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Dandara Marketing Strategy Development

6442 words (26 pages) Business Assignment

1st Dec 2020 Business Assignment Reference this

Tags: Business AssignmentsMarketing

Executive Summary

Dandara is a property development company employing 800people directly with 7 branches across the UK. Head office is in the Isle of Man The company uses a lot of marketing information for the progression of the company. The marketing department use marketing strategy and marketing mix like internal databases, competitive intelligent marketing, and market research. The company also use primary and secondary marketing tools to achieve amazing results. One challenge that the company face is that the departments don’t work as one team, therefore the management team must put more effort to improve the company.

Part A

Over the years the Chairman of Dandara always had the idea of expanding the business by 50% or more in the next five year by using business to business and business to customer marketing strategy and marketing mix. To achieve the required growth, Dandara are planning and developing a long-term forward-looking approach to marketing like advertising in local media to achieve the objectives and increase property sales, revenue, retaining the loyal base of existing customers, attracting the new customers, and placing themselves well in the market amongst the competition. In the past years Dandara’s strategy defies Kotler’s theory, the company didn’t need to develop these defined marketing strategies because of the big customer base and the monopoly the company had. Dandara has built more than 75% of the new houses in the Isle of Man in the past 30 years without clear marketing principles and their dominance in the supply chain is clear and contravene theories by some of the great authors like Kotler. Most of the sales were developed from word of mouth especially on the Isle of Man, with only a population of 85 000, the news spread like a veld fire, and every person sees what the company does. 

However, with plans to expand the company to other regions in the UK, word of mouth wouldn't be relevant as it did in the Isle of Man to increase and expand the business. In the UK as there is a lot of competition and many players in the UK who already have stronger brands, therefore more structured marketing strategies by Kotler and the 4Ps (Jerome McCarthy 1960) (fig 1) must be used to survive the competition and to achieve the desired growth in the next 5 years.

The cyclical mode of marketing strategy influences the product value. In the value market, Dandara marketing department uses differentiated marketing strategy to influence the customers and improve the value-driven product.

Fig 1: Marketing Strategies Theoretical Model Based on Product Value

Over the years, Dandara didn't realise the importance of a defined marketing strategy, however, with the appointment of the Marketing Director and the Commercial Director, things have moved to the next level. The two directors are transforming the company by developing a clear marketing strategy by having a road map for the next decade. This will guide the company in just about every business decision made and help achieve short and long-term goals. Although it may sound simple Dandara had not asked questions that come with creating a marketing strategy and this is the main reason why Dandara didn’t recognise the importance of a marketing strategy in the past. However, although Dandara didn’t recognise the relevance of marketing strategy before the two directors join, the company defied the principles of marketing and has grown rapidly over the last 5 years. The revenue stream has more than doubled, however during the time the company had a monopoly on land and it was the only developer on the Isle of Man. Now with competition hot with the new entrants, the company is now changing its plan by following a clear marketing strategy with the idea of proving the organization an edge over its competitors. The new strategy of selling the houses off plan and preparing bespoke designs where the customer's input during design stages is considered helps in developing good houses, therefore, resulting in higher profit margins. This will help Dandara to maximise use of its resources to provide a sales message to the target market and cover different income groups, different demographics.

With competition hotting up and technology where other entrants in the market are from abroad, it is important for the Directors of Dandara to have a properly defined marketing strategy in operation by having a team of specialist marketing, talented technical professionals and trained in-house staff to deliver the overall aims and objectives and increase the value of the brand.

Marketing Strategy and the Marketing Mix

The strategic plan set up by Dandara new Marketing Director defines the company’s aims objectives and mission. The Marketing Director adopted (fig 2) [7] because she had successfully used this in her previous employment. The diagram summarises the major activities involved in managing a customer-driven marketing strategy and the marketing mix. With the new approach, Dandara makes the customers the focal point in the center (fig 2) and all focus is concentrated in studying the customer behavior, their expectations, the demographics and treating the customers with great respect. This concept was reinforced over the early years the company was set up when most of the satisfied customers introduced or referred the new customers to the organisation. The Marketing Director's goal is to create satisfaction for all clients and develop customer relationships through involving  them during the early stages of the projects. Most of the designs are bespoke, with customers buying the houses off-plan through a process where they all participate during the design of their home. With commercial and Industrial properties, it is the same, for example when Dandara build Canada Life International (fig 2) and Zurich International building (fig 3), the project team had monthly update meetings with the client’s team to trying and get their feedback throughout the life cycle of the project. 

