Market Penetration Strategy Analysis

The assignment focuses on analyzing market penetration strategies in business. It examines various tactics employed for successful market penetration, referencing theories like Ansoff's Matrix. Students delve into the marketing mix and its application within a market penetration strategy framework.

Marketing Management
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Table of Contents
INTRODUCTION................................................................................................................................3
Current competitive position together with future business projections in volume and value terms
for the next 3 years...........................................................................................................................3
New strategic marketing applications for growth from market penetration, market development
and product development.................................................................................................................5
Market penetration...........................................................................................................................7
Marketing resourcing needs of changes to current competitive position......................................10
CONCLUSION...................................................................................................................................11
References..........................................................................................................................................12
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INTRODUCTION
Marketing Management includes a range of processes, strategies and tools that are used for
selecting target markets along with creating and increasing customer base via delivering good
consumer value. It is a process of managing marketing activities as well as other functional
operations at different levels of management (Chand, 2016). The decisions related to marketing
management are based on clear and complete knowledge on marketing functions and managerial
techniques. Marketing management has combined both marketing and management areas (Dent,
2011). With the help of it, a company can meet the different objectives such as increase competition
and raise profit.
To understand the concept of marketing management in the respect of business, British Sky
Broadcasting Group (BSkyB) has taken into consideration. It is a British telecommunication
company of UK and provides services related to broadband internet, telephone network and
television broadcasting. After doing merger with Sky Television and British Satellite Broadcasting
in November, 1990, BSkyB was formed. It is a UK largest digital subscription television company
which offers various kinds of products and services to the customers (Whitwell, 2001). The
following research will cover various objectives, future business projections, new strategic
marketing applications as well as the strategy of market penetration to achieve sustainability and
fulfil the needs of marketing resources in order to implement changes for gaining competitive
advantage. .
Current competitive position together with future business projections in volume and value terms
for the next 3 years
Competitive position has defined the position of a company in a market. It is used to
differentiate current products and services which are offered by a firm to its target customers.
Elements which are considered while competitive position analysis are market profile, customer
segments and methods for delivering values and competitive analysis (Craft and Hassan, 2015). If,
an organization is able to differentiate own products from the competitors then it will easy to attract
customers and raise market share. Without create differentiation, company has to spend more
money, time and efforts to engage customers in different activities and the result of it is it has tough
for organization to sustain in the market place for long time (De Mooij, 2013). Current competitive
position of an enterprise helps in developing future business projections.
Opportunities and threats of BSkyB
With the help of SWOT analysis, it has determined that there are some opportunities and
threats for BSkyB (Giligan and Wilson, 2012). Opportunity for company is that most of the people
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are not DTH customers and not using broadband internet. So, this helps firm to attract new
customers by giving different offers and additional benefits. On the same side, by providing new
services to existing service users, it can be easy to retain them for the long time. Another
opportunity for BSkyB Company is international expansion. In all over the world, use of internet
and level of entertainment have been increased to a great extent with the time. So, firm can plan for
the expansion of business in the internal market and show the presence at global level (Helsen,
2014). On the other hand, main threat for BSkyB is its competitors as Virgin Group, Talk & Talk
and British Telecom offer similar services to the community on the basis of different prices.
For BSkyB, it is required to analyse present competitive position so that future business
projections in terms of volume and value for the next 3 years can be developed (Kotler and Keller,
2012). In this regard, future business projections in volume and value terms for upcoming next 3
years are as follows.
Business projections 2017 2018 2019
Volume 4000 billion 4500 billion 5000 billion
Revenue (Raised by
15% every three years)
2.2195bn 2.509bn 2.7985bn
Market territory Africa Asia Europe
Segmentation TV and internet TV and internet TV and internet
After developing future projections in volume and value terms for upcoming next 3 years for
BSkyB, there is a question to assess that where the business is now and where it should be after
three years (Neves, 2007). A comparison between present and future projection are as follows.
