Evaluation Of Bloomberg's Marketing Communications Plan example essay topic

Introduction Bloomberg are providers of key information in a dynamic, competitive and complex environment. The organisation established by Michael R Bloomberg in 1981 now employs over 7.000 people throughout the world. Bloomberg are Global players trading in an array of information services including news, real time pricing, data and analysis, all of which lead to better decision making for clients. At present the company's core business revolves around financial institutes and media organisations, with the consumer markets virtually unexplored. A report has been produced to develop a new Bloomberg product for the consumer market. The report has been divided into five sections to answer the specified learning outcomes: Evaluation of the role of marketing planning and the main tools of analysis applied to Bloomberg.

Showing an appreciation of how marketing planning and analysis contribute to profit growth for Bloomberg. Application of the key tools in media planning and the management of marketing communications for Bloomberg. Identification of objectives, target segments and strategic plans for Bloomberg's new business to consumers. Evaluation of Bloomberg's marketing communications plan. Evaluation of the role of marketing planning and the main tools of analysis applied to Bloomberg.

Greenley attempts to define the role of marketing planning 'seen as being an annual exercise' and strategic planning being 'of a long term nature'. (Greenley 1986 The Strategic and Operational Planning of Marketing, London Mc Grow-Hill). This view could be seen as a useful general definition of role, Greenley also goes on to outline marketing planning as 'representing only one stage in the organisations development'. It is here that a difference in opinions occurs. Jackson argues that effective marketing planning should be an ongoing process and not merely one stage in the organisation's development.

He states whilst plans 'can be ready made for regular use in recurring and familiar situations' it can become necessary to have plans 'specially made to fit circumstances' (Jackson K. F 1975 The Art of Solving Problems, London Heinemann) as they occur. This view suggests that use of marketing planning merely as one stage in organisational development is ineffective. Perhaps a more flexible description of the role of Marketing Communications is 'the planned application of marketing resources to achieve marketing objectives' (McDonald M 2002 Marketing Plans, How to Prepare Them, How to Use Them). Wilson outlines the multi tasked role of marketing communications; To force businesses to be organised in their approach to marketing. To be have specific aims and objectives. To inform and include everyone in the marketing and communications process.

To obtain the necessary resources for specific tasks. To 'get support' in terms of staff required to do the job. To aid in the setting of strategies. (Adapted from Wilson R.M.S. 1999 Strategic Marketing Management, Oxford, Butterworth Heinemann) Mc Donald shares similar views to that of Wilson in evaluating the role of marketing communications; Activity can be more effectively organised.

Expected developments can be predicted. Businesses can be braced for sudden changes. Irrational response to change can be minimised. Communications are improved, a greater awareness of goals. The direction of the company is clarified.

Marketing planning gives the opportunity for evaluation of progress. A 'systematic approach to strategy formulation leads to a higher return on investment' There are a number of tools of analysis which Bloomberg could choose from, such as the BCG (Boston Consultancy Group) Matrix. However Ansoff's Matrix and Porter's Five Forces are the two tools which will be applied to the Bloomberg case study. Ansoff's Matrix Focuses upon a product or service and to whom it is sold to. Four 'distinct strategic alternatives' (Wilson R.M.S. 1999 Page 221) are offered to Bloomberg's strategists and marketeers through this model.

To sell existing products / services to existing markets. To extend existing products / services to new markets. To develop new products / services for existing markets. To develop new products for new markets. In short, Ansoff's Matrix acts as a framework provoking companies to consider their current position and the direction they wish to take in the future. In terms of both the market / markets they wish to be in and the products / services they wish to offer.

