2. Marketing Consumer Behaviour
Membership number: 14540806
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Date: 1st December 2012
Total Word Count: 6.189
(Excludes cover and content
pages/headings/diagrams/information contained within
references/appendices/bibliography).
Selected Organization: SKY Brasil Serviços Ltda.
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INTRODUCTION
The marketing plan is a part of SKYB’s business plan that focuses on “identifying,
anticipating and satisfying customers requirements profitably”. (Chartered Institute of
Marketing, cited in Drummond, G.; Ensor, J., 2005, p.2).
It is important to understand that, as Bruce Wrenn and Phylis Mansfield (2006, cited by Marketing
Planning Guide) suggests, planning may be defined as a managerial activity which involves:
- analyzing the environment to understand a general direction for the business;
- setting and achieve marketing objectives deciding on specific actions needs;
- deliver marketing strategies;
- providing feedback results to measure and evaluate the marketing activities.
Satisfying customers’ needs and creating relations by putting them at the centre of all of SKYB’s
activities makes the marketing team orientated. Therefore, SKYB is more likely to meet its business
objectives.
PURPOSE OF THE MARKETING PLAN
The marketing department at SKYB plays an essential role in developing products and services to
maximize customer profitability considering opportunities in external/internal resources, within specific
timescales and budget. Therefore, the marketing objectives are defined according to corporate planning
and objectives of the company.
Figure 1: Corporate and Marketing Planning Hierarchy at SKYB
Introduction to Marketing Concepts, 2005
Furthermore, the marketing department plays the role of establishing relationship and loyalty programs
between company and customer, to satisfy their expectations, remain competitive and grow the
business.
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MARKETING PLAN COMPONENTS
To create a marketing plan that reflects its external marketing, customers and internal needs, a planning
tool called P.R Smiths’ SOSTAC framework is the most widely used, and involves several stages:
Figure 2: SOSTAC Planning Model
Chaffey and Smith 2008
SITUATIONAL ANALYSIS – WHERE WE ARE NOW?
Involves analysis which includes a company’s past performance in terms of marketing
results, strengths and weaknesses analyzing environment, in terms of opportunities and
threats. (Paul R Smith et al, 2002).
For SKYB, is essential to consider an internal and external audit , separating them in 2 groups:
macro – PESTLE, economic, social, tech. and environmental trends (see figure 4).
micro – SWOT - customers, competitors, market positioning, culture etc (see figure 3).
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Figure 3: How to be a marketer, 2011
E.g.:
Strengths
- Best broadcasting company in Brazil when it comes to signal, national coverage, relationship and
loyalty with existing customers to optimization of the ROI.
- Market leader in technical assistance less than 24h.
Weaknesses
- Competitors - NTL, Cable & Wireless, benefit packages with low price.
- Requires satellite to be fitted.
Opportunities
- SKY on Demand (new tech. that offers recording in high definition on a set-top box).
- Partnerships with exclusive studios.
Threats
- Competitors expanding coverage using cable (so no satellite dish) and offering additional services such
as telephone + internet + TV packs.
Figure 4: Adapted from JISC, 2012
PESTLE analysis is an effect audit of SKYB’s environmental when they starts to develop research in
specific states in Brazil, or in establishing relations of business with emerging economies that are part of
BRIC (Brazil, Russia, India and China) association.
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OBJECTIVES – WHERE DO WE WANT TO BE?
Is an essential task of the marketing plan and has to be set in line with SKYB’s corporate and business
objectives, to ensure cohesive planning functions. On this basis SKYB’s cannot formulate your marketing
objectives until the overall objectives and strategies of your business have been defined.
E.g.:
Corporate Vision - “be the best broadcast company in High Definition in the Brazilian market”
Business Objectives – “overcoming direct competition with 50% market share until 2014”
Marketing Objectives – “increase sales of High Definition packages by 30% until the end of 2013.”
Objectives at different levels help to achieve overall company objectives and provide direction for the
plan, identifying appropriate strategies to achieve the goals.
The plan also needs to be evaluated, measured and monitored by marketing department, through
specific software’s and database dpt.
Influences
Internal
Stakeholders – shareholders, employees and trade unions;
Organization culture - vision, mission and values;
CRM;
Internal resources – financial, cash flow and staffing, lack of skilled staff encourage outsourcing.
External
Environment – PESTLE analysis (see figure 4);
Segmented publics - customers opinion and pressure groups such as Friends of the Earth and
Greenpeace against tech culture;
Competitive activities - other NTL, cable and wireless companies.
Process
One way to develop well-written objectives is to use S.M.A.R.T (see figure 5) approach.
Figure 5: S.M.A.R.T Diagram
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E.g.:
S: increase sales of HD packages by 30% until the end of the year.
M: 4K signings per month, which equates to approximately 3% market share.
A: taking into account primary and secondary research.
R: based on the amount of financial resources and staff expertise.
T: 3% market share objectives set for SKYB will be achieved by the end of Dec 31st 2013.
STRATEGY – HOW DO WE GET THERE?
Marketing Strategy is the means by which an organization sets out to achieve its
marketing objectives (Bassington and Pettitt, 2007).
Segmentation and positioning are determined at this stage.
E.g.: SKYB target customers in several groups, considering profile analysis, such as trend of migration to
HD technology packages and competitors, tenure, ROI, RM, disposable income, among other studies.
TACTICS AND ACTIONS – HOW EXACTLY DO WE GET THERE/WHICH WAY IS THE BEST?
These elements are implementation method used to carry out the strategic aims, applying the
Marketing Mix (see figure 06).
CONTROL – HOW DO WE MONITOR PERFORMANCE?
SKYB’s corporate plan sets the precedent for the overall direction, priorities and mission of the
organization, considering the highlights of all opportunities and threats to the business, which includes
consideration of market segmentation, targeting and positioning.
