marketing Objectives PAGEREF _Toc512980990 h 11 Marketing Mix PAGEREF _Toc512980991 h 14 Marketing Actions PAGEREF _Toc512980992 h 19 Conclusion PAGEREF _Toc512980993 h 20 References PAGEREF _Toc512980994 h 22 Executive SummaryThe purpose of this report is to provide a proposal for the targeted marketing of services provided by Mace Macro (MMI), the facilities management arm of the Mace Group.
This report details the origins of Mace Macro, their current position and will attempt to provide information on how the existing portfolio can be expanded and how additions to this portfolio could be achieved, in the UAE market. This report focuses on a single business stream as opposed to a holistic view related to the company’s plans for growth. Proposed marketing actions are in line with the long-term business plan of the Mace Group, which recognises that their facilities management capability adds real customer value to services that can be provided. The business plan looks to grow across all business streams, but this report will focus on Mace Macro, not the group. Research of the possible actions has been carried out using published books, academic journals, professional publications and information available on the internet.
An understanding of the Mace Group vision, including the facilities management function is paramount in formulating recommendation within this report. Included within this report are details of analysis required of potential growth areas and the information required for consideration as a result of that analysis. Suggested tools have been provided for the evaluation, measurement, management and mitigation of risks and finances with rationales provided for their suitability in a variance of situations. Information on tools and theories provided is backed-up by suitable referencing to existing data available in the public domain. Historic ; Current Position Mace Macro is the facilities management wholly owned subsidiary of the Mace Group, an international project management and consultancy organisation.
Macro has been in operation since 2002, and developed organically as an extension to the many other building and property related services already on offer from Mace. The company had been providing facilities management services since the mid-1990’s, often in support of significant construction projects. For instance, whilst building the new headquarters for British Airways at Waterside, Mace was challenged to help with the mobilisation of the support services required to manage this significant facility. Following the success of this project, other clients sought to use Mace’s expertise to help with a variety of operational issues related to the management of property. It was clear that the market was ready for a new type of facilities management and Macro was created, bringing together the experience and track record of both Mace and an industry leading management team.
Macro quickly established its reputation with a number of keynote projects and through strategic acquisition of a number of regional facilities management businesses including FM24 in London, Maxim in the North of England and FIMS in Scotland. Key Moments in the Macro Timeline 1.September 2002 – Macro begins operations with four founding partners 2.2004 – First overseas consultancy project for Jumeirah Beach Residence project in Dubai 3.February 2008 – Macro travels with its first UK based client overseas (Invesco) 4.March/April 2008 – Macro establishes its international operations in the Middle East with Old Town Island contract for Emaar (developer of the Burj Khalifa, the world’s tallest building) 5.May 2008 – Macro named Consultant of the Year in the Middle East and followed this success by winning the same award in 2009, 2010, 2011, 2012, 2013 6.Sept 2009 – Macro commences FM operations for Invesco in 26 locations across the US and Canada. Macro also sets up operations in Qatar and Saudi Arabia 7.2011 – Macro appointed on its largest contract, to oversee FM delivery to over 3,500 buildings in Abu Dhabi on behalf of client Musanada. Macro takes its operations to India There was obviously a considerable investment in establishing Macro firstly in the UK and then making the foray globally with the international expansions.
The CAPEX (capital expenditure) required in 2008 in the establishment of Mace Macro International in the Middle East was £150k with anticipated OPEX (operating expenditure) circa £300K, an initial investment approaching half a million pounds. The first audited accounts to include this venture were made available in the 2010 annual financial statement from the Mace Group, which reported a turnover of £840k in the period 2008-2009 for Mace Macro International. Subsequent financial reports have illustrated a definite upward trend within the international FM business, with the 2015 report demonstrating a turnover of £23.2m purely for the Middle East operations. This figure is expected to show a substantial increase in the 2017 report, due for release in May 2018. The company has a generated turnover in the same period of £76.6m for all geographical areas of operations. These figures are reported within the Mace Financial Report (2015), which is freely available in the public domain.
The Mace Group is present in 50 countries (Fig. 1) whilst Macro now operates across 4 continents: North America, Europe, Australia and Asia, with a presence in 23 countries offering a diverse array of services to an equally diverse customer base. Fig. 1 -476253694430Source: Mace Group (2016) 00Source: Mace Group (2016) The current financial status for Macro is shown in Fig. 2 below.
This represents the total turnover and the turnover for each respective activity, and also the profit for the period 2014-2015. Currently, there are 681 people employed globally by Macro. Fig. 2 Despite the significant growth over the previous years, there is still room for significant expansion, for both the group and for Macro, as a company, within the group.
