Comm-333:Marketing

Strategy [student no: 5760734]

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Marketing
Strategy
Comm-333

Prof. Robert
Woyzbun

- Final Exam

Student no:
5760734

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Contents
Question 1: Class Case Question ...................................................................................3
a. Issue Review................................................................................................... .........3
b. Alternatives Considered..........................................................................................3
c. Summary of Recommended Action..........................................................................4
d. Reasons / Rational for Proposed Direction...............................................................5
Question 2: Commerce 333 Marketing “Award” .............................................................6
Why did I select Apple Inc? ................................................................................... ......6
What marketing opportunities have they leveraged?..................................................6
GASSS test.................................................................................. ................................7
What do you believe is their reason for success?........................................................8
What will they need to do in the future to ensure continued success?........................9
Question 3: Markstrat Question....................................................................................10
Consumer panel............................................................................. ...........................10
Multi dimensional scaling..........................................................................................10
Industry benchmark..................................................................................................11
Conjoint analysis.......................................................................................................11
Question 4: Virgin Mobile Article Commentary.............................................................13
a. Core concepts illustrated in the Virgin Mobile Marketing Strategy........................13
b. Differentiation and positioning aspects of Virgin...................................................13
c. Why I think Apple will succeed or not....................................................................14
Question 5: The Consultant’s Nightmare .....................................................................15
Appendix ...................................................................................... ...............................20

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Question 1: Class Case Question

To: Hurricane Island Headquarters

Date: December 14, 1986
From: Alexander Nathan
Re: Summary of Issues and Recommendations

a. Issue Review
Hurricane Island Outward Bound School (from now on referred to as HIOBS) has in the recent
years experienced several problems as financials instability and stakeholder conflicts - I believe a
new direction is needed. In the following I have identified and addressed the key issues HIOBS is
facing and later I will suggest a specific actions and a proposed direction for the 1987 strategy plan.
For the last three years the company has relied solely on donor’s good will to finance
the deficits in order to keep operating. This method of staying in business is too unreliable as
recession and other external factors have too much influence on the future operations of the
organization. If we are so determined to serve the students and people with less fortune, how can we
let an external factor as recession dictate when we can stay in business - it is unacceptable.
The objectives and goals of HIOBS is too vague, more clear-cut objectives must be
created to guide the company in its further strategic process. The overall strategy and
implementation plan of HIOBS must be clearly designed based on the core values of the company.
The core values of HIOBS are the unique educational offerings in the public and special
development programs, making a difference in the community. This is not the case at the moment as
too many activities lack the focus of the most important stakeholder of all: The student.
Recently more competitors have entered the market challenging HIOBS on a number
of segments. Though we are a non-profit organization we still need recognize the importance of
market and competitive research. The last years none real market research has been conducted.
HIOBS is too reactive in its marketing efforts and marketing strategies has been based on past
experiences and old target segments so far. The seasonality of HIOBS’s markets is a key issue and
we need to be innovative in our efforts to identify and attract different segments to solve this
problem.

These key issues will be discussed and addressed in the following leading to my recommendations
of how HIOBS can identify, solve and profit of these strategic issues.

b. Alternatives Considered
I have compiled three different alternatives which you may consider in your strategic planning
process.
Alternative 1
The conflicting interest among our different stakeholders requires a need for focus. Members of the
committee char and board of trustees argues that no one is in this business to make money. However
one of the overall goals of the school is continued growth and financial stability, this is conflicting
interests. This alternative suggests that we focus on SDP and Public courses which should be our
primary target market. We will not prioritize PDP courses above SDP and public courses when
deciding which courses to establish in the summer. We will conduct new market research to better
locate our strategic domain and specific target segments. The goals and objectives will be more
clear-cut defined as primary serving the needs of the students. Our secondary objective will be to

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achieve financial stability to ensure continued operations. This scenario does not solve the problem
of financial instability nor does it help the seasonality of our business.

Alternative 2
This alternative suggests that we should consider prioritizing PDP higher for revenue gain. We owe
to the students to remove the chance of being thrown out of business due to recession. PDP seems to
be a very lucrative market and we will conduct thorough market research to clarify the potential and
how to target. This will eventually allow HIOBS to break even and even more important remove the
financial instability and dependence on donations. We plan the course offering from profitability
while setting some minimum requirements in terms of amount of course offering to students and
special programs. This will allow us to address many of the key issues. However, this alternative
will most likely cause conflicts with or stakeholders as well as it will corrupt our image as a non-
profit organization.