From the word go Dandara had decided that it was going to be a house builder, however, because there was a gap in the market for commercial and industrial building, the company started targeting the bigger companies that where renting in the different towns and offered them prime sites in the Isle of Man business park. This was the case of Canada Life International (fig 3) and Zurich International (fig 4). When they identified this niche market, the marketing Director positioned the company to attract more investors leading to another market where the company tapped in the new investors that are not currently on the Isle of Man and who may be willing to relocate. In the case of moving Canada Life and Zurich, it worked to the advantage of Dandara, however, it created a vacuum in Castle town and Douglas where the companies were previously located. Castletown as a small town lost a population of 300 people and this had a major impact on the businesses in the town and Douglas also lost about 500 people when Zurich relocated and the buildings they left have been vacant for the past 2 years. Dandara correctly identified which customers it will serve (segmentation and targeting) and how (differentiation and positioning) (fig 1 & fig 2) and now they have been very successful.

Fig 2: Managing Marketing Strategies and the Marketing Mix [7].

Recently the company has just finished and handed over a successful hotel building to Premier Inn. This is a new market that the developer has targeted and recently, they have got several inquiries from other different hotel chains that are not on the Isle of Man like Novotel and Travel Lodge. The idea of attracting hotel business was adopted following the market analysis (fig 2), followed by the marketing planning where the marketing department had to work out a plan on how to approach the Hotel chain groups. Also, the company made some sacrifice but cutting the profit margins on the Premier Inn deal (fig 5), however, this marketing deal implementation resulted in the company demonstrating to other Hotel chain group what the company could do. This was successful as the Dandara has got another request by Premier Inn to build a second Hotel as according to their model, staff can cover at least 2 hotels.

Travel lodge always follows where Premier Inn goes and vice versa, and now they are in negotiation with Dandara regarding a site in the same town as Premier Inn. They are requesting a building of the almost similar size and on the same 25-year lease agreement as their competitors. Although the price will be dearer than Premier Inn, however, they will be able to recoup the profits from the demand.  Dandara has correctly identified the total market and then divided it into smaller segments, selects the most promising segments, and focuses on how they are serving and satisfying the customers in these segments better than any other developers on the Isle of Man. Guided by marketing strategy, the marketing department designed an integrated marketing mix made up of factors under its control great product, affordable prices, at times giving the customers some incentives like helping them to move from their current rental premises when the new building is complete, the best place/site as the company holds on to a lot of vacant sites around Douglas and the Isle of Man, and obviously all the products offered by the company are appropriately promoted to reach a wider audience. The marketing department went through a lot of work trying to find the most suitable marketing strategy and mix, they commissioned some marketing analysis, planning, implementation, and control to come up with the best ways to be better than the competitors like Hartford Homes and Heaven Homes. It is through these activities, that the company monitors the players in the marketing environment.

Customer Value-Driven Marketing Strategy, Market Segmentation, Targeting & Positioning

To achieve growth, the marketing department adopted a customer-centered approach to gain confidence in the clients. The customers are treated like kings and this concept has won the company many hearts setting the company apart from competitors and then engage and grow them by delivering greater value. The background research, careful analysis and working closely with the customer helped a lot to understand their needs and wants. From the information obtained during purchasing, the company has been able to use the information to analyse the market, however with the GDPR law, this information can only be for specific purposes and is only kept for a maximum of 7 years which makes it had to have a long history of the customers. However, the marketing department is aware that they cannot profitably carry out business with all clients in the same way as they have different needs, therefore, the company has identified a segment (fig 1) mainly those looking for buying their second home, those who are looking to buy the expensive homes and the new businesses coming into the Isle of Man. From the research done, the two most attractive market segments were people buying a second home and new investors, and this is the market that the company targeted for the long term. The research showed that over 50% of residents buy their second house normally after 5 years of buying their first house mainly because they will have families and some of the families would have grown, and also new businesses are a good target because they are normally very accommodating as they don't understand the dynamics of the local market, therefore they would appreciate professional advice as much as possible.