Elements Present (2015-2016) Future
Volume 3800 million 5000 billion
Revenue 1.93bn 2.7985bn
Market territory UK Africa, Asia and Europe
Segmentation Satellite TV and internet
From the above table, it has been determined that in the present time, BSkyB has good
market position and high market share. Innovative products and services of company has helped in
retaining customers for the long time. Sales volume per year of firm has increased with the time. As
per the present scenario, a forecasted plan for next 3 years of BSkyB Company has created which
shows the volume and value of sales. This forecasting will help firm in achieving “competitive
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business position” in the market.
Strength and weakness of BSkyB
To determine strengths and weakness of BSkyB, SWOT analysis can be conducted. From
this assessment process, strengths and weakness are determined which are as follows.
Strengths
BSkyB is one of the largest satellite service providers in the UK. It delivers services related
to TV channels and also offers different broadcasting services to the customers. In TV broadcasting,
all the channels are in package form and selection of package depends on the needs of service users
(Parasuraman, 2006). Company is also providing different channels of entertainment according
community requirements. There are some channels which are basic and free for all the services
users. Quality of services is much good as compare to its competitor’s services. Company has good
brand image in the customer’s mind as well as high market share. BskyB has spent large amount of
money for the advertisement and new deals (Pride and et. al., 2012). Organization is also
emphasising on developing new products and trying to improve the quality of their existing services
so that more and more customers can attract towards it.
Weaknesses
BskyB is providing services within UK and its growth is now completely depended on
economic condition of the country (Craig and Campbell, 2012). Since last few years, UK economy
has been facing slowdown which is directly affecting the growth of firm. For example, before 2008,
GDP growth rate of UK was about to 2.6% but in 2008-2009, it has declined by 0.7%. It is well
known fact that media industry is completely depended on advertisement and recession period of
2009 in UK was affected BSkyB completely (Ferrell, 2012). In that period, advertisement activities
became slow down by 6% which created the more risk for company in near future. Another
weakness for BSkyB is increase competition level in the market because there are many rivals
present which are offering many channels at free of cost that are charged by BSkyB in its packages
(Goodman, 200).
New strategic marketing applications for growth from market penetration, market development and
product development
In context of achieving future “competitive business position” by BSkyB, new marketing
strategy is required to adopt. To determine new marketing strategy, Ansoff matrix can be used. It is
a strategic planning tool which provides a framework to the organization in order to develop some
strategies for the future growth (Ansoff's Matrix. 2016). As per the above stated future business
projections of BSkyB, to accomplished new objectives and aim for next 3 years, a new strategic
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marketing applications has needed. From the analysis, it has been found that there are three possible
product-market combinations (Hollensen, 2015). These are market penetration, product
development and market development.
Market penetration strategy is used to sell present products into the existing markets. In the
current time, BSkyB is using market penetration as a marketing strategy (Growth strategy: Market
penetration. 2016). Under this strategy, organization is selling its products and services in the UK
market. With the help of market penetration, company is able to increase and maintain market share
of broadcasting products. To achieve this, firm has developed and used numerous combinations of
competitive pricing strategies, different types of sales promotions, traditional and digital
advertisement methods etc. On the other hand, with the intention of restructuring market and
beating competitors, BSkyB has done more aggressive promotional campaigning (6 tactics for
Market penetration strategy). This has directly made impact on the business of its rivals such as
Virgin, Talk and Talk and British Telecom. But to achieve “competitive business position” in
upcoming next 3 years, organization should develop some new marketing strategies for market
penetration. For getting success in the existing market and dealing with existing products, company
should adopt price penetration strategy where it has to drop down the prices of products with the
purpose of attracting more and more clients. Beside this, by increasing the level of promotion,
BSkyB can accomplish “competitive business position” (Belz and Peattie, 2009). Various kinds of
trade discounts, additional benefits to the clients etc will help firm to penetrate existing market in an
effective manner.
