Executive Summary (To be finished last)
Our project will explore how Digital Marketing can build a small mobile phone shop at MBK into a well known store in Bangkok. We hope to apply our Digital Marketing knowledge and stretegies into studying and improving his small mobile store and differentiate it from similar shops in MBK. Our initial strategies will use social media network such as Facebook, Twitter, and FourSquare.
Nature of the Business
• Products: Mostly are mobile phones and smart phones. Some shops will add more variety with MP3 players and other gadgets like iPad.
• Stores: Consumers can buy the products at 2 different types of shops.
o Authorized dealer: such as AIS, DTAC, or Jaymart. These stores offer 100% original products (No fraud or modified), but with a little higher price. They also give a longer warranty period.
o Non-authorized dealer: like those small shops in MBK (L77 is one of them). Those shops charge for a lower price than the authorized dealer, while they cannot guarantee the products as the original version (Even though they tell the customers that their products are not counterfeit, no one would believe that). In addition, they offer shorter warranty period, but have services like free application or give MP3 ring tone for free.
• Consumers’ behavior: Starting from needs to awareness to consideration until making the decision to buy.
o Needs: consumers might need to buy a new mobile phone, because the old one is broken or out-of-fashion.
o Awareness and Consideration: consumers started to search for a new one on Internet or get some references from friends or family. Then they will compare those data and decide which model of the products they like, and they also find a shop to buy it.
o Making decision: Most consumers will make the transaction at the shop recommended by reference persons. If they were not received any suggestions, they will have to choose to buy from the shops that gives them comfortable and creditability or they will select the authorize dealer as a last resort.
• Products: Mostly are mobile phones and smart phones. Some shops will add more variety with MP3 players and other gadgets like iPad.
• Stores: Consumers can buy the products at 2 different types of shops.
o Authorized dealer: such as AIS, DTAC, or Jaymart. These stores offer 100% original products (No fraud or modified), but with a little higher price. They also give a longer warranty period.
o Non-authorized dealer: like those small shops in MBK (L77 is one of them). Those shops charge for a lower price than the authorized dealer, while they cannot guarantee the products as the original version (Even though they tell the customers that their products are not counterfeit, no one would believe that). In addition, they offer shorter warranty period, but have services like free application or give MP3 ring tone for free.
• Consumers’ behavior: Starting from needs to awareness to consideration until making the decision to buy.
o Needs: consumers might need to buy a new mobile phone, because the old one is broken or out-of-fashion.
o Awareness and Consideration: consumers started to search for a new one on Internet or get some references from friends or family. Then they will compare those data and decide which model of the products they like, and they also find a shop to buy it.
o Making decision: Most consumers will make the transaction at the shop recommended by reference persons. If they were not received any suggestions, they will have to choose to buy from the shops that gives them comfortable and creditability or they will select the authorize dealer as a last resort.
External Analysis from (Point and Pok)
Market and Consumer Analysis
Industry Competitive Structure Analysis
Current situation
L77: The company sells smart phones such as BlackBerry, repairs, gives free program installation. L77 also put some other gadgets in the stock like iPad.
Physical shop
The owner started from opening the shop at MBK. The location of L77 is at 4th floor, near Tokyu department store, Zone C, log 4AB19. For any new customers, this shop is hard to find because the store is quite small just like the other shops in MBK. Only a handful of those will have a big shop that catches the eye of the consumers.
Website
L77 also has its own site on virtual world, but it does not provide any transaction on the web. It only created for giving information of the line of products offering, advertising the new merchandise that recently put in a sale category. The website provides contact of the owner in aspects of mobile phone number, BB pin, Twitter page of L77, Skype name, and an e-mail. The function for this website is mostly contribute to give consumers how to contact directly with the shop, but it lags the location map of the store. Moreover, it does not present pictures and specifications of each product on the web, only the model name can be found. More importantly, this website does not often be updated.
