marketing proposal
abdul-92
radioshack_marketing_plan_2.docxRunning head: RADIOSHACK MARKETING PLAN 1
RADIOSHACK MARKETING PLAN 23
RadioShack Marketing Plan
Name:
Institutional Affiliation:
I. Executive summary
RadioShack Corporation is an electronics retail chain that mostly sells households electronics such as radios, mobile phones and tablets. The company is based in Texas in the United States but has many branches country wide. According to Seatle, (2014), the company is currently in the process of winding up after filing for bankruptcy in 2014 due to prevalent loss making since 2009.
I therefore write this market plan to provide innovative solutions that may help this company from being liquidated. This is through charting a detailed market plan whose implementation will put the company back on the path of recovery in addition to solving the debt conflict with the creditors. Additionally I have written this market place in order to provide the possible ways though which this company can reposition itself among the electronic retailers. This is through taking advantage of the companies’ comparative advantage.
II. The challenge
Therefore if something could be done to reverse the process the company may gradually return to profitability and also benefit the millions of American clients who are loyal to Radio Shack. This is by negotiating for rescheduling the companies debt owed to creditors and suppliers. Additionally, the company will seek to increase the sales of high margin electronics such as mobile phones, Televisions and computers. Moreover, the company will need to restructure its sales policy so that more focus can be placed ion those goods that have a high annual turnover rate and high profitability.
III. Situation analysis
Company analysis
Goals
Radio shack recently launched the “it can be done, when we do it together” brand positioning. This is because the RadioShack corporation is a customer centric organization that intendeds to meet the exact customer needs as they arise due to the short lifecycles of the technological products the company deals in.
Additionally RadioShack is keen on gaining the input of customers about technology so that the company can provide just the right kind of products as well as the associated customer service. This is achieved through inviting customers to collaborate with experts in improving the technological products that RadioShack stocks in its retail stores.
The company also aims to give the customers and ultimate store experience. This is to be done through a customer centric décor in the interior of the store. Additionally the customer service that the customer gets at the RadioShack retail stores should be so good as to attract them to the store again and eventually make them loyal customers of the RadioShack because of its efficiency in service delivery.
Focus
The technological devices are the main focus of RadioShack retail stores. Additionally these technological products have very short product cycles. This implies that the products stocked in the retail stores are replaced by even better version in periods that are sometimes less than one year after the launch of the previous version. Therefore RadioShack is committed to up dating the inventories to ensure that the retail stores have the very latest of cutting edge technology products such as phones. Additionally the retail stores are also focused on stocking as many available brands as possible while putting the partnering brands in prominent positions at the retail stores. This means that the retail stores have several brands of a particular technological product which the company is licensed to sell. This ensures that the customers that visit the shack radio retail stores are spoilt for choice and can find whatever they need all under one roof.
Culture
The company was started in early 1920s by two siblings, Theodore and Milton Deutschmann. The company initially focused on selling of radio equipment to radios operated on ships as well as amateur radio operators hence the name. it was also known as the Tandy RadioShack and leather company in 1962 after being acquired by Tandy corporation when it was almost bankrupt. The company late drop the Tandy name in 2000 and was henceforth known as the RadioShack Corporation. The company has a long history of retailing many electrical devices from VCR cleaning discs to Power supply equipment. Therefore the company has established itself as the one stop shop for all electrical purchases ass well the repairing of damaged electrical products. Moreover the company is well known for offering services that are primarily aimed at the consumers, for example, the company offers the customers opportunities of suggesting the products that should be sold as well and they are also given the space to repair the broken electronics with the help of the experts at the retail stores who have access to most of the accessories and spare parts for home based electronics.
