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Marketing Strategy Of Cello Group Plc

Posted by Matthew Harvey on Oct-17-2018

1 Marketing Mix of Cello Group Plc

The marketing-mix model is applied to discuss the Marketing Strategy of Cello Group Plc.

1.1 Product
This Marketing Strategy element reflects the solution to the customers’ needs. Cello Group Plc
should develop unique product design, name and features to stand out in the competitive market.
Following factors should be considered to develop the product strategy- quality, variety, features,
packaging, brand name and augmented services.

1.2 Pricing
This Marketing Strategy element requires an evaluation of the value of products for targeted
customers. The pricing strategy of the Cello Group Plc will focus on setting the list price, credit
terms, payment period and discounts.

 If Cello Group Plc decides to choose the price penetration strategy, it will have to set the
lower price than competitors. The company will be able to win market share based on discounted
pricing. However, management should be aware of the potential retaliation from competitors in
the form of an undesired price war.
 The choice of skimming strategy will require clear communication of differentiation basis and
how such differentiation justifies the extra price.

Today's customers are not interested in knowing the ‘price' but a total cost involved in acquiring,
consuming and disposing of the product.

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1.3 Place/distribution
This Marketing Strategy element requires Cello Group Plc to make some important decisions when
developing its distribution plan. It should decide:

 Whether the company wants to make the product available to targeted customer segments
through its channels, or it needs a distribution partner to serve the customers' needs.
 Whether the distribution will be direct (involving no middlemen), or indirect. If indirect
distribution strategy is adopted, the number of middlemen must be selected (wholesalers,
retailers etc.)
 Whether it is interested in: traditional brick and mortar distribution network, online distribution
or a combination of both. Certain online retailers like Amazon are available if online distribution
strategy is chosen. The company can also develop its online website to sell the product.

Modern customers give high importance to the ‘convenience’ and ‘easy availability’. The selection of
‘right’ distribution channels will require Cello Group Plc to:

 Firstly, consider the product characteristics. Involving various middlemen to distribute

perishable products will not be a wise decision if the product is perishable.
 Analyse the market dynamics, customers' preferences and own resources and capabilities. If
customers place high importance to personalised services and prefer shopping from traditional
stores rather than online channels and firm also has enough resources to open their outlets, than
distribution strategy should be set accordingly.
 The competitors’ distribution strategies also need to be studied. A comprehensive cost-
benefit analysis of each channel and comparison with own resources and capabilities will help
Cello Group Plc develop an effective distribution plan.

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1.4 Promotion
This is one of the most important elements of Cello Group Plc Marketing Strategy. Cello Group Plc
can blend above and below the line promotional strategies to achieve its marketing objectives. The
above the line promotion options for Cello Group Plc are- television, radio and print advertising.
Below the line promotion options are- catalogues, tradeshows and direct mail campaigns.
The promotional plan of Cello Group Plc Marketing Strategy requires the company to consider the
following factors:

 Start with clearly defining your unique selling propositions and understand why customers
need the product and how it is different from available alternatives.
 Craft the message content and evaluate how the crafted message will help customers in
creating a clear image of the offered product. Consider the AIDA (awareness, interest, desire,
action) when developing the message.
 The promotional strategies like direct selling or high profile advertising will suit if the
company wants to push the product. However, the pull strategy will require the development of a
prestigious brand image that could attract the customers towards the offered product.
 Collect the following target market information- who will buy the product? (Age, gender,
income and social status), what is price sensitivity level? And what are customers’ desired
communication modes? Incorporate this information into the promotional plan.
 Filter out the promotional options based on the above information and conduct a cost-benefit
analysis of selected promotional alternatives.
 For example, the selection of TV advertising as a promotional strategy will allow the
company to target the mass market, increase brand awareness and brand recall. However, it
is an expensive promotional strategy and suits if the company has adequate resources
available for the promotional efforts.
 The popularity of social media marketing has raised significantly during the last few
years. Use of this promotional strategy will enable Cello Group Plc to reach the mass market
economically. It will also offer an opportunity to actively interact with customers, develop a
personalised relationship and manage e-WOM to get better results. However, the risk of
uncontrollable negative e-WOM remains there.
 Lastly, consider the budget constraints and allocate budget to chosen promotional strategies
according to their nature, importance and frequency.