The company gathers customer feedback and promotes marketing analysis through information
systems, considering tools such as Balanced Scorecard and KPIs (Key Performance Indicators) to
evaluate and ensuring the quality of the plan.
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MARKETING TOOLS
Ray and Linton (2009) argue that to be effective, an organization must design the marketing mix to offer synergy and
consistency its channels members.
In this way, it can be defined as tools that SKYB uses to market its services, considering the 7 Ps:
Marketing Mix Element E.G.:
Product (Service)
- TV packs in Digital and HD technology, Broadband and TV Combos (channels + additional points).
- additionally, products are sold separately and can be added to the contract, such as movie channels(HBO and Telecine) , SKY
On Demand and Pay-Per-View.
Price
- penetrating and premium pricingis adopted according to package category, consideringniche customers profiles.
- SKYB compares attributes with competitors to ensure the best cost X benefit, and may decide to higher prices in order to
obtain a specific market share that no other broadcast company has.
Place
- several points of sales with more than 480 kiosks across all states of Brazil, representingmore than 53% of sales. In addition,
website (quick sale), phone (800), email or even letter also can be used to sell the service.
- installation is carried out by technical team at the region where the service was contracted.
Promotion
-advertis conducted on TV, radio, in cinema, online, using poster sites and in the pressfor example in newspapers and local
magazines.
-Other promotional methods include sales promotions, point of sale display, merchandising, direct mail (to new and existing
customers), door drops and loyalty schemes using celebrities(e.g. Gisele Bundchen) as ambassadors of the brand.
- this may be supported by in-kiosk promotions to get people to experiment the service and collect specific promotions to
encourage them to contract the service.
People - building specialized teams in different sectors helps organization to directefforts before,during and after sales.
Physical Evidence
- acquisition, relationship, retention and consequently customer satisfaction and new client referral.
- feedback is collected by Business Intelligence area and reported to Marketing area.
Processes
- operational excellence isone of the company’s strategic themes.
- Supply Chain area providesenough support to regional sales and guarantee resourcesto enable customer service in less than
24 hours.
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COMMUNICATION MIX
SKYB is aimed at not only creating awareness about the service but also to put efforts to bring in sales
and increase brand equity, persuading customers to experiment and buy concepts.
E.g.:
Advertising: massive media campaigns promoting new packs will promote awareness and long
term relationship between the customer and brand.
Sales Promotion: boost the sale mostly at declining stage of specific packages, using discounts
via e-mail marketing. Good for short term relationship.
PR: Facebook campaigns to communicate mass audiences and charitable functions about timely
payment, stimulating awareness and demand for SKYB services.
Personal Selling: cost-effective, even with travel cost and incentives to sales team boost the
results. Customers look at the packs that suits best to their needs and tell the sales
representative about their questions and needs.
Direct Marketing: campaigns by sending e-mail who purchases specific pay-per-view movies,
giving 30% off discount on future purchases. This approach requires data that can be tracked
and measured from its target audience.
MARKETING TECHNIQUES
Can be considered a procedure used to carry out a particular task:
Growth
Diversification: largely because both the products and the market are unproven territory for
the entrepreneur.
Market Development : It's even possible to develop a new market for existing products by
adjusting the service's packaging or expanding the services distribution channels.
Product Development: based on product development is the mirror image of a market
development strategy.
Market Penetration: usually seeks to gain a competitive edge through pricing or other
initiatives.
Competing
Cost leadership: the objective is to become the lowest-cost producer in the service sector.
Differentiation: SKYB business targets much larger markets and aims to achieve competitive
advantage across the whole of an industry.
Focus: aims to differentiate within just one or a small number of target market segments.
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Communication
Push: direct selling and events for customers at SKYB where a great deal of personal selling is
involved.
Pull: Free trials, coupons and competitions. This is a good strategy because the service demand
is high, customers use the brand as part of their purchase decision.
Profile: sustaining dialog with customers and keeping them up to date with progress, through e-
mails, newsletters and progress reports.
Distribution
Intensive: a producer sells its service through every possible outlet in the market, where a
consumer might reasonably look for it.
Selective: a producer sells its product through multiple, but by not all possible wholesalers and
retailers in a market.
Exclusive: the producer gives only to limited number of dealers the exclusive right to distribute
its products in their territories.
Word Count: 1322 (excludes references, appendices and bibliography)
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1. Research Objectives:
E.g.: the Customer Service area reported a steady increase in 2.0% of HD customers of churn who had
intention to cancel the contract for the last year. Thereby, the objective is identifying the main reasons
for why customers behave this way.
2. Research Plan: concerns the development of a plan that is efficient in meet the problem /
opportunity. It constitutes:
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2.1. Data sources: can be from a primary source, secondary or both.
2.2. Research approaches:
E.g.: in depth interview(open-ended questions, freedom to answer the in their own way). Effective for
“pro-churn” profile that will provide confidential information about dissatisfaction, trend to migrate to
competitors, disposable income etc.
2.3. Research Instruments:
2.4. Sampling plan: sampling size, unit and procedure to recruit the group of interest for the study.
E.g.: sample of 50 customers with packages in high definition, above average ticket of R$200.00, 2 or
more contact in Retention area to cancel their contract.
2.5. Contact method:
E.g.: face to face, to ensure attention and minimize the risk of omissions.
3.0 Data Collection: desired method of the company and most expensive stage.
E.g.: extract the information and track details, such as personal data, purchase history, average ticket,
amount of complaints etc.
4.0 Data analysis: Gathered data in line with the company procedure, using statistical and non-statistical
data.
E.g.: in depth interview, involving re-reading the transcripts to identify themes emerging. It is crucial to
considerate data collection rounds, primary undertakings and manipulations during the research.
