Below are two model answers to questions based on the SRCL case study.
Analyse the possible reasons for the change in the figures labour turnover figures
The change in the figures is very significant – 18.3% 2008-2009 compared to 4.9% in 2005-2006. The figure also doubled in the last year.
One factor is the aging workforce. 28% of the firm’s workforce are over 56. This makes it more likely that they will retire at some point and the work is also very physical increasing the likelihood of early retirement. The age profile of the workforce is getting older meaning that the numbers retiring will increase – increasing the the labour turnover figure. However, some employees do stay on past 65 (5), and retirements alone cannot account for such a big jump in the figures as only approximately 3% of the workforce will reach 65 in anyone year and 18.3% are leaving.
A factor is also attitude and skill of the workers being taken on. They lack the skill to complete the training and they lack the desire to do hard physical work in difficult conditions. These two factors combined will also increase the number leaving and therefore labour turnover. Although these factors would not explain the sudden jump in turnover as social factors such as these do not change so suddenly.
The final factor is the introduction of the new machinery. This has taken some of the job satisfaction out of the job and affected motivation of workers. This has been the key change in the last couple of years and therefore may be the reason for the jump combined with the aging workforce who feel threatened by the new technology and are perhaps choosing to retire rather than learn how to use the new equipment.
Analyse how SRCL might change the marketing mix if they decide to diversify and target the super rich.
The marketing mix shows the key factors that influence the consumers buying decision.
SRCL currently sell mainly business to business, and as a subcontractor. They have worked on Palaces and listed buildings. This suggests that in terms of the product that they offer they should appeal to the super rich who want the best that is available. It may be that they need to change some of the materials that they use to make them more appropriate for domestic dwellings (although the rich customers that they might target are likely to live in quite grand places) and they might need to look at what is fashionable at the moment in terms of home design. They should offer a discount service made from concrete. However their USP is likely to be their “heritage” service and they probably want to emphasize this to attract customers.
SRCL already charge high prices that reflect the service that they offer as bespoke and of the highest quality. They should increase their prices because rich people will perceive it as better quality and buy more. They probably would not require any sort of discount strategy given that they will be targeting the super rich whose prime concern will be quality.
They will need to make their new target market aware of the product. The best way to do this might be by targeting firms of architects who would actually be doing the design work. Trying to target the end customer is likely to be too expensive, hit and miss and impractical. They should advertise on TV as this will reach their target market. They should advertise on in the national press as this will reach their target market. Promotion might be through specialist trade press and Trade Exhibitions. Good public relations through some celebrity receiving their service might also boost demand.
In terms of PLACE they are already located in an area with a large number of potential rich customers in the South-East. They should open up new branches in posh areas. They should establish whether there is profitable demand for the service before the think about relocation or new branches.
In the exam you would not want to try and cover every aspect of the marketing mix because your answer would therefore lack depth. Better to develop 2 or 3 points in depth.
