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Mba G4S

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Marketing opdracht voor Executive MBA (RSM)

Marketing opdracht voor Executive MBA (RSM)


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  • 1. Marketing Management Individual Assignment 23 December 2008 EMBA’09 Roel Kock
  • 2. Executive summary Executive Summary G4S must enter new markets and extend their service in existing market with the various benefits of CASH360 The benefits of CASH360 provide G4S with a whole new range of services which enable them to provide more services to current, armored car services customers and provide G4S with new potential customers for the benefits of CASH360. Conclusion CASH360 has various benefits which enable G4S to enter new market and extend services in existing markets. Why The benefits of CASH360 are applicable to more customers than the current armored car services. CASH360 gives G4S access to a whole new group of customers. CASH360 offers modules of cash management What The five benefits of the CASH360 have various values for various potential clients. G4S can become the cash management provider for a whole range of needs for various customers. G4S needs to segment the market based on the potential benefits of the modules of CASH360 How Because of the different product benefits G4S can segment the market based on product benefits like such as decrease in counterfeit notes, decrease of cash shortage, increase in sales and labor savings. SME and One shop stores do not have armored car expense but they do have cash management problems. With the benefits of CASH360, G4S can tap into these problems and provide modular services.
  • 3. When connected to existing POS, CASH360 verifies the amount paid and spots – and rejects – counterfeit notes. Estimated annual savings $ 1,000*. Better cash management can reduce the number of Cash Pick up. Estimated annual savings $ 3,000*. Management and personnel spends more time with customers and that will generate additional sales. Estimated annual savings $ 8,200*. Eliminating the manual counting can decrease the labor costs. Estimated annual savings $ 6,750*. This amount is excluding sinkness costs of staff after a being confronted with a ‘criminal situation’. A decrease of cash theft. Each time money is handled it is vulnerable to internal or external theft. Money is handled and counted more than 10 times (up to 16 times) depending on the size and practices of the store. Estimated annual savings $ 8,200*. A 100% closed cash cycle can generate substantial profits up to $ 27,150 per year if all five benefits of the closed cash cycle are applicable for a customer. The five benefits of a closed cash cycle have a large economic value Decrease in armored car expenses 1 Decrease in counterfeit notes 2 Increase in sales 3 Decrease in labor costs 4
      • Cash Shortage
    5 The economic value of the product is determined by the customer because the customer decides what the needed benefits are. Product benefits * See slide 11 for value assumptions
  • 4. In order to sell the CASH360, G4S must segment the market based on the benefits of the closed cash cycle. Decrease in armored car expenses Decrease in counterfeit notes Increase in sales Decrease in labor costs
      • Cash Shortage
    The various benefits of the CASH360 give G4S the opportunity to enter new markets with and introduce new product benefits. Segmentation Shops with large cash sales and thus armored car expenses can benefit largely from a closed cash cycle. Shops with a large number of cash transaction with notes between 20-50 have the highest change of counterfeit notes. (increase of 76% in 2007) Shops with intensive customer interaction can benefit substantial from spending more time on the point of sales. Shops with many POS, a separate cash back office or expensive labor spend more time and money on counting the money. The more cash changes hand to change it can be stolen. CASH360 decrease the ‘number of hands’. 1 2 3 4 5 Current market New Services & New customers New Services & New customers
  • 5. Retail Gas Station Supermarkets Single Store SME Corporations Multinationals CEO: Higher profits and lower costs will increase the net income. Head of HR: more safety for personal and less sickness due to robbery. Better social image. CFO: More free cash flow because of better cash management. Threats: Many multinationals already have some attributes of cash management but not the whole closed cash cycle. Expensive to replace old machinery. G4S needs to integrate (part of) the product in existing cash management system. Opportunities: G4S has already ties with these companies. These companies face a increase in costs due to safety regulations and a tighter margin makes them searching for costs savings. Owner: higher profits and lower costs will increase the net income Store manager: more time in shop will help store manager to reach the sales targets. Threats: staff and manager might be part of the ‘theft’ problem. So the focus should be on the owner and trustworthy store manager. Opportunities: Increase in staff safety and fewer costs for the enterprise. Owner: higher profits and lower costs will increase the net income Threats: the close cash cycle will eliminated the possibility for the entrepreneur to generate ‘black’ money. Opportunities: More safety for shop owner e.g. night-shops. Possibility for shop owner to spend some time away from the shop to seek new entrepreneurial opportunities. Due to different DMU’s and product benefits, G4S needs to differentiate its marketing position per target market Challenges