Before Bloomberg make any of the above decisions they can use the matrix to build a profile of the organisations current position. Assess the choices and actions the company has made in the past, then plot them into the matrix framework. PRODUCT CURRENT NEW Market Penetration Product Development Bloomberg News est 1990 Bloomberg Radio est 1992 C Bloomberg TV est 1994 U R R E N M T A R Market Extension Diversification K E T 'Personal' magazine? est 1994 N E W Figure 1.1 (Adapted from: Ansoff H.I. 1957 Strategies for Diversification, Harvard Business Review) The matrix has been used briefly to outline some of the companies past actions. Bloomberg should also take the opportunity to look at the existing structure of the company to see where its core competencies lay. This should lead to Bloomberg looking at its capabilities in terms of existing infrastructure, resources and knowledge. Wilson cites that the direction and nature of decisions within the matrix are 'influenced by the product life cycle and the current shape of the companies portfolio'.

The matrix identifies that Bloomberg have not yet Diversified into a new market with a new product. Perhaps the company could add another string to their bow by entering the previously untouched consumer market with a new product advising the mass middle market. In order for Bloomberg to gain the most from the matrix they must express their new strategies and objectives quantitatively and not just qualitatively. Failure to do this can lead to 'wishful thinking which often smacks more of cheerleading than serious marketing leadership' (McDonald M.H.B. 1984 Marketing Plans, How to prepare them, how to use them). Porter's Five Forces This is another marketing Planning tool available to Bloomberg. The Five Forces 'has become an important tool for analysing an organisations industry structure' (Recklies D 2001 Page 1 The Manager.

Org web) The purpose of the Five Forces is to enable business units 'to find a position in the industry where the company can best defend itself against these competitive forces or can influence them in its favour' (Porter M.E. 1998). When applying the model to Bloomberg there are a number of important factors to consider as cited by Recklies (2001). The model assumes the market is perfect e.g. few regulations, a strong economy etc. The model is best used for straight forwards market structures. It can be hard to apply to complex industries with many interrelations. The model can only analyse a specific point in time.

It assumes that factors such as technology, politics etc are stationary. Potential Entrants (Threat of) Trade Journals targeting Bloomberg's existing customers. Broadsheet newspapers using their access to consultants and vast circulation figures to provide rival tv programmes and radio stations. Suppliers Industry Buyers (Bargaining power of) Competitors (Bargaining power of) Bloomberg trade in FT.

Com Small as many of the products information. They Reuters / services are bespoke and not cannot buy it as a Trade Journals offered elsewhere. commodity only harvest Customers are paying for it through reporters. information not easily available. Substitutes (Threat of) A slim threat of substitutes, for example the Interactive television service could be imitated. If the rival company could not produce the same depth of detailed information, they may compete offering a significantly lower price. Consultancies such as McKinsey could produce and sell their own specialist limited circulation journals. Figure 1.2 (Adapted from: Porter M.E. 1998 Competitive Strategy) Summary It is difficult to rate either tool more highly than the other as they both perform different functions.

They both have their strengths as well as their limitations. When using tools of analysis in marketing planning they should be used only to assist and guide and not to govern decisions. Both these tools are subject to internal and external variables which could throw any marketing plan off course. For example, neither tool takes into account the impact a war would have on the company, the markets in which it operates, and the products / services offered. Show an appreciation of how marketing planning and analysis contribute to profit growth for Bloomberg. "It isn't enough to do the accounts at the end if the fiscal year and then hope the right net profit occurs".

(McDonald M. 2002) This is where marketing planning and analysis come into play and contribute towards Bloomberg's profit growth. There are numerous ways in which good marketing planning and analysis can make this contribution. Firstly a variation on Porter's 'Generic Strategy Matrix' can be used. This acts as a framework whereby Bloomberg can identify their products / services and position them accordingly on the matrix. This depends on each product / services relative cost and differentiation towards the competitors. McDonald states that 'some markets are inherently more prone to lack of differentiation in products or services' however if they are 'substantially different from another's, costs are rarely a driving force' (Mc Donald M. 2002).

