Analyzing Royal Mail's Marketing Strategies: Segmentation, Targeting, Positioning, and Extended Marketing Mix

Executive summary:

Market segmentation, targeting and positioning is a highly important process in today’s business framework. Segmentation assists the marketers to identify the characteristics of different groups or customers. Extended Marketing Mix is another important process that influences the promotion and marketing of company product as well as sales. This process is the expansion of the original marketing mix which consists of four major aspects such as product, placement, price, and promotion. This study, is going to analyse the Segmentation, Targeting and Positioning Model (STP Model) of Royal Mail on order to highlights the strategies and marketing approaches set by the company to extends brand awareness and business in the national and international market. This assignment is going to analyse the marketing mix used by Royal Mail, the UK’s most famous and trusted parcel and letter delivery company.

Introduction:

Marketing can be referred to as the business process that assists any firm or organisation to create a relationship with customers, clients and community. This assignment is going to analyse the marketing misused by Royal Mail, the UK's most famous and trusted parcel and letter delivery company. Moreover, this study will analyse the different marketing processes of Royal Mail such as segmentation, targeting and positioning in order to extend their brand awareness and business in the national and international market.

Company Background:

Royal Mail is a famous and highly trusted courier and postal service in the United Kingdom, which is established in 1516. The headquarter of Royal Mail is situated in London, UK. This company has two main business division such as Royal Mail (letters) and the Parcelforce Worldwide (parcels). It has one wholly owned subsidiary, The General Logistic System, which is an international logistics company. Royal Mail is the public limited company, which offers the facility of providing, emails and parcels throughout the UK. According to the Annual report 2017-18 of Royal Mail, this company has gained revenue of £ 9,776 million (2017). Its net income in 2017 is £273 million (2017). Royal Mail has 1,42,000 employees working all over the UK, 62 network hubs and 17,000 parcel shops (royalmail.com, 2018).

1.Analysis of effeteness of the marketing mix of Royal mail:

Extended Marketing mix:’

The extended marketing mix is referred to as the combination of elements that influences the promotion and marketing of company product as well as sales. This process is the expansion of the original marketing mix which consists of four major aspects such as product, placement, price, and promotion. As stated by Jain (2017), in the extended marketing mix process, there are additional factors that can influence the promotion, sales and marketing of a company. In the Extended Marketing Mix, there are seven elements such as product, price, place, promotion, people, process and physical. Each element in this process is connected to each other and is used to meet the demand and expectation of the customers.

In the case of Royal Mail is a famous and trusted pre-element delivery company, that operates throughout the UK. Its prime focus in customer satisfaction and trust through improving its product and service quality. Extended marketing mix process allows the marketers of the Royal Mail to improve its overall service by focusing on the seven above mentioned aspects of its business which are essential in order to meet customer needs (royalmail.com, 2018).

Product:

As stated by Loo and Leung (2018), products can be considered as the goods or service of the company that the customer buys. Royal Mail considers the improvement of its customer experience as the key focus of this company. For this reason, it focuses on improving its service as well as products. it improves the process of delivery confirmation of all its barcode parcels, in order to make the service more convenient to the customers. Royal Mail, also informs the sender after the mail has been successfully delivered to its mentioned destination. Royal Mail also acts the delivery partner of UK's SMEs. More than 5.4 million of the UK's SMEs form the more than 47% of the total UK turnover of this company. Royal Mail also improves the international customer service by making the process easier and more convenient for the sender as well ad for the receiver. By improving the cross-border capability of Intersoft, Royal Mail now offers its customer the facility to track the cross-border outbounds and returns service through using the online app (companyreporting.com, 2018).