Alternative 3
This alternative is a hybrid of alternative 1 and 2 allowing HIOBS to attain the advantages of both
while staying loyal to stakeholders. I recommend this alternative and in the following I will provide
a summary of the recommended actions.

c. Summary of Recommended Action

First of all, we need to be more precise in our definition of goals and objectives. This is the core
fundament of all strategy decisions we encounter, and as such we should be more concrete and
specific. Our core goal and objective should be to create a tremendous educational process for our
customers, and creating a difference in the society. Thus I recommend that we firmly communicate
that this is a core value of HIOBS. Other goals must be set as well in the areas of time to break even
and other financial indicators. However, though the public and special programs we provide are our
core competency, we must acknowledge the importance of becoming financially stable. The market
student programs and SDP is maturing and we need to develop new markets in order to become
profitable. I suggest that we explore the market of PDP, sales so far advocate great sales potential
and we should pursue a larger piece of the pie. The professionals are a segment we can target
without having to justify moral issues as a non-profit organization as we are earning money in favor
of the students. Some would argue that we spend valuable resources on the wrong target market. I
on the other hand believe that this decision is easily justified as a pure surviving strategy allowing
HIOBS to increase profitability, decrease dependence on donations and in the end provide a more
stable service to our main customers - the students. To further underline our commitment to our
non-profit concept we will introduce price changes. Price on our SDP shall be decreased to under or
just covering marginal costs allowing this segment to have a negative impact on our net income.
The public courses shall remain constant though quarterly compared to the industry norms. The
price on the professional programs shall be increased to indicate a premium program. This will
increase profitability while staying loyal to our goals, core values and stakeholders.
To target the PDP market we will need to conduct thorough market research in order
to identify the needs of the PDP and how to target them. This is the solution for another key issue as
we can address the seasonality of our business. Because professional usually is on vacation during
the summer we can conveniently offer courses in our less popular periods, and thereby creating
profit in our down periods. In spite of this new target market, we must communicate to the public
that students still is our primary market and that resources and focus devoted to that market not will
suffer.

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In regards to the marketing plan of 1987 I think we should focus a lot of our efforts in
building the off-season business. Based on market research, we should target the PDP market for
this period and build profitability. Telephone salesmen shall be hired in order to take a more
aggressive approach to the corporations. However, the salesmen should never be used towards our
students. By expanding our alumni network (AIM) we can enlarge our potential customer database
and hopefully attract more students. This is a very cost-effective way of encouraging more
enrollments, though it should be supported by face-to-face presentations on various schools in target
areas. At the moment the face-to-face presentations are proactively held, we need to be more
aggressive in going out to the schools in highly populated areas and explain the students about our
school, not as salesmen but as impassioned instructors providing educational experiences. We shall
capitalize on our brand name and our impressive history as a non-profit organization doing a
difference in society.

d. Reasons / Rational for Proposed Direction

The primary rational behind the proposed direction is to solve the key issues HIOBS is facing at this
point. Through a new and clear definition of core goals and objectives we are able to create the
fundament for the further strategic process. By market expansion to PDP we can increase
profitability and eventually break even for the first time in many years. This will allow us to build
up a company equity we can use constructive to dodge the potential risk of fewer donations in
recession periods. The reason for this change is not to maximize profits for own good, but to create
a financially stable organization serving our primary target market the students in the long run.
I believe that HIOBS somewhere along the road forgot who the company’s efforts
should evolve around. The PDP efforts should never being prioritized above students but when it
comes to the continued operating of the organization one must take action and pursue a changed
strategy. The overall rational behind the proposed direction is to ensure the continued stability of
Hurricane Island Outward Bound School and its efforts to help students and people of less fortune
by giving them an experience for life.

- Alexander

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Question 2: Commerce 333 Marketing “Award”

Why did I select Apple Inc?

