Case study - Organizational review
You are the marketing manager for a ten store chain of outdoor-lifestyle stores in Brisbane called BBQ fun. The stores specialize in BBQs. outdoor furniture and BBQ consumables. The organization is close to reaching its previously set goals and is looking to activate the next phase in the organization's development. The CEO has asked you to undertake an organizational review. To help you get started, the CEO provided you with the Marketing Plan for BBQfun (July 2008), the latest IBIS report for the industry and a copy of the annual report by the chair in December 2009, and a subsequent interview.
You review the annual report and note the following statement by the chair of the board.
"Within the next ten years BBQfun will become a national retail brand, catering to the needs of home makers with a range of unique, high quality outdoor-lifestyle products made accessible to at through our easy to manage payment plait."
At the time of the annual report the chair of the board was interviewed by a reporter who has made the recording available through their website, you watch and listen to the interview and hear the following statements by the chair of the board.
"BBQfun's values have been the same for as long as the organization has existed. For our stakeholders it has always been about stewardship and to adhere to professions' and moral standards of conduct in all that we do. For our people we are committed to encouraging self-directed teams, we cultivate leadership and we maintain high levels of safety. Externally we are committed to wise environmental practices and to offering meaningful value to our customers."
"By 2018, I see BBQfun with a significant retail presence in outdoor lifestyle in every Australian capital city, starting with 15 stores in the greater Brisbane area and growing to 50 Australia wide"
"Our market strengths continue to be our ability to source imported products that customers want at prices that customers believe represent value for them but which give the organization the required margins and financial returns"
You asked the CEO about the new phase in the strategic plan who explained that it was a big step.
"We now need to change our focus from local suppliers of services to national ones and to think about opportunities to save money by getting a wider geographic benefit and choosing media with a more national reach."
When asked about the current marketing plan against actual results for the year the CEO said:
"Welt we achieved our sore growth and sales growth but our gross profit margins are currently sitting on 48%. I think we are stiff below the threshold for container toys which would give us the extra margins. SO, expansion in sales is a key issue here.
We spent IS 70.000 on radio advertising and $220,000 overall including magazines/PR and direct marketing. While this ratio advertising expenditure got us the sales results, it was a significant cost that was not initially planned for. The PR has been particularly useful with many write ups given our unique offer.
The customer loyalty lists had achieved a total of 17,000 and a survey by Lombard's indicates that 70% of people in the target market recognize the BBQfun brand and what it represented.
Overall our original SWOT analysis in 2008 is still a valid analysis for today. Not much has changed n that regard."
Studying the latest IBIS report for the Industry you note the following differences between BBQfun's marketing pan 2008 and the current situation. You noted that interest rates were in fact rising and that unemployment was not at 5.3%. The social trend towards house proud purchases is growing stronger than anticipated while the broadband rollout has been delayed putting on hold some of the organization's internet marketing plans.
You also note the sales break.tps between the existing Brisbane stores and see BBQs at 40%, outdoor furniture at 35%, and BBQ consumables at 25%. The CEO explained that Initially, the BBQ consumables category gains early traction with the market followed by the uptake by customers in the other categories. For this reason the CEO suggested a target of 40% for BBQ consumables items would indicate that the new markets were on track to achieve the overall sales target.
Quite often a new customer's first purchase from is In the BBQ consumables and this gives us the opportunity to sign them up for our loyalty program. Our initial advertising budget will feature these items and will be the front entrance prominent display in the initial period. The board has decided to apply the industry's self regulating county of origin and ensure that the actual country of origin is clearly displayed on all these items.
The following are some more notes from your BBQfun mid plan review.
• A new manufacturer overseas has been sourced due to cheaper prices. Samples and first shipment quality were good but the second shipment had a number of returns. This has presented an opportunity for a higher margin or reduced overheads with the consequence of the quality positioning in the market under review.
• The honouring the three year guarantee has been challenging with the lowering of quality in the new manufacturers lines.
• Promotions in the Brizzy magazine combined with instore entertainment has been very well patronised with a high number of leads to follow up.
• Joint industry-wide promotions will allow 8BQf un to establish early traction in its goals for market share.
Procedure:
1. A collection of data that relates to the Marketing Plan. Your Assessor will advise you on the options to be taken in this assessment to either
a. select an organization for which you can access sufficient market data. The organization may be one with which you are familiar, for example, your own workplace or another as negotiated with your assessor.
2. Prepare a one to two page project update report that outlines the current progress of the marketing activities against the marketing plan and overall objectives. Your report should comment on the strategies and tactics being used to:
a. monitor and implement the promotional activities
b. monitor product, pricing and distribution decisions
c. monitor marketing results against targets in the Marketing Plan
d. monitor marketing revenue and costs against budget
e. record variations n revenue and costs against budget.
3. Prepare a ten minute presentation based on your report.
4. Ensure that:
a. the report's content, format and level of details meet organizational standards for an internal project update
b. the presentation's content, format and level of detail meets organizational standards
c. the presentation is delivered to set deadline (as established by the facilitator).