Word Count: 10056

CIM

Driving Innovation
Responding to change in customer
behaviors

Membership No.
38456843
 STRATEGIC MARKETING Membership No. 38456843

Table of Contents
1.0 Where are we now? .................................................................................................................................................... 3
1.1.1 What does Abans provide and what is their customer base? ................................................................................. 3
1.1.2 Competition ...................................................................................................................................................... 3
1.2 The Disruption ............................................................................................................................................................. 4

1.2.1 Customers do not visit the store anymore ............................................................................................................. 4

1.2.2 Customers do their research of products using third-party websites without consulting tech experts at Abans ... ..4
1.2.3 Implications ........................................................................................................................................................... 5
[Link] Short-term implications ............................................................................................................................. 6
[Link] Medium-term implications......................................................................................................................... 6

1.3 Adapting innovation and entrepreneurship ................................................................................................................ 7

1.3.1 [Link] .................................................................................................................................................................. 7

1.3.2 Abans’ ability to adapt ........................................................................................................................................... 8
1.3.3 The change in the marketing function of [Link] .................................................................................................. 8
[Link] Price .......................................................................................................................................................... 8
[Link] Advertising and Promotion ........................................................................................................................ 8
1.4 Recommendations ...................................................................................................................................................... 9

1.4.1 Short-term recommendations .............................................................................................................................. 9

1.4.2 Medium-term recommendations .......................................................................................................................... 9
1.4.3 Focused Recommendations ................................................................................................................................ 10
2.0 The Creative climate within the Marketing Function................................................................................................. 10

2.1.1 What is Creativity? .............................................................................................................................................. 10

2.1.2 Components of the Creative Climate ................................................................................................................... 10
2.1.3 Dimensions for Innovation and Entrepreneurship ................................................................................................ 11
2.1.4 Strengths and Weaknesses in adapting to the changing nature of Customer behavior ......................................... 11
2.2 Current external networks used by the marketing function in developing a creative and innovative environment..12

2.3 Internal Marketing .................................................................................................................................................... 12

2.3.1 Where are we now? ............................................................................................................................................ 12

[Link] What is internal marketing? ..................................................................................................................... 12
[Link] Internal marketing approaches taken by Abans ........................................................................................ 13
2.3.2 Where do we want to be? ................................................................................................................................... 13
[Link] Internal Market Segmentation ................................................................................................................. 14
[Link] The relationship between the core functions of Abans and the company’s objectives. ............................. 14
[Link] Internal Marketing Mix ............................................................................................................................ 15

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3.0 Internal Podcast ........................................................................................................................................................ 16

3.1 Overview ................................................................................................................................................................ 16

3.1.1 Scenario .......................................................................................................................................................... 16
3.1.2 Recommendation ............................................................................................................................................ 16
3.2 Communication of Internal Functions ..................................................................................................................... 17
3.2.1 Communication of Internal Functions - Strengths ............................................................................................ 17
3.2.2 Communication of Internal Functions - Weaknesses ........................................................................................ 17
3.3 How communication should be used to simulate the creation of innovative ideas .................................................. 18
3.3.1 Recommendations on how to improve inter-functional communication .......................................................... 18
3.3.2 How can the staff get involved with the proposed changes? ............................................................................ 19

[Link] What are the proposed changes? ............................................................................................................. 19

[Link] How can everyone help? .......................................................................................................................... 19

[Link] Conclusion .............................................................................................................................................. 19

References ...................................................................................................................................................................... 20

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1.1 Where are we now?

Vision: Attract and retain customers for life Abans PLC was incorporated in 1981. It is a for-profit organization and
comprises of a product portfolio of globally trusted brands of
Mission: Always there to serve you better
electronics and home appliances.

Abans PLC possess an island wide reach with a network of over 400 showrooms with over 4000 employees, as well as
over 15 Elite showrooms (which offer the entire product line) in strategic locations around Sri Lanka.

