Marketing Plan of TNT Express
Strategic Marketing Plan for TNT Express
This strategic marketing plan is concerned with the growth strategy for TNT express which has been courier service providers across more than 200 countries. It has attained the leadership position the European market and there is higher growth opportunities still exists in the European market for achieving further growth. The strategic plan considers the performance of situation analysis through important market assessment tools such as SWOT, BCG matrix and it has been evaluated that the new business development strategy is considered effective for attaining higher market share. The company already occupies the leadership position in B2B segment and its focus on B2C segment would enable it to achieve higher growth. In successfully performing the growth strategy, this strategic marketing plans consider the marketing strategy as well as targeting and positioning strategies which indicates that the marketing strategies of TNT express should be to pursue intensive growth strategy in new European markets with major target segment should include both the B2B and B2C customer segments. The company should position itself as fast delivery of courier service provider and also the cost efficient service provider as well. The marketing mix strategies has also been assessed which indicates that the major role is to be played by the promotional activities and as such, company should initially make huge investment in promoting its new market area including its new target market segments through its websites and various other promotional tools. Finally, proper control and evaluation need to be performed to assess whether the growth as pursued by the organization is achieved or not and strategic actions need to be taken for any kinds of deviations from expected performance.
The situation analysis of company TNT express as performed indicates about the internal as well as external environment faced by the company. For instance, the performance of such situation analysis with the help of SWOP indicates that the TNT is a one of the fourth largest transport integrators and stands at first position in Europe. The major business of the company is to move parcels, documents and pieces of freights from one country to another in over 200 countries as per the requests of its customers. The company has strong road transport and it also makes use of its airline services in ensuring timely delivery of parcels and documents at its customer’s request. The company has a worldwide presence as it is operating in more than 200 countries and also expanding it business at a rapid pace in major growing countries. However, on the basis of SWOT analysis as performed for the company, it has been identified that there are ample of opportunities available for the company to achieve higher growth in the European markets as there are various small players comprising of major proportion of market share in the distribution industry (TNT Express, 2012).
As a result, this strategic business plan is aimed at achieving expansion of business in the potential growth areas where it can be possible for the company to achieve higher growth. In achieving the growth strategy in a most effective manner, this strategic business plan considers the marketing strategy of the company that would enable it to achieve higher growth in those markets. In addition to this, the strategic marketing plan will also consider about the target market strategies and the appropriate marketing mix strategies as well, as the demands of customers from courier service providers is different because of availability of wide variety of services in such market. The strategic marketing plan will also consider about the marketing mix strategy in pursuing higher growth and also about the budget factor which is very crucial for achieving success in the growth strategy of the organization (Lamb, Hair and McDaniel, 2008).
From the assessment of situation analysis of TNT express as performed, the marketing strategy that would be considered as highly effective for the organization is to adopt a growth strategy, so that the opportunities as seeking by the company in terms of continuous expansion in the growing markets can be achieved. However, the development of most effective marketing strategy for the organization can be ensured from its mission which is presented below:
The mission statement of the company is stated as “we are a global team of empowered people that connects business, markets and people in a sustainable way” (TNT Express, 2012).
The corporate mission of the organization specifies that the TNT express is primarily concerned with allowing businesses, markets and people to connect with each other. It provides a platform through which businesses can transfer their parcels and documents to every corner of the world through its highly skilled workforce and thereby ensures better connectivity. However, the situation analysis of the company indicates about the desire to expand its operation in the European markets. The growth strategy as planned to pursue by TNT express requires it to properly analyze the target markets so that the growth as planned to achieve by the organization can be possible. For instance, the major objective of the company is to increase its market shares in the European markets, as there are huge potential for growth for the company. With respect to its growth in the Asian markets, company aims at expanding in such markets with primary emphasis being placed on providing road based express services. Thus, the external analysis of TNT express indicates that there is sufficient room for expansion of its markets and as a result, the market growth strategy is considered as appropriate for the company. In addition to this, the company is regarded as leader in B2B distribution services, but the market analysis reveals that there has been an increasing demand from customers to provide residential services as well. As such, the growth strategy of the company also includes significant attention to the development of residential services for its customers (TNT Express press pack, 2009).