Fig 3: Canada Life International Building Exterior- Photograph by Dandara Marketing Department.

This niche market segment hasn't been served a lot by other competitors as most of them were targeting first-time buyers, however from the analysis done, you only get a profit of £30,000 per house from selling a first-time buyer house of £150, 000, but the company gets a profit of approx. £100,000 by building someone a second house which cost approx. £300,000. The time building the two houses isn’t much different. Another good example is when building a commercial building like Canada Life International (fig 3), it takes about 9 months to build with a build cost of £3,5million, and this building was sold for £7m generating a 100% profit in under a year. The figures speak for themselves how this segment that Dandara has targeted is very lucrative and the company has positioned itself as a leader in the industry for these deals across the UK and the trend is going to continue for the next 5-10 years. The same deal has been done for other projects which included Zurich International building (fig 4) and Premier Inn building where the company got the same profit margins over the past 5 years. In the commercial office development segment, Dandara has differentiated (Michael E. Porter 1980) the service from other competitors by offering design and building concept and they developed a multi-disciplinary team with Architects, Engineers, Quantity Surveyors and a construction team that is capable of undertaking projects from inception to completion, therefore most of the cooperate clients have developed a lot of confidence in the company's service. This market has proved successful and the marketing department is exploring some new segments to further develop the business in the future further emphasising the importance of this careful process of market segmentation, market targeting, differentiation, and positioning.

Fig 4: Zurich Building Exterior- Image by Dandara Marketing Department.

Marketing Director had to develop a marketing strategy to achieve the following:

One of the relevance of Marketing Strategy in the current vision and long-term plans to increase the business by 50% in the next 5 years is that it will help the Dandara to gain a competitive advantage in the construction market amidst the tough competition with an edge over the existing players and the new entrants who are trying to establish their brand presence in the market conditions. The new marketing Director fearing the competition has now prepared a well-defined marketing Strategy focusing on the unique selling propositions of the brand along with the features and benefits of the residential, commercial and industrial building and services offered by the organisation in a creative, strategic, and planned manner highlighting that how the brand and its offerings are better than the ones of the competitors like Hartford Homes and Heaven Homes. Consistent and continuous messaging, communication strategy and technology implementation helps the brand to curate a distinctive identity in the volatile and competitive market. The success story for Dandara to achieve 50 percent growth in 5 years is going to be spearheaded by the forward-thinking, paying attention to where the market is going, where the consumer is and the behavior of the consumers. The Marketing Director has correctly highlighted that the customers are right there on the internet and we need to capture the leads and feeding them to our sales team. Recently the company is looking for the service of a Marketing executive to further strengthen its position in the market. The main duties will be to monitor and report on competitors, do email campaigns, enhance Dandara Group online and monitoring social media sentiments [3].

The Marketing Director's marketing strategy is all about simplifying the brand but still making them unique, elegance, and making sure they are practical. Among other things, the promotion of the new house type designs and sustainable ecohouses which doesn’t use gas or oil central heating systems and only use renewable passive energy sources saving customers entire heating bills amounting to about £1200 per is going to make the marketing strategy simpler by strengthening the brand (Wang Fang-Hua). These types of houses are considered the future and that is where the future is going in terms of the property market. However, there are some issues with these emerging concepts as the capital investment is more than the standard buildings and some Directors have raised concerns over using a very big marketing budget to achieve the 50% growth in 5 years because they all think marketing strategy is not the single most important thing for the company to grow. I won’t dispute the power of a strong marketing strategy because of the recent success the company has seen, however, it is not always easy or quick to see the direct effects as some of the results take longer to realise.

Though the Dandara never used a formal written marketing strategy before the appointment of the new marketing Director, there were some unwritten rules that the Directors were using. However, there wasn't consistency when new employees were employed and some of the marketing principles were lost along the way because there weren’t any reference materials to look at. Most of the work was only due to the experience of the team who have been working with the company for many years. The reason why Dandara had to adopt a marketing strategy is to highlight and promote the attributes, legacy, and USP's of the brand to, in the beginning, then followed by its offerings.