Twitter
This is the main stream for L77 to talk and give information to the consumers. L77 updates the status of each product via Twitter regularly (more than 5 times per day). The shop owner also participates with the consumers or his Followers on Twitter by giving advice and answer to questions related with his business. This gives him a very great opportunity to use “Pull marketing strategy” to get more customers. Anyway, he does not use Twitter for doing only business, but also his personal life and issues mix with it. That might cause him into trouble, if rival shops attacked him or he might tweet something that ruin his image.
Competitors
1) Authorized dealer
AIS, DTAC, Truemove shop: The big 3 companies that focus mainly on providing telephone services not selling the mobile phones. Those firms sell both mobile and smart phones, and repair for only their own customers. They have no free additional program installation service.
Physical shop
These 3 firms have many branches throughout the country. The stores offer a wide range of service from selling the mobile phones and telephones number, providing internet access on mobile, paying the bills, and repairing the phones.
Website
The site gives clear picture and specification of each model, especially for BlackBerry and iPhone, including with the price plan. They advertise and promote the products on their homepages. Moreover, it gives consumers to get free download application or software upgrade for BB or iPhone. The websites also provide tips and tricks too. By giving these information, consumers can learn and understand each products before making decision to buy solely on these website.
Facebook
These 3 firms let the consumers participate in their wall. People are joined to question and answer by themselves, while the companies will only post some pictures or give update on incoming events.
Twitter
They use Twitter primarily to update on any events or news, but when compare with L77 Twitter page, these 3 companies have less consumers participated with them. More importantly, L77 has more followers than those firms.
Jaymart: One of the authorized dealers in Thailand that focus mainly on selling the phones has a wide range of mobile phones, smart phones, and other accessories. Jay mart also has checking, repairing, and home delivering services. In addition, the company provides customers with membership card that gives promotion and discount, and customers can also trade the old mobile phone with a new one.
Physical shop
Jaymart has its branches in every zone of Thailand. The shop not only sells the merchandises, but also provides services like repairing, insuring the phone, and paying bills.
Website
Jaymart has its own web page. The site gives lots of information of the products from picture, price, specification, until the review part of the mobile phones. People can buy the products online and the company will deliver it to their hands. The page provides news and activities of the company. Moreover, it has a webboard that consumers can ask questions, while Jaymart will answer and give valuable knowledge of the products.
Facebook
Like AIS or DTAC, Jaymart use Facebook in the same manner added with some video advertising. However, not many consumers participate with the company.
Blisstel: Blisstel main operation is the same as Jaymart, but it does not have delivery and trading services.
Physical store
Most of the shops located in discount stores and department stores in many part of Thailand. The shops’ duties are to sell mobile phones and give repair service.
Website
Blisstel homepage provides less content than Jaymart. It has pictures and information of each model, but no review of the products. However, it shows the bestseller products and the new releases one. It also gives the payment plan like AIS, DTAC, and Truemove does.
Facebook
The company has its own Facebook named “Blissclub”. It posts the pictures of past events and lets the people come in and comment. It uses the same approach as the other companies, which is to update news and public the upcoming events.
2) Non-authorized dealer
Tomato mobile shop: The competitor, who acts almost the same as L77, is located at MBK. It mainly sells the smart phones like iPhone and another recently released gadget, iPad. The customers who bought the products can get any other programs or applications from the shops.
Physical shop
The company has 4 shops at 4th floor in MBK which they have different products from each other.
Website
It provides consumers with clear pictures and map for each store in MBK added with cell phones numbers of each person in every shop. The site also has the link to Facebook and Twitter too. The website regularly updates price and specification of each products’ model. In addition, it provides the FAQs column in the site that give the answer to the frequently ask questions.
Facebook
The page contains mostly the update on price and stock of the merchandises, but it lacks of participated consumers. It has only 2 pictures on the page, and that photos are the logo of the company not the location of the stores.
Twitter
Right now, Tomato has only 33 followers on Twitter. It uses this channel to update just like it did on Facebook, and there is no people asking or comment anything on that page.
A.O.B. Mobile shop: This competitor sells a wide range of mobile phones and the accessories. It has repairing, delivery (via post offices), and programming services. Moreover, it also buys the old mobile phone from any customers.
