final marketing plan

Aaron Rodriguez, Robin Gines, Stephanie Hernandez

Marketing 3100-07

November 28, 2016

RadioShack Final Marketing Plan Report

Table of Contents

1. A Brief History of RadioShack (Stephanie & Robin) …………………...……........pg. 3-4
2. Report Body
1. Marketing Mix Analysis (Aaron) ……………………………..…………... pg. 4-5
2. Marketing Mix Recommendations (Stephanie)………………………........ pg. 5-8
3. Performance Evaluation Using Marketing Metrics (Robin)…………….…pg. 8-10
3. Bibliography ……………………………………………………………..……... pg. 11-12

1. A Brief History of RadioShack

According to Wolf (2015), RadioShack started in Boston in 1921 as a small ham radio shop. In 1963, after 42 years, RadioShack nearly went bankrupt but it was saved when it was acquired by Tandy Corporation, a leather retailer. After that RadioShack slowly started to pick up momentum, quickly establishing a reputation of the to go store for all your electronic needs. In the 1970’s RadioShack was the leading retailer of CB Radios. In 1977, RadioShack introduced the TRS-80, the first mass produced computer, outselling every competitor and becoming one of the best companies of the time. After this peak in RadioShack’s history they remained stagnant, causing Dell and IBM to pull ahead and become more powerful computer companies working through multiple channels (Solomon, 2014).

Despite RadioShack falling behind, they tried their best to keep up with the changing market, making concentration stores that focus on specific items (i.e. Computer City to sell computers). This new direction proved to be unsuccessful and all of RadioShack’s new focused stores were closed by the 1990’s. Although RadioShack tried to keep up with the market by switching their focus from radios to computers, to calculators, and then finally to mobile phones and TVs, the company began moving into the shadows of new companies like Best Buy. Enough though RadioShack was starting to fall out of the spotlight, their initial success allowed them to retain their reputation for being the go to store for technology gear (Solomon, 2014). Between the years 2004 to 2013 RadioShack hardware sales fell 31 percent as they lost 42 percent of their store base (Wolf, 2015).

In RadioShack’s prime they were the go to spot for a hobbyist to get the parts they needed to assemble their own tech gadgets, they were the place people wanted to get their standard radios, speakers, or new phones from. In the early 2000’s, RadioShack was on top of the market and a major part of the technology industry, selling  parts and offering a wide variety of gadgets including cell phones. In the late 2000’s technology started advancing and people’s preferences started to shift, the way people were buying things was changing. While other companies started to approach the market at different angles in an attempt to keep up with their changing target market, RadioShack remained stagnant, this lead to RadioShack being left behind in the technology industry. In 2015, after 11 consecutive quarter losses, RadioShack filed for Chapter 11 Bankruptcy (Corrigan, 2015). Today RadioShack is struggling to find its way back into the spotlight after being in the shadow of other companies for so long. RadioShack is currently attempting to reestablish their brand as “your neighborhood electronic store”.

2. Report Body
1. Marketing Mix Analysis

Radioshack uses multiple tactics to promote price, promotion, product and place. Radioshack promotes price by price matching its competitors prices when customers find a better deal. For phones they have a low initial price and allow customers to pay off the rest over a long period of time. Their promotion strategy is to promote their new slogan and revamped logo. Their old slogan was “your neighborhood electronic store” and now it’s changed to “let's play”. This illustrates the new found approach America has towards technology. Previously, America saw technology as a hobby of making new things and improving them. Now America’s perception of technology is that it is a form of entertainment and leisure and this is what the change in the slogan represents. The product that they are allocating a lot of their resources into promoting is their NCredible headphones by Nick Cannon. They are constantly featuring it on their social media pages and showing all the features it has to entice the public into buying the product. Radioshack use place in their marketing mix by locating themselves in the same area as their competitors and offering similar products and prices to acquire some of their customers. Radioshack is also available online where they are becoming convenient to the everyday consumer by being highly accessible.  