Figure 1
Figure 2
Source: Abans Electricals PLC Annual Report 2014

1.1.1 What does Abans provide and what is their customer base?

Abans provide globally trusted brands of electronics and home

appliances, mobiles and smartphones, security surveillance systems.
Abans primarily sells LG products as they are the sole agent of LG
for Sri Lanka. They also provide IT and communication equipment, and sanitary ware and a
host of other household items that add convenience to people's lives. Abans has also started the
production of refrigerators and air conditioners in the country helping the country’s GDP plus
making it a cheaper purchase for its customers.

The Abans brand has come to be synonymous with reliability and high quality, making it one
of the best-loved brands in the country. The introduction of Apple products to its portfolio has
given Abans an edge over its main competitors.

Abans’ primary focus is to provide quality electrical items for the general household. They
have been able to gain the trust of its customers by providing world renowned, top notch brands.

Abans has also managed to develop good ties with companies to form a B2B type relationship providing these companies
with the electrical solutions that they require.

1.1.2 Competition

Abans’ main competition in Sri Lanka has been Singer and Softlogic with
comparatively the same products list and focusing the same target market.

However there has been a shift in the consumer behavior with the introduction of online selling and thus a new set of
competitors has come up for Abans. A few examples of these are [Link], [Link], [Link] etc.

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1.2 The Disruption

As shown in figure 2 (pg.: 1) over the years Abans has seen a considerable reduction in its market share. There can be
multiple reasons for this reduction; for example bad customer service, issues with the products, flaws in promoting their
products etc.

However this document would focus on why Abans has lost its market share due to changes in customer behavior.

The sale of electronic items through online websites against the sale of electronic items by Abans over the years is shown
in the graph below.

According to the graph (figure 3) it is clear that online websites such as [Link], [Link] and [Link] has taken away
a large proportion of the sales away from Abans.
Figure 3
As shown, after the civil war ended in 2009 there is
a considerable increase in purchasing of electrical
equipment. However Abans who is a leader in the
market has been unable to cater to this increase in
demand for electrical equipment.

Figure 4: Predicted global E-

commerce sales 2014 -2019

In 2014 online websites in Sri Lanka has been able to make sales of
over Rs. 4.5 billion while Abans who has over 400 showrooms
around the country has only been able to make Rs. 3.2 billion. This is
a good example for the loss of the market share of Abans shown in
figure 2 (pg.: 1). Abans’ market share has been taken away by online
shopping websites of which most of them are run in small offices.

Abans been an industry leader has failed to enter into this market Source: [Link]

segment and now losing the market that it once used to be in-charge of. It is important to understand why customers have
shifted into purchasing online rather than visiting the store. There are a few aspects that need to be considered for this
change in behavior of customers.

A few years back online purchasing was not something that was
practiced as such in the country as people were not used to it. With
people getting comfortable with technology, the customer/user behavior
has changed dramatically with many people shifting to purchase their
products online against visiting the store. As shown in figure 4 it’s
predicted that global online sales will increase in the years to come and
by 2019 it would go over 3550 trillion US dollars. This shows it is a
growing segment and that companies like Abans need to utilize new
technology to keep up with the changes in customer/user behavior.

Figure 5 on the right looks at online vs. traditional retail in Germany in

the year of 2015. The consumer electronics segment which is what
Abans specializes in is only second to books. Thus figure 5 proves that a
large portion of the German market prefers to purchase their electronic
products online rather than the traditional method of visiting the store.

Figure 5: Online versus traditional retail

in Germany 2015, by product group

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1.2.1 Customers do not visit the store anymore

Back in the day when online shopping was not available the leaders in the household electrical appliance market was
Singer and Abans. Figure 4 shows the normal way a customer had to follow in order to purchase his/her desired product.

Visit the Browse through a selected range of Select a product Pay via Purchase
showroom products particularly from one brand cash/cheque
Figure 6

With the introduction of new technology the first step shown on

figure 4 could be taken out completely. The points below explain Source: [Link]
why people do online shopping and not visit the store.

 Anytime, Anywhere. People are able to purchase

products at the convenience of their home at any time
during the day as comfortably as possible.
 Purchase on the go. Figure 5 shows that there would be a
57% increase in the global mobile data traffic amounting
to 24.3 Exabytes per month. This data shows that people
are predicted to get more and more inclined to get their
work done on the go on their phones, which is Figure 7: Global mobile data traffic from 2014 to
convenient with their busy schedules.
2019 (in exabytes per month)
 Get it delivered. There is nothing the consumer has to
worry as he the item he purchases will be delivered straight to his doorstep.

