Professional Diploma in Marketing: PC House Channel Expansion Report

This report offers a comprehensive analysis of the PC House Limited (PCHL) channel expansion project, undertaken during a period of global economic slowdown. It critically evaluates the project's effectiveness, success, and failures by examining resource utilization (human, financial, and physical), team management (building, roles, conflict resolution, and performance), and information sources. The report delves into the budgetary process, including budget definition, procedure, monitoring, and variance analysis. It assesses the Key Performance Indicators (KPIs) and conducts a cost-benefit analysis to evaluate the project's financial impact. Furthermore, it explores the marketing activity's contribution to the marketing department and the company, identifying challenges faced and offering recommendations for performance management improvements. The report utilizes tables and figures to present data and analysis, providing a detailed overview of the project's strengths and weaknesses to inform future marketing strategies.

WEIGHING UP THE
PAST TO IMPROVE THE FUTURE
PC HOUSE LIMITED
CHANNEL EXPANSION
Professional Diploma in Marketing
Managing Marketing
September 2010
CIM Membership No: 13150575
Word Count : 6553 (Excluding appendix, background and rationale for the Marketing
activity)

Managing Marketing
CIM NO: 13150575
To : Director of Marketing – PC House Limited
From : Jay D. McCullen, Manager – Marketing, B2C division, PCHL
Subject : Weighing Up the past to improve the future
Date : 2010.08.25
Executive Summary
With emerge of global economical crisis major economies of the globe have been negatively affected and
have formed a negative impact on consumer behaviors and market growth immensely. Therefore in terms
of corporate environment function undergo so many crisis and project in order to determine the survival
of the company during the respective period. And majorly marketing division has been subjected to cost
reduction, minimization of investment on marketing related activities. This report mainly addresses the
critical evaluation of the Channel Expansion project which was executed in the middle of such a difficult
era in order to identify what contributed to the effectiveness, success or failure of the activity.
And the report capitalizes on the areas of resource utilization, team development, information flow and
KPIs of the project obtaining a vertical understanding on each of the aspect and identifying strength and
weakness depicted. And finally have provided recommendation projecting the future substantial grounds
of the company.
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CONTENT
Pg
1.0 Background and context 7
1.1 Defining the market 7
1.2 PC House Limited 7
1.3 Marketing Department of PCHL 7
1.4 The global Economical Slowdown 8
1.3.1 Selection of marketing activity and the rationale for the selection 8
1.3.2 Marketing activity subjected 8
1.3.3 Rationale 8
2.0 Critically assessing the human, financial and physical
resourcing requirements for the channel expansion
2.1 Human resource 9
2.2 Financial requirements 9
2.2.1 Critical evaluation of financial requirements 11
2.3 Physical requirement 12
2.4 Overall evaluation analysis and justification 13
3.0 Team management 14
3.1 Team building 14
3.1.1 Identification of the team members & structure of the team 14
3.1.2 Belbin’s team roles 15
3.1.3 Formation and managing the team 16
3.2 Potential areas of conflict and solutions provided 18
3.3 Team and individual performance 20
3.3.1 Evaluation of qualitative factors of the project team. 20
3.3.2 Evaluation of quantitative factors of the project team 20
3.3.3. Individual performance evaluation 22
3.4 Summary 23
3.4.1 Team performance 23
3.4.2 Individual performance 23
4.0 Evaluating the quality of different information sources required to
deliver the marketing activity 24
4.1 Information required to facilitate the marketing activity
Channel Expansion 25
5.0 Undertaking a full review of the budgetary process of PCHL 26
5.1 Defining the budget 26
5.2 Budget procedure in the context of the PCHL 26
5.2.1 Flow the budgetary process in the context of PCHL 26
5.3 Final budget 27
5.4 The monitoring, evaluating and controlling on the financial performance
of the channel expansion activity 27
5.4.1 Projected KPI performance level Vs acquired performance level 28
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Managing Marketing
CIM NO: 13150575
6.0 Cost benefit analysis 29
6.1 Cost benefit analysis for PCHL channel expansion 29
6.2 Evaluating the contribution of the marketing activity to the work
of marketing department 30
6.2.1 Marketing department of Retail Division, PCHL 30
6.2.2 Evaluating the contribution of the marketing activity to the work of
marketing department 30
6.3 Evaluating the contribution of the marketing activity to the work the Company 31
7.0 Critically evaluating the success or failure of the marketing activity 32
7.1 Critical evaluation of the success or the failure of the activity 32
7.2 Identification of key challenges and issues faced in implementing the marketing
activity 33
8.0 Identifying available options to improve performance management and
key recommendation for their introduction 35
8.1 Identifying available options to improve performance management 35
8.2 Key recommendations 35