On the other hand, to increase presence in other countries, BSkyB should use market
development and product development strategies (Cravens and Piercy, 2008). These both will help
in accomplishing additional business objectives for the future growth. In this context, to achieve
“competitive business position” in upcoming next 3 years, BSkyB should look for new geographical
markets where company can export its existing services and products. For further segmentation,
firm should require a complete market research which help in knowing new groups of customers
(Dent, 2011). Market development will be a good strategy for BSkyB as organization’s existing core
competencies and experience will help in improving present services.
Product development should be used by BSkyB as new marketing strategy will help in
achieving “competitive business position” in near upcoming 3 years. It will work as growth strategy
for company in which firm will attain new competencies for developing new products and services
(Keegan, 2002). Along with this, product development strategy will develop new competencies in
the firm. This framework will more appropriate and suitable for BSkyB because it will help
organization to stay remain in competition. In this context, company should adopt different
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strategies and tactics that will help in implementing product development action plan in a better
manner (Loyka, 2007). For this, company should emphasis on research and development that brings
new innovations in the existing products. Beside this, enterprise should collect detail information
about customer’s needs and wants.
From the above discussion, it has been found that there are different kinds of new strategic
marketing applications for the growth of BSkyB in order to achieve “competitive business growth”
in upcoming next three years (Williams, 2012). Market penetration, product development and
market development are major strategic frameworks which will give growth to the company in near
future. With the help of these, it will become easier to achieve forecasted business growth
objectives.
Market penetration
Marketing penetration is another name of growth strategy in which company focuses on
selling its existing services and products into the present market. It is a less risky framework
because it helps in utilizing company’s resources and capabilities effectively (The marketing mix.
2016). It provides accurate information about rivals as well as needs of consumers. There are four
objectives of market penetration such as increasing and maintaining market share of existing
services, securing the growth of company, giving advantage to increase the level of competition and
raising number of customers (Saxena, 2010). BSkyB has used market penetration as a marketing
strategy where company is focused on improving its existing products and services. Along with this,
firm has got complete information about client’s needs and competitor’s strategies. For achieve
“competitive business growth”, market penetration should be sustained (Morgan, 2014). In this
context, there are three ways by which BSkyB can achieve sustainable market penetration which
can be addressed by as follows.
Marketing mix strategies: It is referred to 4 P's which are price, product, place and promotion. It is
related to put the right object at the right time and at the right place. For an organization, it is a
difficult task to find out the wants and needs of customers and produce products and services
accordingly (The marketing mix. 2016). In the case of BskyB, marketing mix strategies help in
attaining market penetration in an appropriate manner. Products of firm have met the requirements
of clients through developing such strategies. For this, right product mix should create by BSkyB
which may help in expanding existing product line (Belz and Peattie, 2009). While the development
of services, company should include product life cycle phases so that expected life of product can
be defined.
On the same side, prices of goods of BSkyB should be reasonable so that client can pay it
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easily. Pricing of goods makes its huge impact on the whole marketing strategy of company as well
as on the sales and demand of products (Parasuraman, 2006). For market penetration and achieve
“competitive business growth”, prices of broadcasting services should be reasonable so that target
market can pay it.
On the other hand, place is an important part of marketing mix strategy. Distribution channel
of an organization should be most efficient so that buyers can easily access that place. In this regard,
different types of distribution strategies can be used such as intensive, exclusive, selective and
franchising (Cravens and Piercy, 2008). For BSkyB, management should open some selective stores
in the UK from where clients can get services in an easier manner. Distribution place of product will
play an important role in the success of sustainable market penetration strategy for the organization.