The growth strategy as considered for TNT express should be supported by certain marketing objectives for the firm. The main focus of the strategic marketing plan would be to devise strategies for TNT express that would make it possible for it to:
Increasing the Size of the Market
- Achieve a market share of at least 25% in the European markets which the company presently has a 16% market share only.
- To successfully enter into newer markets through its road based express service by better positioning its brand TNT express.
- To achieve an overall increase in its revenue from all its markets by 10% in the next three years (Hoffman and Bateson, 2010).
Focus on Achieving Cost Efficiency
Another major marketing objective of the company should be to achieve efficiency with respect to its cost in providing courier services to its customers. The main motive should be to provide additional benefits in the documents and parcel distribution services in the new markets which could be attained by focusing on the road based express services. Hence, the company should not consider the airlines mode of providing services in the newer markets initially, as it would lead to higher costs for its services which in turn would adversely affects its performance. Thus, the road express services should be adopted in newer markets to achieve cost efficiency in its operations (TNT Express press pack, 2009).
The selection of appropriate target market is highly essential so that the marketing of the products and services offerings of the company can be possible in a most effective and efficient manner. In case of TNT express, the target market selected for the growth strategy is the existing European market, because such market comprises of 43% of countless small players. As a result, TNT can achieve higher growth in its existing European markets by way of its broad product portfolio and paying attention to its customers (TNT Express press pack, 2009). The uncovered European markets have been selected for the growth strategy because the major competitors of the company occupy a major proportion of markets share in the European markets. For instance, DHL occupies 16% market share, UPS has 9% and La Poste of France has 7%. There are numerous emerging European economies which have also to be included in the growth strategy of the company, as these include Moldova, Albania, Belarus, Macedonia etc. Thus, by way of leveraging its advantage of broad product category, company can achieve higher level of success in these markets, as they reflect the availability of huge market opportunities. The competitive intensity in these markets is lower for TNT express, as it is the market leader and majority of the share in the distribution services rests with small players. Further, the company has better access to these markets, as it has started building its new road services since 2009. Thus, better accessibility along with lower level of competition leads to the selection of uncovered European markets as the target market for growth strategy of THL services (Pride and Ferrell, 2010).
Target market segments: Within the selected target market for growth strategies, the target market segments of the company should include B2B and B2C customers, as the analysis of the distribution markets of the company in situation analysis indicates that there has been considerable demand of customers for residential delivery services of the company. This is because, the major target customers of the company includes B2B customers and it occupies the market leadership position in the B2B market as it is known as largest B2B express distribution company. There has been a significant growth opportunities for B2C markets for the company as revealed by its market analysis and hence, it should target the B2C customers in its target market for effectively achieving its mission. Thus, the basis for the target market and the target segments selected is the huge growth opportunities available in such markets and also the huge demands for B2C services by the company (TNT Express, 2012).
The selection of target market should be followed by the adoption a well positioning strategy so that the company can position itself in a most effective manner among its target customers. In case of TNT express, the company basically a distribution company and indulges into the distribution of parcels and packages for its B2B customers. As the company is planning to target B2C customers and also the newer European markets, the company should position itself in a manner that would attract the attention of B2C customers in the target markets. For instance, it should position itself as the fast distribution services providers as per the needs and requirements of its customers in a cost effective manner. In case of B2B category of business segment, TNT offers a wide range of products and services to its customers such as 9:00 Express, 10:00 Express, 12:00 Economy Express, Same day delivery services and many more (TNT Express press pack, 2009). These services are core to the success of B2B services of the company and hence, company should integrate all the services for its B2C customers in the selected target market and positions itself as the customized service providers as per the needs of its customers. In addition to this, TNT express should also position itself as the cost efficient providers of parcel distribution services, as the situation analysis indicates that cost is given higher emphasis by customers in the distribution industry. Thus, the positioning strategies of the company should be to position itself as speedy and cost efficient provider of parcel and packages across different regions for both the B2C and B2B customer groups (Hooley and Graham, 2008).
