E-marketing plan for Hovis Bread

1. INTRODUCTION:

Any businesses that want to sell their products/services in the market need to create a marketing plan. The marketing plan is claimed to help the organisation create products/ services that tackle the needs of customers, hence making profits (Teece, 2010). As the Internet and digital technology has been developing tremendously, many organisations have moved from traditional marketing to digital marketing because instead of just informing customers about the products/ services available, the organisations now can communicate with them and build relationships with them through the use of these channels (Shankar and Hollinger, 2007).

This report will aim to design an e-marketing plan for Hovis bread – a famous British bread brand. Hovis bread is currently ranked 3^rd place in the UK, after Kingsmill and Warburtons (Wiggin, 2002). Hovis bread is known for its rich history and is one of the brands in the UK that uses solely British ingredients. This can be considered one of the main competitive advantages of Hovis bread. In terms of the market, although it can be seen that the recent UK recession has changed the people’s shopping habits that affected every market, the bakery market is still considered one of the biggest market sectors in the UK food industry (National Statistics, 2012). Nonetheless, the bakery market in the UK is currently facing fierce competition as there are more and more new entrants in the market.

2. Situation analysis:

a. Internal analysis:

One of the strengths of Hovis bread is its use of purely British ingredients, which might boost sales amongst British citizens (Hovis Bakery, 2013). Moreover, the brand is also known for high quality and healthy products (Mintel, 2011), which is beneficial to increase sales amongst customers that have high concerns about their health and lifestyles.

In terms of marketing strategy, it is seen that Hovis has an integrated marketing communication, which involves both traditional marketing communications and e-marketing communications. Nonetheless, it is seen that Hovis does not engage solely in e-marketing activities, which might reduce the efficiency and effectiveness of its marketing strategy. Although Hovis bread has a wide range of online medias to advertise its brand such as the Hovis website, Youtube channel, Facebook and Twitter, its use is limited to promote brand awareness, not to generate sales.

b. External analysis:

It can be seen that Hovis bread is facing tough competition in the market at the moment. Not only is Hovis competiting with its main competitors, which are Warburtons and Kingsmill, it also has to face a number of new entrants entering the market.

Additionally, Hovis bread has to cope with intense competition within the online premium bread market due to the ease of price comparison amongst e-retailing sites. These intense competitions may raise the threat of removing Hovis from a consumer’s evoked set (Nenycz-Thiel et al, 2010).

In terms of opportunities, it can be seen that the popularity of e-commerce is rising with high Internet usage and online shopping amongst the 16-24 age group. This group is considered to have healthy and nutritional diet and look for products that can help to boost their wellness and health (Euromonitor, 2010). Thus, tackling this age group can enhance Hovis’s sale.

3. Marketing strategy:

a. Positioning:

In order to secure its positioning in the bakery market, Hovis should create a distinct impression in its target customers’ mind. In this case, it would be emphasise the distinct health benefits of Hovis bread. Across all Hovis’s online channels and distributors, the message that Hovis products do not contain artificial preservatives should be sent loud and clear in order to tackle its target customers. This would be served as a key message in a positioning statement and customer value propositions and is used for communications development across the firm. By successfully positioning its business in the market, Hovis will create a competitive advantage that its competitors cannot copy and imitate (Teece, 2010). However, it is important to note that in order to succeed the positioning should address customers’ wants in needs in Hovis’s target market.

b. Target markets:

As stated above, the 16-24 age group is found to be the one that has the highest rate of internet usage and online shopping (National Statistics, 2013). Moreover, they are also evident to have high awareness toward their health and healthy lifestyle. Therefore, tackling this age group will be likely to increase Hovis’s sale performance and profitability. The aim of Hovis is to concentrate on this market segment, whilst continuing to operate in other market segments that still generate profits. In order to address the target market successfully, Hovis needs to identify which channels, aspects of advertisements (such as pictures) and languages could be used that can attract consumers in the target market and persuade them to try Hovis products.

c. Differential advantages:

The competitive advantage of Hovis products is indeed its commitment to not using artificial preservatives. By creating the positioning that Hovis products only use natural ingredients and the benefits they bring to customers’ health will address the wants and needs of consumers that care about their health and healthy lifestyles. Moreover, another advantage of Hovis is its use of solely British ingredients that can interest consumers that support British products.

d. E-marketing objectives:

The main objective of Hovis’s e-marketing strategy is to achieve the sale of 75,000 loaves in 12 months in the UK market. In order to do that, the e-marketing strategy should fit the overall marketing strategy and the marketing communications should aim to focus on information and persuasion.