2. Marketing Mix Recommendations

While RadioShack offers a wide variety of products not all the them are helping RadioShack to flourish and grow as a relevant technology company. RadioShack has focused on mostly the same products their entire retail career, they have been very slow to catch on to new technological trends that entice customers. On RadioShack’s website they have 4 shopping drag down menus, 2 of which are general categories being “shop all” and “on sale”, and the other 2 being more specific but terribly outdated which are “parts drawer” and “radios”. Under the parts drawer section RadioShack offers capacitors, buzzers, fans, fuses, ic sockets, motors, etc. and under the radio section RadioShack offers scanners, CB radios, radio antennas, etc. These two seemingly big product points that RadioShack offers need to be removed from their product selection because they are no longer a part of the cutting edge technology that people are looking for; radios have been a thing of the past since mp3 players and the internet became more popularized. People also are not looking to customize their devices on their own now, new technology allows people to purchase computers and pick some of the specific parts they want included as opposed to deconstructing the laptop to customize it themself. If we take items such as portable radio we would have more money to spend on more things that people would actually buy to generate sales. According to Vogt, N. (2016) Radio listening has increased but as technology moved so then the capability of how they would listen to the radio. In his Fact Sheet 73% of people currently listen to the radio through their smartphones making our old portable radios such as the RadioShack FM/AM pocket radios sort of useless because now people have found a way to reach the radio in a more efficient way. This lead back to pushing our point which is that getting items that are more relevant to people’s usage. Taking out items that aren’t selling and aren’t relevant to our currently time would give us more money for other things for our company and would boost sales if we have item focuses.

RadioShack needs to focus on carrying more relevant technology such as video games, gaming consoles, and cellphones. RadioShack currently offers no videogames, no gaming consoles, and only Boost Mobile and Virgin Mobile cellphones. According to Tennant, D. (2016) from Toptenreviews.com the top three companies are Verizon, AT&T, and T-Mobile. RadioShack is losing a chunk of the market by not have phones in their stores in an age where phones are the most essential thing we need. According to Chaffey, D. (2016) relating to a marketing statistic, 91% of people have PCs, 80% have smartphones, and 47% have tablets. This is a huge chunk of the market that we aren’t attracting. RadioShack is also losing a big chunk of its potential market by not catering to the video game community. According to the market analysis company NewZoo, the global games market reached $99.6 billion in 2016, which is up 8.5% from 2015, as video games become more and more popular this number will increase, resulting in more lost potential profit for RadioShack if they do not start offering these products.

In order to attract new customers as well as boost RadioShacks sales we would use the market penetration strategy because we sell a lot of the same products as our competitors; using this strategy will help us pull customers away from our competitors with our lower prices, this would help us attract more attention and gain happy loyal customers. In an Article from The Street by Ragusa, 67% of Americans would prefer to spend less on a product, people are constantly looking for deals, if we lower the price of our products we could attract our old customers as well as new ones.(Ragusa, G.,2016) Although this may hurt our company in the beginning because the price cuts would cut into our profit, it is something we must do in order to get people back in our stores.

RadioShack needs to work heavily on the promotion of their overall store in general as well as the products that are being sold there. While most people are aware of RadioShack as a company, the majority of people see it as a store of the past. In 2014, RadioShack made one of their last televised advertisements, a super bowl advertisement about their reestablished and updated stores in hopes of drawing more attention and customers but it didn’t work. Now a days RadioShack does most of their marketing and promotion through their weekly ad deals and through their social media platforms such as their Twitter and YouTube page. RadioShack’s YouTube page is filled with great video product promotion such as advertisements for products and testing product videos. Another thing RadioShack is not doing with their advertising is making it audience specific, RadioShack is not targeting potential customers directly. RadioShack needs to making more televised ads that tell customers what popular products they are carrying, at what price, and their store locations. RadioShack also needs to target their customers more directly, by observing customers’ online search habits and pushing them ads for the products they are searching for as well as similar products that they could be interested in. Social networking sites such as Facebook offer sponsored ad spaces RadioShack can also utilize. In order to effectively promote their products RadioShack must conduct interviews, focus groups, and do observational research to see which types of technology customers are interested in (i.e. customization tools, video games, cellphones, RC toys, etc.).

Because RadioShack is bankrupt and quickly losing money they had to close down the majority of their physical locations which they heavily relied on. With the closing of so many of RadioShack’s physical locations, it is hard for customers to think of RadioShack as a viable option of there to get their electronic needs. Since RadioShack cannot afford too many physical locations anymore they need to work on their online presence and relocate their physical stores to more technologically involved cities like Los Angeles and San Francisco. RadioShack must work on their online promotion and marketing to increase their website traffic.

3. Performance Evaluation Using Marketing Metric

RadioShack has been on a decline for the past 6 year and has yet to adapt to the market. RadioShack has focused on the 80s look with red shirts and khakis which wasn’t working. Back in 2011 their Net profit margin was at 1.53% and later decreasing to -80,768% in 2016. RadioShack has failed to adapt to the changing market sticking to what they were doing before 2011 when advanced technology was still being processed.(Inc., V. (n.d.) Compared to Best Buy in 2011 they were at 24.45% Net Profit Margin already controlling the market in that time. Best buy consistently kept adapting to the trend on what people wanted to buy making while our store stuck to selling DIY items.

In 2011 the top technology items that were being sold were Laptops and cellphones which Best Buy had those in sell and the time generating sales and controlling the large tech market in our day. They moved along with the market as RadioShack wanted to stick their DIY items and current items that aren’t being used today.