 Appendix I company Background 38
 Appendix II Operational; Structure PCHL 40
 Appendix III CIM declaration 42
 Bibliography 44
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TABLES & FIGURES
TABLES
No. Pg
Table 01 Human resource requirement ……………. 10
Table 02 Financial Requirement ……………. 11
Table 03 Physical requirement ……………. 12
Table 04 Overall Evaluation ……………. 13
Table 05 Belbin's team roles ……………. 15
Table 06 Potential areas of conflicts ……………. 19
Table 07 Team Performance Evaluation ……………. 20
Table 08 Evaluation of quantitative factors ……………. 21
Table 09 Individual performance evaluation ……………. 23
Table 10 Information required facilitating the marketing activity ……………. 24
Table 11 Type information required & Accuracy of the judgment made ……………. 25
Table 12 Final Budget ……………. 27
Table 13 Evaluating Budget variance ……………. 28
Table 14 The budget variance ……………. 28
Table 15 Cost benefit analysis ……………. 29
Table 16 Evaluating the contribution of the marketing activity to the work
of marketing department
……………. 30
Table 17 Critical evaluation of the success or the failure of the activity ……………. 33
Table 18 Identifying available options to improve performance
management ……………. 35
FIGURES
No. Pg
Figure 01 Structure of the team ………… 14
Figure 02 Tuckman's team development model ………… 16
Figure 03 Level of Potential Vs Solutions provided ………… 19
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ABBREVIATIONS
 PCHL PC House Limited
 UVP Unique value propositions
 KPI Key performance Indicators
 CBA Cost Benefit analysis
 SLR Sri Lankan Rupees
 FDI Foreign direct investments
 IT Information Technology
 B2B Business to Business
 B2C Business to Consumer
 ROI Return on Investments
 HR human Resource
 RSM Regional Sales Manager
 BDE Business Development Executives
 CAGR Compound Annual Growth Rate
 SOM Share of Mind
 VC Variable cost
 FC Fixed cost
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1.5 BACKGROUND AND CONTEXT
1.6 Defining the market
Looking at the industry base facts and figures it is revealed that the legal size of the local hardware
industry tones up to US$ 214 mn accountable for 71% of the total annual IT expenditure. And
projected to grow in 16% CAGR by 2014. Has been identified as one of the fastest growing markets
in the south Asian region.
Source: www.BMI.com/ Report Q1, Sri Lankan IT Industry
1.7 PC House Limited
PC House limited (PCHL) is a SBU of PCH Holdings which can be defined as a IT hardware reseller
and one the pioneering corporate venture in the Sri Lankan IT hardware industry . With a well
established sales operation across the isle covering both regional and metropolitan borders with 26
well equipped sales branches, a skilled technical team and ample storage facilities. PCHL operates
keeping both B2B & B2C focuses in the heart of the operation. And also boasts as the first ever IT
company which is listed in the CSE.
Source: Company catalogue
1.8 Marketing Department of PCHL
Marketing department posses a hybrid structure of both geographical & market structure facilitating
both B2B ( Corporate) & B2C ( Retail) operations and also ensuring support in terms of
geographical borders as the retail division is categorized in to two sub divisions Metropolitan
operation(13 Metropolitan branches) & regional operation ( 13 regional branches).
(Please refer appendix I for the elaborated version of organizational structure of the PCHL marketing
division)
This report mainly capitalizes on critically analyzing the process that was applied to the subjected
marketing activity with the constraints on the marketing expenditure which has resulted due to the
global economical slowdown
1.9 The global Economical Slowdown
The global economical slowdown can be defined as negative economical decline in the global
economy due to which a negative economical situation has been created. And this formed
unfavorable grounds for the business to strive where most of the business finds hard to survive. And
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Managing Marketing
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few icons of the industry could not survive. And situations such as tight credit policies, higher tax
ratios, lower purchasing powers, which are unfavorable for the business has become apparent.
1.4 Selection of marketing activity and the rationale for the selection
1.4.1 Marketing activity subjected
Channel expansion project of PCHL which was executed by establishing new sales branches in
the Northern Province and braches were located in the selected main administrative cities of the
northern region. Which are,
a) Jaffna
b) Killinochchi
c) Vauvniya
d) Mannar
1.4.2 Rationale
With emergence of the economical crisis consumer preference grew more cost sensitive with in
the regional territories & majorly with in the metro limits where PCHL was already operating.
And the metro B2C operation was considered one of the steering sources of growth that PCHL
possessed. Therefore with the heart of the corporate growth getting adversely effected by the
fierce competition, lower basket value and often price wars, the need of establishing a new source
of growth came in to the corporate concerns. So with the potential perceived in the northern
market and the grater vacuum for PCHL to establish UVPS determining the advantage of being
the first it was decided to expand operation in to the northern market.