It is important that the online marketing goals of Hovis cover all bases, because setting up good digital marketing goals can help the organisation to manage and control performance across digital marketing activities. Thus, the 5S models by Smith and Chaffey (2006) is useful to use to set goals for Hovis’s digital marketing strategy. The 5S involves sell, serve, speak, save and sizzle.

In terms of sell, building trust in the payment process and offering free delivery on the website would help Hovis to boost sales (Aaker, 2009). Considering younger consumers in the 16-24 age group have limited purchasing power, free delivery is indeed a plus point when it comes to their purchasing decisions.

As for speak, it suggests that digital channels are not only good for boosting sales, they can also serve as communication channels that help the company to engage with its customers (Hunt et al, 2006). Thus, the language and photos used in digital channels should fit Hovis’s target market in order to engage them in the company’s products/ services.

In terms of serve, the company website and online customer service can act as a place where customers ask questions, pay compliments, and voice complaints. Therefore, the quality of online service is extremely important to add value to the organisation’s brand image and support other elements in the 5S model (Chaffey and Smith, 2005).

Moreover, using digital media can help the organisation make cost savings (Day, 2006). For example, having a catalogue that can be downloaded online can save Hovis a huge amount of money printing and posting catalogues to customers.

More importantly, building the brand online is crucial for the digital marketing strategy because it decides whether the digital marketing strategy adds value to the overall marketing strategy and the business performance or not (Kotler and Amstrong, 2010). Thus, key considerations here is to think about what makes a positive online experience for the organisation’s target market.

It suggests that through digital channels and distributions, companies can engage with customers more easily. Understanding their wants and needs should also make understanding their online purchasing behaviour easier. Additionally, through effective online communications and active interactions with customers, it is also easier to satisfy them and make them more loyal to the brand. Successful implementation of the 5S model can help Hovis increase brand awareness, brand image, boost sales and add value to the company.

5. E-business model/ strategy:

In term of e-business strategy, Hovis should adopt differentiation strategy. Differentiation strategy refers to an approach that aims to develop and market a unique product for a particular market segment (Sausen et al, 2005). When an organisation has competitive advantage, it can sustain it through advertising campaign. In the case of Hovis, as it clearly has an advantage in the market for having natural and healthy products, this strategy is appropriate to further strengthen and sustain its competitive advantage.

When Hovis’s products are valued by its target segment and they perceive them to be better than those of Hovis’s competitors, the company can charge premium price for its products.

Successful implementation of differentiation strategy can bring the organisation a number of advantages (Arping and Loranth, 2006). First of all, it can grant Hovis the access to leading scientific research, which is beneficial for the company to develop its products quality. Secondly, it can bring Hovis a strong, skilled, and creative product development team, which is competitive advantage that other competitors cannot copy or imitate. Thirdly, differentiation strategy can also bring Hovis a strong sales team that has the ability to convince and persuade consumers about the products’ differentiation and therefore affect their purchasing decisions, which in turn brings more sales and profits for the company. Last but not least, as the strategy succeeds, the organisation can develop a reputation of quality and innovation, which would strengthen their position in the market.

However, it is important to note that it is difficult to maintain the differentiation over a long period of time due to competitor and customer changes in habits, lifestyles, tastes, etc (Aaker, 2009). Thus, it is crucial that the company continually evaluate what customers want and need to make sure it is always updated.

In terms of the link between the e-business strategy and the marketing strategy, it can be seen that they are linked closely to each other and all aim to differentiate Hovis’s products in the market with its distinct flavours and health benefits. This indeed would attract Hovis’s customers in its target segment who care about their health and healthy lifestyle.

6. The E-marketing mix:

a. The e-mix- product, place, price, promotion:

Hovis will adopt the e-marketing mix, which involves product, place, price and promotion. The overall aims are to enhance communication and integration with customers through digital channels and distributions, and add significant value to the product offered by Hovis.

In terms of product, as Hovis aims to differentiate its product in the market, its strong point needs to be seen on every digital channel and distribution. It states that the most common online activity is to find information about things that web surfers interested in (Chaffey and Smith, 2008). Thus, in order to help visitors to find information about Hovis’s products, the website needs to be updated with information related to health, a healthy lifestyle in general and particularly the health benefits that Hovis products offer. Moreover, the website will also have an option to register, so that visitors can proceed with their purchases more quickly next time they shop. It is also useful for the company to save customer information for research purposes as well. In addition to this, the site will also have a personal diet plan for those looking for help with a healthy diet and who need advice on which products can help with this.