5.0 Present the findings: is the preparation of reports with data on the research, presenting
methodology and conclusion.
6.0 Decision Making: The mkt managers should examine the evidences, and decide whether or not to
continue the project, considering minimize risks and optimize opportunities.
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Alan Wilson (2006), argue that a secondary data is information that has previously been
gathered for some purpose other than the current research project.
USES
A secondary source is essential to contain the results of large surveys with cost inaccessible.
SOURCES
E.g.:
Industry associations as ANATEL presenting performance indicators and Pay TV analysis in Brazil.
Internal updates reports from research institutes, as IBOPE and market report websites, with
data market indicators to measure the service format, price positioning e etc.
Press articles: Impress Official to conduct investigations of brand perception
Nagios monitoring tool to identify trends regarding TV services.
SKYB’s studies offer insights and with a quantitative study in 2010 offering a big amount of
information regarding customer’s behaviour towards brand and service innovation sector.
BENEFITS
Low or no cost.
Faster than primary data.
Identify evidences and hypothesis, giving new directions for the research.
LIMITATIONS
Might be manipulated seeking different goals, may not sufficient for a 100% effective survey.
E.g.: sources are not comparable or equivalent, such as ANATEL’s (National Communication Agency)
reports about Service Regulations v. IBOPE’s (Brazilian Institute of Public Opinion and Statistics) reports
about consumer behaviour.
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USES
Jan Wiid and Colin Diggines (2009) argue that primary data is the information that has
not been collected before. In other words, it did not previously exist and is collected to
address a specific problem.
E.g.: statistics surveys polls about level of satisfaction and questionnaires about customer profile and
first -hand accounts of SKYB magazine events.
METHODS
E.g.:
SKYB’s primary data regarding the development of new loyalty strategies can be obtained
through methods.
Qualitative focus groups and in depth Interview to evaluate customer behavior about new
technologies in the market, consumption habits and brand perception.
Quantitative surveys as can be carried out to measure satisfaction about overall service and
estimate retention and loyalty potential.
Positive aspects: sampling is more controllable, face-to-face interview allows for greater interaction,
visuals may be used, allows for more complex questions and interviewer can probe responses.
Negative aspects: expensive per interview, difficult to reach people in out of way locations and bias
caused by appearance of interviewer.
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BENEFITS
The primary research is conducted for a specific objective. Therefore, the data is current updated,
exclusive and relevant to the problem.
LIMITATIONS
demands additional resources in budget and time;
more expensive than secondary data;
massive process in planning, recruiting, implementing and processing the whole information.
The best option is to outsource research agencies for some specific needs when it comes to deeper
analysis.
KEY CONCLUSION
SKYB considers a combination of secondary data to assist in the diagnosis, check the key points and
develop hypotheses to solve the problems. At this stage, it is advisable combine primary data to propose
cohesive solutions about the previous analyses.
Word Count: 702 (excludes references, appendices and bibliography)
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To: Marketing Manager
From: Marketing Assistant
Subject: Consumer Behavior Report
Date: 01 October 2012
1.0 Executive Summary
This report will explain the main concepts of buying behavior, identify the importance of customers to
the SKYB, evidence the differences between consumer and organizational buying behavior, clarify the
significance of the business decision making unit and the decision making process and elucidate the
need for effective internal communications to create good internal relationships, establish and maintain
good customer relationships.
These points will help to understand the impact of customer’s personality, why they make the purchases
that they make, what factors influence customer purchases and the changing factors in our society.
Table of contents
2.0 Introduction
3.0 Importance of customers
4.0 The main concept of consumer and organizational buying behavior
4.1 The differences between consumer and organizational buying behavior
5.0 Decision Making Unit (DMU)
6.0 Decision Making Process
7.0 Internal Communications
8.0 Conclusion
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2.0 Introduction
SKYB is a service satellite broadcasting company headquartered in Sao Paulo, Brazil, with operations
across the country. Founded on 11 November 1996, today is the largest branch in Latin America thanks
to the merger with former competitor DirecTV Brazil. In late 2011 the company pay TV recorded 4.0
million of customers, the second largest operator with more subscribers. The core business of SKYB is
focused on B2C market. However, since 2012 there is a small Acquisition department starting to create
a few and specific strategies directed only to B2B market.
3.0 Importance of customers
For SKYB understanding customers and target business is the key to success while not understanding
them is a recipe for failure. For marketing area simply finding customers and companies who are willing
to purchase their services is not enough to build a successful marketing strategy.
The company defines a “good” customer as one who holds the potential to undertake activities that
offer long-term value to an organization. The activities performed by customers not only include
purchasing products, these also include such things as:
feedback on company performance;
prompt payment;
suggestions for new product, voluntarily.
Thereby, in the competitive market, SKYB considers important aspects such as profitable transactions in
order to maximize the profitability ensuring longer term survival, create positive opinion in order to get
support for different organizational activities and enhancing the brand through positive word of mouth
(WOM) communication.
In summary, customer’s needs could be summarized by the following features:
Bring in revenue to the business through profitable trading activity;
Turnover of the continuous flow through profitable transactions will ensure perpetuity of
business;
Positive opinion will be spread in public if the service is provided with excellence.
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4.0 The main concept of consumer and organizational buying behavior
Consumer behavior can be defined as the acts of individuals directly involved in
obtaining and using economic goods and services, including the decision processes that
precede and determine these acts. (Lancaster et al, 2005).
Khan (2006) argued that organizational buying behavior is a complex process of
decision-making and communication. It takes time, involves several members and
considerations such as need recognition, definition of characteristic and quantity
needed, development of specification to guide the procurement, acquisition and analysis
of proposal, performance feedback, evaluation etc.