Group TargetsThe Mace Group does have a vision in place for group wide growth and expansion. In 2012 Mace reached the significant milestone of £1bn turnover. This achievement is illustrated in Fig. 3 below. Fig.
3 Source: www.building.co.uk (2013) To build on the successes up to 2012, the Mace Group has developed the 2020 Vision, which is to become a £2bn turnover organisation by the year 2020. Macro, as an integral company, has formed their own strategy to be aligned to this: The targeted forecasts are shown in Fig. 4. -644752975551Source: Mace Macro (2013) 00Source: Mace Macro (2013) -181315-337303Fig.
4 00Fig. 4 The forecasted targets To achieve the forecasted targets, the income generation for Macro that will allow the growth desired in financial and positional terms is affected by several factors, as shown in Fig.5 below. Fig.5 Service for MarketingThis report is to identify the business stream that would receive the greatest benefit from a marketing drive. On initial viewing, it may be assumed the area to that requires growth, in terms of turnover, would be the helpdesk function. However, despite the lower turnover, the margin, based on a relatively low head count of staff, is greater than that of managed services, even with the large disparity in turnover.
As a result, we will develop a marketing strategy focussing on our managed services function, to not only grow our market share and turnover, but increase profitability and gross contribution to the group. The first step is to identify where in the market our managed services currently sits. This will be achieved by the use of the BCG matrix shown in Fig.6. 225853465126Source: www.marketing91.com(2018) 00Source: www.marketing91.com(2018) 0-3810Fig.
6 00Fig. 6 In order to use the matrix, it is imperative to understand the terminology and how it is applied: Cash Cows – high market share in a low growing market Stars – good market share and good growth Question Mark – unknown product in the market Dogs – low market share and low growth rate A critical analysis of the revenue generation of the managed services individual offerings, allows us to define and identify the individual services which fall under its control. Cash Cows – Our managing contractor engagements (47% of turnover, large market share) Stars – Our managing agent engagements (41% of turnover, large market share) Question Marks – Technical hands-on services (10% of turnover, small market share but potential to grow) Dogs – Owner’s association management (2% of turnover, static market share for 5 years) Whilst we could possibly look at improving the owner’s association function, historically, across the UAE, there has been little growth or development of this market. We should therefore concentrate on our technical services, as this has a greater potential for growth. To provide clarification in which to develop a marketing plan, we should carry out market research into the viability of the promotion of services.
Market research will be used to specifically and purposely obtain as much information about our business as possible. Typically, information will be obtained from a number of sources, and will depend on the who, the what and the why of the purpose of the research. The primary driver for the collation of this information is to be aware of the competition, trends/fad and especially, the consumer wants and needs. Figure 7 details the usual methods of this type of research.
Fig 7 Source: Referenceforbusiness.com (2017) Information, unless it is interpreted is of no value, and must be understood. Jamil (2016) states ‘marketing data and information must be provided from a variety of sources to produce knowledge, in a process that can be characterised as organizational intelligence”. This interpretation is an integral facet of the 6 marketing steps that are required. This is shown in figure 8. Figure 8 Source: mymarketresearchmethods.com (2017) Marketing ObjectivesHaving identified the technical services as our focus, establishing objectives, for the next 3 years is paramount for success.
These objectives must be SMART as defined by Blanchard (1985): Specific Measurable Achievable Realistic Time-bound In order to create these objectives, we need to establish the particulars of our service. This can be achieved by the use of either a SWOT (RapidBi 2016) or PESTLE (CIPD 2013) analysis. As we currently operate in the UAE and have an understanding of many of the facets of a PESTLE, for this report, a SWOT analysis will be used. Strengths – established name and presence, brand recognition, ability to offer a one-stop shop Weaknesses – limited activity within technical services, low employee numbers, higher overheads Opportunities – continued housing construction with an increase for maintenance activities Threats – smaller operations, existing providers in the industry Building on our strengths, we can develop objectives which will combat any weakness and threats, and also embrace any opportunities. Considering the analysis, three SMART marketing objectives, will be: Attract new customers (increase market share) Build brand awareness Increased revenue It would not be ineffective to use a scatter gun approach (trying to cover the entire market) in pursuing these objectives; we have to consider where potential lies and create target segments from that consideration. This creation of segments is supported by Cheng (2017) who states, ‘a comprehensive attitude-based market segmentation analysis can identify distinct market segments in order to best serve the needs of each segment and to develop plans to increase usage.