Therefore it is evident that there is a shift on the customer/user behavior as people are now not visiting the store but
purchasing products online as it is more convenient.

1.2.2 Customers do their research of products using the third-party websites without consulting tech experts at Abans
When internet was not common in Sri Lanka, there was only a limited amount of information that people could utilize.
Thus people were inclined to visit retailers like Abans and Singer to get information of different products and had to trust
what a sales representative mentioned about the product. Abans and Singer predominantly have brands that they are
affiliated by and therefore most people had to purchase products only from those brands. However with the introduction of
internet, there is a large amount of knowledge that is easily accessible to anyone. The customer gets the ability to do a lot
more research when purchasing as he or she gets to compare and contrast between different products using the internet.
YouTube has lengthy review video of all the latest products in the market and hence allows the customers to get ideas from
different individuals who have used the product before purchasing. Foreign brands are also accessible for customers with
the help of sites like increasing the range at which they select what they need.

1.2.3 Implications

Search Select Implement Capture

Address issue of Use current website Communicate this With the correct functioning of the
customers are platform to publish its development to the current online platform, Abans will have
changing from products and create it to customers and new the opportunity to reach out to
Short-term Implications

traditional be an online retail store customers, making the site large amounts of people. Which in
shopping to for Abans’ products demanding as an online turn will bring about above
online shopping. rather than just an shopping platform. average profits.
informative site.
Address issue of Will create a database of Position this as a This will improve the participation
customers doing information on different professional database where of customers as he/she can get a
their learning products by tech experts. product specialists give good understanding about the
about products their review about each product; making this database a
online rather than product. substitute for sites like YouTube
consulting a tech and regaining trust among the
expert. consumers.
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Address issue of Develop customer Use different metrics to The customer relationship
customers are relationship management analyze the various changes management system will allow
Medium-term Implications

changing from tools to understand the among the customers and Abans to understand each
traditional behavioral changes also use systems to store customer and try to retain the
shopping to among customers about large amounts of data from frequent customers who bring
online shopping. their buying patterns etc. each customer. more profits than the rest.
Address issue of Broaden product Use this information of Will enable Abans to develop a
customers doing spectrum by adding other products to show why better position for the brands that
their learning information about the brands Abans is Abans sell and will be able to gain
about products products not affiliated by affiliated by are perceived profits as people are given the
online rather than the brands they sell. better than the others. notion that the brands that they sell
consulting a tech have better products.
expert.
Table 1: Source: Tidd and Bessant (2009)

Internal Environment Urgency External Environment Urgency

Abans lacks tech savvy employees who are High A large amount of the competition that has built High
capable of maintaining a large website as recently for Abans are companies that have
proposed in table 2 above. It is an urgent adapted new technology keeping up with the
requirement if Abans is going forward with changes in customer/user behavior. It is important
the proposed website. for Abans to adapt the latest technological
advancements.
It is required to see how well the employees High Abans is a reseller and to attract quality world Medium
of the company would accept the proposed brands Abans needs to be more accessible to its
changes. A quantitative questionnaire or customers. The more it is accessible to its
similar data collecting method should be customers the greater the chance for “big” brands
carried out to understand the attitude of the to work with them
employees towards going online and creating
the database.
With the upcoming changes the de- Medium The low-income earners need to be monitored. In High
centralized structure will need to be changed Sri Lanka this low income earners taker a majority
to a functional organization structure where of the market. Thus Abans should reach out to
Abans will have to group employees these customers with products that are suited to
according to a specialized or similar set of their budget.
roles or tasks.
Table 3: Marketing Manager Abans Electricals PLC
[Link] Short-term implications

As mentioned earlier this shift in customer behavior has affected the market share of Abans during the past few years. If
Abans does not adapt to this situation, they will continue to lose its market share since there is a more convenient method
for the customers to purchase their products from home instead of visiting the store.

In the short-term Abans has a large risk of losing control over the customer relationship as the customers are moving
towards online purchasing. Abans have built a strong group of loyal customers over the years; however there is a risk of
these customers moving away from the company.