Many buying decisions involve simple and complex mental processes, based on personal, social, cultural
and emotional reasons, such as image and impulse (e.g.: the act of buying an expensive clothes or even
a brand new flavor of a juice at the supermarket), rather than rational thinking, such as price and
analyze. (e.g.: large investments like car or an apartment, or even service contracts like mobile phones
and subscription TV).
In other words, organizational buying behavior is more functional and controlled.
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4.1 The differences between consumer and organizational buying behavior
Factor Consumer (B2C) Organisational (B2B)
Emotional /Rational
-based on emotion, cultural , social, personal and
psychological factors.
E.g: customer may buy the service at SKYB under culture,
social class, reference groups, family, stage in life cycle,
economic condition, personality, motivation, and perception.
-based on rational, tangible and realistic factors.
E.g.: Accenture company, consulting company focused on
application of technologies to business. Responsible for sales,
delivery, and leadership projects.
Type and size of Purchase
-wide range of products, single or low quantity.
-consumer buying dependant on the purchase can be
impulse buying.
-low and high involvement.
E.g: customers have to choose one channel package, and in
a future SKYB offers additional products that can be added.
-complex, takes longer, more people evolved, formalized
with negotiations and big amount of investment.
-can be routine buying, limited or extensive, involving the
whole DMU.
Importance of long-term relationships
-long-Term relationship is difficult.
-less personal.
-delivers a positive experience in order to endorse the
business with new and existings customers.
-efforts are made to create relationship and loyalty to the
customer to keep buying the product.
E.g: SKYB has a huge relationship program called VIVA SKY
with more than 80% of registered and active customers .
Mass and direct media is more effective to this strategy.
-long-Term relationship is easy, fewer buyers, spend and buy
more.
-personal selling is the most appropriate form of
communication.
Associated or perceived risks
-low involvement: inexpensive, few information, quick
purchase.
E.g.: shampoo in a supermarket.
-high involvement: big investment, research involved, effort
to find out if it is worth or not.
E.g: channel packages at SKYB. The customer needs to
consider real needs X futility , its willingness to take on a
financial contract , check the prices and compare the
services of competitors etc.
-routine purchases involving trusted contractors and
suppliers.
-short term purchasing agreements in lower quantity when
trying a new supplier.
-relashionship with suppliers is essencial to ensure constancy
of business.
Number of buyers involved
- high volume.
E.g.: SKYB manages more than 4MM of customers in its
base
-low volume in generally large contracts duration.
-many times with different market segments.
-the effort targeted is more personalized and unique.
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5.0 Decision Making Unit
The structure of the DMU can also be examined in terms of the different functions that are represented.
These roles can be placed broadly into six categories:
1) Users – all areas of SKYB (finance, marketing, communication, supply chain, business
intelligence, intelli-churn, WEB etc) which are players who recognize that there is a need to be
satisfied or a problem to be solved.
E.g.: invest more in customers who tend to cancel their contracts with direct marketing
campaigns, in order to optimize the indices of retention.
2) Influencers – SKYB has consultants employed by businesses to help deciders make a final
decision and lawyers employed to offer legal advice. They have a persuasive role in relation to
the deciders and are specialists who make recommendations based upon experience and their
knowledge of services.
3) Deciders - their role carries the responsibility of placing the final order. The company has senior
managers and correspondents in each brunch on behalf of an organization in the market,
reviewing the information provided from lower down the buyer decision process from the
buyers, gatekeepers and the original initiators.
4) Approvers - The supply chain and financial area often are the budget holders. They are
responsible for defining, distribute and monitor budgets of each area at SKYB.
5) Buyers – This function within an SKYB generally responsible for purchasing. They are given a
brief with a series of criteria against which to judge potential products or services, and their
suppliers. They tend to be responsible for sourcing and negotiation. They are also responsible
for assessing the extra demands that will exceed the pre-set budget and decide if the purchase
will be done or not.
6) Gatekeepers - control access to the rest of the DMU and may be such as analysts and
secretaries who control whether suppliers can get to speak or meet any of the individuals
above.
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Figure 01: Relationships in the DMU
Blythe 2006
6.0 Decision Making Process
Khan (2006) argued that DMU consists of a series of steps which consumer undergoes.
First of all, the decision is made to solve a problem of any kind. Costumers keep making
decisions to buy products and services of their choice, and it is influenced by internal
determinants (memory, personality, self-concept, attitude, motivation and
involvement), and external determinants (cultural, social group, family etc).
The steps included in decision-making are:
Figure 02: Decision Process
Khan 2006
Problem recognition – perceiving a need
When we found out a difference between the actual state and a desired state, a problem is recognized,
and when we find, we usually try to solve the problem. In other words, we recognize the need to solve
the problem.
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E.g.: A man realize that open channels of television are limited and offer little entertainment and culture
for your family.
Information search – seeking value
Internal searches can be used scanning one’s memory to recall previous experiences with brands, often
sufficient for frequently purchased products.
Also, the customer can recover in personal sources (friends), public sources (consumer reports) and
finally marketer dominated sources (research websites, salespeople etc.)
E.g.: A man becomes more attentive to the content of channel TV and technology, TV services contracted
by his friends, and peer conversations about satisfaction and worthwhile. He may more actively seek
information by visiting sales kiosks, talking to salesperson, or reading online TV subscription reviews,
among others.
Evaluation of alternatives / selection – assessing value
How the customers process competitive brand information and evaluate the value of the brands.
E.g.: Through gathering information, a man learns more a total set of brands available to him that
compete in the TV subscription market, their features and characteristics. He will become aware of only
a subset of the brands (awareness set) in the market. Some of these brands may satisfy him initial
buying criteria, such as price and processing speed. As man proceeds to more information search, only a
one will remain as strong candidates (choice set).