Strengths
RadioShack has a rich distribution networked through out the United States as well as in Mexico. RadioShack operates 4297 retail stores in the United States as of December 2013. The numerous distribution of its outlets enables the company to reach many customers in the unite states and Mexico where the company currently has business operations. Additionally, the geographic distribution of its retail stores enables the company to spread its business risk as the location of its business in different states enables the company to reduce the risk impact that would be experienced if the company had all its locations in one state. The long history of serving customers has enable d the company to establish a respectable brand so that many customers are attracted to RadioShack which is their premier choice for electronic accessories. This has enabled the company to be a house hold name and brand among the electronic consumers in the United States. Therefore the products that are branded RadioShack are trusted by all the consumers because they recognize the company as a customer centric organization that tirelessly aims at satisfying the needs of the consumers. Furthermore, RadioShack boasts of highly skilled salesmen who ensure that the customers are well served. They are also part of the customer experience that gives RadioShack an edge over its closest competitors.
Weaknesses
The company’s branches are spread out all over the United States and this has the effect of reducing the company’s total profits because the retail outlets that incur losses reduce the total profitability of RadioShack. This implies it would be better to have a few profitable retail outlets than to have many retail outlets of which a significant number are loss making retail stores. The company has been in the news for negative reasons that have and may potentially continue impacting on sales in the near future. This is because of the company’s decision to sell all the personal data of its customers. This makes it hard for the company to regain the trust of customers who may now be fearful of dealing with the company because they may perceive the company of not respecting their personal information which they may not necessarily want to be shared with third parties. Additionally, RadioShack does not manufacture its own electronics and may thus be limited in terms of the product development it can conduct on the products that it sells under its private brand. This is because the company has been license to only brand and sell the electronic products produced by other manufacturers with minimal allowance for further development of the products. Thus this is a weakness when compared to Apple Inc. which can respond to customer needs by adding developing its products by adding features which the customers are demanding for.
Market share
The company has faces stiff competition in the electronic retail sector because there are many competing electronic retailers. Additionally, many manufactures have stores that cater primarily for their products thus ensuring that customers go to the manufacturers outlets rather than third party outlets such as RadioShack, for example, Apple is a manufacturer that has retail outlets that distribute all of its products to the general public and all of its potential clients thus making it challenging party retailers such as RadioShack, to sell the electronic products they have. Between the years of 2009 and 2013 RadioShack corporation was consistently ranked as the third largest electronics retailer in the United States after Best Buy Company incorporated and Apple Incorporated. However RadioShack has also been losing its market share to Apple Incorporated. The latest statistics show the company having a market share of 4.5% compared to Best Buy Company incorporated at 31.3% and Apple Incorporated at 15%. The loss of market share to apple can be attributed to the fact that Apple manufacturers its own products and is also an esteemed brand. Therefore customers may not buy as much of apple products or products similar to apple from the RadioShack outlets as compared to the amount of products that they would acquire directly from Apple stores (Dilger, 2014).
Customer analysis
Number
I have not found the exact number of customers who shop at the RadioShack retail outlets but I have found that the company has 4.5% market share of the United States specialty electronics retail market.
Type
RadioShack is an electronics retailer that caters for all kind of people regardless of their country of origin or their age. However, most of their clientele had previously consisted of males both young and old who had a hobby of making up electronic appliance when provided with the necessary electronic components which were and may still be available at the RadioShack retail stores. On the other hand the store has morphed and now targets all customers, for example, the father mother and child in a family can all go together to purchase their phones and other necessary electronics at any of the RadioShack retail stores. Additionally only those individuals who are above the age of 18 years may purchase some types of electronics because of the needed identification of registration of the purchase, for example a five year old can purchase an I pod at the store but will be restrained from buying a closed Samsung Galaxy because the mobile network under which the phone is being sold will require that the buyer should register his official national identification details which minors do not posses.
Value drivers
The retail outlets of RadioShack are intended to give the customer a pleasurable experience. This is because of the inviting physical arrangements of the stores as well as the space that allows for customers to have an easier and enjoyable shopping experience by making it easier to locate items in the store as well s providing for samples which the customers can use to tryout the functionality before they finalize on a purchase. Additionally, the sales representatives at the retail stores are highly skilled and ever willing to assist the customer where possible in order to ensure that the customers have a pleasurable shopping experience at the RadioShack retail outlets.