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Managing Marketing
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TASK 01
2.0 CRITICALLY ASSESSING THE HUMAN, FINANCIAL AND PHYSICAL RESOURCING
REQUIREMENTS FOR THE CHANNEL EXPANSION
Resourcing has been outlined considering the market requirement and company compatibility levels in order to fill the identified gaps of the
market. And it has taken a more of a practical approach towards deciding the resources allocation. And the approximate resource plan for the
respective activity is as shown below.
2.5 Human resource
This is referred to all the natures of human resource support that is required for the project
Description In house /
Outsourced Role in the channel expansion activity Critical evaluation of provision of resources
Project team In house Planning, execution and control of the respective
project ensuring the objectives are accomplished
effectively.
Assigning of the team members was effectively
accomplished with out making any negative impact
or any traffic in the prevailing operations.
Marketing
audit team
In house Audit being the fundamental base of the planning of
the project a team which posses the know-how of
marketing audit was required to in order to obtain
market data analysis ensuring a higher accuracy.
In house audit team which was located in head
office was required to execute the marketing audit.
Though audit was successfully completed the team
had to go through few conflicts as per the less
marketing orientation it possessed.
Market
intelligence
sources
Out source Agents from industry and the selected market were
required in order to obtain access to the info sources
for marketing audit team and the project team.
Was adequately deployed from several information
sources which PCHL identified as most important.
Sales force for
the new
branches
Recruited Sales team to take over the respective regional sales
operations was required. And it was decided to recruit
sales force compromising
 Regional sales manager
The team was successfully recruited, though
adequate number of technicians could not be
recruited from the territory borders. PCHL had to
recruit technicians from Colombo and send them to
respective territories with all accommodation
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Managing Marketing
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 Four branch Managers
 Ten Senior marketing and sales executives
 Three accounts executive
 Six computer technicians
And it was decided to recruit the team from the
territory through which PCHL would be enable in
effectively developing relationship with immediate
customer communities and the level of knowledge and
the experience on the respective territory would be
providing edge to the company.
provided from the point of company. The team
ensured a well balanced combination of experience,
skills & knowledge. A slight deviation in the
qualitative focus & team integration of the
operation was revealed at the point of
implementation which was later addressed by few
meetings and workshop sessions.
Sales training
conductors
In house To accomplish the training and mentoring session in
relation to the newly recruited staff.
Adequate number of sales training conductors was
provided from the company HR development
department. Though training session were
successful, level of exploitation of the staff to the
broader forum of sales techniques and sales nature
of competitors was not sufficient. .
Product
specialists
Out source
& In-house
To provide the product knowledge to the newly
recruited staff and the product specialists were
provided by suppliers and business partners.
Sufficient numbers of product training sessions
were held by business partners, Suppliers and in
house product managers.
Intermediaries Out source This is to backup the operation with wider presence
across the territory ensuring corporate objectives are
met. And two categories of dealers were deployed.
Provided sufficient coverage at the initial stage
though it was decide to increase the number of
level 02 dealers deployed as per the intensity of the
competition was increased.
Table 01: Human resource requirement
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Managing Marketing
CIM NO: 13150575
2.6 Financial requirements
The approximate total budget required was SLR 20 millions and the break down of the budget is illustrated below.
2.6.1 Critical evaluation of financial requirements
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Cost segment Budget required/ SLR Million
 Market research 1.38
 Site development 2.14
 Communication cost 13.32
 Recruitment & training 1.00
 Compensation of Market intelligence sources 0.52
 Other cost 1.65
Total Budget required 20.01
Table 02: Financial Requirement

Managing Marketing
CIM NO: 13150575
The budget was productively utilized no major deviations was perceived except for the slight exceeds in site development and
communication budgets were reported as respectively, expenditure on Jaffna branch establishment required additional budget than the
projected whilst few more communicational channels such as provincial radio channels, magazines and sponsorships were recruited which
required an additional budget. It was approved after much negotiation and justifications provided.
2.7 Physical requirement
Following are the physical resources required for the channel expansion activity
Resource requirement Description Critical evaluation of provision of resources
Locations for branches This was the main requirement of the project as it has
a direct impact on the success of operation. Therefore
all four locations had to determine the prominence in
the selected territory, easy reach to the target crowds
in the selected a administrative cities.
Premier locations were selected for the branches
ensuring all the requirement criterions.
Refurbishment and
constructional materials
It was required to adopt the standard interior and
exterior templates with in the new branches as a
partial intension of the branding procedure.
IT system The requirement of data storing, inventory
management and constant communication with the
respective functional teams in the headquarters was
critical and it was decided to set up a wi-fi network
compromising three desktop machines, two routers,
three modems and associated peripherals for each of
the branch.
Few network breakdowns and communicational
errors were occurred in the initial stage which was
promptly addressed by the company IT division.
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