Please refer to the 'Generic Strategy Matrix' on next page. RELATIVE COST HIGH LOW Niche Outstanding success Bloomberg 'Personal' magazine Bloomberg Radio H D I I G F H F E R E Disaster Lowest Cost N T I A T I O L N O W Figure 1.3 (Adapted from: Porter M.E. 1980 Competitive Strategy) Bloomberg's portfolio of products and services can be positioned within the matrix. This activity in itself can be very useful in aiding profit growth. For example a number Bloomberg's products and services such as 'Technical Analysis', 'Dynamic Data' and 'Personal Magazine' (as detailed on the model) can be placed into the Niche category.

They are specialised and relatively bespoke, which differentiates them from more generalist products / services offered by competitors such as FT. Com. They can also be labelled as Niche as they are 'High' in relative cost not just to the clients but also possibly in terms of production costs for Bloomberg (due to market experts fees for sourcing information). This indicates that it would be prudent for Bloomberg to charge premium prices, the information they provide is high quality and unavailable elsewhere. 'Bloomberg Radio' has been placed into the 'Outstanding Success" category. The station provides specialist financial news and associated information, yet cost implications for clients as buyers and Bloomberg as producers are likely to be lower.

Reporters, journalists and experts have been paid to source information for a range of other services offered such as 'Personal' and 'Financial' magazines. Consolidating this information and redistributing (as almost a byproduct) it through another medium should offer cost advantage. It is worth reiterating at this stage that this type of planning and analysis is vulnerable to many variables. What looks good planned on paper may not prove effective when applied in practice. Bloomberg may consider utilising the PIMS (Profit Impact of Marketing Strategy) Database (Jain S.C. Marketing Planning and Strategy) before deciding upon the capital they invest in marketing, as well as the return on capital employed (ROLE) they expect. PIMS can be a valuable aid to marketing, planning and analysis.

It reveals trends and reveals facts e.g. 'total advertising spend is not correlated with profitability' (Fill C. 2002 page 208). What are the implications of this regarding the profit growth of Bloomberg? That the potential profit growth of certain products / services are dependent upon an 'optimum promotional mix' as opposed to simply pumping vast sums of money into marketing campaigns. Indeed packages such as PIMS are likely to become more prominent as management become ever more accountable for which specific promotions and media formats generate sales. A way to illustrate how marketing planning and analysis has contributed towards Bloomberg's profit is to look at the businesses actions in terms of organisational structure (Figure 1.4). Corporate Mission Statement SBU SBU SBU Specialist Consultants Journalists Specialist Consultants Journalists Specialist Consultants Journalists Media Format Media Format Media Format Figure 1.4 Bloomberg have formulated a corporate mission statement that they give 'customers the information they need' in 'whatever form is the most appropriate'.

Bloomberg have taken the corporate mission statement and made it reality, aided by the very structure of the organisation of the company. For example from the company has effectively been divided up into SBUs (Strategic Business Units) which cover different functions and markets. These SBUs comprise of teams of 'individuals with key skill sets' with their own 'specific area of responsibility'. The products / services (mainly information focused) are then delivered in appropriate forms to the range of clients through relevant media formats. The BCG (Boston Consultancy Group) Matrix is a useful marketing planning and analysis tool which can contribute towards Bloomberg's profitability. The BCG Matrix can be used to categorise the companies products / services in terms of their profitability and perceived market share.

This matrix can be combined with a version of 'Product Life Cycle'. The benefits are that Bloomberg can assess at where each of the products and services are in terms of profitability and market share. Then calculate where they are in terms of life cycle. For example one product may fall into the 'Dog' category as it has low market share and produces little profit. Bloomberg can ask themselves which quadrant this product was in previously. e.g. if the product has been around for a few years and made the transition from 'Cash Cow' to 'Dog', it may be prudent for them to recoup losses by axing the product or rejuvenating / relaunching it.

However if the product is brand new, probably it has started out life within this quadrant, sales may grow with frequency of PR and the consumers product awareness. It could be categorised as in the 'early adopter' (McDonald M 2002) phase of the cycle. Consequently its share / presence in the market will grow. A problem with this matrix is that it can prove difficult to accurately define what market share is and exactly what it means. e.g. is it share of the UK, European or Global Market? Before the key tools in media planning are applied, their purpose will be outlined; 'to devise an optimum route for the delivery of the promotional message to the target audience' (Fill C. 2002 Marketing Communications).