I have chosen Apple Inc for this marketing award document. Apple is an American company
manufacturing consumer electronics as iPod, iTunes, iMac and many more. Being attracted to the
products, it was one of the first factors causing my increased interest in the company. When I read
more about the company I became fascinated with the historical economic performance which has
been very volatile. During the 90’ies the stock could be bought at a historical low level due to many
failed product launches. In 1997 Steve Jobs were hired to reorganize the product line and he was
very successful. In 2007 the company produced 24.01 billion in total sales worldwide in their fiscal
year. The impressive come-back indicates a strong will to survive and succeed even in the darkest
situations.
The product line of Apple is very diverse in fact one has to look much around to find a
technological company offering a product line as broad as Apples. Apple designs computer
hardware, the operating system it runs on, programs which work on the operating system and music
and video equipment that brings its all together – everything in a smooth consistent design.
Needless to say Apple is well represented in many areas, but still the company somehow seems to
dodge the conventional wisdom predicting failure if one does not specialize. The many products are
all linked together in the Apple world giving the consumer incentives to buy another product to
obtain additional advantages. A consumer would not use an iPod unless he had iTunes installed, and
if the iPod works best on MAC OS X operating system, why not buy that as well. In terms of
design, compatibility and distribution channels Apple has managed to create an incredible amount
of positive synergy effects across the different SBU’s. This I will explain further in the below.
Today Apple is not only interesting to me because of its economic performance and
shiny products, it is the marketing strategies behind, and the great work in targeting, positioning and
in realizing that companies efforts should evolve around the consumer.

What marketing opportunities have they leveraged?

Apple is operating in a very dynamic industry. The endless development of new technology results
in highly shifting costumer needs, short product life cycles and many opportunities for new market
entry. An outcome of the fast changing environment is often rapid changes in relative market share
as new products enter and exit. In an industry like this I think it is admirable that Apple can
maintain a position as market share leader as they have done the last decade. As a hybrid between a
prospector and a defender, I believe apple can be characterized as an analyzer. While holding a
strong market share in several markets Apple devotes substantial resources to R&D 1 (13 % in 2006)
and other areas that helps identify new technology, and to produce it. This creates substantial
competitive advantages for Apple over its competitors.
On the other hand, Apple assumes a defensive position in several markets due to
different market conditions. For example, the market for iPod is not changing as rapidly as other
markets Apple is represented on. Though Apple is introducing various product improvements they
are still focused on defending their market share through promotion and synergy effects.
Conventional wisdom suggests that this is a hard strategy to pursue as analyzers often
are not as profitable defending as a defender and as innovative as a prospector in product

1
Appendix (1)

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development. However, Apple seems to have got it right, with annual growth rates in net sales
above 20 % the last three years2 and net income even better.
2004 2005 2006 2007
Net sales (billion US$) 8,3 13,9 19,3 24,0
∆% 68% 39% 24%

Another great marketing opportunity I believe Apple has produced is through its very successful
targeting and positioning strategies. The iPod for example, is an impressive result of great market
intelligence. The iPod is a beautiful piece of equipment, however, it is not a technological
masterpiece there are several other products on the market with far more superior features and
technological capabilities. The reason why the iPod is so popular is the perceptual attributes Apple
has positioned deep in the minds of the consumers. Many of Apples other products as the Mac Book
pro and the operating system are based on cutting-edge technology and is therefore easier to
position as – cutting edge. What impress me is how Apple managed to identify the demanded
attributes from their different target groups and position the iPod where it did best – creating a
massive marketing opportunity.

GASSS test

Goals and objectives

Mission statement of Apple: "Apple is committed to bringing the best personal computing
experience to students, educators, creative professionals and consumers around the world through
its innovative hardware, software and Internet offerings."3 As stated in the mission Apples seeks to
provide innovative products bringing the best experience to its customers. As analyzer this supports
the strategy as being an innovator while stile acknowledging that the consumers are in the center of
the eco system.
Allocation of resources
As a prospector one should devote a substantial amount into R&D in order to finance the produced
questions marks and stars. Apple used 13 % of its financial resources in 2006 on R&D. One could
argue that this it is an insufficient amount compared to other companies in the business. However, I
believe that it is important to remember economics of scale and that 13 % equals about US$ 260
million.4

Apple Inc. 2006: Allocation of resources

Scope

2
Appendix (1)
3
http://en.wikipedia.org/wiki/Apple_inc#Mission_Statement
4
Appendix (1)

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The scope of Apples domain is very broad but and in most cases very dynamic due to the fact that
Apple operates in the technological business. Some markets are more dynamic than others, but
many of the markets are fairly well established and the customer segments are well defined. The
revolutionizing new product of Apple, the iPhone is being established on one of the more dynamic
markets. Again Apple fits its profile as an analyzer, by having the broad and dynamic domain of the
prospector while still defending more established and well-defined domains in markets with more
stable technology and customer segments.