2 Customer Analysis of Cello Group Plc

The development of effective marketing mix strategies depends on Cello Group Plc’s knowledge of
its potential customer base. The strategies will be more effective if the company understands the
needs, expectations and attitude of its customers. The detailed analysis leads towards the
identification of different customer profiles or segments (as explained in detail in the next section).
Cello Group Plc can follow three steps to conduct customer analysis:

 Firstly, Cello Group Plc should clearly define who current and potential customers are? At
this step, a whole group of customers is identified so that it could be divided into different
segments based on their motivations, traits and characteristics. Identification of potential
customers can be more challenging than current customers.
 The customer analysis should offer information about how the needs and expectations of
different groups differ from each other and what can be possible reasons.
 Lastly, Cello Group Plc should analyse how it’s offered product/service serves the needs of
different groups and which customer groups have more profit and growth potential. This
information will help Cello Group Plc develop customer profiles and personas.

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Cello Group Plc can consider following factors when developing the customer profiles:
 The customer analysis must identify the total market size including current and potential
customers that could be divided into small measurable segments.
 The customer profiles must have some observable differences.
 The company should also conduct behavioural analysis to identify the psychographic
profiles. It involves identifying and weighing the relative importance of factors considered when
making a purchase decision or more commonly called buying criteria. Common buying criteria
are- prestige, convenience, quality and price.
 Cello Group Plc can then develop the customer personas. Important elements to be included
in developing customer personas are:
 Demographic information (e.g. gender, family, age, location etc.)
 Preferred communication channels.
 Possible influencers (publications or celebrities they follow)
 Challenges they face due to unserved needs and desired solutions.

The customer analysis and development of segmentation strategies run in parallel. Cello Group Plc
can use the information obtained from the customer analysis to develop the segmentation, targeting
and positioning strategies as discussed below:

3 Segmentation of Cello Group Plc

The development of Cello Group Plc Marketing Strategy requires identifying segmentation basis to
understand the specific buying behaviour of customers. The needs, expectations and buying
behaviour of customers are heterogeneous and depend on multifaceted factors- like:

 Age
 Gender
 Income
 Lifestyle
 Values etc.

By using the segmentation technique, Cello Group Plc can narrow down the large, diversified target
audience into specific and narrowly defined groups. Market segmentation surveys are common
methods of obtaining the customer-specific information that could be used to create groups sharing
common characteristics.
After understanding the unique buying behaviour of customers and getting the required information
through surveys, Cello Group Plc can divide the market into small homogeneous groups. It can be
done by exploring the geographic, demographic, behavioural and psychographic characteristics of
customers.
The company can use one or more of these segmentation strategies to choose the right market
segments and develop an effective Marketing Strategy.

 The geographic segmentation divides the market according to geographic areas, like- city,
country and region.
 The demographic segmentation will require Cello Group Plc to divide market according to
demographic characteristics, like- gender, age, income and ethnicity.
 If Cello Group Plc chooses behavioural segmentation, then customers will be divided
according to their buying pattern like usage frequency, benefits sought, usage occasions and
brand loyalty.
 Use of psychographic segmentation will result in customers' grouping according to their
lifestyles, interests, attitudes, values and traits.
Cello Group Plc can combine the different segmentation strategies for more specific targeting as
explained in the next section.

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4 Targeting and Positioning of Cello Group Plc

After dividing the large diversified customer market into smaller groups with homogeneous
characteristics, Cello Group Plc should wisely choose the target segment/segments whose needs
and expectations match the company’s resources and capabilities.
The targeting can be done by evaluating the commercial attractiveness and growth potential of
identified segments. Cello Group Plc can choose one or more segments depending on the
segments’ characteristics and the company's resources, capabilities and growth objectives.
The commercial attractiveness and growth potential of each segment can be evaluated by using the
following indicators:

 Identified segments have the appropriate size

 Have concrete differences.
 The estimated profits should exceed the additional marketing costs.
 Segments are easily accessible.