Purchase decision – buying value
The purchase decision cannot be influenced easily, it takes rational decisions considering advantages
and disadvantages of when, how, from where, what and from whom to buy.
E.g.: Although the service is more expensive, a man chooses SKYB taking into consideration signal quality
combined with a robust technical support. Also, in terms of sale and term duration of contract is the best
cost-benefit.
Post purchase behavior – value in consumption or use
After buying a product, the customer compares it with expectations and is either satisfied or dissatisfied.
E.g.: SKYB produce a positive post purchase communication (personalized e-mail layout) in order to build
a relationship between company and customers, and follow-up calls from salespeople in this stage trying
to convince customers that the man made the right decision.
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7.0 Internal Communication
Importance to create good relationship
Internal communication has been recognized as a strategic focus for business
communication, second only to leadership concerns (Barnfield, 2003).
Jo and Shim (2005) note that “given the emerging paradigm of public relations by
relationship management, the terms of internal communication need to be redefined as
part of building favorable relationships between management and employees” (p.278).
Thus, without an effective internal communications, employees and areas will work in isolation and this
will substantially reduce employee satisfaction and organizational performance. Innovators strategies to
facilitate better interaction will enhance employee relations and build on the credibility of managers and
the communications process.
Besides, this is necessary to make the employees motivated and involved with brand such that they are
able to present a consistent uniform message to non-members and new customers.
Some key benefits for SKYB to utilize internal communication to building a strong corporate culture
capable of sustained growth and increased profitability:
Mid-level management spends more time increasing revenue and profitability;
Human Resources produces more and costs less;
Marketing ROI increases;
Employee satisfaction and retention increases.
Importance to establish good relationships
Once customer needs are identified, all areas should contribute for addressing those, responding
customer’s desires on time.
Some key factors to consider in SKYB’s:
Customer Experience strategies, which includes:
Understand the overall company vision, mission and values.
Ensure customer service is defined as a key responsibility for the mkt department.
Share the customer experience strategy via comprehensive communications plan.
Ensure that this strategy does not conflict with other strategies of the company.
Rewards: the loyalty program VIVA SKY offers rewards and benefits, especially for customers
with high disposable income. Each invoice paid, points are accumulated, so the more customers
spend, the more they earn.
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Specific events: with the renewed interest in retaining and up-selling current customers,
company -sponsored special events is a good bet.
Customers' opinions using online tools: create interaction is the best option, including asking
for feedback through SKYB’s web site and e-newsletters, online customer surveys and providing
message boards.
Solve problems: a dedicated channel for resolving customer problems quickly and effectively,
including online customer assistance. This will help you to create positive word-of-mouth and
increase sales from new customers as a result.
Enchantment: send cards and call to customers to express how grateful the company is for
them. That one simple act will make the customers feel respected, valued, and appreciated.
Online communication: newsletters, emails, tweet, and Facebook status updates (social media
in general) is an appropriate way for staying connected and incorporating soft sells.
Annual reports: Product quality reports and company reports keep customers apprised.
Constant adaption of the business plan: with economic climate and industry trends change,
making the business plan a living and breathing document, not a static manuscript that resides
on a bookcase.
Importance to maintain good relationships
Maintaining customer relationships requires a number of activities, such as better service,
improvements in services, prompt response, continuously adding value to services etc.
In this context, that ensures employee interaction, motivation and contribution through different
communications tools:
Company newsletter (paper and electronic)
Intranet site
Small group meetings
Suggestion boxes
Posters
Crisis communications tools
Orientation material for new employees
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The SKYB also uses as a part of their business strategy the customer relationship management (CRM)
software that addresses customer life cycle management business processes, and provides functionality
to enterprises in sales, marketing and customer service (including call and contact centers) through
collaborative, operational and analytical components, such as:
build database, listing the names, profiles etc.
Identify potential targets most loyal to the company and draw up a plan for building customer
loyalty, like special schemers, offers, incentives etc.
communication with customers: emails, newsletters, anniversary cards, gifts, invitations to
special events to build customer relationships.
8.0 Conclusion
The image that employees have their own organization is the basis of the external image of the
company. For this reason, SKYB keep in mind that employees are also their “customers”, and, moreover,
are the ones who really do the business. It is with their work that the organization remains active,
producing and generating profits, and this "gears" to work in the best possible way.
Therefore, there is no better communication strategy than turning employees into ambassadors for the
business.
Word Count: 1.792 (excludes references, appendices and bibliography)
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To: Marketing Manager
From: Marketing Assistant
Subject: Channel Behaviour Report
Date: 01 October 2012
1.0 Executive Summary
This report will explain the main concepts of channel behaviour, identify the role of marketing
communications activities the SKYB, evidence the aspects that motivates and maintain trust among
channel members. These points will help to understand the digital channels for distribution, as well as
their pros and cons, considering the impact on existing and traditional channels.
Table of contents
2.0 Introduction
3.0 Role of marketing communication activities
4.0 Motivate channel members
5.0 Maintain trust among channel Members
6.0 Digital channels for distribution
7.0 The impact of digital channels on existing and traditional channels
8.0 Conclusion
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2.0 Introduction
This article discusses how marketing distribution channel at SKYB will manage an effective
communication in order to reach their target customers and maintain a position as the greatest
broadcast company in Brazil and among largest in Latin America.
3.0 Role of marketing communication activities
Communication is the glue that holds together a channel of distribution, to attract and motivate
customers, maintain trust, resolve conflicts, reinforce commitment and build satisfaction.
E.g.:
Provide incentives such as cultural contests in order to encourage partners to optimize the
company's profits;
Meetings about the strategy of distribution and reallocation of decoders;
Communicate information on time before getting wrong information from third parties;
Develop a two-way interactive communication process between parties in order to developing
trust and credibility.