  • 6. Single Store SME Corporations Multinationals Introduce new benefits of CASH360 to current customers Introduce various benefits of CASH360 to new customers like SME Retail and SME Supermarkets Introduce new benefits to new customers like single store retails, supermarkets and gas stations New market & new customres G4S can leverage its existing relations with corporations to work together on a closed cash cycle with the CASH360. The CASH360 has to be integrated in the existing system and interfaces of the multinationals. G4S also needs to look into to the possibility of alliance with a bank (e.g. like Fortis with Gunnebo and Jan Linders Supermarket). Various benefits, like decrease of cash shortage, can be introduced to new customers. Singel shop retailers will have large benefits from CASH360 like more sales and less theft from staff. And more ‘danger’ stores like remote stores or nightstores will increase the satefy of staff and customer with CASH360. The various benefits of CASH360 give G4S the opportunity to introduce new services to current customers and offer new services to new customers . P3 P2 P1 M3 M2 M1 P3 P2 P1 M3 M2 M1 P3 P2 P1 M3 M2 M1
  • 7. Retail Gas Station Supermarkets Single Store SME Corporations Multinationals Benefits Decrease in armored car expenses Decrease in counterfeit notes Increase in sales Decrease in labor costs Decrease of cash shortage Benefits Decrease in counterfeit notes Increase in sales Decrease of cash shortage Benefits Decrease in counterfeit notes Decrease of cash shortage Flexibility of shop owner Customer Pyramid The segmentation gives G4S the opportunity to give different offerings based on the company needs Key account manager Needs to establish a collaboration achieve all CASH360 benefits for it clients. Bring the client to the ‘Haarlem site’. SME Sales team Needs establish awareness and interest in various benefits of the CASH360 via mailings, on-site visits and demo-sessions. Bring CASH 360 to the client with a remote demo-model. One Store Sales team Needs establish awareness and interest in various benefits of the CASH360 by one-site visits and one-site demo-sessions. Bring CASH 360 to the client with a remote demo-model.
  • 8. G4S can grow by introducing new services to its current product to large corporations G4S can offer current customers the benefits of a closed cash cycle. 1 G4S needs to leverage its current relationships to collaboratively offer the new benefits 2 Promotion by innovation will give CASH360 more spotlight in magazines and promotion by market leaders 3 A pull strategy via unions and auditors (V3) will increase the interest for CASH360 4 Advice: Who, what & how (1) Product Closed cash cycle will decrease the counterfeit notes, cash shortage, labor savings, armored car expenses and increase sales. And also an increase in Cash Flow because of shorter time to bank account. Service 100% service of the cash cycle will allow the large companies to actually reduces FTE costs. And with approval of Central Bank recycling is an interesting option for corporton to put the money back in the ATM. Advice Weekly report with sales & cash statistics within the branch will enable the branch manager to optimize staff & sales. Price The price has to be set in combination with collaborative innovation to integrate the system with the current systems and interfaces of the corporation. Activities links The JIT of cash and recycling at the front office will decrease the amount of cash within the store and will generate more interest. Actor Bonds The current relations as ‘cash transport’ can be used to establish the interest for the services. Resources ties Training of staff and customers to use the machines can be done by G4S. Also safety training can be outsourced to G4S. Also a new service for banks because they need to do ‘robbery training’ every 12 months. The safety of staff is a major attention point for the union of corporations. These unions and the internal and external audit companies should be made more aware of the risks and the possibilities. A recommendation of the external auditor is always a nice pull strategy. There are several innovative leading companies who influence the market, e.g. Albert Heijn. Awareness does not have to be created. The interest and trail needs to be established. This can be done by marketing at fairs, magazines bus more important relation meetings with CEO / CFO of current network. Collaborative innovation to tie several internal systems together. Union Audit G4S Fairs Companies Large Companies Labor Affairs Magazines Magazines Bank Insurance
  • 9. G4S can enter the new SME Supermarket & Retail market with various benefits of CASH360 G4S can offer CASH360 benefits to new markets like SME Retail stores 1 G4S needs to leverage its current relationships to collaboratively offer the new benefits 2 Promotion by focus cash and safety by helping shops who had a ‘criminal’ experience. 3 G4S needs to create interest via shop associations 4 Advice: Who, what & how (2) Activities links The branch information and analysis of the cash flows will help the entrepreneur to optimize his staffing and sales. Actor Bonds G4S need to use it current bonds with large corporation, e.g. via store association, to get in touch with SME’s. Resources ties A training centre for new staff will help the entrepreneur. Access to a ‘back up staff’ will give the entrepreneur less personal worries. For this G4S needs to train a group of staff member to use the machines. The local store manager will probably has local connections with the nearby store managesr or local shop association. Presentaion (promotion) for increase of safety can be held at these store associatios. Store Associations (e.g. Kalverstraat vereniging) are commonly known within the SME’s. First awareness need to be generated by focussing on shops that had recently theft or other criminal experience. A visit by a sales force is necessary to convince the entrepreneur to take the CASH360 on trail. The focus should be on the highly visible and active entrepreneur because this can generate a buzz marketing. Product CASH360 will decrease the counterfeit notes, cash shortage and sales uplift. The benefits depends on the type of branch and size of business e.g. Service Service included all the office supplies for the cash register. 