After segmenting the customer market and choosing the right target market, Cello Group Plc now
requires to set a clear positioning statement that could create a positive image of the offered product
in the customers' mind. Cello Group Plc can follow the following steps to develop an effective
positioning strategy:

 Develop the positioning statement for Cello Group Plc Marketing Strategy by answering the
following questions:
 What your brand stands for?
 What are the needs and wants of your target market?
 How your brand serves those needs?
 How different is your offering from competitors?
 Answers to these questions will yield enough information to develop a positioning statement.
 The comparison of their communication and messaging strategy with competitors will reveal
the potential areas that could be addressed with targeted positioning message.
 Identify the strengths/weaknesses of business by comparing with competitors to find that
gaps that offered product can fill.
 Analyse positioning of competitors and evaluate own position in the market.
 By using the analytical data collected from a different market, customer and competitor
surveys, develop a positioning statement and periodically test its effectiveness by collecting
qualitative and quantitative data (like focus groups, polls, interviews etc.).
 Use the test results to make necessary adjustments in the brand positioning.
5 Company Competitive Advantage in the Marketing
Strategy of Cello Group Plc
The survival in the increasingly competitive market requires Cello Group Plc to set the clear
differentiation basis that could provide an edge against rivals. Cello Group Plc Marketing Strategy
should focus on identifying unique selling propositions (USPs). Some examples of USPs are the
highest quality, lowest cost or uniqueness of idea. Identifying USPs is not sufficient as the
effectiveness of the Marketing Strategy of Cello Group Plc will directly depend on management's
ability to communicate the identified unique selling propositions.
The Cello Group Plc can apply Porter's generic strategies model to explore how competitive
advantage can be created. The pictorial presentation of the Porter Model is given below:
The company can set a competitive advantage based on cost or differentiation.

5.1 Cost based competitive advantage

 The cost leadership strategy will suit if Cello Group Plc has developed capabilities to reduce
the cost below the industry average and achieve the economies of scale. Moreover, it will require
Cello Group Plc to develop close collaboration between different functional areas.
 Developing most effective distribution channels, access to latest technological tools to assist
production processes, using lean production methods and strong bargaining position when
negotiating with suppliers are some indicators of setting competitive advantage based on cost
leadership.

5.2 Differentiation based competitive advantage

The differentiation strategy focuses on developing brand loyalty by offering premium products. The
company can find different ways to develop differentiation leadership, such as- by focusing on the
reliability, durability, benefits and distinctive features of products, by developing strong brand
recognition and by increasing expenditure on marketing efforts like celebrity endorsements and
sponsorships etc. Cello Group Plc can set achieve competitive advantage by adopting product,
service, quality, image, people or innovation differentiation.

5.3 Competitive advantage model

Following the model shows how Cello Group Plc can develop an effective Marketing Strategy by
evaluating its resources and capabilities, identifying distinctive competencies and leveraging those
competencies by adopting either cost or differentiation orientation:

6. BCG Matrix in the Marketing Strategy of Cello Group Plc

Cello Group Plc should continuously evaluate its product line by assessing their growth potential and
share in the market. The products can be classified into the following categories:

 The products with high growth and high market share are classified as stars. Cello Group Plc
should increase the investment after identifying the stars in its product lines.
 Products with high market growth but low share are classified as question marks. Cello
Group Plc should analyse why market share is low despite the high growth rate.
 Products with low growth but high market share are cash cows that need to be milked for
continuous good performance in the market with low growth and limited opportunities.
 Lastly, products with low growth and low market share are dogs’ Cello Group Plc should
divest as it is difficult to make profits and get an adequate return by investing in dogs.

The high number of stars and cash cows will indicate good performance, whereas, a high number of
question marks and dogs will be a cause of concern for Cello Group Plc. The product classification is
necessary for evaluating the success of the Marketing Strategy of Cello Group Plc.