The more defined we can make each segment, the more focussed Macro can be in specific marketing. The University of Minnesota (2017) provides details on four dominant marketing characteristics: Behavioural: How will customers use our services and what benefits do they want? Demographic: Hoes does ethnicity, background and age have an impact on what they purchase? Geographic: Customer locations and how are they reached? Based on their locations, what do they purchase? -42545487045To identify potential customers, these characteristics are used to narrow down our prospective targets. An example of this is shown in Table 1 0To identify potential customers, these characteristics are used to narrow down our prospective targets. An example of this is shown in Table 1 Psychographic: What do our customers think about and what do they value? How do they live their lives? -606425-117475Table 1 00Table 1 Segmentation Target Segment Unlikely Possible Likely Very Likely Geographic Country of Origin Asia Emerging Nations Westernised Europe Density Rural Town and rural City City Demographic Age Under 20 20-25 25 -35 35 and over Gender Male Female Male & Female Male and female Income Low Middle High High Occupation Students, manual labour Students, semi-skilled Businessmen, Professionals Businessmen, Professionals Education High school Technical Bachelor’s Masters Business schools Masters Business schools Social Status Low Low, middle High High Housing Shared Apartment Villa/Compound Villa/compound Psychographic Lifestyle Low-orientated Moderate-orientated Achievement-orientated Achievement-orientated Personality Downbeat Easy-going Determined Ambitious Behavioural Benefits sought Affordability Value Convenience Convenience User status Self-reliant Semi-reliant Reliant Reliant Attitude Indifferent Indifferent positive Positive Enthusiastic Marketing MixAfter reviewing the segmentation table above, we can see that there are distinct social groups – one which would be less likely to welcome our services and one which would. Rather than expend time and resources on an unlikely group, we should focus our attention to the likely/very likely demographics. Having established who Macro should be targeting, the next question is how do we actively target these potential customers? According to Ivy (2008) the traditional marketing tools are grouped, historically, into the 4 P’s; Price, Product, Place and Promotion (The Marketing Mix).
There are also 7P’s (CIM 2009) but for this report, we will concentrate on the more typical 4. Fig 9 Source: The Marketing Mix (2018) In devising our marketing strategy, Macro must consider the various elements of these 4 P’s Product- Where will the service be used – home or work? What trades will Macro offer? Are there any trades Macro need to add? What terms of engagement will be available? How are Macro different to the competition? Price- Pricing strategies What is the cost to Macro to offer the service? Do customers believe they receive value for money (perception)? Can Macro lower their price point, but increase market share? Place- How will customers discover Macro’s services? How can Macro differentiate their distribution strategy from that of their competitors? Do Macro require a dedicated sales team? Should Macro attend trade exhibitions? Promotion- How best to communicate with potential customers? When is the optimum period for promotion? Is social media a good medium to consider? What do our competitors do to promote their businesses? Table 2 illustrates how Macro should interpret the descriptors and the subsequent actions. Table 2 Item Description Macro Action Product What do the customers want? Not to presume that we know best, speak with and engage the clients as to their specific wants and needs Price Only worth what the customer is prepared to pay Cheapest is not always what the client wants, Macro can offer additional services which can enhance the value for money our clients feel they receive Place Delivery of service at the right place and at the right time Adhering to our own internally agreed KPI’s and with the clients KPI’s. Late delivery of services will inhibit the likelihood of repeat business or recommendations Promotion Brand advertising, PR, special offers, exhibitions Macro to raise their profile by attending expo’s, articles in magazines, press releases on successes, increased use of social media, sponsoring charitable events etc. No matter how good the Macro product is, unless it is heard of or seen, there will not be the growth or expansion that is planned. Macro have to be mindful that marketing is not just advertising or selling, but it is a key management discipline that enables the suppliers of services to interpret customers wants, needs and desire; and to match or exceed them, in delivery to their target customers.
Whilst not part of the marketing mix, further clarification can be provided by the use of the 4 C’s, developed by Lauterborn (1990), with their interaction and complimenting of the 4 P’s. This interaction is shown in Fig. 10. Fig.10 27305105410Source: Lauterborn (1990) 0Source: Lauterborn (1990) Customer Value – rather than placing the emphasis on the product, the emphasis is shifted to something missing from the customer’s life Cost – whilst the selling price is important, the overall cost of the service must be established Convenience – it must be straight forward and uncomplicated for the customer to purchase our service, and believe the service they receive is cost effective Communication – constant dialogue is required between Macro and its customers Having an existing presence in the region (Macro is present across the whole of the UAE) will be a distinct advantage when considering new possible avenues: it will provide a more informed insight into the needs and the possible entries. This market research is crucial prior to any consideration of expansion (current competitors, financial stability, quality of locally available employees, long term viability based on future domestic growth plans for each service, (prevalence of corruption based on region, tax liabilities, cost of living etc.) as discussed by Barkema and Vermeulen (1998).