Decision process
The decision making process of the electronic buyer begins far from the retail store most likely at home where the customer identifies the need for an electronic appliance such as a phone or computer for example. The customer then goes to the RadioShack website or visits the physical RadioShack retail store that is nearest to his residence. The customer then compares the various brands of the electronic appliance that he wishes to purchases, this is done by comparing the functionality, price, quality, durability and version of the electronic appliance. The customer may then place an online order after which the chosen product is delivered to a location of his or her choosing after payment of all the charges required. Alternatively the customer may pick the electronic appliance he so desires and take it home after paying for it at the counter. RadioShack is one of the largest electronic retailers in the United States and may thus have virtually all of the electronic components and appliances that the customers require.
Concentration on customer base for a particular product
The customers are mostly those who visit the RadioShack stores for mobility products which consist mostly of wireless devices such as mobile phones and tablets and the other customers who visit the stores in order to purchase other electrical appliances and accessories such as mobile phones. The customers who purchased other electronics other than the wireless devices are categorized as the retail customers, for example, these customers are the ones who purchased the batteries and other electronic appliances at the RadioShack stores. The following is a distribution of the customer concentration based on the sales of particular products in the RadioShack retail stores.
Competitor analysis
Market position
The electronics retail sector is very competitive because of the high demand for mobility products such as tablets, mobile phones and other wireless devices. Thus the retailer that will benefit the most from the market share and also in attracting customers is the retailer with a good and strong brand name. This is exactly what the closest competitors of RadioShack have. The most competitive company in the specialty electronics retail business is Apple Inc. though it has the second highest market share. The company has a very strong brand in addition to having a high appetite among consumers for apple products especially I phone, thus customers are attracted to buy their mobile devices directly from Apple stores as opposed to acquiring them from Radio Shack stores.
The closest competitors are viewed as innovative, for example, the Samsung section of the Best Buy stores is a contributing factor to its success. However many customers view RadioShack as a traditional store that is not innovative though they can get most of their electronic tools and accessories at the stores. This may be because the changing times have led to a shift in the tastes and preferences of customers, for example, customers are increasing engaging in online transactions that are reliable because they do not have the time to go to a physical store and then search for an appliance that they desire.
Strengths
The biggest strength of Apple Inc. is that all of Apple stores stock only Apple products of which Apple Inc. is the manufacturer. This therefore means that Apple customers can get everything they need at the apple stores, including, getting a feel of a new mobile version or getting technical assistance for malfunctioning apple devices. Thus the customers can even get better discount prices because the stores sell the products of the parent company. Additionally, the stores are an avenue for the customers to give their suggestions and feedback to Apple so that improvements can be made on the devices.
Best Buy Co. Inc has made partnerships with niche produces in the mobile industry, for example, they have a partnership with Samsung. This partnership entails the opening of a Samsung section in the retail outlets of Best Buy. Therefore customers can get the Samsung Galaxy experience because the phones on display are also made available for the customers to try the latest Samsung phones and also get mobile services for their Samsung phones. This gives Best buy and edge over its competitors.
Weaknesses
The apple stores are primarily focused on Apple products. This means that they are limited in the extent of the services and products that they can offer to customers, for example, means the store cannot gain from the lucrative revenues that are generated from the sale of other competing mobile devices and their associated accessories.
Market share
There is a high demand for I phones and thus retail stores that can sell this phone model are very successful and profitable, how ever Apple introduced its Apple stores from where its customers can get its devices as opposed through of their third party distributors like RadioShack. This is the main reason why RadioShack has consistently lost its market share to Apple Inc. over the last four years especially after the introduction of I phone. Evidently customers prefer to buy all their accessories and Apple devices from the Apple stores except in those areas where such a store is non-existent. Additionally, the biggest specialized electronics retailer is Best Buy Co. Inc. which has a market share of 31.3%.