On the basis of performance of environmental analysis of the company, it has been identified that the corporate strategy of the organization should be market development. As the company already occupies the market leadership position in B2B markets, it needs to develop other European markets for its document handling business by way of building road express services. Hence, the primary corporate strategy of the organization should be to achieve diversification. Apart from the corporate strategy of market development, the marketing strategy as identified effective for TNT express is to market its document handling business to B2C customers, as there is higher growth potential available to the company in such market segment. The positioning strategies as identified effective for TNT express is to position itself as speed facilitator of parcels and documents delivery of its customers at required destinations and a cost efficient service provider in such document handling services (TNT Express press pack, 2009).
Marketing Mix Strategy
The marketing mix strategy of an organization includes the efficient use of different elements of marketing mix so that a better overall organizational development can be achieved. In case of TNT express, the development of an effective marketing mix in order to promote its B2C document handling business in the new market segments of European economy is essential. The decision with respect to all the important elements of marketing mix for TNT express considered essential is given below:
Product: In case of TNT express, there is no such physical products to offer, as the company delivers documents, parcels and pieces of its customers across 200 countries. Thus, the services of the company can be considered as its core product. With respect to its services, the company should include the B2C customers in its service offerings for attaining higher growth (Anderson and Vincze, 2006).
Price: Pricing decisions are crucial as they directly impact the purchasing decisions of consumers with respect to company’s offerings. In case of documentation industry, the role of pricing decision is crucial and as such, the courier companies should aim at reducing their pricing impact for their document shifting services. In case of TNT express, the company should consider its road express services for delivering its document handling services instead of considering airline route, as it would be highly costly. Thus, the primary strategy of TNT express should be to reduce its cost in expanding its B2B and B2C services in other European markets, so that it can provide its documentation services at reasonable rates (Foxall, 1981).
Place: The selection of place is of utmost importance in expanding business operations to newer markets. As in case of TNT express, the new market development requires the company to pay adequate attention so that the best possible location within the European country can be selected for the purpose of covering its documentation business. The intensive growth strategy of TNT express in the European markets is considered effective because of large volume of opportunities available in such markets.
Promotion: This is an important criterion in the success of the strategy of expansion of existing business operation in newer potential markets. The company should implement more intensive marketing campaign with huge investments should be made on a wide range of media for promoting its documentation service inauguration in newer European markets. Since the strategy of the company also includes the consideration of B2C customer segments, the existing promotional strategies should be completely altered and new promotional strategies should be followed for promoting the growth as planned by the organization. The company should make use of its websites for promoting its expansion, as it provides tracking facility to its customers, which leads to higher number of customers accessing its websites on regular basis. As a result, the promotion of its expansion strategies through its website would be highly effective (Sengupta, 2005).
Physical Evidence: The role of physical evidence in case of service firms is extremely crucial, as the customer looks for physical evidence in order to judge the quality of services provided by the firm. As in case of TNT services, it can provide a sense of physical evidence to its customer by developing a separate website for its new target market so that customer can collect all the information about the services of the organization from its website. The inclusion of information pertaining to its B2C services should also be made in its website so that customer can be informed about its new service offerings (Anderson and Vincze, 2006).
People: The role of people in service delivery is crucial and as a result, they should be given considerable attention. The satisfaction of people of the organization is of utmost importance, as their satisfaction would result into customer’s satisfaction. In case of TNT express, the majority of its employees have the customer facing role, as they need to handle the parcel of their customers for timely delivery. Thus, the strategy considered as effective for handing its people is to provide them adequate training regarding the management of B2C services so that the delivery of parcels of customers can be performed in a most effective manner in the new regions (Foxall, 1981).
Processes: Processes have a significant role to play in case of courier services, as the level of speed is highly determined from the effectiveness of the existing processes of the organization. In case of TNT processes, it should build a tracking process in its new website whereby customer can track their parcels and documents. Further, the processes of handling the documents for shipment should also be performed effectively which could be attained in an efficient manner through the consideration of technology (Anderson and Vincze, 2006).
The strategic marketing plan of the company implies the expansion of its B2B services along with B2C services in emerging European markets so that the available opportunities in such markets for distribution related services can be trapped and higher market share can be attained. In performing the expansion to new markets, there are various costs that need to be incurred and there will be revenue generation from its services as well. A forecast of its operation for the next three years is performed in the appendix section which implies that the company has to bear losses in the initial year of its operation in the newer markets, as strategies need to develop to identify customer requirements and thereafter, in the 2nd and 3rd year of its operation, the growth strategy of the organization will result into benefits for the organization in terms of higher profitability.