As a result of the new marketing strategy, there have been new grounds broken. Dandara has started attracting new customers. Most of the customers are corporate clients. Since the past 2 years, the company has gone into a 10-year lease agreement with Canada Life International. This long lease helped to market the company into bringing more corporate client who wanted new Iconic modern buildings (fig 3, fig 4 & fig 5).

Fig 5: Premier Inn Building Exterior- Photograph https://www.three.fm/news/isle-of-man-news/parent-company-expects-premier-inn-to-deliver/ 02 July 2019.

Because these buildings had a long lease, they attracted a market of a high net worth client who wanted to have decent investments which are low risk. Because of the success of this initial deal, many more corporate clients approached Dandara to build a new sustainable building for them on a long lease e.g. Zurich International HQ, they are on a 15-year lease, and recently was Premier Inn who went onto a deal with Dandara for a 25-year lease. As with Canada Life, there were high net worth client already waiting to buy the buildings. This a clear marketing strategy that has been tested now successful. The company is continuously looking for pockets of sites to continue with serving the niche market they have found. Dandara Directors and the marketing department now understand the importance of marketing strategy to continue to attract the new set of customers from the same operational market plus from the untapped markets as well.

One important thing the marketing department is looking at promotional tools (Chen Yi-xiu 2005) and techniques that are part and parcel of the marketing strategy is looked at and selected considering the taste, lifestyle, income, and this information is analysed from the purchasing forms and all fence sitters are also being targeted to appreciate the brand. For different products or different customers need, Dandara has developed different promotional strategies.

Over the years, Dandara has never been bothered by doing Market Research and study, however in the short time Dandara has started doing it, the company has already started producing significant property deals and sales and now make a significant part of the marketing strategy and it is helping the management of the company to plan the features, and unique selling propositions of the products and services that are in pipeline or are in the launch, planning phase and this will raise the profits and company growth in the future. This has demonstrated to the marketing department that the idea of a business marketing strategy for achieving and promoting product value is important (Liu Fang, Yan Jian-ren 2007). Although Dandara is on top careful with the nature of the products and service, there are some external forces like government policies and changing technology that impact of the strategies, however, the company keep on hiring professionals to deal with the issues.

The marketing department is given an annual budget to be spent for the benefit of the company and this has helped in keeping the company relevant when changes occur to attaining not only marketing goals but the overall business goals and objectives.

As Dandara has spent a lot of investment on competitive research and detailed study of the market dynamics along with the spending capacity of the targeted market, the marketing strategy has helped the company to arrive at an optimal pricing plan for its properties. This has helped the company to generate higher sales and profits and set the company for future growth as most customers were satisfied (Woodruff et al 1983).

One main reason why the marketing director is in a process of recruiting the digital marketing executive is to promote the business to target audience, know the customer habits, behaviors, wants, and needs, and know where they like to hang out on social media and do an analysis of the big data. On top of the new businesses coming, there is also a big population of people employed in gaming companies, and most of them are buying houses like hot cakes and the idea is to approach them through their Human resources department before they move to the Isle of Man and the UK and table some offers before they are exposed to other developers.

Dandara has had the most success over the past 5 years by building approx. 75% of the new residential, industrial and commercial buildings and employing about 150 staff directly and indirectly on the Isle of Man. Remember that common saying “Failing to plan is planning to fail” (Alan Lakein). Before the employment of the marketing director, Dandara failed to recognize the importance of a marketing strategy and didn’t fully integrate digital marketing into the company’s marketing plan, and had the following consequences:

  • lost out some contracts to competitors like Auldyn Construction;
  • lost market share to existing and start-up competitors like Haven Homes;
  • gained and retained fewer customers because many complained about the service and the company’s unsympathetic approach to delivering construction projects.
  • missed out on opportunities for better targeting and optimization
  • Lacked planning and at times suboptimal execution as Hartford Homes started gaining more ground posing more of a threat, filling in the gaps of the lackluster service Dandara was offering.