In terms of place, for digital marketing strategy, location is important (Constantinides, 2006). The main online location of Hovis is of course the website. However, the link of the website will also be posted on other pages and websites such as Facebook, Twitter, Youtube, healthy eating sites, etc. where customers can click on it and are taken to the main website. Identifying which site Hovis’s target customers visit regularly would help with where to place the links and advertisements, hence increasing its effectiveness.

As for price, it suggests that as information is freely available to anybody that is connected to the Internet, the online price war can become more competitive than ever (Sheehan, 2010). Through the Internet, customers can compare prices over a number of websites before deciding where to make their purchases. Therefore, it is important that Hovis investigate competitors’ prices before deciding their price, because it can determine the sale volume of the firm. Moreover, in order to attract and retain customers, Hovis can create loyalty incentives to reward customers for purchasing online and tempt them to make more purchases next time. Additionally, to make their purchasing process convenient Hovis should make various payment options for them to choose from such as credit card, debit card, American Express, PayPal, etc. The payment process should also be secured in order to avoid Internet fraud and win trust from customers.

In terms of promotion, banner advertisements will be placed on websites where Hovis’s target customers often browse. Stories related to new products will be placed on the main website and on some review sites for customers to read and gain more information about the company and its products.

It suggests that in today’s technology world there are more and more people using the Internet every day. Therefore, creating an e-marketing mix would help Hovis to adapt to this trend and be able to find more opportunity to expand their market. Along with the overall marketing strategy, the e-marketing strategy would help to target customers and communicate with them easier, hence it is easier to persuade and affect their purchasing decisions (Krishnamurthy, 2006). These also mean increases in sale volumes, profits and the organisation’s overall performance.

b. The role of digital:

One of the important aspects of digital marketing is to create an effective two way communication with customers. It states that through online communication, the organisation can create, engage, and maintain long term relationships with customers (Szmigin et al, 2005).

As customers can access the Internet at any time, it also creates an opportunity for Hovis to build relationships with its customers (Luck and Lancaster, 2003). Through interacting and building relationships with customers, Hovis can gradually build brand equity. With the use of the 5S model, for example the speak and serve, with a helpful and professional manner over websites, social networks and emails, Hovis can build a good image of the company for its customers, which could result in an increase in sales and loyalty. Moreover, one of the most convenient functions of the Internet is that customers can make their purchases at any time and this can increase sales as well.

It suggests that digital marketing can strengthen communication and interaction with customers, increase trust and loyalty amongst customers and in turn increase sales, profits, and the overall performance for the company.

c. The online value proposition:

Ansoff (1957) states that the use of the Internet is to support the offline marketing strategy. Thomas (2005) also argues that there are more and more organisations that use the Internet as an effective tool to source value network, customers. Hovis’s sources of differentiation are the fact that the firm uses solely natural ingredients and 100% British products. An effective online value proposition of a company is one that clearly tells customers why its product is different and worth purchasing. Thus, this should be based on customer feedback and testimonials to enhance the efficiency and effectiveness of the company’s online value proposition. The online value proposition of Hovis should also emphasise the use of natural British ingredients and their benefits for customer’s health. Whilst offline value proposition might be overlooked by customers, online value proposition can be placed anywhere on the website, such as digital channels that catch the most attention from visitors, hence increasing its effectiveness.

7. Summary and evaluation:

In summary, in the world of technology, traditional marketing alone will not allow organisations to maximise their potential and extend their business. As the Internet is used by more and more people, it creates an opportunity for organisations to extend their market. Moreover, it also creates an effective two way communication with customers, hence increasing communication and interaction with customers. In turn, the business will be able to attract and return customers.

In order to maximise the sale potential of Hovis as well as its brand image, the differentiation created for Hovis is its use of natural British ingredients in its process that are good for customer’s health. The target segment is the 16-24 age group, who spend the most hours during a day on the Internet and is more likely to seek healthy products for healthy lifestyle.

The e-marketing objective is to increase sales through a digital marketing strategy by implementing the 5S model. The reason for using this model is it can help to boost brand awareness, the company’s image through the use of websites and digital channels and in turn increase sales and profits for Hovis. Moreover, the strategy also uses the e-marketing mix to ensure that all the prices, place, promotions and products add significant value to the product offered by Hovis. In terms of online value proposition, as it determines whether Hovis products are better than those of the competitors and worth purchasing, it needs to tackle what consumers want to hear and should be based on customer surveys, testimonials and feedbacks to increase its effectiveness. Overall, the e-business strategy, the marketing strategy and the e-marketing strategy need to link well together to ensure that they all contribute to the organisation’s overall aims and objectives.

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