In the successful strategic expansion of the organization, it becomes essential that there should be time plan for each and every major activities involved in the expansion process. The setting up of timeline will help in the successful accomplishment of all the major tasks essential for achieving success in the growth strategy. For instance, the major tasks that will be involved in the expansion strategy along with the timelines needed are discussed as follows:
Development of website: 6 Months
Promotional activities: Ongoing during the period of three years
Building road access to newer markets: Maximum of 1.5 years
Training to employees for handling B2C services: 3 months
Miscellaneous tasks for expansion strategies: 4 months
Evaluation and Measurement: The final process is the evaluation and measurement of the strategic decision of expansion as undertaken for TNT express. The performance of evaluation task can be possible through considering a range of metrics. For instance, the most important way of measuring the performance of strategic decision is to measure the revenue generated from the growth strategy as undertaken. In case of TNT express, the revenue from its B2B as well as B2C business segments need to be measured for the newer business locations and the attainment of expected revenue from its newer operation would mean that the company has taken a correct decision of expansion in the various areas of European regions. The non attainment of desired performance would require actions for identifying the areas that need attention and necessary strategies need to be taken to achieve desired level of performance.
Summary of Situation Analysis and SWOT
Situation analysis is a marketing tool that helps in the assessment of situation that the business is facing. It is concerned with the trends faced by the company in the market. It is concerned with three important C’s such as customers, companies and competitors. The situation analysis of TNT Express indicates that the customers are given higher importance at TNT and as such, the company has local representatives across different parts of the country to handle its customer’s requirements. With respect to the competitors, there are certain competitors of TNT that poses significant threat in the form of higher competition and the major ones include FedEx, United Parcel Service (UPS) and DHL. As far as the company is concerned, TNT is a major international cargo delivery service company that delivers document, parcels and pieces across 200 countries. The better assessment of the situation analysis can be possible through SWOT analysis of the company which is performed as follows:
- Wide market coverage.
- Stronger social media efforts for stakeholders.
- Strong air as well as road networks.
- Customer budget constraint makes it more appealing for document transfer.
- Broadened its product offerings to cover more industries and customer types.
- B2B Market leader in Europe.
- World’s leading B2B distribution company.
- Air network is not highly effective across the world.
- Internet fraud is a big concern for the company as fraudulent communication for advance wire transfer of money before the goods are allegedly shipped by TNT express affects its relationships with customers.
- Long terms growth opportunities in countries like China, India, Southeast Asia, South America etc.
- The market of Europe still offers room for expansion.
- Significant growth opportunities for B2C markets.
- Tougher business environment with huge uncertainty.
- Stiff competition from major competitors such as FedEx, UPS and DHL.
In addition to the SWOT analysis, the situation analysis of TNT express can also be performed through marketing tools such as BCG matrix as performed below:
BCG Matrix: BCG matrix is another major strategic tool that helps in assessing the position of a company. This tool includes the market share on one side and industry growth on the other. It is quite useful in identifying the current situation of an organisation with respect to the growth rate of the entire industry. There are four major grids of BCG matrix which are discussed as follows:
- Cash Cows: This category involves the products which have high market share and low industry growth rates.
- Stars: The products of the company having high market share and high industry growth is categorized under this category of BCG matrix. This is the most favourable situation for the products of the company.
- Question Mark: Question mark implies the high industry growth rate and low market share of the products of the company. As such, company has to make decision to identify the loopholes in its existing products.
- Dogs: Dogs falls into the category of low market share and low industry growth rate. The best option for the company in this case is to liquidate its products in order to minimize its risk.
In case of TNT express, the company is said to occupy the position of star in the BCG matrix in case of European markets. This is because, it occupies the market leadership position in the distribution industry as it has the maximum individual market share of 18% which is industry highest and majority of the remaining shares is occupied by small players which amounts to around 43%. Further, the emerging European economies provides further growth opportunity in the distribution business by expanding its operations in the newer European markets.