Sources of competitive advantages

Apples superior technology used on many products allow for substantial competitive advantages.
Furthermore Apple has integrated most of the marketing mix variables in their strategy.

Sources of synergy
Synergy exists when different factors within a company reinforce and complement on another so
that the total performance of the company increases more than it originally would. Apple enjoys
great competitive advantages from the positive synergy effects widely produced in the Apple world.
First of all Apple enjoys synergy on corporate level through transferring of
competencies and knowledge from one part of the company to another. The technology used in the
development of their operating system MAC OS X can, and is being used widely in other parts of
the company, creating lower development costs and an improved process of development. In
addition all of the Apple products are linked together technologically and design wise. The
customer is constantly being given incentives to keep exploring the Apple world as the products
works best together and has similar design. Some products are even completely complementary
goods – they can’t work without one another (iPod and iTunes). As such, I believe that Apple is
doing a good job creating sources of synergy among the different SBU’s creating substantial
competitive advantages for the company and increasing net sales.
The Apple brand has great brand awareness worldwide and the company name
combined with the distinctive names of iPod, iMac and so forth is all a part of the company’s
branding strategy. As such I believe that Apple is in lucrative position, the company name is widely
recognized and respected, and is contributing to the competitive advantages of the company.

What do you believe is their reason for success?

Apple understands that the customer is in the center of the factors influencing the company’s
marketing strategy and that a well designed and implemented strategy is impacted by each of the
4C’s: Internal resources, the context in which the company operates, competitors and last, but not
least customer demand, trends and opportunities. Apple recognizes that listening to the customers is
important while still keeping in mind that the customer does not know what is technically feasible.
Creating market intelligence is very important in the markets in which Apple operate as they are
dominated by rapidly shifting customer needs and changing demanded attributes. In my opinion
Apple has done a great job positioning their products as cutting-edge technology. Though some of
the products are based on maturing technology the company managed to promote and position the
products as cutting-edge technology for everyone, creating perceptual attributes in the minds of the
customer.
The strategy of Apple is mainly driven by the goals and objectives, scope and sources
of synergy created by the company. As an analyzer the company is operating in perfect market
conditions in mixture between hyper dynamic markets and more mature markets with well-defined
customer segments. However, whatever market Apple chooses to target, their brand reputation and
image make a great asset as it is widely recognized and respected.

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What will they need to do in the future to ensure continued success?

In the near future Apple faces intense competition on a number of markets as large corporations as
Sony5 move in on Apples territory. Apple needs to respect the competition and act accordingly
depending on the challenged market. As a market share leader on a number of market Apple should
be ready to counteract potential competition with fortress, confrontation or market expansion
strategies. When Apple is being challenged on the iPod market by Sony I would recommend that
the company protected against share loss by beating competition head-to-head. Apple should
improve the products and keep working on positioning it better and more efficiently. With that in
mind, I also think Apple should strive towards being as proactive as possible instead of just reacting
on a competitor entry on the market. With a very dominant role on the market for iPod it was just a
matter of time before a major competitor would try to get a piece of the pie. Therefore it is
important that Apple continue to focus on product development and searching for new market
opportunities while still staying within the current scope of strategic domain. Apple needs to focus
on the core values they provide to the consumer and the continued development of Apple as a
brand.

5
http://www.news.com/Sony-challenges-Apple-with-20GB-music-player/2100-1040_3-
5253866.html

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Question 3: Markstrat Question

The research studies play a vital role in the marketing world of Markstrat. The 23 different market
research studies can enlighten you on subjects from everything from brand awareness to how many
salespeople there were dedicated to each competitive brand in the industry last period. However, not
every study is relevant for every period as a company wisely should choose where to focus its
resources. Before choosing the research studies one should have in mind the core goals and
objectives of the firm, the breadth of the strategic domain, the competitive position and possible
sources of synergy, the different studies may produce. With that in mind, I will now explain the four
studies I believe has been very important to my team to strengthen our competitive position on the
market.
I have chosen the studies: Consumer panel, multidimensional scaling, industry
benchmark and conjoint analysis as well as four examples from my experience in the Markstrat
world, two from the Sonite market and two from the Vodite market.