Promotion is a last element of market mix strategy. It plays an important role in boosting
brand recognition and increasing sales (Giligan and Wilson, 2012). Elements which are included in
promotion are sales organization, sales promotion, public relation and advertisement. In the context
of BSkyB, for accomplishing “competitive business growth” in next 3 upcoming years, promotion
is the most required element. These all 4 P's of marketing mix strategies help in achieving
sustainable market penetration. For example, by identifying the needs of customers, BSkyB can
develop a product or service (Craig and Campbell, 2012). The prices has to be adjust according to
demand of goods in market. Along with this, company has to adopt unique distribution channel and
place where buyers can easily access services without facing any kind of difficulties. In addition to
this, promotional methods have to be used to increase sales and profits within upcoming 3 next
years (Kotler and Keller, 2012). Therefore, with the help of following marketing mix strategies,
BSkyB can achieve sustainable market penetration and meet future business objectives in a right
manner.
Digital marketing communications: Dynamic evaluation of various digital media with the time
develops new opportunities of growth and defines new methods of marketing (De Mooij, 2013). It
is completely different from traditional marketing communication mix. For marketing, numerous
kinds of innovative digital media tools such as pay per click, search engine optimization etc can be
used. In the context of BSkyB, digital marketing communication methods help in achieve
sustainable market penetration which can be understood by an example. In order to accomplish
business objectives and penetrate the market, BSkyB has to adopt social media marketing through
using Facebook, LinkedIn, Twitter etc (Fillis, 2010). By creating pages on numerous social
networking sites, it will be easy to influence the buyers and clients as well as inform them about the
services.
On the other hand, BSkyB can take the help of Opt-in e-mail marketing through which
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company can send e-mail newsletters to its customers, business partners, stakeholders etc
(Goodman, 2005). It a good method used for marketing of existing and upcoming product ranges.
E-mail newsletter will contain all the important information about the services of BSkyB. In
addition to this, with the help of online or digital public relation (PR), company can easily penetrate
the existing and new market. It is used to create and encourage good image of organization in the
market (Hollensen, 2015). This digital marketing communication method will build and boost brand
image in the market and the result of this is that it will penetrate market of BSkyB in more
appropriate manner.
On the other side, Search Engine Marketing can be used by company with the intention of
gaining more attention of buyers and clients. It will help in attaining the best position of business in
the existing market via search engine as compare to its competitors such as Virgin Group, British
Telecom and Talk and Talk (Pride and et. al., 2012). Once, organization will able to attract new
users, positioning of text will keep users on BSkyB websites for long time duration. The following
strategy will penetrate the market and remain firm in the competition (Whitwell, 2001). Hence,
from the above analysis, it has been concluded that different kinds of digital marketing
communications has assisted BSkyB in achieved sustainable market penetration.
Customer relationship management (CRM): It is a method which reflect strategies, practices and
technologies which is using by a company to manage and analyse interaction. Main goal of CRM is
to improve business relationship with consumers which helps in increasing sales and profitability. In
the present time, most of the companies are using different CRM systems wherein they collect and
compile information about their service users for various business purposes (Ferrell, 2012). It is all
about merging all the marketing efforts of organization to achieve business objectives as well as
understand buying habits and preferences of the customers. In the stiff competition level, it is
required for the firm to retain clients for the long time. CRM is a tool which can be used to
transform the consumer’s needs into satisfaction (Dent, 2011). BSkyB can attain sustainable market
penetration with the help of CRM method. For example: in the present time, consumers want a
customized experience related to a product from starting to end. Therefore, with the help of CRM
method, it can be easy to quickly identify the needs and desires of service users and make changes
according to it (Craft and Hassan, 2015). It will improve user experience and they will enjoy better
customer services from BSkyB side.
On the other hand, CRM is focused on providing crystal clear picture about the sales of
services and existing market share (Helsen, 2014). Therefore, BSkyB can determine and forecast
future sales. It will also assist company to more focus on marketing efforts and make strategies for
marketing more effectively. It will replace inefficient processes of company from the improved
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procedures. With the use of it, BSkyB will able to develop good communication with service users.