Physical shop
The store is also located on 4th floor in MBK like L77.
Website
This firm has no homepage, but it uses the pdamobiz.com to advertise and sell the products. The page includes very clear pictures and specification of each model. It states the location of the store in MBK. Instead of showing its map, A.O.B Mobile shop informs its customers by describing its location and showing its store pictures on website. It also gives the telephone number to contact directly with the sale persons. The page is not well organized and it is too messy.
BB POP mobile shop: The shop sells smart phones and their accessories. It has delivery, repairing, and free programming services for the buyers.
Physical shop
The shop is located on 4th floor at MBK.
Website
The store has its page at www.pdamobiz.com * as well as A.O.B. On the site; it provides e-mail, telephone numbers, BB pin, and the map of the store. BB POP uses the same approach as A.O.B. to advertise and post price and picture of the products.
YSR: It sells iPhone, iPad, and other accessories for those. This store has no physical shop, so it provides delivery service.
Physical shop
It has no storefront, so it operates on pdamobiz.com instead.
Website
It shows pictures and price for the products. It has insurance and claim service for its customers that they can send the products directly to the authorized dealer service center. The site gives e-mail, MSN account, telephone number, and BB pin.
Remark*: Currently this website (www.pdamobiz.com) is one of the largest smart phone online communities. Furthermore, it provides not only updated mobile and IT information but also online areas for trading between register sellers and potential buyers.
Table1: Summary Services of Blink7 and Other Competitors
Service | Sell | Repair | Application | Delivery | Trading |
Blink7 | O | O | O | X | X |
AIS, DTAC, TRUE | O | O | X | X | X |
Jaymart | O | O | X | O | O |
Blistel | O | O | X | X | X |
Tomato | O | O | O | X | X |
A.O.B. | O | O | O | O | O |
BB POP | O | O | O | O | X |
YSR | O | X | X | O | X |
Table2: Benchmarking Channels of Blink7 and Other Competitors
Channel | Physical Shop | Website | Facebook | Twitter | Level of Participation* |
Blink7 | O | O | X | O | 5 |
AIS, DTAC, TRUE | O | O | O | O | 4 |
Jaymart | O | O | O | X | 3 |
Blistel | O | O | O | X | 3 |
Tomato | O | O | O | O | 3 |
A.O.B. | O | O | X | X | 3 |
BB POP | O | O | X | X | 2 |
YSR | X | O | X | X | 2 |
Remark*: Level of participation is scaled to from 1 to 5
Marketing analysis
Segmentation Targeting Positioning (STP) Analysis
Current marketing mix (4Cs)
· Consumer’s Need: Blink7 directly responds to needs of people, who tend to not believe in traditional advertising but trust and make purchasing branded merchandizes corresponding to recommendations from people they know as well as opinions posted by unknown consumers online. Unlike the old product approach that is to develop and produce a product as good as possible to market and make sales, this consumer approach is to study consumer wants and needs, and to offer products and services in response to those needs through online platforms such as Twitter. Brink7’s target consumer is concentrated on online people especially groups of teenagers plus working age people who could use computer and internet.
· Cost of Appreciation: Blink7’s consumers can trade off between lower price and official warranty and service. According to the interview with Mr. @L77, since not only most of his customers are price sensitive but also official warranty and service might not cover buyers in every case, some consumers prefer to buy smart phone as well as other accessories from Blink7 rather than certified distribution center of mobile phone.
· Convenient to Buy: One of Blink7’s drawbacks is limited distribution channel. Currently, the shop has only one physical channel via a single store located on 4th floor at MBK. Besides, although Blink7 has already adopted online platforms to enhance its marketing channels, its online payment and delivery service have not been established yet. As a result, when consumers and potential consumers either want to buy a new mobile phone or install new programs, they have to unavoidably walk in to Blink7 shop at MBK.