Consumer panel

The consumer panel allows the company to identify, not only their own share of the total market
based on unit sales, but also the competitor’s respective share of the market. The survey is divided
into the different segments for example: Buffs, Singles, Pros, HiEarners and Others in the Sonite
market. I believe it is a very relevant tool in many situations as it lets the marketer gain an overview
of the market as for who are the main players and the brands dominating the industry. This
information can be very valuable in a performance evaluation or as a tool to identify new target
markets, determining how to target them and eventually boost of the competitive position
During the simulation, I believe it to be around period two; we noticed from looking at the
consumer panel that some segments still remained fairly untapped as no team had a substantial
position dominating the segments. This fact caught our interest and we decided to develop a market-
attractiveness / competitive-position matrix for evaluating the target markets and to discover the
potential. The consumer panel only played a small role in the actual matrix development as it only
clarifies the competitive situation in term of market share, but still it played a vital role for us in
discovering the potential in the segments. We evaluated the potential in the segments from the five-
step evaluation model from the course material6:
Among other studies, the consumer panel played an important role when we had to make
assessments about the market attractiveness and competitive position. We established many criteria
to make the above mentioned assessment, including factors as competitive rivalry, relative market
share, growth rates and opportunities for competitive advantage. Many of these we were able to
clarify from studying our consumer panel, thus we were able to measure and decide whether or not
and how to target the segments.

Multi dimensional scaling

With the maturity of the Sonite market more and more brands were introduced to the market serving
every segment and every niche of the industry. Teams targeted the segments closer than ever before
in hope of preserving their absolute market share and their competitive advantage in order to ensure
the continued profitability of their brands - the market was becoming saturated. In a market
situation as such I believe that a good and well-implemented positioning strategy matters more than
ever before. Thus, multi dimensional scaling was an obvious choice for our team when we as
6
P. 161, Exhibit 7.5

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marketers had to face the reality of declining growth rates and what countermeasures to implement
in order to maintain and protect our market share. To gain information about the situation we
decided to purchase the multidimensional scaling of brand similarities and preferences. The study
shows how your brands are perceived by the different segments in comparison with all other brands
in the market. Not only does it allow one to identify the most important characteristics asked for by
the consumers, but you can also identify how the other brands in the industry are perceived of,
compared to your brand. This is illustrated on the perceptual map - a three-dimensional map
graphically illustrating the ratings of the respondents. Thus, the study makes an excellent tool in the
process of positioning a current or new product in the customers’ mind. In the course material seven
steps are outlined as the positioning process7. In this process, the multidimensional scaling provides
huge benefits as it can be used to determine the customer’s most preferred combination of attributes
as well as it helps to define the difference in the benefits sought by different customers. By
examining the positioning grid we learned the competitive strength of different brands, the intensity
of rivalry and the opportunities there lies in pursuing a differentiated position within a specific
target market.

Industry benchmark
As the Sonite market matured and with competition at its highest, we decided pursue a
diversification strategy by investing in Vodite R&D in order to increase growth and profitability of
our company. At that point the Vodite market was a completely untapped market with unknown
potential. By next round we had developed a Vodite product and were ready to enter the market,
however before we could decide on a strategy it was important for us to know whether or not
someone else would enter the industry as well. This problem we had foreseen, and therefore
invested in the industry benchmark study: From the benchmarking study one can grasp a
compilation of general information of all competitors in the industry, as sales, COGS8 and R&D
expenses, for example. This study allowed us to see if someone, and in that case who, had used
enough capital on R&D to yield a Vodite product. Furthermore it was an indication of the quality of
the product, assuming the amount spent on the development is an indication of quality. We learned
that we were the only company with a product offering in the Vodite market that period, since no
one else had spent substantial capital on R&D. Based on this precious piece of information we were
able to specifically tailor our pioneer strategy by taking advantage of the fact that we were the only
ones with a product offering in the market. In short, our strategy was based on a large entry scale,
high price, high quality and broad targeting using our competitive advantage we discovered from
the industry benchmark to its fullest.

