Culture
Sociocultural- “The sociocultural environment is of particular concern to marketers as it has a direct effect on their understanding of customers and what drives them. Not only does it addrsss the demographic structure of markets, but it also looks at the way in which attitudes and opinions are being formed and how they are evolving.” (Brassington & Pettitt)
For Amstrad, they will have to consider changes in demographics, culture, attitudes and current issues. Amstrad previously use to make games and games console, but they are out of this market. Children wanted better games, more functions etc. Amstrad were not able to compete on this level with competitors such as Nintendo & Sega. Times have also changed, adults now are also keen on playing computer games. Amstrad were not able to capture this market. Amstrad were not seen as a good game provider by customers. Amstrad have to consider peoples attitudes.
Technological- This is key to Amstrad, and the market they are in, especially computers, e-mail, fax etc. They have to be innovative. There is always new products coming out. They will have to always do marketing research to keep up, and come out with new products. This is very important with competition from the Far East and new companies trying to copy them. Technology effects how they develop new processes and products. They have to be quick to the market, before a competitor gets there first. Technology is very important and effect how they carry out there marketing. They have to get the right product, at the right price, promote it well and make available in a suitable place. This is called the 4 P’s, and is very important for there marketing mix.
Economic- This could include things like government policy, interest rates and market structure. Amstrad have to consider structure of there competition, and also the current marketing condition. If there was a recession, then people will have less money to spend, and many Amstrad product can be seen as a luxury, rather then something needed. This is not just for the public, many businesses are also affected by recession, and may be good customer of Amstrad. From the history of Amstrad and information on website, we can see that they are also selling to other countries. This is good because if UK market drops through increase of interest rates or changes in government policies, then Amstrad still have there overseas business to look at. They are not just stuck to UK market.
Political- This can be things like regulatory body, local and national government etc. There are advertising Codes of Practice in this country and also rules and regulation changes could affect Amstrad. For example, if the advertising standards were not happy with Amstrad and think there products and advertising is misleading to customers then they would be told to stop. This can be very expensive, especially if they have spent lots of money on there advertising campaign.
Marketing is all about looking outwards and meeting the customer’s needs and wants. There are always opportunities and threats that can have effect on the marketing mix. The PEST factors look at the external environment, which is important for Amstrad to always look at, as this will effect there marketing mix.
Management and Leadership
Amstrad Plc is currently owned by the founder and chairman, Sir Alan Michel Sugar.
Porter (1985) suggests that for competitive advantage a firm must seek to lead a generic strategy to achieve above-average performance in an industry: cost leadership, differentiation, and focus. Each generic strategy is a different approach to creating and holding a competitive advantage.
From the analysis of Amstrad, we can see that a cost leadership strategy was used, firstly from the low cost sale of hi-fi turntable covers, and also the IBM compatible PC sold in the 80’s at a quarter of the price of competitors. Alan Sugar, in the Amstrad annual report 2005 states, “We are experts in design and engineering. One of our talents is to engineer products with all the specialties and facilities the market demand and delete those facilities that are only enjoyed by the minority.” Amstrad introduced products which were simpler to use, which offered substantial cost savings as the product was designed for ease of production. In the early years, Amstrad subcontracted a lot of its manufacturing to the Far East, saving on the expensive labour costs of the UK. Amstrads strategy of cost leadership involved tight cost controls and low-cost production.
Motivational Theories
Amstrad Plc. has motivated their staff and employees very accurately. At Amstrad, providing a considerably supportive environment goes way beyond the workday, so that their workers feel confident that their personal needs will be covered. Amstrad offer comprehensive benefit options as part of their total compensation plan. All Amstrad workers are licensed to participate in the following programs:
- Medical Coverage
- Company-paid Life Insurance
- Financial planning service
Along with outstanding benefits and competitive compensation, they offer ongoing professional training and development programs designed to help their people learn their skills and master new ones. Whether in Engineering, Marketing, Accounting, Operations - or any of the many business units within their dynamic organization, the Amstrad team enjoys many opportunities to learn and succeed.
Working with Others
At Amstrad, everyone is apart of a successful team. Everyone plays a vital role in helping others to live their lives more freely and enjoyably with new electronic products.
Teamwork and Groups
At Amstrad every staff finds different ways of working with different people. From Well educated physicians to extremely skilled engineers, Amstrad Plc is a great place to work.