[Link] Medium-term implications

Abans should move into some sort of digital change soon. Following is a few issues that they would face if they do not
respond to this customer behavior:
 Competition over digital platforms would increase that would have the ability to put Abans out of business.
 Abans hold a large pool of in-house trained technical staff that can be taken up by the online companies that are
gaining strength in the market place.
 Losing suppliers as there is a possibility that they would start supplying their products to companies that have a
more online presence rather than Abans.
 There is a threat of commoditization.

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In the years to come if Abans fails to be innovative and respond to this situation there could be serious implications as
mentioned above. As the behavior of the customer is shifting to not visit the store but purchase online; there is a high risk
that certain Abans outlets will have to be closed down.

1.3 Adapting innovation and entrepreneurship

This situation that is faced by Abans is something that most organizations in Sri Lanka are currently facing. With the
interest and comfortability that people in Sri Lanka show towards the use of internet for performing their day to day
activities, there have been a lot of online businesses that have started up.

This has made the current market leaders to re-strategize and to embrace innovation to survive in the market. [Link] is a
good example of a company that faced a similar situation but they were entrepreneurial enough to use this customer
behavior in order to create a new method to deliver their products to its customers and be one of the market leaders.

1.3.1 [Link]
A specific business that has been able to adapt new technology and excel in its
industry is [Link]. Wow started as a small department store in Colombo. They
had a large product range in this offline store which was mainly inline to
compete with Arpico; which is another leading department store in Sri Lanka.
Wow failed to see improvement in its sales with this one store in Colombo and thus started considering other options.
Online shopping websites were not something that was popular in Sri Lanka during the time. It was not something that
people were comfortable with as there was a concern using credit cards for online shopping in the country. However Wow
decided to change its structure and in 2011 they launched a website where people were able purchase products online.
[Link] today is Sri Lanka’s largest online store and one of the pioneers in the industry, has been at the forefront of driving
innovation in this field.

[Link] provides customers with everything they need and want, all in one location. The website is a one-stop destination
for electronics, clothes, toys and gifts as well as hotel vouchers. The company has partnered with leading banks to offer
convenient payment options and instalment plans that make it increasingly more affordable for customers to purchase
products on the website.

Like [Link] those that thrive are quick to read and act on signals of change. These companies that are adaptive are able to
work out how to experiment rapidly, frequently, and economically; not only with products and services but also with
business models, processes, and strategies.

In order to adapt, Abans should have had its antennae tuned to signals of change from the external environment and
predicted this change in customer behavior like [Link] did.

However change is not something that Abans can easily bring like [Link] did. Abans is a large company and in order for
it to change its business structure, it would have to go through a massive amount of procedures unlike [Link].

1.3.2 Abans’ ability to adapt

o Becoming an adaptive competitor can be difficult, especially for large, established organizations. Typically,
companies like Abans are oriented toward managing scale and efficiency, and their hierarchical structures and
fixed routines lack the diversity and flexibility needed for rapid learning and change.

o Abans predominantly sells products from one brand which is LG. This would be a problem for them when going
online as the other online websites sell products from a range of brands which gives more selection for the
customer. Stripes & Checks as a shirt manufacturer does not have this issue.
o The top management of Abans is not flexible as the management at [Link]. This would be a major factor that
prevents Abans to succeed going online as the top management do not readily embrace change.

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 Abans already has 400 showrooms in Sri Lanka and each showroom has their own vehicles for product delivery.
This network would be easy for Abans if they go online as they already have the distribution channels.

 Abans is the sole agent of the brand LG which would help them have an edge over other online websites as they
should be able to sell LG products at the best price in the market.

 The brand “Abans” is household name in Sri Lanka and it has been able to build a large amount of loyal customers
over the years. This familiarity and loyalty of Sri Lankas towards the brand “Abans” will help them enter into an
online business with ease as they carry a large amount of trust of the people.

1.3.3 The change in the marketing function of [Link]

[Link] changed their entire system to adapt to the change in customer behavior that they proactively observed that would
happen. It was possible for the company to go partly online but the management chose to go fully online as they did not
want to complicate their marketing function. By going fully online Wow just had to connect the suppliers with the
customers rather than having their own warehouses to store the products.