Price:

As stated by Mohammad (2015), pricing strategy needs to be based on the market trend and customer demand, which assist most of the customer in the market to afford the product or service. Royal Mail has taken the cost reduction target for the three consecutive years through improving its pricing strategy, marketing framework and customer dealing process. it has managed highly reasonable and justified pricing strategy for the customers, which assist all the customer over the UK and Europe to afford this trustworthy service. the account officials of Royal Mails, check of the overall market price of the parcels and delivery service all over the UK and Europe, in order to set the justified price in each delivery service for the customer. From the Annual Report of Royal Mail 2017-18, it is reported that this company has conducted the cost avoidance programmed by £225 million of costs, in 2017, in order to offer the convenient and highly organised customer service in affordable cost (companyreporting.com, 2018(companyreporting.com, 2018).

Place:

According to Luo et al. (2015), in the extended marketing mix, the place is considered as the channel of distribution through which the products and service are delivered to the customers. Royal Mail, pursue the faster-growing areas in the UK as well as in the international market to improve its delivery channel. It has already expanded its relationship with the network's partner and realties in the UK and Europe in order to maximise the opportunities to cross border delivery among the UK Europe and Asia. Royal Mail operates the B2C delivery service in Europe. Royal Mail has a strong relationship with GLS delivery service, which improves its delivery and distribution channel to maintain the internal and national parcel delivery. Royal Mail has also expanded and automated its distributional channel and network by an established denser network of the parcel and delivery access point for return, shopping and collection of the parcel. In 2018, 250 new Customer service Point have been established in the UK making the distributional of parcel and letter faster and convenient.

Promotion:

Promotion is the process through which a company can convince the customer to buy the product and service of that particular organisation (Mallik and Farhan, 2018). Royal Mail uses highly effective promotional strategy in order to grab the customer attention. for promoting its service and product Royal Mail use the online platform, through which it promotes its products and service on Facebook, LinkedIn and Blogs. It also designs its official websites to attract the customer about list new services, offers and facilities for eth customers. It also conducts campaigns in the highly organised cities and malls of UK, to attract a large number of customers. Moreover, the PRM (Public Relation Manager) of Royal Mail, attend the media conference in order to provide the updates about eth new service and offers of this company. In addition to this, lime the other companies, Royal Mail has also offered the impressive discounts and recreational pint gain to the customers for sending more than 10 emails and parcels (royalmail.com, 2018).

People:

People in this process is considered as the individual who is working for a particular company (Luo et al. 2015). Royal Mail employs nearly 159,000 employees throughout the UKI and Europe. From eth ONS result it has been seeding that more than 185 jobs in the UK is given by the Royal Mail. Employees are hard working and highly skilled, who prioritise customer presence and privacy first. Moreover, Royal Mail makes the possible changes to its working process and the labour model in terms of providing the maximum flexibility and creative environment to the employees. It also provides the paid holidays, good pension and remuneration to its employee, which is the reason behind its well-organised and highly efficient workforces. Each staff is passing through the highly organised training and guidance which assist them to learn how to deal with customers.

Process:

Royal Mail uses the highly convenient network and distributional channel, which assist its marketers to deliver the product to customer within the given time (Jain, 2017). For improving the distributional channel and delivery process, Royal Mail has automated as well as expanded its network by establishing a the denser distribution channel, throughout the UK. Moreover, it has updated the network of the delivery access point by strengthening its relationship with the famous delivery service company, GLS delivery Service. From eth 2017-18 annual report of Royal Mail is reported that more than 250 new CSP (Customer Service Point), have been established in UK and Europe, in order to make the delivery faster and convenient. In addition to this Royal Mail also pursue the fastest Growing areas of the UK in order to promote the cross-border delivery channel. Through improving the B2C delivery service, Royal Mail has improved is cross birder delivery service through Europe and UK (companyreporting.com, 2018).

Physical

As stated by (Luo et al. 2015), in the marketing of product and service it is important how the products or service has been presented to the customers. Royal Mail focuses on offering high-quality service to customers, handle the complaints and check timely delivery of the parcel and letters to the customers. For offering the highly convenient service Royal Mail also send the information to the seen der about the delivery after the parcel has been delivered to its destination. It maintains the clarity in the delivery service that assists the company to gain customer confidence.