· Communication: Blink7 obviously benefits from Twitter which allows to Mr. @L77 to online communicate through 24 hours per day and 7 days per week with his customers and potential customers. Customer can easily access to find out product information and special promotion by following Mr. @L77’s Twitter which usually communicates and is updated the information minute by minute. Twitter applies two ways communication between seller and buyer. As a result, Mr. @L77 can customize his consumer’s need via investigating from their interaction and participation in Twitter. Furthermore, as Twitter stimulate communication among potential buyers Mr. @L77 can exploit viral and buzz marketing by launching new attractive promotion via this online application as well
Current digital marketing mix (Digi4Ps)
· Permission Blink 7 advertises and talks to the potential customers via Twitter. The shop owner, Mr. @L77 routinely updates the status and price range on the products at his shop every hours. Thus, only the people who follow Mr. @L77 on Twitter will receive the update on the products or will be able to tweet to Mr. @L77.
· Participation After consumers followed Mr. @L77 on Twitter, they can now talk or discuss on any topics related with the products itself or they can even talk on personal issue. Mr. @L77 will promptly reply to any requests especially for questions concerning the products in his store. For examples, the frequent ask questions are how much the new BB cost? And is it available in your stock?
· Privacy (Profile) After prospective customers getting involved, at this moment there is no systematic mechanism to get Blink7 learn more about an individual customers background and needs except those intimate online talks that may help Mr. @L77 to know his customers better. As the communication still at the level of Question and Answer, the privacy issues, for now, are still not a major concern.
· Personalization Getting the services become more customized Mr. @L77 provides specific update on mobile phones by separately replying to certain customers that he knows. Also, customers can schedule with Mr. @L77 when to buy the mobile.
SWOT Analysis
Strength:
· Very first store that apply DigiMarketing
· Large number of followers that later become customers
· Closely connect with customers
· Already established branding (unlike other shops)
Weakness:
· Twitter channel just a word-of-mouth ads
· Some would consider this as a reference and go to other stores
· Consumer is price sensitive
Opportunity:
· Expand more branch with strong branding
· Get sponsored by mobile phone companies
· Add more IT products
Thread:
· Easy to imitate
· Some negative comment will hurt the shop as a whole
Problem identification
1. Intense competition Hundreds of identical mobile shops with similarities in size, services and merchandizes that are gathered in the same place creates highest competitive environment for Blink7.
2. Limited selling space At 5 sq.m. shop floor with one of highest rent rate in Bangkok, the shop faces shortage of working and inventory stocking area. Difficulties also arise if the shop to plan and promotional events or displays on site.
3. Limited financial resources Just a small and ordinary mobile shop that anyone can find at any corner of Bangkok, raising substantial capital to expand the shop or hire more staffs are almost out of the questions.
4. Time constraint As a sole entrepreneur with only 2 front-line staffs, it is not easy for Mr. @L77 to perform any time-consuming operation and marketing initiatives aiming to improve the competitiveness and eventually the sales.
5. Small room for expansion Mobiles and related accessories are similarly provided by any stores in the country, and the average turn-over period, especially for mobile phones, is almost a year, relying mainly on these products is considered a risk for Blink7.
Objectives
1. Being differentiated Staying distinguished from other mobile shops by establishing Blink7 as a brand for not only a mobile and accessory vendor but also an intellective and trustworthy source of information regarding comprehensive range of gadgets and applications that people keep coming to find consults and solutions and eventually become loyal customers.
2. Financially successful By creating other sources of revenue on top of the existing mobiles and related merchandizes that have limited growth potential by developing Blink7 to be famous the meeting point between prospective customers and other gadget shops. In this way blink7 can enjoy more sustainable and bigger pool of income.
Milestones
M1: Becoming the 1st Digitalized Mobile shop
Where to be?
1. Transferring what existing customers and followers valued in Mr. @L77 into blink7 instead in order to create more brand awareness to the shop itself. This will allow Mr. @L77 to have more time by enable him to allocate interactive jobs to automated digitalized tools and maybe remote staffs. As the shop grow bigger and bigger in the future, it will be more obvious that a man cannot be everything for the company.