An area where Macro are well placed to strengthen their existing market presence and to aid their future expansion aspirations is one of added value. The services that are already offered in excess of a traditional FM role: consultancy, helpdesk, owners associations etc. do give Macro an edge over their competitors. The ability to manage a project from design review to steady state operations in one that clients would actively seek. Another area for Macro’s consideration is partnering with select clients. Collaborative partnerships in business benefit from the close, trusting relationships between partners.
Network strength and openness create profit amongst businesses that have created trust between them. Collaborative partnerships between businesses often generate higher levels of productivity and revenue when there is stable, bidirectional communication between parties. These partnerships develop into longstanding practices and relationships that can extend beyond the length of a single project. Internationally, ISO 44001; Collaborative Partnerships (2016) (formerly BS 11000) could be embraced and employed to grow these partnerships. Progressing a project from design to occupation, with partnerships in place, could see Macro recommended by our partners as the service provider of choice to their tenants/owners. Market research, as previously mentioned, is pivotal in the forming of a marketing strategy; it can also be known as a marketing audit.
This strategy must be aligned to the overall corporate business strategy and supported form the top down, an unsanctioned plan will fail through lack of commitment throughout the company. Irrespective of the routes taken for expansion, crucial to the success is the cohesion with the financial department of the company. The support offered by finance teams is invaluable and includes: Information on project financial implications Clarifies consequences of decisions Develop and produce business strategies Monitoring and control of finances (including internal audits) The importance of the “buy-in” of the financial department is vital to the success of any strategy as discussed by Moles et al (2011) and shown in Fig. 11. All plans and budgets are inextricably linked to the financial department. Fig.
11 Marketing ActionsHaving identified, through segmentation, the sectors that we should be aiming our marketing at, we can tailor the marketing methods to ensure our campaign reaches, and is received by our chosen segment, to achieve the objectives previously stated and repeated below. Attract new customers (increase market share) Build brand awareness Increased revenue It would be fair to presume, based on the analysis, the vast majority of those likely/very likely to engage our services would be active on social media. Mediums such as Facebook and Twitter offer extremely cost effective methods of advertising – low cost, large audience. Whilst we do have social media pages, these are generally used for internal announcements or business related news.
To change these, or create specific pages is straightforward and immediately reaches a large audience. We should be actively building on relationships with existing customers, with high emphasis placed on CRM (Customer Relationship Management). Use these customers as a positive advertisement; recommendations from friends on a service they have received will bring in new business far quicker than cold calling potential clients. There should be emphasis on the size of Macro; we are not going to disappear overnight, and have the resources to fulfil obligations, unlike smaller less established providers.
Clients have to perceive they are receiving value for money, not necessarily the cheapest. As previously mentioned, the finance department will have to agree to a budget. This would be needed to visually promote our brand; whether this is in the form of posters, flyers etc. or a greater number of vehicles with company livery. We want people to think “where have I seen that before” when they see the Macro logo. To reduce our price point may seem counter-intuitive when discussing increasing revenue, but, as our market share grows, we can afford to reduce cost, but still maintain the same margin, with the same high level of service offered to clients.
A 5% margin of many clients is far more profitable than 15% of a few clients. Considering the time scale of 3 years to achieve the targets, we cannot just do one thing and then wait to see if we are successful. It will be a continual process and one that will need monitoring and adjusting, depending on market conditions. The Plan, Do, Check and Act cycle (Deming 1950) Fig. 12, is the perfect tool for this purpose.
Fig.12 Source: www.balancedscorecard.com Using this cycle, Macro will be able to react positively; changes discovered during the check stage can be implemented in a more proactive manner than purely reactive. ConclusionThough the planned growth for the company is ambitious, Macro is well placed to reach its targets. There exists strength within the company, but a strategic development of a service will build on those strengths and in doing so, build on the strength of Macro as a business entity. This pool of strengths will also maintain the professional level of services that Macro currently offer and will be able to offer to new and existing clients.
One Macro, not sub-divisions, will be the most effect way to raise the profile of the organisation. The full and correct research into potential new markets will pave the path for entry into those markets. Attempting to enter these markets blind would be doomed to failure carrying with it financial losses and possible harm to the excellent reputation built up by Macro. Accurate market analysis with allow for more focussed financial planning for expansion, budgets have to be put into place and monitored. Overspends may not always be easy to be recovered. A continual process of risk management is crucial to the success of the plan, without it, how can there be measurement of successes and failures? Macro will need to learn from what did go wrong even more than from what went right.
The costs of managing the risks regardless of their type (funding, spending, operational etc.) will always be far outweighed by the costs of not managing the risk. Financial risk management may be the single most important activity carried out. Negative financial impacts will affect the cash flow, ultimately, no cash flow = no Macro. Without the adoption and implementation of the measures highlighted within this report, the Macro vision will remain just that, a vision but never reaching realisation.
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