Limitations Dandara had with having a marketing strategy

Although adopting a marketing strategy will Dandara grow the business by more than 50% in the next 5 years, however, it is coming with a cost. Marketing costs money eg radio, TV, newspapers and website the company used for marketing and analysing the big data will require an investment of time and the results are not guaranteed as a human being are very unpredictable and at times you will never know which strategy has worked. In some instance it involved a lot of hit or miss and return on investment was not directly proportional to the marketing campaign and this set back the company for months.

Part B

The Marketing Process Marketing is all about creating the process in (fig 6) presenting a 5-step model of the marketing process for creating and capturing customer value [7].

(fig 6) “In the first four steps of the marketing process, the company creates value for target customers and builds strong relationships with them. If it does that well, it can capture value from customers in return, in the form of loyal customers who buy and continue to buy the company’s brands” (Kotler).

Fig 6: The Marketing Process: Creating and capturing customer value [7].

Dandara Group Pvt Ltd

Dandara has been a hugely successful company over the last 5-6 years. They have won many government and private contracts and involved in in-house projects, winning many industry awards for design and build projects, materials used value for money and responsiveness to government housing policies and regulations. It has diversified into other growth areas. What is the company doing? Relationship marketing or customer-centered marketing.

Dandara marketing department has used Kotler's [7] concept of relationship marketing and customer-centered marketing. The first thing they did was to group customers according to their potential to generate the company profit from the big data, from documents stored in the system and manage relationships with them. They classified customers (fig 7) into one of four relationship groups, according to their profitability and projected their loyalty and each group required a different marketing strategy [7]. Results of the analysis done from the big data and other sources demonstrated that strangers demonstrated low potential for generating Dandara profit as there is a risk that they may not have loyalty. There is a little fit between the company's offerings and its needs. The relationship management strategy for these customers is simple can be related to butterflies which are potentially profitable but not loyal. There is a very good fit between the Dandara's offerings and their needs, however, like real butterflies, the company is enjoying them for only a short period of time before they're gone (fig 7).

Fig 7: Customer Relationship Groups [7].

The new Marketing Director has transformed the company by implementing relationship and customer-centered marketing strategies by retaining customers. Dandara is now able to create an environment where the most per-purchase average can happen, and this is helping develop the business and create more profit from the existing base of customers.

According to reporting by CMS Wire of data collected by SumAll, 25-40% of the total revenues of stable businesses comes from returning customers. Businesses at the 40% revenue level in returning customers were able to generate 47% more in revenues than businesses that only have 1 in 10 repetitive customers purchasing products or services.

Many existing customers who have developed a good relationship with Dandara brand are purchasing houses and referring their friends and relatives to the upcoming housing developments in Lonan, Peel, and Ramsey because of the past experiences in previous dealings and the only marketing effort required is to make the current customer base becomes aware of new houses and industrial units being built across the UK a helping the company sales to multiply with minimal investment. However, a relationship is not always smooth and easy to maintain with the nature of human being. Peoples behaviors change our time because of change of circumstances and as they grow older, so the marketing strategy comes with a price and must be constantly looked at to suit the needs and it is against this background that the company always need an emergency budget to fall on when situations like this arise.

The positive experiences existing customers are getting is helping the brand to go viral when they leave positive feedback for the businesses when the service goes beyond their expectations and thereby passing good words about the company through word of mount and social network sharing. Now, the marketing department has managed to create personal connections with the customers and building material suppliers through the customer focus strategy they are using and with the suppliers of the building materials. One problem that comes with this is how far do you go with pleasing people. Some customers take advantage and their demands keep changing, and therefore Dandara must keep the standards high by investing in more training to staff on how to handle the ever-changing needs of the customers to represent the brand to communities the company is servicing and every time the customers interact with the staff, they will be interacting with the brand as well as increasing the connection and possibility of future purchases and referrals. The idea of keeping a strong brand like (Armstrong and Kotler) [5] alluded to should be Dandara's priority in the future because the company receives honest insights from people who are already invested in the company since they always wanted the company to succeed because the relationship becomes too personal. This will help the marketing department in the formulation of future customer-centered strategies using the right information. It is always that the devil is in the detail and that small little concerns or mistake which break the relationship with the customers "straw that broke the camel's back" (fig 8) [4].