100% service for CASH360. Advice Weekly report with sales statistics within the branch will help the retailer to manage his staff and staff expenses. Price A two year renting contract for the whole cash cycle gives the owner extra free cash flows. Based on the savings annually $ 24,000 (no CIT) a renting price of $ 1,000 saves the owner directly $ 1,000 per month. Union G4S Fairs Police SME Labor Affairs Magazines Insurance Other stores
  • 10. Various features of CASH360 are attractive offers to ‘single shop owners’ 1 G4S needs to leverage its current relationships to collaboratively offer the new benefits 2 Promotion by focus cash`and safety by helping shops who had a ‘criminal’ experience. 3 Advice: Who, what & how (3) G4S can enter the new market of ‘single shop owners’ with various benefits of CASH360 Product CASH360 will decrease the counterfeit notes, cash shortage and sales uplift. Product will enable the owner to more ‘off site’ activities which enable him to explore more entrepreneurship instead of counting money. He does not have to be afraid that his staff runs of with the money when he (or she) is not at the store. Service Service included all the office supplies for the cash register. 100% service. Advice Weekly report with sales statistics within the branch which enables the shop owner to improve his staff planning, opening hours and promotion activities. Price A two year renting contract the whole cash cycle gives the owner extra free cash flows. Based on the savings annually $ 24,000 a renting price of $ 1,000 saves the owner directly $ 1,000 per month. Activities links The branch information and analysis of the cash flows will help the entrepreneur to optimize his staffing and sales. Actor Bonds Cherish it’s ties with branch organization for V3 Marketing. Resources ties G4S can also supply ‘Staff & Security’ for a fixed amount of hours per month. This will enable the entrepreneur to deploy more ‘entrepreneurship’ instead of standing at the till. Provide free security training to entrepreneurs. First awareness need to be generated by focussing on shop areas which recently experienced theft or other criminal experience. All shops in this area need to be visited to offer free security training. After this the CASH360 can be placed on trail with the most visible and active entrepreneur because this can generate a buzz marketing. Union G4S Fairs Police Shop Magazines Insurance Store association Shops Shops Shops G4S needs to create interest via shop associations The local store manager will probably has local connections with the nearby store managesr or local shop association. Presentaion (promotion) for increase of safety can be held at these store associatios. Store Associations (e.g. Kalverstraat vereniging) are commonly known within the SME’s. 4
  • 11. Tidel makes the machines of the CASH360 and the estimated annual savings $ 1,000. Percentage here is unknow. But $ 1,000 on counterfeit notes seems quite high for a $ 200.000 shop. But since this is not the big saving we continue with the savings made by Tidel. Tidel ( www.tidel.com ) makes the machines of the CASH360 and the estimated annual savings $ 3,000. Which can be 15% of the 0.4% -1.7% spend on managing the cash proces. So the saving is for a $ 2.000.000 turnover shop (average spend 1%). So the turnover of the store is an important factor in determining the target shops. Tidel makes the machines of the CASH360 and the estimated annual savings $ 8,200. Percentage here is unknow. But an increase in sales if staff and management can focus on sales instead of couting money seems reasonable. Even staff at the till can spend more attention to the customer so they can focus on cross selling but also on service which will increase future sales. Tidel makes the machines of the CASH360 and the estimated annual savings $ 6,750. Which can be 75% of the 0.4% -1.7% spend on managing the cash proces. So the saving is for a $ 900.000 turnover shop (average spend 1%). The turnover of the shop is an factor to segmentate but also to number of tills and cash back offices and off course the costs of labor. Tidel makes the machines of the CASH360 and the estimated annual savings $ 8,200. Which can be 10% of the 0.4% -1.7% spend on managing the cash proces. So the saving is for a $ 8,200.000 turnover shop (average spend 1%). This is quite a large shop. So turnover is a key in determining the focus shops. But also smaller shops will benefits because it is commonly know that ‘theft’ of staff is a big issue. Value Assumptions Decrease in armored car expenses 1 Decrease in counterfeit notes 2 Increase in sales 3 Decrease in labor costs 4
      • Cash Shortage
    5
  • 12.
    • Secure Logistics. 2008. Retail solutions. An intelligent solution that really counts. May 2008.
    • PlatformDetailhandel Nederland. 2008. Nationaal Onderzoek Winkelcriminaliteit 2007.
    • Brits.H. & Winder.C. 2005. Payments are no free lunch. DNB Occasional Studies. Vol.3/Nr.2. 2005
    • National Forum on the Payment System . Report 2007. Report to the Minister of Finance. April 2008
    • Bowen. M. The outsourcing of the cash cycle. G4S Presentation
    References