Brand Equity of Cello Group Plc

Brand equity reflects the overall value of the brand. The customers' experiences and perceptions
determine the brand value. Positive perceptions reflect the high brand value and positive brand
equity, while negative perceptions reflect the low brand value and negative brand equity. Cello
Group Plc should continuously evaluate its brand equity to ensure the long-term survival in an
increasingly complex and competitive customer market. It can be done by evaluating the following
brand equity components:

7.1 Brand equity components

7.1.1 Brand awareness
Brand awareness provides the basis for brand equity development process. High brand awareness
shows that the customers know that the Cello Group Plc brand exists and can recall the important
brand-related information. The company can measure brand awareness by conducting brand recall
surveys. The high brand awareness acts as an anchor to other associations. It increases brand
visibility that can help Cello Group Plc gain consideration in the competitive market.

7.1.2 Brand association

Brand association reflects the customers’ associations with Cello Group Plc based on their
memories, previous experiences, interaction with Cello Group Plc’s employees, price points,
advertisements, WOM, celebrity associations and publicity in different media channels. It is
important for Cello Group Plc to carefully plan each interaction with internal and external
environmental actors (such as government, employees, shareholders and media), as customers
develop brand association not only due to direct interaction with the brand, but also the indirect
interaction with different environmental factors.

7.1.3 Perceived quality

Cello Group Plc should carefully evaluate the customers’ perceptions of product quality as these
perceptions influence their pricing decisions.

7.1.4 Brand loyalty

Brand loyalty is among the most important element of Cello Group Plc’s brand equity. It can be
attitudinal (customers’ feelings towards the brand) and/or behavioural brand loyalty (repeat
purchase). Higher brand loyalty can decrease the marketing expenditure, increase Cello Group Plc's
ability to introduce new products successfully, erect the barriers to new players and strengthen the
company's bargaining power against other channel members.
Cello Group Plc can increase brand loyalty by rewarding the customers' repeat purchase behaviour.
Although the loyalty programs are expensive, it will benefit Cello Group Plc be reducing the costs of
acquiring new customers.
7.1.5 Proprietary brand assets
Lastly, Cello Group Plc should evaluate its proprietary assets (like channel relationships, trademarks
and patents). These intangible assets prevent the competitive advantage erosion and develop brand
loyalty.

7.2 Brand equity development

In light of Keller brand equity model (shared above), the Cello Group Plc can take the following steps
to develop the brand equity:

 Develop the brand identity by building brand salience/awareness.

 Identify and communicate the meaning of Cello Group Plc brand. How it serves the
customers’ tangible needs (performance) and emotional/psychological needs (imagery).
 Evaluate the customers’ feelings and judgments of Cello Group Plc brand to assess their
response.
 Lastly, focus on building- behavioural loyalty, sense of community, attitudinal attachment and
active engagement to develop brand resonance that sits on pyramid top.

7.3 Brand equity measurement

Cello Group Plc can measure its brand equity by evaluating the:

 Difference between the price charged by Cello Group Plc due to its brand name and price
charged by similar unbranded products.
 Amount of extra sales volume generated compared to other branded and non-branded
competitors.
 The company’s share price.
 Brand’s potential to make future earnings.
 Return to shareholders.

The company can also combine the above methods and formulate a multiplier to accurately assess
the esteem and strength of the brand that reflects the brand equity.

8. Competitors Analysis in the Marketing Strategy of Cello

Group Plc
The detailed competitor analysis is highly important for the development of Cello Group Plc
Marketing Strategy. The competitive analysis is done to understand the relative positioning and
market share of the company's direct and indirect competitors. Cello Group Plc should first identify
the competitors, evaluate their strategies and compare the strengths and weaknesses of their
products with their product offerings. There are five steps Cello Group Plc can follow to understand
the strategic positioning of its key competitors:

 Firstly, clearly define the target market.

 Identify the director competitors and create a list of it.
 Analyse the competitors’ product offerings, their market share, key strengths and
weaknesses.
 Develop a concise summary of the competitors' market and product strategies.
 Conduct a comparative analysis against its products and/or services.
 Continuously update the competitive analysis to make informed and strategically wise
decisions.