4.0 Motivate channel members
Push communication strategy
The push strategy “pushes” a service through the trade channels.
This results in a better competitive position for SKYB, because all participants make more profit with the
sale of this service than with others.
Figure 1: Learnmarketing, 2010
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SKYB utilizes tools to push the packages through the marketing channels teams:
Trade magazine: advertising content focused on the service industry in question with little if
any general-audience advertising.
Direct marketing: e-mail marketing, sent to segmented channel members, also re –sales,
relationship and retention groups and SMS message (mobile).The information is purchased from
outsourced companies.
Trade promotion: direct campaigns at wholesalers or retailers. In a trade promotion,
wholesalers and retailers are offered special discounts (often in addition to a trade allowance),
subsidized or free display racks, or stands, gifts, or other incentives.
Joint Advertising: paid for by sponsors and viewed via various traditional media, including mass
media such as newspaper and magazines or new medias such as blogs and social media.
The benefits are high members attention, customized message, interactivity, persuasive impact,
potential for development of relationship, adaptable and opportunity to close the sale.
Pull Communication Strategy
Figure: 2 Learnmarketing, 2010
The pull strategy focuses its marketing activities to the customer, creating loyalty with that a customer
demands only the own product.
SKYB offers as a sales point:
Phone support: receptive support for issues related to sales, technical support, retention,
negotiation and relationship.
E-commerce: service contract and new equipment request.
Letter: request of contact by customers
Kiosks: the largest and most comprehensive sales channel, throughout the national territory.
It is essential motivating channel members selecting the most effective sales staff, because most
channel intermediaries like to work together and are motivated by the association.
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Figure 3: Motivators Used For Motivating Channel Members.
Basics of Distribution Management: A Logistical Approach
5.0 Maintain trust among channel members
It is essential to provide accurate and sufficient information in company to build a close relationship
between SKYB and channels as well as among customers and sales team.
The SKYB adopts Public Relations activities that manage relationships between suppliers, investors,
partners, retailers, point of sale, distributors and other stakeholders in order to raise information of the
brand and the company’s activities in terms of leadership and political decisions.
6.0 Digital Channels for distribution
I. Internet – most quick way to request the service, the partner simply enters on the portal and
performs the transaction.
II. Affiliate networks - GoogleAdsense to increase online conversions on a performance basis and
enables publishers to monetize traffic with affiliate ads, which guarantees:
Global affiliate publishers
Simple link and creative delivery tools
Reliable conversion tracking
Automated publisher payments via AdSense
Advantages:
Low cost as no commissions or discounts given for intermediaries
Organization has control over distribution activities about packages
Can get the feedback from members directly
Disadvantages:
Unable to reach to all market segments through digital channels
Customers are not willing to buy their first package (contract) online as they prefer to collect
information and try the service in real life.
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7.0 The impact of digital channels on existing and traditional channels
The traditional channels members such as agents, retailers etc don’t like the company to directly sell to
end customers as it reduces their commissions and discounts. This may create channel conflicts in the
longer term.
8.0 Conclusion
This task exemplified important points regarding the distribution and channel members, considering the
logistics processes responsible for the administration of the materials, from the hiring of service and
decoder output production line to delivery at the final destination. The SKYB sells the product to the
partners and then to final consumers. Within this context we can see a number of variables and trade-
off decisions to be taken by professionals involved in logistics process.
Word Count: 771 (excludes references, appendices and bibliography)
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To: Marketing Manager
From: Marketing Assistant
Subject: Communication Plan Report
Date: 01 October 2012
1.0 Executive Summary
The purpose of this report will show the main aspects of communication plan, Identify the profile of
customers at SKYB, evidence the communication tools and activities, clarify the significance of the
objectives focused on retention / loyalty and elucidate the need for an effective target, budget and
control. These points will help the company retain their customers and exceed the expectations of
business.
Table of contents
2.0 Introduction
3.0 Current communication activities
4.0 Communication Tools
5.0 Objectives
6.0 Target
7.0 Communication Mix
8.0 Budget
9.0 Control
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2.0 Introduction
SKYB and one of the largest pay TV in Brazil, so is always in constant development with innovative
approaches and communication plans to reach a target audience using several channels of marketing
communication, always concerned with who is the target, when, how and with what message.
3.0 Current communication activities
First the advertisement must receive "attention". Second, having attention it must
create "interest". Third, having the reader's interest it must create "desire to buy".
Fourth, having created the desire to buy it should help "decision". (Ferrell, O.C et al,
2005).
Therefore, AIDA interest model is an acronym used in marketing and advertising that consists in
different phases that lead to the purchase of a service.
These are the 4 steps that SKYB needs to take your audience through to make the customers to buy the
packages, or indeed to take on board the messages in your report:
Attention: attract the attention of the customer.
Interest: raise customer interest by focusing on and demonstrating advantages and benefits,
instead of focusing on features.
Desire: convince customers that they want and desire the service and that it will satisfy their
needs.
Action: lead customers towards taking action and/or purchasing.
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4.0 Communication Tools
Strengths Weaknesses E.g.
Advertising
- attract customers and aware them about availability of packages
for all audiences;
- reach a large numbers of people on a national or regional level in a
short period of time.
-messageis temporary, require multiple exposures for the
ad to rise above the clutter;
- expensive in terms of creative and production costs.
- commercial TV to launch new SKYB Apps
for Ipad and Iphone;
- messageshould be summarized in 30 “;
- ad will be only in some regions of Brazil,
for limitation of contract with pay TV
operators.
Personal Selling
- allows the salesperson to target the messagespecifically to the
audience and receive immediate feedback;
-more precise than other forms of promotion;
- greater persuasive impact;
- source of marketing information, helping the company to build
loyal and long-term relationships with customers.