Fig 8: “straw that broke the camel’s back”.

I must admit just like the marketing Director does that there isn't a brand and business on our planet that is 100 percent perfect, although the marketing department has made efforts to make the marketing strategy perfect, products sometimes have failed because not every client will be happy because of different circumstances, however, because at Dandara relationship marketing efforts are in place, it gives the company an out to be able to keep that customer because customer contacts are at the forefront of this marketing effort. Use of social media, Skype, snapchat, the Dandara brand has made an immediate 1-on-1 impact on clients. The company uses their social media pages to keep reinforcing the value propositions that are offered by the group and monthly, bulk emails are sent to clients and these are highly successful and making a long-lasting influence on customers.

Savage and Chadwick Architects

Savage and Chadwick Architects was established 12 years ago. The company has been successful with its marketing strategy and plans in the past. It has survived the difficult market conditions but in recent days have struggled to see the way forward. At present they have been struggling to win anything as big as they used to but surviving. Ignorant to private customers and often referring some potential client to competitors because they felt they were small clients over the last 10 years ago, since the company only focused on big government contracts based on the relationship the Director had with one of the Department of Infrastructure (DOI) Project Managers who by coincidence was his brother. Based on the trust and relationship the project manager had with Savage and Chadwick Architects, the company flourished and had a good flow of projects that kept the business going in the past 12 years. Because of the exposure the company got from doing DOI projects, this relationship spread to other government departments as their service was also very good. However, this relationship wasn't because of any good marketing practice, as it didn't even follow Kotler's three steps of building customer relationship, it only came from referrals and professionalism and proving themselves on the job. Not many other Architects were happy about the government practice at the time of appointing consultants without tendering the project because they thought it was unfair competition, but Savage and Chadwick had already established a niche market that focused on big buildings. At the time 12 years ago when the company was formed, the number of Architects practices based on the Isle of Man was less than 5 and Savage and Chadwick were the biggest and during this time, the company success defied all marketing principles and it was a natural growth.

In the past 5 years, there have been more competitions as some good Architectural Practices started imaging. The new practices started challenging government procurement systems, and as a result, the relationship between government and Savage and Chadwick was weakened as all capital projects must go through tender. The situation has been bad as government policies changed and the new procurement system ensure there is equal distribution of contracts to all consultants and as a result, Savage and Chadwick are now suffering, and they can't keep all their staff because they must get a consistent flow of work. One thing the company could have done was to diversify into property development to vary their work and clientele. This could have been done by assigning or employing a marketing champion who could have given them ideas like building other relationships with a different type of clients rather than entirely relying on the tax payer's money. Government policies keep changing and recently there is the new equality act that calls for everyone to be treated the same, and this had a major impact as every other company were now eating from the same pie despite their experience, so relying entirely on the relationship with government as the main client is a big business risk. The marriage between Savage and Chadwick and the government now represent a broken relationship, from what was a customer-centered marketing because of things that couldn't be avoided and, in all fairness, it's good to say it was a strategy that came up out of convenience rather than design. Because of the consistently high volume of work that was coming in from the government, the company lost the customer-centered approach as they became related. They never developed the customer centred marketing strategy. This is a common problem with most specialist trades, they want to do it all instead of employing marketing consultants and or a Marketing Director. If Savage and Chadwick are to employ a Marketing Director, they could regain their old position in the industry by entering new areas based on their experience and the good service they provide. Since the Isle of Man is the new business hub and because the financial capital of Europe, new relationships with lots of Industries and new companies coming over to set up their headquarters and businesses here can be developed and create a brand that still is customer-centered, but this will need a proper structure and strategy. I feel Savage and Chadwick Architects should have invested in knowing the current market environment and changing customer needs and designing a marketing strategy that is driven by the clients and constructing a marketing program that all lead up to building the company and managing profitable customer relationships.

Savage and Chadwick are missing out on some of the advantages of relationship marketing like making the business to concentrate on long-term goals instead of short-term success through creating strong bonds with the customers so that they see value in the brand, however they are saving on costs as it is costly to implement the strategy because providing value to an existing customer base does not guarantee that there will be more sales.

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