There a number of media planning tools which Bloomberg can utilise in the management of marketing communications. Kotler's Five Ms model and Govoni's Lifecycle Graphs will be discussed. The Five Ms Model Message Bloomberg are now providing consumer advice. This new service demonstrates social responsibility, e.g. helping consumers make the right decision. Mission Money Measurement To achieve circulation of Consumer Base: Currently comprises Communications impact: Measured 1 million in first year. of affluent professionals, 35% earning by website hit rate. Sales identified To target ABC 1 market. lb 75,000 + Per Annum. by advert type, Customers asked Take custom from competitors.

8 out of 10 work for international co's. which advertisement induced sale. To give customers the info Measure by sales achieved after they need, "when they need each stage of launch. it", "in whatever form". Media Frequency: Target Audience (TA) exposed to message at key times. e.g. between 12 - 2 pm for professionals on lunch break. Also heavily at weekends. Reach: Difficult to specify. Media Vehicles: Current Satellite channels, specialist Radio, Internet Future Broadsheets, metro, Terrestrial TV / Radio Figure 1.5 (Adapted from Kotler P. 2003, The Five M's, Page 592) The advantages of using Kotler's Five M's model; Acts as a framework for the entire media planning process from start to finish.

Corporate mission statement can be used as the starting point. Provides a focus for business, a reminder of reason and purpose. Companies size and market position are detailed. Particular attention paid to 'Message' and 'Media' allowing detailed planning in these key areas. The final stage of the model contains a 'Measurement's ection. Provokes consideration e.g. how to measure success and evaluate effectiveness of company's marketing communications operations.

Problems with this model are; It is difficult to accurately measure market share (as with the BCG matrix). Does not consider companies resources in terms of infrastructure and wealth. This could detract from a realistic media plan in terms of capabilities. A major advantage of Kotler's model is that the 'Media's ection can be used in conjunction with diagrams from other experts such as Fill's 'Media Vehicle's election Table (Fill C. 2003). This could allow Bloomberg to put more detail into planning also to build in flexibility (planning for all eventualities). Kotler's framework can also be supported by a range of auxiliary tools which take the form of mathematical formulae.

These include: Gross Rating Point: Reach (of advertising) x Frequency (of ad message) = Gross Rating Point. (Fill C 2002) Why should Bloomberg use these auxiliary tools? The use of such formulae will allow Bloomberg to devise more accurate and realistic media plans based on figures (albeit estimated) rather than being expressed by words. The media plan will be quantified and hopefully more measurable. Problems with using auxiliary tools are that obtaining accurate / realistic figures can prove difficult. For example it is easier to estimate 'Coverage' than 'Reach'. e.g. to obtain a coverage figure for a television advertisement in the South East of England, one could calculate this on the basis of how may people are TV owners in that demographic area.

However calculating 'Reach' is far more difficult. Although a certain percentage of people within a given area will own a TV, how is it possible to assess if the advertisement reached (was seen by) the audience? Bloomberg can use tools such as simple 'Timing of Campaign' (Govoni E.A. 1986 Promotional Management) graphs. Please refer to graph below: V Phase 1 Phase 2 Phase 3 Phase 4 O L U M E O F A D V E R T I S I N G TIME Intro High Awareness Levelling out Increase at key periods Figure 1.6 (Adapted from; Govoni et al 1986 Promotional Management) This tool shows that Bloomberg's advertising could climb steadily to create awareness of the company name and service in the new market they are entering. Advertising will then peak to create maximum awareness within the target market, then decrease and level out as frequency is reduced yet still present to drive sales. The application of this simple tool can provoke companies to consider at what times they need to increase and decrease advertising.

Also they can incorporate such graphs when budgeting for media campaigns. Dividing the graph into phases can prevent spiralling costs, with expenditure being assessed before and after each phase. If Bloomberg were to come up with a product for consumers it would be an online magazine giving information and advice on a range of electrical products. The Proposed Product Bloomberg are to provide consumers with relevant, accurate and reliable advice on a range of electronic products.