-cannot reach as manypotential customers;
-costof each contact is much higher;
- high cost-per-action (CPA) each time a salesperson
contacts a potential customer, including compensation (e.g.,
salary, commissionand bonus);
- training costs to sales staffis expensive including training
programs, travel, hotel etc.
-salespeople learn about competitors'
services, preparing a speech and a
persuasiveapproach about SKYB service;
- acting as problem solvers and advisors
for customers rather than using hard-sell
tactics.
Public Relations
-highly credible form of SKYB’s promotion;
- establish credibility for a service, company or person in the minds
of targeted customer groups by capitalizing on the influence of a
third-party;
- target market being exposed to more detailed information than
they receive with other forms of promotion;
- objectives can be achieved at very low cost when compared to
other promotional efforts.
-convey information about new packages or facts to a
member of the news media (e.g., reporter) who then recraft
the information as part of a news story or feature;
-the final messagemaynot be precisely what the marketer
planned.
- PR statementabout the details of an
event on the launch of the technology in
HighDefinition for a newspaper;
- date and event details interpreted
wrongly by reporter and disseminated;
- result : negative impact in social
networks and public opinion.
Direct Marketing
- direct business of SKYB approach have beneficial costs for
customers, as there is no price hike due to wholesalers or retailers;
- exact response to their communication.
- could offend the customers and manydo not endorse it as
they say it inhibits their private lives.
-e-mail marketing with information about
new invoice prices;
-Result:irritation of the customer and
impact on cell customer service.
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5.0 Objectives
1) Retention
Increase the number of repeat packages purchases made per customer by 5% within the next 12
months.
2) Loyalty
Raising the index of utilization of program points to redeem VIVA SKY physical gifts and extra
program packages by 20% within the next 12 months.
The best way to develop well-written objectives is to use S.M.A.R.T approach.
E.g.:
Specific: Increase overall customer retention in 5% by the end of 2013.
Measurable: it is important to consider 3, 5 million existing customers in conditions above, which
equates to approximately 2% of market share.
Achievable: taking into account primary and secondary research and facts from our market
share data SKYB do believe the objectives set are achievable.
Realistic: considering the amount of financial resources and staff expertise SKYB do believe that
objectives set are realistic. It is important to assess the behavior of customers with intention to
cancel the service and overdue invoices. These data can be captured with teams of business
intelligence, retention and negotiation.
Targeted/Times: it is the expected that objectives set for SKYB will be achievable by the end of
31st
December 2014.
6.0 Target
The customer profile on SKYB can be identified through the systemic filters that allow the company
to direct efforts to specific groups of customers, such as historical consumption of products coupled
to the package, trend of migration to competitors, intention to cancel the service etc.
I. Retention: customers between 1 to 3 years in SKYB bases with score of intention to cancel the
service in = < 30 %, main capitals of Brazil such as São Paulo and Rio de Janeiro, no more than 1
register in retention and negotiation areas and already registered in the loyalty program VIVA SKY.
II. Loyalty: customers already registered with minimum 6 months in the loyalty program VIVA SKY, low
and average index of redeem physical gifts and optional packages, high value customers with
monthly ticket > £60,00 (R$200,00), located in main capital of Brazil such as Sao Paulo and Rio de
Janeiro.
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7.0 Communication Mix
The marketing communication provides a menu of communication methods which can
be used separately or ideally blended to achieve communication objectives. (Dahlen et
al, 2006).
The communication plan should be designed based on specific profile audiences who the company
wants to relate, enchant and retain. This is an exclusive customer segmentation that SKYB prioritizes in
their business plan, developing strategies listed below in accordance with company objectives.
Direct Marketing with online tools:
Display Ads is interactive ads that appear on the next to content on web pages or web services.
Formats include static banners, pop ups, videos, and floating units.
E.g.: each customer has their own login and password, so when log-in, they can click on the ad about an
exclusive package sale via website, find more detailed information and request the purchase online.
Search that advertisers pay for prominent placement among listings in search engines whenever
a potential customer enters a relevant search term, allowing ads to be delivered to customers
based upon their already-indicated search criteria.
E.g.: Key -words are determined by the company. At the time that customer perform research about
themes like movies, entertainment and TV subscription, the first sponsored link will be SKYB and their
packages.
Social Media
E.g.: Facebook and Twitter provide opportunities for SKYB communicate directly with customers by
tracking and creating content to which customers can respond.
E-mail Marketing: applicable to the audience due to targeted content that can be developed.
This channel offer advantages such as cost saving, easy tracking and time optimization
The only issue about email marketing it is reliability and reputation.
E.g.: simple layout with differential approach on the company (raising the perception of VIVA SKY), or “a
la carte” product offers such as Cine SKY (Pay-per-view), HBO or Telecine channels. The acceptance can
be made through the e-mail (opt-in).
E-Decoder (text message on TV screen via satellite): this feature is widely used when it comes
to specific actions customer relationship.
E.g.: consider this channel for notification of new premieres of pay- per-view, exclusive channel releases,
incentive to redeem gifts and extras at VIVA SKY and etc.
Mobile (SMS): important to estabilish instant enchant in order to provide highly interactive
constant touch with customers. Other benefits can be considered, such as easy way to gather
data, instant results, huge viral potential, micro blogging and mobile payment.
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The main disadvantage is that only short messages can be sent.
E.g.: this channel is extremely important to notice delinquent customers about the due date of the
invoice. Also used to warn customers about specific partnerships such as cinemas, travel agencies etc.
The customer can make the payment of the invoice, check the news about SKYB and share this
information in social medias, such as Facebook, Twitter etc.
Direct mail: A solo advertising piece that only contains institutional information about the
company. This channel is expensive, but highly informative, targeted market, and easy to track,
which allows a company to easily compute their return on investment (ROI).