All staff members learn every aspect of working at the company through an extensive, on-going training program, which is offered to those who are experienced as well as inexperienced. This aids everyone to contribute to the crew. From wiring the set-top boxes, to packing them in boxes and shipping them, every staff plays a key part in the success of the organisation.
Amstrad considers a lot of factor to make their customers a happy customer. These include:
When a customer purchases an item, They will want to get good quality products and fast service when they require. When all this accomplished, the customer is satisfied. If any member or staff is unable to comply within these rules, the requirements to make a winning team will not be fulfilled.
Therefore, we can say everyone at Amstrad is important.
Group dynamics
Senior management and indeed management across the company communicate with employee in many ways. All senior managers hold regular meetings with their director reports and their border-reporting group, and all senior managers operate an open-door policy. Senior management and operational management spend a large proportion of their time visiting worldwide branches, speaking and soliciting views and information from crew and franchisees.
Amstrad are very committed to finding new and innovative ways of communicating effectively with their employee. Every member of the organization need to have knowledge of what the company is doing so that they can feel proud of their jobs and are committed to the company’s future successes.
Conclusion & Recommendations
To meet customers needs, Amstrad must produce the right product, at the right price, make it available at the right place, and let people know about it through promotion. For Amstrad they have been very successful throughout there history. But one of the key problem is that there products have a short life cycle. Competitors are always looking to bring something out even better. As from the history of Amstrad, they have not always been the first to bring out new products. There strategy in the past was to find new processes of how to make an existing product more cheaper. This was there success in the 80’s with computer. Porter generic strategic strategy is difficult to understand, but I think after reading the book and Amstrad’s history, that there strategy is focused on cost. They are not interested in what the minority want but more on what the majority are looking for.
I would say they are market oriented. Bringing products as demanded by the market, rather then building products just because they have the ability to do so. There is no point making a fantastic product if nobody wants to buy it. Amstrad’s 4 P’s have been very good. There strategy focused on reaching many people.
Amstrad have many strengths but also weaknesses. They will have to always consider there threats such as competition and new legislations or changes in the external market such as the PEST analysis. They have to get the correct marketing mix, with balance between everything.
They must continuously do market research to look for new products to bring and also how to make them cheap, to sell more. It is important for Amstrad to spread there risk, to sell in more countries in case in the future they slowly suffer from more competition and new competition. It is good marketing to spread the risk.
Amstrad currently market leaders in Satellite and Sky. Although this is good, they have to look at the products which are making them money, and concentrate on the old products which sell well.
It is important for Amstrad marketing to always plan for the future, and also let there employees know. This is good for motivation and people feel important.
To conclude, it seems with my limited research with the time I had to do this assignment, Amstrad are an established business with good strategy based on a balance marketing mix. They are good at targeting the right customer and also there positioning is always timed well.
Appendix 1- Amstrad PLC Company Profile
A Brief History
(Adapted from Amstrad website)
1968
Amstrad founded by the present Chairman Alan Sugar, trading in electrical goods.
1970
First manufacturing venture embarked upon. Lower prices were achieved by injection moulding plastic hi-fi turntable covers, severely under cutting competitors who used the vacuum forming process. Manufacturing capacity is expanded to the production of audio amplifiers and tuners.
1980
Amstrad lists on the London Stock Exchange.
Amstrad doubles in size each year during the early 1980’s.
1984
Amstrad launches the first mass market Home Computer package (CPC range), designed by Amstrad engineers in the UK. This product captures the market from the existing players Commodore and Sinclair.
1985
Amstrad launches the first mass market dedicated Word processor (PCW 8256). This product opens up a previously untapped market.
1986
Amstrad launches the first mass market IBM compatible PC (PC 1512). At £399 this unit is less than a quarter of the price of established market leaders.
Within 6 months of its launch Amstrad captures 25% of the European Personal Computer market.
The introduction of the PC1512 alters the face of the computer market throughout Europe and brings Amstrad international recognition as a major force in the home and business computer sectors.
1989
Amstrad launches the first mass market Satellite Receiver/Dish package for Sky TV and becomes the European Number One supplier of satellite receivers.
Amstrad launches the first combined Fax, Telephone and Answering machine acquiring 52% of the personal fax market.
1990
Amstrad launches the first integrated Satellite Receiver/Decoder for Sky TV.