2. Establishing itself in consumers’ minds as the first mover in digitalized mobile shop that not sell only mobiles phones or some hi-tech gadgets, but the place that updated and reliable information are circulated back and forth between the shop and followers.
3. Becoming the IT and related gadgets information hub that brings interested people in, make them become loyal customers, and distribute them to other shops that sell products and services that are not covered currently by the shop and get the commissions from those transactions.
When will we get there? Short-term, 3 months
What to be achieved?
Short-term: 3 months (Reband)
· Turn twitter’s follower to customer; ?? ppl now to ??? ppl
· Mobile info tweet ratio; now ???% to ???%
· We would apply push marketing strategy, thanks to hashtag function in Twitter. We would observe the tweet, especially when people discuss about smart phone, then, we approach accordingly.
· We expect to double the conversion ratio (note: twitter increase 20-30% sales) since we would approach specific prospective customer with the right approach.
Moreover, with upgraded website which is more interesting, would do a great job when prospective customer need an information like updated price and new coming device.
M2: Strengthening the Brand and leave competitors behind
Where to be?
1. After becoming the first to successfully bring digital marketing into action in the business, now the shop can expect a stream of both direct and indirect competitors to come after it. Actions that building strong and effective entry barrier is what to be implement throughout the year to.
2. Not only for the shop to expand its customer base, it has to keep them in touch, involved, and buy from or via the shop for as long as possible. To achieve this, highest switching cost must be allocated to the customers.
When will we get there? Medium-term: 1 year
What to be achieved?
Medium-term: 1 year (Keep Advantage)
· Number of web hits (pageviews); 1200 hits/month to ??? hits/month
· Number of follower in twitter; 2500 followers to 5000 followers (too much???)
· We aim to double webpage visitor and number of follower in twitter.
We expect to see a number of activity on our application like logging in, comment on content (introduction of new gadget, gadget review) . This would ensure us that our existing customer still stick with us and would consider us a priority when buying a new phone or even refer to us when their friend need a recommendation.
M3: Going Places and Diversify
Where to be?
1. For a longer period of time, the shop, which at that moment could be called as a company can be expecting the to raise more capital for further expansions and more ambitious strategies.
2. As Bangkok is a widespread city (too early to mention about Thailand) when the shop becomes famous it could provide more physical site to the customers allover the city. Customers should be able to find and shopping with Blink7 at any major IT locations across the town both in the city center and Bangkok’s outskirt like Zeer Rangsit or Secon Square.
3. Before, Blink7 may distribute customers to other shops, but in the future as the size and numbers of the stores increase, it should consider diversifying it product and service ranges to finally become the one stop center for all you can think about IT.
When will we get there? Long-term: 3 years
What to be achieved?
· Number of product category; mobile phone, tablet, camera, etc
· Number of branches; IT mall around BKK
· Revenue; from ??? to ???
· E-commerce on blink7 website; order, payment, delivery
· We expect to earn at least similar revenue of the best seller shop in MBK and wherever we open the store.
Partnership with leading store in each product category. For example, when people think of headphone they would think of www.munkongadget.com. We would do a partnership with that. Therefore, we would draw a prospective customer from every angle.
Recommendations
We propose several recommendations to build L77. Through our recommendations, we expect L77 to be able to: 1) build its brand and established itself as a first mover in using digital media in the business, 2) enjoy more free time by distributing his work load on the digital platform by using tools, 3) increase switching cost, attract, and retain more customers with a mobile application that can communicate and update promotions and new services to the phone that was purchase only at L77 store, 4) enjoy advertising revenue on its website through renovation.
L77 is doing everything by himself. Since the brand is already established, we propose that L77 can now let other people do the digital updates on the social media platform. This way, L77 can expect more free time and also train his workers to become more digitally skilled. Twitter tools now enable multiple usage of the same Twitter account on different computers, so L77 can tweet and reply on more technical questions and let his worker tweet price updates.