In our current time there isn’t a statistic on how many people still do DIY products. We would need to understand how many people still create their own gadgets. In an age where 91% of people have PCs and 80% have smartphone we would need the numbers on the creative people out there. RadioShack has set their product focus on their Ncredible Headphones but they would need to join in on the larger market of technology users. People using headphones are only a small market compared to the larger market of smartphones and PCs that RadioShack isn’t targeting or hitting at all. RadioShack although they are known for DIY they have to add their focuses on other products that people are currently using.

In 2014 in a time they were back to a positive of Net profit Margin of 1.97% they released their Commercial in the Super Bowl which cost a lot of money. This was a gamble for their company and made their sales go negative years after. They should’ve spend money on getting time for their commercial during the Super Bowl because it costs a lot of money to get time and with that money they should’ve used it for more better things for the company such as rebuilding before spending a lot of money on a commercial. The commercial didn’t work for RadioShack as for our competitors they have minimal amount of commercial advertisement focusing on their in-store look and online look. Best Buy has the current items that people used which people often buy or have them in 2016 which are the phone and PC market. RadioShack would need to sell the same items or find more items to make exclusive at our store other than only headphones. In a generation where phones,headphones, and PCs are the top sellers in the market we need to set those our focus as opposed to DIY products which aren’t really selling at all.  In order to evaluate the performance of our marketing mix recommendations, we would need to compare our pre recommendation net sales and profits with post recommendation net sales and profits. We would also want to compare how our products are selling in comparison to our competitors products and because our online sales need to improve we would also need to keep an eye on our web traffic to see if we are gaining more attention.

3. Bibliography

Abril, D. (2013, May 24). RadioShack hopes new marketing strategy leads to turnaround. Retrieved November 28, 2016, from http://www.bizjournals.com/dallas/blog/2013/05/radioshack-hopes-new-marketing.html

Bestbuy.com vs radioshack.com Traffic Statistics. (n.d.). Retrieved November 28, 2016, from https://www.similarweb.com/website/radioshack.com?

Best Buy Co Gross Profit Margin (Quarterly):. (n.d.). Retrieved November 28, 2016, from https://ycharts.com/companies/BBY/gross_profit_margin

Chaffey, D. (2016). Mobile marketing statistics 2016. Retrieved November 28, 2016, from http://www.smartinsights.com/mobile-marketing/mobile-marketing-analytics/mobile-marketing-statistics/

Electronics, Batteries, RC Toys, Soldering Tools, and more! (n.d.). Retrieved November 28, 2016, from https://www.radioshack.com/

Gustafson, K. (2015, June 30). RadioShack wants you to know it still exists. Retrieved November 28, 2016, from http://www.cnbc.com/2015/06/30/radioshack-is-back-the-retailer-proclaims.html

Inc., V. (n.d.). Erratic Net Profit Margins over the past 6 years. Retrieved November 28, 2016, from http://www.vuru.co/analysis/RSH/economicMoat

President, B. S. (n.d.). Global headphones/headsets sales 2016 | Statistic. Retrieved November 28, 2016, from https://www.statista.com/statistics/327000/worldwide-sales-headphones-headsets

RadioShack Super Bowl 2014 Commercial [Video file]. (2014). Retrieved from https://www.youtube.com/watch?v=aUCHy5y23nI

Ragusa, G. (2016). Most Americans Prefer to Buy Cheap Rather than American-Made Goods. Retrieved November 28, 2016, from https://www.thestreet.com/story/13572046/1/most-americans-prefer-to-buy-cheap-rather-than-american-made-goods.html

Ross, N. (2011). Best tech products of 2011. Retrieved November 28, 2016, from http://www.abc.net.au/technology/articles/2011/12/22/3396554.htm

Stevens, L. (n.d.). Retrieved November 28, 2016, from http://www.wsj.com/articles/survey-shows-rapid-growth-in-online-shopping-1465358582

Tennant, D. (2016). Top 10 Cell Phone Providers of 2016 | Top Ten Reviews. Retrieved November 28, 2016, from http://www.toptenreviews.com/mobile/phones/best-cell-phone-providers/

The Global Games Market 2016 | Per Region & Segment | Newzoo. Retrieved November 28, 2016, from https://newzoo.com/insights/articles/global-games-market-reaches-99-6-billion-2016-mobile-generating-37/

Vogt, N. (2016). Audio: Fact Sheet. Retrieved November 28, 2016, from http://www.journalism.org/2016/06/15/audio-fact-sheet/

Zibreg, C. (2012, December 12). IDownloadBlog.com. Retrieved November 28, 2016, from http://www.idownloadblog.com/2012/12/12/radioshack-50usd-off-iphone-5/