Additionally, the company has also been losing its market share to other electronic retailers such as HH Greg Inc, and even Amazon because all of these companies are differentiated in their service delivery to the customer, for example the revenues of Amazon.com have been on an upward trend since 2009, because it specialized in online services unlike RadioShack that is involved in both online services, the traditional physical store and until recently even the mail order purchases. The lack of specialization has seen it loose its market share from 5.5% in 2009 to 4.5% in 2013 (Bailey, 2015).
Collaborators
RadioShack has subsidiaries in Mexico and a few in China. These subsidiaries contribute a small part of its revenues but also increase the business risk that the parent company has to tolerate. This is because the political and economic environment in other countries outside the United States is different and may sometimes affect the business adversely
Climate
Political and legal environment
The privacy laws are a major part of the legal environment of RadioShack because it has acquired personal information of millions of its customers through out the years of its existence. This information includes telephones and home addresses. The company is also subjected to the rules and regulations of the Securities Exchange Commission.
Economic environment
The business is affected by the growth rate of the country. This is because it is indicative of the number of jobs created hence the amount of disposable income that the American house holds have. When the growth rate is high then there may also be an increase in the sale of electronic devices because households will have a lot of money. Tough economic conditions on the pother hand have made the RadioShack Corporation to reduce in its profitability so that it is now on the brink of winding up. This loss making is shown by the graph below which is for the year ended 2014.
Figure 1 FINANCIAL PERFORMANCE OF RADIOSHACK
Social and cultural environment
The American culture of “keeping up with the Jones” has seen an increase in the sales of latest technology devices. This is because all consumers want to have the latest device there is so that they are not the odd one out. Technological environment
The period between 2000 and presently has seen more technological innovations being launched than at any other time in human history. The smart phones we have are increasingly being developed to be more sophisticated hand held devices. Therefore the future may see an even higher increase I technological innovations in computing and electronics.
SWOT analysis
The RadioShack has a long history of retail in the electronics business. Therefore it is a household brand that customers have learned to rely on over the years for their electronics. However this brand name has also been the source of disadvantage for the company and all of its private branded products. This is because the company has been tagged as conservative and lacking in innovativeness. This negative perception has seen a decline in the market share and revenues of RadioShack as customers moved to other electronic retailers. Additionally the store has numerous stores that are spread over a wide geographical region. This is strength as it means the company is able to capture a large portion of the market by making it easy for customers to get their electronics but, it is also a weakness of the company because the unprofitable stores reduce the profitability of the successful stores thus resulting in net losses for the company.
Additionally the company faces external threats from the online competitors such Amazon.com as well as the manufacturers who sell their products as in the case of Apple Inc. this is because it the online platforms of selling and buying are gaining traction versus the traditional physical stores approach that has been the focus of RadioShack Corporation. However there are numerous opportunities for growth for RadioShack stores. These opportunities arise from the customers need to for quality purchasing experience as well as efficient after sales services. This can be achieved through forming mutual partnerships with electronic manufacturers for exclusive selling rights so that the customers can be assured that all their needs will be catered for by the special experts sent to RadioShack stores as opposed to the common cases where buyers have to go through a long process to fix or be refunded their money for a malfunctioning device bought at a third party store.
IV. Market segmentation
Segment 1
Description
The mobility customers are those who purchase wireless devices at the RadioShack retail stories. They are generally of all ages and genders because mobile phones, computers and tablets are unisex and not limited to any age, race or profession. Percent of sales
They form the bulk of sales as they generate 53% of all the revenues received annually. They are therefore the most important customers for RadioShack. What they want
These customers want to have the latest wireless gadgets that include wireless head sets, wireless tablets and other wireless accessories. How they use product
They use the products mostly for work and entertainment. This is because of the ubiquitous nature of Wi-Fi networks I homes, offices and even public places such as restaurants. Support requirements
The wireless devices may sometimes have malfunctions at the time they are bot. therefore it is essential that RadioShack should provide after sales services that include free repair on devices that have manufacturing defaults. Additionally the RadioShack stores should also provide the accessories that are used along side the devices, for example, headphones. How to reach them
RadioShack should reach these customers through the internet because they are vey exposed to the internet and spend much of their time online. Price sensitivity
In most cases these customers are not sensitive to the price at which the device is sold because more often than not it is either essential they acquire the device or they are willing to spend huge sums of money for prestige purposes.