Bloomberg will provide this service initially online, whereby customers pay lb 15 per quarter and receive an ID Number and Login Code. These products include: Hi Fi Equipment Televisions DVD Players and video recorders Computer hardware and software Subscribers will have unrestricted access to the Consumer Advice Website which contains numerous reviews conducted by Bloomberg, on a range of electrical products. Also customers will have access to a database of all products which have been reviewed previously. Am additional feature is that the website is updated on an hourly basis, the moment a new product is released Bloomberg customers will know. Customers will gain access to the online Bloomberg Consumer Advice magazine which is free to download. Finally subscribers will be able to email Bloomberg advisors (for free) advice on electrical products they are considering to buy.

Customers also have 24 hour access to Bloomberg's specialist advisors via a premium rate telephone service. Bloomberg's slogan will be "What? Buying without Bloomberg?" Target segments How Bloomberg will select it's target segments? Bloomberg will select its target segments by utilising the Ansoff Matrix (please refer to figure 1.1) This matrix shows Bloomberg's existing product and service portfolio. The matrix clearly shows that the company have not entered a new market with a new product / service. By Bloomberg entering the 'Diversification' quadrant they can enter the consumer market which could provide new and potentially vast customer base.

Although Bloomberg are entering a new market with a new product, it could be argued that the concept of this new product has elements not dissimilar to that of ones in their existing portfolio. For example they are no stranger to providing quality information tailored to certain markets e.g. the financial and professional magazine publications. Nor are Bloomberg unfamiliar with establishing a successful website with '201 million hits per month'. Bloomberg will use 'Market Specialisation' initially. Whereby the company focus is on 'serving the many needs of a particular customer group' (Kotler P 2003 Marketing Management).

M 1 M 2 M 3 Key: P 1 M = Market P = Product (service) P 2 P 2 Figure 1.7 (Adapted from Kotler P 2003) This method of targeting market segments allows a reputation to be gained for serving a particular consumer. Who are Bloomberg's target customers? Likely to be from ABC 1 socio economic groups. Those with access to the internet (at work and home) With disposable income (medium to high) 21 - 65 age range (broad appeal) Bloomberg will initially target their existing professional customers, this will be done using existing Bloomberg products and services they subscribe as advertising channels. The reason for this is that it is cheaper to target existing customers than invest in trying to obtain new customers. In effect Bloomberg will attempt to evolve their existing professional customers into consumers when in their leisure time.

These customers will act as vehicles taking Bloomberg into their home for more fun applications. Objectives The Corporate objectives: "Bloomberg is in the business of giving its customers the information they need - no matter what that information is - where and when they need it - in whatever form is the most appropriate. We don't ask our customers to accept less". Michael R. Bloomberg These corporate objectives will encompass Bloomberg's new consumer product, the two go hand in hand albeit in different markets.

This new consumer product has great potential to diversify into other areas, for example reviewing motor vehicles, insurance policies, holiday packages, mobile telephones etc. However Kotler cites that 'a company would be wise to enter one segment at a time' (Kotler P 2003). The aim being to keep ones next moves a secret from competitors. Bloomberg's new internet service will be aimed at UK residents initially. However has the option of launching internationally at a later stage. Strategic Plans Strategic plans can be modelled on the 'planning implementation and control cycle' (Kotler P 2003 Page 91).

For example Bloomberg will commence planning at the corporate level, their corporate ideals expressed in the mission statement continuing downwards. This new consumer targeted product will be managed within a new SBU (strategic business unit). The organisation and implementation of the business plan will then be instigated by teams within the SBU, overseen at the corporate level. The ongoing progress in establishing this new service will be controlled by constantly measuring performance and evaluating results. A lifecycle model similar to Govoni's will be adopted and divided into phases e.g. initiation phase etc which will track the lifecycle of the product. Advantages of this are that the product can be controlled ate each phase.