E.g.: an exclusive institutional material of VIVA SKY would be send, based on utilized points on the
program and key demographics, such as gender, age, household income, household size and profession.
Some components of the communication mix are not suitable for this plan, because involve massed
information, which cannot effect arises when it comes to specific audiences, such as TV, radio, social
media mass publications to create awareness about the brand, online advertising, PR etc.
8.0 Budget
The company has annual fee contract with advertising agencies and database marketing consultancies.
For this reason, the best budget to apply is the objective and task method for determining expenses per
channel allocating the marketing budget based on set objectives.
To use this method, SKYB define the desired results of advertising and the strategies and tactics required
to achieve these results. Additionally, no financial restrictions exists, SKYB can build its marketing budget
by examining each goal and the tasks necessary to reach these objectives:
A primary challenge associated with this method is the difficulty of accurately assessing the direct
marketing costs necessary to accomplish the objectives.
9.0 Control
It is important to consider Key Performance Indicators (KPI) to measure factors that relate to SKYB
objectives, in order to promote changes in processes, providing a way to report back successes in
organizational structure or management.
E.g. of KPIs in the context of retention and loyalty:
Percentage of customer opinion surveys completed about VIVA SKY loyalty program
Average customer retention figures
Number of complaints received subcategorized in specific subjects
Customer retention rate
Percentage of purchase made on time
Percentage of decoder deliveries received on time
Number of decoder deliveries involving incorrect quantities
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Many of these customer KPIs are developed and managed with customer relationship management
software.
Pre testing
Send email and SMS in advance
Before to start-up the actions, it is advisable to test the market system and effectiveness of channels
sending the communication to a small group of customers, considering the same planned audience.
Focus Group
Customers brought together to "focus" on a topic or subject, and give their opinion about the brand,
service, monthly prices and technical support.
Post Testing
Control group
Customers who get what you have always sent, while test groups get something new and different. You
learn by comparing the response and conversion rates of the two groups. Each group has to be large
enough to give statistically valid results.
Measuring the effect on the best customers
The objective is to analyze the spending habits of customers. E.g: e-mail are announcing free pay-per-
view, the company may be doing a good job with their least valuable customers. This gold group may be
unsatisfied for some reason but willing to pay full price because they have money.
Long-Term effects in terms of retention
The campaigns are measured by return on investment. E.g.: E-mail marketing may bring customers
in to the SKYB website. They may or may not accept the offer. The company measures their ROI by
those who click on e-mail and accept the offer.
Example of what to Test + Control:
- Total response by various media
- Total number of offer acceptance
- Cost per lead, and by media
- What subject is more interesting for customers
- How is payment made, check, credit card, PO, cash
- Life time value of the customer
8.0 Conclusion
The SKYB believes a consistent communication plan involves different phases to the success of any
strategic company. Therefore , it is necessary to take into consideration the real needs of the audiences
and direct efforts to promote segemented plans , according to different profiles and desires.
Word Count: 1.602 (excludes references, appendices and bibliography)
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APPENDIX ONE
Company Background
SKY Brasil Serviços Ltda.
SKY Brasil is a B2C company of satellite pay television in Brazil founded on 11 November 1996 and today
is the largest operator in Latin America.
The group SKY + DirecTV form a giant audiovisual distributor and is a subsidiary of British Sky. In 2011
the company pay TV recorded 3.8 million digital subscribers, and the number of HD subscribers is
836,000, up 127%.
According to Anatel (National Telecommunications Agency in Brazil), in February 2012 the company
managed 4.01 million subscribers. In August of the same year this figure accounted for about 4.5 million,
the second largest operator with more users in comparison with competitor NET.
Services
SKY Livre
The company launched on July 4, 2008 a prepaid service, whereby the customer purchases a
decoder and prepaid recharges as the number of days you wish to attend (5 to 100 days). The
service already has 100,000 customers (1 % of the base). The services of Pay per view (PPV)
were not available until 2010, when the company launched three new packages: The Sky Fit,
Light the Sky and Sky Mix.
SKY Broadband
In October 2011 the satellite TV operator in partnership with Nokia Siemens announced
Telebrás and provide for Brasília - DF, being the first broadcasting company to provide
technology in Latin America. On 14 December the same year the carrier announced 4G Internet
services only to the Federal District.
SKY on Demand
Released on May 18, 2010 is a rental service available only to subscribers of high definition
channels that allows the purchase of services by internet or phone, which includes films,
concerts and events, after purchase the content is stored in the machine up to 24h for viewing.
SKY Online
On February 15, 2012 SKY launched the "Sky Online", in which only users of cable TV can watch
movies on your computer, where they can be purchased or rented.
SKY Tunes
In April 2012 it launched the SKY Tunes, user -facing iPad and iPhone.
Cine SKY (Pay-per-View)
Formerly known as Cine Premiere is an option to purchase movies on the Internet by the
website, by phone or device connected to the network telephone.
Viva SKY
Released on August 22, 2007 is a loyalty program available to subscribers only, which customers
can get points that can be exchanged for other services such as exclusive discounts with
partners, earn points and redeem gifts, experiences, programming and more.
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Key Facts
Here are some of the key facts and figures about our business at a glance:
Total customers 5,540,000
Digital customers 4,000,000
SKYBHD customers 1,440,000
SKYB Livre (Prepaid) 100,000
SKYB Broadband customers 500,000
Adjusted revenue £3,517 million*
Investment in programming £1,298 million*
Adjusted operating profit 1
£1,089 million*
Number of employees 10,800
Price of SKYB TV package From £15.50 a month
1
Excluding exceptional items
*12 months to 30 June 2012, (conversion from R$)
All operating statistics are accurate as of 30 June 2012.
APPENDIX TWO
SKYB: Customer Intention (K) VS Churn per Year (2005-2012)
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