1992
Amstrad purchases 29.9% stake of Betacom PLC from Canon Street Investments PLC. A rights issue and subscription, increases Amstrads shareholding in Betacom to 71.3%. Betacom, a UK based domestic telephone supplier provides Amstrad with a foothold in the developing telecommunications market.
1993
Amstrad acquires Dancall Telecom, (for £8m) a Danish dedicated telecommunications manufacturer specialising in cordless phone technologies PCN and NMT450. The acquisition enhances UK CT2 research resources and facilitated access to the Scandinavian market.
Amstrad launches the worlds first Personal Digital assistant (PDA600).
Repayment and cancellation of share capital involving a scheme of arrangement, as a result of which Amstrad’s shareholding in Betacom reduces to 66.2%.
1994
Amstrad acquires Viglen computers, the UK’s leading supplier of computers direct to end users.
Amstrad Direct launches in the UK, supplying computers and faxes direct to the public.
1995
Amstrad acquires Dataflex design communications, a specialist in modems.
1996
Amstrad launches Dancall GSM mobile phones.
Amstrad grants Betacom a licence to use the Amstrad brand on consumer electronics products.
1997
Alan Sugar appointed Chairman of the Board at Betacom.
Amstrad launches Dancall dual band mobile phone (World phone).
Amstrad sells Dancall Telecom to German telecoms manufacturer Bosch Telecom for £96m.
Amstrad launches Cable Receiver/Decoder STB for Foxtel in Australia.
Amstrad awarded a contract to supply advanced Interactive Digital Set top boxes to British Sky Broadcasting PLC.
Amstrad’s consumer electronics and satellite business is sold to Betacom.
Amstrad PLC is de-listed from the stock exchange and each shareholder receives loan notes, shares in Viglen Technology PLC and shares in Betacom PLC and a letter of entitlement to the potential net proceeds arising from two court cases.
Betacom PLC changes its name to Amstrad PLC (Nov).
1998
Amstrad announces an agreement with Cable & Wireless Communications to sell Cable & Wireless branded telecom products into the retail market.
Amstrad commences supply of multiple products to BskyB to facilitate digital interactive services.
1999
Amstrad DRX100 (Digital Satellite Receiver) awarded What Satellite TV award for “Best Sky Receiver.”
Amstrad sells Betacom, Answercall and Cable & Wireless branded telecommunications business to Alba PLC for £4m in cash.
2000
Amstrad launch the e-m@iler, a personal communication centre incorporating fully featured telephone with email capabilities.
Amserve, a subsidiary of Amstrad, is established to manage the retail sales and distribution of the em@ailer, deliver advertising into consumers and generate email revenue from the em@iler.
Amstrad announces Britannia Music and Direct Line Financial Services as the first companies to sign-up to participate in direct advertising programmes on the em@iler.
Amstrad announces that Dixons Group plc has taken a 20% stake in its wholly owned subsidiary, Amserve Ltd, in a £15m deal.
Amstrad announces it is the first company to have received full type approval from BskyB for its new DRX200 Digital Set Top Box incorporating the new ST5512 chipset.
2001
Jack Straw and Sir Alan Sugar launch e-m@iler watch, a revolutionary new scheme which allows Neighbourhood Watch co-ordinators to communicate with the police in near virtual time by means of Amstrad e-m@iler communication centres installed within their homes.
Amstrad releases it’s next generation Digital Set Top Box, the DRX300.
Amstrad add HSBC, Jungle.com and Blue Square to its ever increasing list of advertisers on the e-m@iler.
2002
Amstrad launch the e-m@ilerplus, the next generation e-m@iler, which now offers internet access and allows you to download and play Sinclair ZX Spectrum games.
2003
Amstrad signs two separate new manufacture and supply agreements with BskyB, the first for Sky+ set top boxes and the second for a new sky branded combined keyboard and remote control unit.
2004
Amstrad commences shipment of Sky+ set top boxes to BSkyB.
Amstrad announces an order to supply digital satellite set top boxes to the Italian broadcaster, Sky Italia. First shipments commence ahead of schedule.
Amstrad launches E3- the 3rd generation of emailer superphone. The E3 Videophone allows Britons to ‘look who’s talking’ by making video calls to other E3 phones.
2005
Amstrad announces an agreement with BSkyB to develop and supply a new PVR box.
2006
Amstrad plc announces new product launch, the DRX700i digital satellite high definition (HD) set top boxes, produced for Sky Italia.
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