Segment 2
Description
The retail customer segment consists of those customers who purchase all other electronics apart from wireless devices or their accessories.
Percent of sales
These customers contribute 44.1% of the total sales revenue of RadioShack. This makes them the second largest segment and a significant segment because the difference between segment one and two is almost negligible. What they want
They desire the electronic devices that are categories as for household consumption these includes televisions, Radios and mobile phone accessories. How they use product
The products are mostly used to satisfy their hobbies, for example, the electrical appliance accessories are used by customers who love to repair or build electronic devices as a hobby. Support requirements
The biggest issue with electronics is the malfunctions that result after some time after the purchase. Therefore the RadioShack stores should stock the accessories for appliances that were sold some years back or otherwise provide the essential repair services needed. How to reach them
They can be reached through the mass media advertisements and sponsorships, for example advertisement during prime television time about the available discounted electronic appliances. Price sensitivity
These customers are highly price sensitive. This means that they will not be compelled to buy their products from RadioShack if there are other retailers selling the same appliances at a cheaper price.
V. Alternative market strategy
The alternative strategy to a full recovery for RadioShack was liquidation. This is because some analysts have argued that it is a herculean task to attempt rebranding and repositioning RadioShack. This is because the fundamentals that make up the business of RadioShack are flawed and thus the business is only destined to make losses even in the future after rebranding it., therefore analysts as well as the company’s executives were of the opinion that liquidation was the best strategy to save the shareholders from losing more money to an unprofitable and outdated business model.
VI. Selected market strategy
The marketing strategy that was chosen was rebranding RadioShack and repositioning it as an innovative electronics retail company that is customer centric. This is because though the current business model of physical retail stores may not be profitable a new approach built on the retail stores would turn around the company back to profitability.
Product
The products that are sold at the RadioShack outlets include the private products which are branded under the RadioShack brand; this should be changed because these products are of poor and standard quality. Therefore going forward RadioShack will source its products from manufacturers with high quality products. This can be achieved through signing exclusive sale agreements so that customers can expect to find high quality products which are sold under the manufacturer’s brand name. Additionally, if the packaging is done by RadioShack then those high quality products will bare the RadioShack brand name. The warranty will depend on the type of electronic appliance bought and the agreement between the supplier or manufacturer and RadioShack. Thus RadioShack shall be positioning it self as stores within a store because it shall be the only store selling high demand quality products, for example in a deal between LG electronics and RadioShack for exclusive selling rights.
Price
List price
The list price shall remain the same as it is currently. This is because the market plan is not intended to alienate the customers who are already loyal to RadioShack. Discounts
The discounts will be offered for RadioShack branded products. The discounts should range between 10% and 20% depending on the type of electronic product being sold, for example, the batteries which have a high rate of turn over can have a discount of 20% while products with a long shelf life such as televisions can have discounts of 10 %.
Bundling
Bundling can be done offered to those customers who choose to be RadioShack branded products, for example, the RadioShack tablet maybe bundled together with additional accessories such wireless headsets and even a power bank at a discounted price. Payment terms and financing options
The payment shall be both through cash and credit especially in the case of RadioShack credit cards. The online payment platforms shall also be opened up so that online shoppers will transact conveniently. Leasing options
There shall be no leasing options because it is more expensive in the long run as it requires a lot of supervision of the customers to whom products are leased to.