2. Analysis of the segmentation, targeting and positioning strategy for Royal Mail:

Segmentation Targeting and Positioning Model (STP Model):

In marketing approves, Segmentation, Targeting and Positioning Model are widely used by the marketers (Schlegelmilch, 2016). It consists of three important stages such as segmentation, targeting and positioning. In the first stage, the company needs to determine the kind of group of segments, based on which it would set the business strategies. In eth second stage, the company would finally select a particular segment to serve. In the third stage, it would set the strategies to optimise its products and service for that selected segment in order to meet the expected result (companyreporting.com, 2018).

Segmentation:

As stated by Wang (2016), market segmentation can be referred to as the process of dividing the entire market into different segments or groups based on their characteristics. There are four types of segmentation process, geographic, demographic, psychographic and behavioural segmentation.

Royal mail focuses on the Geographic segmentation process, in which it focuses on the differences of buying behaviour, habits and characteristics of international and cross border customers Through applying this segmentation process, Royal mail, improves its cross-border network connection, distribution channel and the quality of the delivery process. according to geographic segmentation process, assist the marketers to understand different needs of customer residing in a different geographic region. Royal Mail operates its business in the UK and Europe. Moreover, it is going to expand its international marketing footprint in Asia. In these aspects, geographic segmentation is highly appropriate and fruitful for this company, to understand the types of buying habits, behaviour and needs of the customer in these countries (royalmail.com, 2018).

Targeting:

This is the second stages of the STP model, in which the company needs to select a particular segment based on its characteristics (Kurniawan et al. 2018). In this aspect, Royal Mail chose the Geographic Segment, which assists the marketers to analyse the needs of national and overseas customers. Royal Mail operates its business throughout the UK and Europe. Due to the ever-changing needs and expectation of customers based on the changing geographic characterises, affect the overall marketing process of the company. In this aspect, the geographic segmentation has assisted Royal Mail to understand the market trend of different geographic region and its changing customer preference. Based on this underacting Royal Mail, improve its network, delivery process and distribution channel to offer convenience and faster delivery to customers (royalmail.com, 2018).

Positioning strategy:

Positioning is processed in which marketers set the strategies and approaches to optimise its service and products for the selected segment in order to meet the expectation level of the customers (Lopatovska, 2015). For improving the customer service in the different geographic region, Royal Mail has standardised and improvised its distribution channel. Moreover, it has strengthened its relationship with the retails and network providers in the different geographic regions such as in the UK it has strong relations with GLS delivery service, in order to provide the faster delivery service to the customers (royalmail.com, 2018).

Conclusion:

From the above-mentioned, discussion, it can be concluded that market segmentation, targeting and positioning is a highly important process in today's business framework. Segmentation assists the marketers to identify the characteristics of different groups or customers. Targeting assists the marketers to select the relevant segment based on which the company will set its marketing strategies. Positioning is the process which is associated with the optimisation of product and service to meet the need of that selected segment. Therefore, these three aspects are the major concerning factors that influence the success of a business. Moreover, it also concludes that the Extended Marketing Mix is another important process that influences the promotion and marketing of company product as well as sales. This process is the expansion of the original marketing mix which consists of four major aspects such as product, placement, price, and promotion.

Recommendation:

Based on the above-mentioned discussion following recommendation can be made to Royal Mail in order to improve its service.

• Royal mail should install the online postal service for letters and written documents through which it can provide the softcopy to the receiver through email. This process will minimise the cost and time for both the company and customers.
• It should improve and restructure its online order and payment process. although, Royal mail provides the online transaction process to its customers, sometimes customer deal with huge network problems due to a connection error. Therefore, Royal Mail needs to modernise and standardise its online payment and application system by offering the facility of using mobile apps to customers.
• It should conduct the digital point gain system for the customer who will pay through debit or credit cards. This strategy would motivate customers to pay through online process and get impressive cashback and additional points. This process will improve the sales and profit of Royal Mail.

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