Conjoint analysis
When we first entered the Vodite market it was intentionally with a broad targeting strategy aimed
towards many segments, not just one. Naturally we recognized that innovators were the first to
adopt the product, but still we wanted to adopt a mass-penetration strategy. However, the next
period more companies entered the market, and therefore it was important to position the product
better and to keep improving it so it matched the most demanded characteristics. To aid us in
improving the product and market it the right way we used the market research study, Conjoint
analysis. The study shows the consumer preferences for the physical attributes of the products.
Rated on a scale from 0 to 1 it enables the marketer to identify the four most important attributes for
each segment. The knowledge we gained from the study we applied to our positioning strategy as

7
P. 176. Exhibit 8.4
8
Cost Of Goods Sold

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we expanded our efforts to perceptual position our products better. Finally I believe we gained a
great asset from this study we could use to strengthen our competitive position.

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Question 4: Virgin Mobile Article Commentary

a. Core concepts illustrated in the Virgin Mobile Marketing Strategy

From reading the article “Branson has bigger plan for Canada” I have identified three core concepts
I believe to be the essence of the Virgin Mobile marketing strategy:

- Attain share growth

- Differentiation
- Virgin the brand

As the headline announces: “Branson has bigger plans for Canada” - Virgin, with Richard Branson
in lead, is expanding its position within Canada with the purpose to attain market share growth. So
far, Virgin has solely been represented on the pre-paid cellular market which consists of 22 % of the
total market. However, Richard Branson has decided to pursue a bigger piece of the pie challenging
large established corporations on the post-paid market as Rogers Corp. Telus Corp. and Bell Canada
Inc.
Virgin declined to announce any details about their specific market entry strategy,
however, president and chief executive Andrew Black says9 that more details on their “more simple
and transparent” service would be announced next year. Though Virgin is keeping the details a
secret I believe that Virgin will try to differentiate their services from the competitors by offering a
unique service and making their product offering more simple and transparent. Hence I believe that
another core concept of the Virgin Mobile marketing strategy to be an aim for differentiating their
offerings from those existing competitors to gain a competitive advantage.
Since the 1970’s the Virgin Group has expanded well all over the world. The
conglomerate mainly operates in the areas of travel, lifestyle and entertainment and is known for its
flamboyant way of doing business and youthful image. Virgin the brand has gained massive
awareness throughout the decades because of the many successful ventures, donations to science
and public relation stunts often performed by Richard Branson himself. Whenever the Virgin Group
enters a new market or industry I believe they harvest great synergy effects from their other SBU’s
and the company name - this applies to the Virgin Mobile marketing strategy as well. The company
knows how to play on the Virgin brand and how to create publicity, this I consider to be a great
vigor in the marketing strategy.

b. Differentiation and positioning aspects of Virgin

Virgin has declined to announce details on their specific product offerings and marketing strategy.
However, from the article I can extract that Virgin is differentiating their services from their
competitors on product level. Virgin wants to provide more simple and transparent products to the
customers backed up by premium customer service. In addition Virgin is going to differentiate their
services through the Virgin brand. Rogers, Tellus and the other big companies already have strong
foothold in the market, but Virgin provides services to the Canadians in many other industries as
well. This can create positive synergy effects, as a customer who frequently buys CD’s in a Virgin
Megastore will get incentive to stay brand loyal to Virgin and try out a subscription at Virgin
Mobile.
When reading the article I became a bit confused about who exactly Virgin is
targeting. Virgin self proclaims that they are targeting the whole Canadian audience whereas a
9
”Branson has bigger plans for Canada”

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telecommunication analyst from SeaBoard group says that Virgin group might experience problems
in relying too much on the youth. Virgin is a youthful brand with revolutionizing techniques but I
do not think that Virgin will rely solely on the youngest consumers. Nevertheless Virgin needs to
carefully consider if they want to adapt a mass segment strategy or if they are going after niches.
Virgin has chosen to position itself on a few attributes: The premium services in a transparent
product line combined with the strength in the Virgin brand. I believe that this will help Virgin
succeed in the market, as it is important to prioritize and select only a few attributes to position on,
in order to create distinctive and intense positioning.