In addition to this, company will gain loyalty of customers and change their perspective towards the
services of firm. For instance: CRM is allowing BSkyB clients to select the approaches of
connectivity (Keegan, 2002). The chosen method of communication will simplify marketing of
company. Therefore, with the help of CRM, organization can easily penetrate the market and take
competitive advantage.
From the above discussion, it has been clearly identified that Customer Relationship
Management, Marketing Mix Strategies and Digital Marketing Communication methods help
BSkyB in achieving sustainable market penetration (Saxena, 2010). These all tools and techniques
will deliver sustainability in market penetration at the time of achieving “competitive business
growth” within upcoming next 3 years.
Marketing resourcing needs of changes to current competitive position
BSkyB needs to allocate marketing resources properly and effectively for bringing above
proposed changes related to the competitive position (Craft and Hassan, 2015). Needs of marketing
resources in various fields are explained below.
Attention to structure: BSkyB needs to improve the structure of its marketing department for
bringing proposed changes into it (Williams, 2012). Company needs to hire more skilled and
talented people for improving the marketing and promotional activities. Along with this, it is
requited for the firm to decide the chain of command and proper management. This whole process
will require new infrastructure for satisfying employees (Loyka, 2007). Along with the new hiring,
company needs to design new jobs also for preventing duplication of jobs and improving the current
situation.
Customer Service Processes: BSkyB Company needs to use CRM model for improving
relationship with the customers (Morgan, 2014). With the help of this CRM model, it also needs to
conduct training programmes for improving body language, personality, communication skills,
presentation skills, etc of the employees. This results to improve customer service processes and
influence users to purchase products. By keeping all the information of customers on CRM system,
firm can easily contact with them. Through this model, BSkyB can identify new customers and
maintain relationships with all of them (Neves, 2007). This model is also cost effective as it does
not require much amount of money for the installation.
Technology: For bringing technical changes and to get good market position, BSkyB needs to
adopt new technologies and software. These technologies help in improving the performance of
company by managing time and proper communication (Belz and Peattie, 2009). Company can use
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enterprise resource system for effective planning and development of strategies. Along with this, for
giving better experience to customers through internet and TV channels, firm has to adopt new
technologies which can improve the quality of services. On the other hand, with the help of
different types of technologies, BSkyB can improve its practices related to marketing and
advertisement (Giligan and Wilson, 2012). Therefore, it can be said that technology is marketing
resource need of company which helps in brining and implementing changes within the firm.
Marketing information system: It is a kind of management information system which is
designed to support marketing decision making process (Cravens and Piercy, 2008). Under this
system, company can gather, store analyse and use data for the purpose of improving marketing
processes. In the context of BSkyB, Marketing Information System can be considered as a need of
marketing resources. With the help of this, firm can store all the data related to customer’s needs as
well as preferences and use it whenever required. For example: at the time of expanding existing
product lines, BSkyB can use its present customer database to analyse their responses as well as
preferences (Hollensen, 2015). Hence, Marketing Information System can be count as a marketing
resource needs for BSkyB.
CONCLUSION
From the above study, it can be concluded that marketing management is an important part
of the organization. With the help of it, a company has managed it existing marketing resources as
well as activities. Applications of marketing management are depended on the size of business and
industry in which firm is operating its business. BSkyB is a British telecommunication company of
UK. From the SWOT analysis, it has determined that major strengths of company are high market
share, dominate distribution of services, new innovations, large number of service users, effective
advertisement methods and highly contribution in organizing CSR activities. But on the other hand,
weakness of BSkyB Company is that it is unable to retain customers for the long time. There are
different new marketing strategies which can help company to achieve future “competitive business
position” as well as penetrate market. In this context, it is more important for the organization to
focus on sustainable market penetration strategy. On the other hand, needs of marketing resources
within the firm has increased day by day to implement the changes of marketing of existing
products and achieve future “competitive business position” in upcoming next 3 years.
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