The company can use different strategies to get the information about competitors, such as- doing
Google research, going to trade shows, browsing public documents, asking customers, playing
secret shopper technique and tapping the vendors
A detailed competitor analysis can be categorised into the following parts:

 Identify market growth, share and financial objectives. Some examples are maximising short-
term profitability or investing in R&D for long-term growth.
 Evaluate the competitors’ strategies by collecting information from shareholder reports, white
papers, press releases, promotional campaigns, hiring practices, acquisitions and mergers. This
information will reveal the direction in which the competitors are moving.
 Use the above information to analyse competitors’ strengths, weaknesses and core
capabilities.

9. Market Analysis of Cello Group Plc

Cello Group Plc Marketing Strategy development requires a comprehensive market analysis. It can
be done by quantitatively and qualitatively assessing the customer market. The information obtained
from the market surveys will help Cello Group Plc management in identifying the emerging
opportunities, exposing the potential threats and understanding how they relate to the company’s
major strengths and weaknesses.
Cello Group Plc can follow the following steps to conduct the market analysis:

9.1 Market size analysis for developing Marketing Strategy of Cello Group
Plc
Cello Group Plc should evaluate the market potential and volume to determine the size. The market
potential includes potential customers and considers upper demand limit. The market volume
includes certain indicators like realised sales and total turnover. Cello Group Plc can take
information from different sources to accurately determine the market size, such as- financial data of
industry’s major players, government data, customer surveys, published industry reports and trade
association data.

9.2 Market trends analysis for developing Marketing Strategy of Cello Group
Plc
It is important to analyse the emerging market trends, particularly when environmental turbulence is
high. Cello Group Plc can use different trend analysis techniques for this purpose, such as-
marketing mix modelling, risk analysis, choice modelling and customer analysis. Cello Group Plc
should also monitor the political, legal, regulatory, social and economic changes as these
environmental forces play an important role in shaping the market trends.

9.3 Market growth analysis for developing Marketing Strategy of Cello

Group Plc
Cello Group Plc can extrapolate the historical data to determine the market growth rate. This
information can help a company in determining the current lifecycle stage of the industry.
9.4 Market profitability analysis for developing Marketing Strategy of Cello
Group Plc
Cello Group Plc can use Porter's five force framework to determine market profitability. The high
buyer power will negatively affect market profitability, showing Cello Group Plc’s customers have
different options. Low supplier power positively influences profitability and indicates Cello Group Plc
has a strong position during the negotiation process with suppliers. High entry barriers show that
there will be lesser new entrants in the market. High substitute product threat and high competitive
rivalry will also decrease the market profitability and attractiveness for Cello Group Plc.

9.5 Cost structure analysis for developing Marketing Strategy of Cello Group
Plc
Cello Group Plc can use Porter’s value chain model (as given below) to determine the industry’s cost
structure.
It will help Cello Group Plc in isolating the costs and identifying critical success factors. Cello Group
Plc can also use the information obtained from cost structure analysis to develop cost advantage.

10. References
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Khan, M. T. (2014). The concept of 'marketing mix' and its elements (a conceptual review paper).
International journal of information, business and management, 6(2), 95.
Kim, K. H., Jeon, B. J., Jung, H. S., Lu, W., & Jones, J. (2012). Effective employment brand equity
through a sustainable competitive advantage, marketing strategy, and corporate image. Journal of
Business Research, 65(11), 1612-1617.
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Tan, Q., & Sousa, C. M. (2015). Leveraging marketing capabilities into competitive advantage and
export performance. International Marketing Review, 32(1), 78-102.
Wensley, R. (2016). The basics of marketing strategy. In the marketing book (pp. 75-107).
Routledge.
West, D. C., Ford, J., & Ibrahim, E. (2015). Strategic marketing: creating competitive advantage.
Oxford University Press, USA.
Zablocki, A., Schlegelmilch, B., & Schant, E. (2017, May). Customer-Based Brand Equity in the
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Warning! This article is only an example and cannot be used for research or reference purposes. If
you need help with something similar, please submit your details here.

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