Planning Implementation Control Corporate planning Organisation Measuring Results Divisional Planning Implementation Diagnosing Results Business Planning Corrective action Product Planning Figure 1.8 (Kotler P 2003 Page 91) This will help Bloomberg to stay on track and manage the marketing and communications process. Porter cites that there are 'three potentially successful generic strategic approaches' (Porter 1998 page 35). Cost Leadership Differentiation Focus Bloomberg will use the 'Focus's strategy which concentrates on a particular 'buyer group', 'segment' or geographic market'. Why? This strategy is what Bloomberg do best, providing specialist information to specific groups. The emphasis of this strategy will be built around serving a particular target very well' (Porter M.E. 1998).

This framework evaluates Bloomberg's overall marketing plan. 1: Who receives messages? 2: What messages says? Initially, existing professional customers. Existing professional customers will be In the next stage the mass middle market familiar with the Bloomberg corporate will be targeted to gain a higher turnover. brand.

The message therefore will inform, that Bloomberg gives consumer advice on electrical leisure goods. The mass middle market will be unfamiliar with Bloomberg. This target audience will need to be informed on who Bloomberg are an what advantages this product has. Hence the slogan "What? Buying without Bloomberg? Suggesting that to buy without consulting Bloomberg is most unwise.

3: Cost Implications Low, as it is cheaper to sell to existing customers, rather than investing in attracting new ones. High, the mass middle market is a huge target audience, requiring big campaigns to ensure coverage and reach of potential customers. 7: Control & Evaluation BLOOMBERG 4: Image of organisation Online questionnaires could be emailed to Perceived as formal professional and existing professional customers. The chance to concise. Has an exclusive image and win a 'Ferrari Enzo' will be offered as incentive. expensive price tag. Questions would include what the customer Widely unknown by the mass middle bought and why?

What their opinion was of market. This is a blank canvass, on the site and the advice given? Ease of which the desired image can be use etc etc. painted. Portrayed as Trendy, reliable, To new customers a 10% discount off their impartial. A company who's word can next subscription fee would be offered if the be taken as Gospel truth.

Questionnaire was filled in. Similar questions as stated above would be asked. 6: Actions of customers 5: How is message delivered To make the connection between Bloomberg's The message can be delivered to existing existing integrity in providing quality professional customers through Bloomberg business related information and this new form services and products they already use. e.g. of consumer targeted information on an advertisement on 'BIT' tv service. electrical leisure goods. They should be encouraged Also mailshots could be used to target existing to take Bloomberg out of the office and into professional customers at work and at home, the home. not dissimilar to Virgin Wines method. New customers with no prior knowledge of the company Ambient Media in the workplace (with permission will soon realise that it is essential to use Bloomberg agreed with companies), e.g. Bloomberg's new to make an informed decision before they buy. product promoted on drinks mats in the rest Failure to use Bloomberg runs the risk of buying rooms and canteen at 'Shell Centre' head office. the wrong product, wasting significant money Television advertisement, radio advertisement and looking foolish. and billboard advertisement. The frequency of the first two methods increasing at weekends to reach Monday to Friday workers when they have time to watch TV.

Advertisements in the evening when 9 to 5 Figure 1.9 (Se khon Y 2003, LCP, London) workers are unwinding at home in form of the TV. Conclusion This framework emerges from the report and is a culmination of the points discussed throughout. This paradigm summarises Bloomberg's marketing communications plan, for the launch of a product aimed at a segment of the consumer market. The concept behind the this new product is relatively simple, this is a major strength as it is not hampered by unnecessary complexities.

This paradigm can be seen as cyclical, once the final stage of 'control and evaluation' has been carried out, there is the transition back to stage one. However it cannot be assumed that what falls under each of the seven steps will remain the same. Internal and external factors will dictate what form each of the seven steps takes. For example the audience who are to receive the message may change and the cost implications may vary. The paradigm reflects the nature of ever changing market environments and allows at least some of the challenges within the marketing communications plan to be considered.

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