c. Why I think Apple will succeed or not

As an exchange student in Canada one of the first things I did, was to buy a mobile subscription so I
could communicate with friends and family back home. However, I found the industry to be very
complex to approach as a consumer, especially as a foreign one. I discovered that Rogers probably
would be the place to go as they are a major provider in Kingston, but I quickly got confused with
the huge product line, various variations and prices. Their product offering were so confusing and
the shop personnel did not have the expertise to aid me in my decision. Concluding I bought a
monthly subscription, which turned out to not work properly and was highly overpriced. Virgin
seems to be offering a simple and transparent solution to the consumers, which in my opinion is
highly needed in this market.
Virgin is challenging the major corporations head-on by offering post-paid
subscription much like the products offered by Tellus and Rogers, but with some important new
characteristics. Conventional wisdom suggests that this frontal attack strategy is a highway to
disaster if one does not recognize the importance of achieving a sustainable advantage over the
target competitors. The mobile industry is a heterogeneous market where consumers have many
preferences in regards to price, service, safety and not to mention stability. By stability I mean both
in terms of stable cellular reception, but also in terms of brand loyalty and preference. In my
opinion many consumers in this industry is very loyal to their provider because of necessity, either
it works and they stay with that provider or they shift because it does not work. This can be a
disadvantage to Rogers since it can be hard to steal some of the repeat purchase away from the
target competitors. Virgin needs to be very distinctive in their offering and positioning,
differentiating their products by offering premium customer service and a new simple and
transparent product line. Lastly if Virgin supports the product differences with strong promotion or
an attractive price I believe they have a good chance of creating a sustainable competitive
advantage.
The differentiated products are not the only strength Virgin can use in the head-on
competition. Virgin is a multi billion company with strong capital to support the entry. This is a
major advantage to Virgin and can be used to practically start a price war by lowering price. The
competitors will most likely answer aggressively by lowering their price as well, and Virgin should
expect this in its planning.
Being somewhat of an entrepreneur myself, Richard Branson has always been one of
my entrepreneurial idols. I believe that if Virgin Mobile makes proper use of their image and
Richard Branson himself, pre, during and post launch, they can create enough publicity to support
the actual product differences offered. Potentially I believe that Virgin Mobile can gain a
sustainable competitive advantage which will be the fundament in their future success on the
Canadian market.

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Question 5: The Consultant’s Nightmare

“The laws of probability dictate that

some new products will
succeed, most will fail and some
will excel!”

- I say we increase Your chances!

Advantages of being market-oriented

Background
• Worked intensively in partnership with Your
organisation for 3 months

• Both Your management team and us

recomends to make a change

• We will explain why this is important and

how

Advantages of being market-oriented

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Executive summary
• Changes in the market requires Your attention

• It will increase Your profitability

• Why and how to become market-oriented

Advantages of being market-oriented

The market is changing

• Many new Entrants

• Seller’s to buyer’s market

• The eco-system – Let’s manage it together!

Advantages of being market-oriented

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Does it pay to be market-oriented?

• Strengthened cash flows and less volatility

• Increas shareholder value

• Increased profitability

Advantages of being market-oriented

Production changes
• The customer does not know what is
technically feasible, You do.

• Innovation while listening to the market

• Focus the production efforts =>

Increased profitability

Advantages of being market-oriented

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Pricing
• Price on perceived value! Not production costs

• Technical expertise combined with market IQ

• Increased profitability

Advantages of being market-oriented

Financial projections
2008:
• Increased profitability
• Increased sales
• Increased value for
your shareholders
Today 2008 2009

Let us explain this in detail..

Advantages of being market-oriented

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Implementation plan

Re-evaluate Market Strategy Implementat

Corporate opportunity formulation ion Control
objectives analysis

Advantages of being market-oriented

Why choose us to assist you ?

• Experience with assist product-oriented
company increase profitability in 25 years.

• We helped company XY, now the company..

• Our experience combined with your technical

expertise – lets us convince You…

Advantages of being market-oriented

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 Comm-333:Marketing
Strategy [student no: 5760734]

Appendix
1.
Apple consolidated statement of operations 2004 – 2006

Source:
U.S. Securities and Exchange Commission:
http://www.sec.gov/Archives/edgar/data/320193/000110465906084288/a06-25759_210k.htm

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