Distribution (Place)
RadioShack initiated a store closure program to reduce the number of stores especially those that were consistently making losses. Therefore the distribution channel must be changed to ensure there is minimal loss resultant from the methods of distribution. The distribution channel to be used should be a combination of a few regional physical outlets as well as the online trading platform. Thus a customer may choose to go to the regional store or better yet just order a purchase online and wait for its delivery to his location in just a few hours. This would ensure faster and efficient logistics as well as resulting in an increase in sales. Additionally, there company would benefit from having higher margins on the online purchases because of the additional charges such as the transportation costs and the costs of warehousing which can be factored in the price of the item. The transport to the location of the purchase order will be achieved by outsourcing the transportation activities to a logistics company so as to save on costs that would have been incurred in maintaining the vehicles as well as employing the drivers.
Promotion
RadioShack Corporation should spend at least 10% of its total sales revenue in advertisements. The advertisements will mostly be conducted online through social media sites as well the most popular internet search engines such as Google. The is also a need for public relations in order to address the issue that will result from the rebranding, such as complaints from the core clientele who may have issues with some of the changes that may be implemented. The public relations will ensure that the company presents the image of a company that is keen on serving the customers but with new emphasis on innovation and efficiency in service deliver.
Promotional programs can also be conducted in order to attract customers initially. These can include offering give always when the customers purchase the flagship products at the RadioShack outlets.
Break-even point for any additional spending
The break even point for any additional spending may not be easily determined as of now because the company is changing completely from its traditional image to a new brand whose acceptance will depend on the perception made on the customers. Projected results of the promotional programs
The results of the promotional programs cannot be accurately determined because of the subjective nature of the effect of the promotional programs. However it is estimated that the promotional programs may result in an increase of 20% in the sales revues of the year ended 2013.
VII. Short and long-term projections
This project is for the short term because it is experimental. If it succeeds then the company may negotiate a debt rescheduling program with the creditors who are owed money by RadioShack for their services. Should this strategy fail then RadioShack should proceed with its plans to liquidate.
VIII. Conclusion
RadioShack has already applied for liquidation. Therefore the company needs a fool proof rescue plan that will ensure the ultimate survival of the company. Additionally the company is in dire need of a rebranding because its current image is costing it many customers who would rather go to other electronic retailers.
IX. SUMMARY
I believe that this plan will work because RadioShack will be able to compete with the innovative retailers such as Amazon.com. Additionally, the restructuring will enhance the company’s image in the eyes of the public and position the company among the best and most reliable electronic retailers. Additionally, this strategy will ensure that RadioShack proves to the creditors and shareholders that it can be profitable for the foreseeable future. Moreover, reducing the number of physical stores will ensure that the rent expenditure is drastically reduced by up to 50%. This will contribute to higher profit margins for the company. This market plan will ensure that RadioShack is profitable and can pay for its expenses.
References
Radio Shack (2013). Radio Shack Corporation 2013 annual financial reports. Retrieved 17 March 2015 from: http://www.annualreports.com/Company/2062
Dilger, D. (2014). Apple gobbling up retail market share as Radio Shack, Best Buy shrink. Retrieved 17th March 2015 from: http://appleinsider.com/articles/14/03/06/apple-gobbling-up-retail-market-share-as-radio-shack-best-buy-shrink
Bailey, S. (2015). Best Buy: The largest consumer electronics retailer. Retrieved 17th March 2015 from: http://marketrealist.com/2015/01/best-buy-largest-consumer-electronics-retailer/
Seatle, P. (2014). Dead brand walking. Retrieved 17th March 2015 from: http://www.economist.com/blogs/schumpeter/2014/03/radioshacks-woes
Sheet1
| customers | 2013 | 2012 | 2011 |
| Mobility customers | 55.10% | 55.60% | 52.80% |
| retail customers | 44.90% | 44.40% | 47.20% |
customers201320122011
Mobility customers55.10%55.60%52.80%
retail customers44.90%44.40%47.20%