L77 brand is well known in the digital mobile phone market. We propose that he can extend his business to sell other digital equipments such as computer and cameras. We do not recommend him to stock up inventories; however he can be the middle man and provide the equipment as ordered by his customers. L77 must update himself on other devices other than mobile phones or hire experts in other fields to assist him and use his brand.
Since the barrier to entry into using the digital marketing platform is quite low, we recommend L77 to take this opportunity to increase his followers. With a large amount of followers, new entrants may find it difficult to compete with L77 and give up in their initial stages.
We propose several recommendations to build L77. Through our recommendations, we expect L77 to be able to: 1) build its brand and established itself as a first mover in using digital media in the business, 2) enjoy more free time by distributing his work load on the digital platform by using tools, 3) increase switching cost, attract, and retain more customers with a mobile application that can communicate and update promotions and new services to the phone that was purchase only at L77 store, 4) enjoy advertising revenue on its website through renovation.
L77 is doing everything by himself. Since the brand is already established, we propose that L77 can now let other people do the digital updates on the social media platform. This way, L77 can expect more free time and also train his workers to become more digitally skilled. Twitter tools now enable multiple usage of the same Twitter account on different computers, so L77 can tweet and reply on more technical questions and let his worker tweet price updates.
L77 brand is well known in the digital mobile phone market. We propose that he can extend his business to sell other digital equipments such as computer and cameras. We do not recommend him to stock up inventories; however he can be the middle man and provide the equipment as ordered by his customers. L77 must update himself on other devices other than mobile phones or hire experts in other fields to assist him and use his brand.
Since the barrier to entry into using the digital marketing platform is quite low, we recommend L77 to take this opportunity to increase his followers. With a large amount of followers, new entrants may find it difficult to compete with L77 and give up in their initial stages.
To boost up the number of his followers and create more brand awareness of L77, we suggest him to exploit viral and buzz marketing by providing customers an option to promote his brand in order to exchange with price discounts. Initially, customers will get % discount, which depends on product margin, for the products they would like to buy plus other free application programs if they agree to participate in the campaign that request them to express their good feeling experience about either L77’s products or services with a short, funny, and emotional sentence. Moreover, we would like to ask for allowance those participants to record their VDO clips and post them on L77’s website and YouTude. We believe that after publishing in online, those VDO clips would effectively attract L77’s and non L77‘s customers and fashion awareness of L77 especially in digital platforms. We foresee that this method would lead to a bunch of comments and page views on L77’s clips in YouTude, increasing traffic on L77’s website, and discussion topics about L77’s promotion in blogs as well as widespread world of mouths about L77 in Google when typing key words such as “MBK mobile phone shop”. In sum, admittedly, L77 would suffer from decrease in merchandize margin. However, he will eventually gain more and be compensated with increase in sales attributed to widespread recognition among potential consumers.
Our primary proposal is for L77 to establish himself as the first mover in adopting digital media in his mobile phone selling business. To do this, a simple mobile phone application must be made that will enable L77 to communicate with customers that bought his phone. Every phone that he sell, this applications supposedly name “L77” or “Blink” will be installed and will act as a simple channel for L77 to send updates on new services and news that can be useful to that customer. Customers that buy from L77 and find that this application useful will be attracted to L77 services and L77 can enjoy a higher customer retention rate and revenue. This is possible because, customers that have this unique application are likely to be up to date with the latest mobile trends, they can boast about it with their friends and spread useful information in their networks. Furthermore, because it is a new idea, we believe it will make a buzz and people will talk about it in digital channels and through physical networks. Customers who are interested in the deals from L77 via the application are most likely return to the store and spend money. On the other hand, customers that find the program not relevant can simply delete this extra service. Ultimately the primary objective of the program is to make L77 customer experience a higher switching cost, create a buzz and build brand awareness, and establish himself as the first mover in adopting digital media.
L77 website can be improved to make it more professional looking. L77 says that he doesn't have time to manage his website, so we propose that with a small investment, he can hire a web hosting company to professionally design his website. Since his brand is already well known, he can also use it to make money from online advertisements.
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