[Link] Price
The pricing has interestingly reduced with Wow going online. When Wow was having its department store, the pricing was
much higher when compared with the pricing they have implemented when going online. This is a significant example of
how the marketing function of Wow has changed by going online.
It is important to understand why this price has reduced. A few points explaining this is given below:

 Wow does not have worry about using warehouses to store its products anymore which will drop the final cost of
each product.
 The supplier is directly linked with the customer and thus Wow acts as a middle man and not a retailer.
 Wow does not have to maintain a showroom anymore which would relieve them from large amount of costs
monthly that would be added to the final cost of each product.

[Link] Advertising and Promotion

The way in which Wow does its advertising has completely changed with the
introduction of new technology and new modes of media. When Wow
operated in Colombo as a department store, majority of its advertising was
done outside the store with different types of banners and boards to attract
customers. Wow also used newspaper articles to promote the store which cost
them large amounts of money with minimal return. The transition of Wow to
an online business has opened their business to new modes of advertising that
is difficult to be achieved by a normal offline store.
Social media is a tool that Wow uses extensively to get its message across to
the target audience. Been an online business Wow is able to directly link
customers to their promotions with the use of social media, and make a faster Figure 9: Facebook insights is a
turnover from an advertisement to a sale. great tool to know your audience
For businesses in any industry, the key to success is knowing your audience.
Social media also helps target audiences more effectively which Wow uses extensively to target different demographics of
customers with different products. Social media marketing is a new way of marketing but Wow has been able to be on top
of it and get its messages across to its customers effectively.

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1.4 Recommendations

As discussed, Abans failed to fill a void that was building up in the market. People visited Abans for their electrical needs
before there were websites; however as soon as online shopping websites came about, the customer/user behavior started
shifting.

1.4.1 Short-term recommendations

Abans needs to strategize how they are going to move forward. It is not possible for Abans to suddenly switch to an online
system. The groundwork should be built for it during the short-term. A few areas that Abans needs to focus on are listed
below.

 Abans is the sole agent of LG which is a world renowned brand. They should try to work with new brands and
expand their product portfolio. The ties with LG will surely help them gain attention of other leading brands in the
world.
 Abans needs to stress to its customers the importance and advantages of purchasing electrical items from them in
their marketing material.
 Abans is always the number one specialist when it comes to household electrical appliances. These new online
websites that are taking away Abans’ market share are just using their website as a platform to sell their products
and do not have a proper knowledge on electrical items. Abans needs to build this notion again in the mind of the
consumer which they have failed to do over the years.
 Have more locations that offer after sales service. Abans holds a large pool of young technical staff that holds
immense knowledge on the technical aspects of the products. Thus they are able to give an unmatched after sales
service over its competitors. However only one such service center is located in Colombo; Abans should try and
expand on the service centers. Maybe have a service center at each showroom.
 Abans should try and reach out to companies. Companies, unlike the average customer would need products in
bulk. By adding a few well established companies into their customer portfolio they can build the Abans brand
name in the market.

1.4.2 Medium-term recommendations

Abans needs to gain the market share it has lost. The short term recommendations will lay the groundwork to re-establish
the brand Abans among the people. However there are certain steps Abans needs to follow in the coming months in order
to retain the number one spot in the market.
 Abans needs to tie up with an online shopping website that has been able to gain recognition in the market. This
way Abans will have the ability to enter into the online spectrum without investing a large amount of money on a
website. This way however they would lose a certain amount of the profit that they gain from each product.
 As mentioned earlier even though Abans has a large base of tech experts within the company; customers move to
third party websites and magazines to get an idea of the products they are planning to purchase. A database is
proposed for this
 The managers at Abans need to put aside the traditional single-business forecast and instead examine the risks and
uncertainties that could significantly affect the company for future change in customer behaviors as this. This
simple extension of the familiar long-range strategy exercise can force people to realize what they don’t yet know
and to address it.
 Abans should shift its focus from traditional competitors’ moves to what the new players are doing and to think of
ways to insure your company against this new competition or neutralize its effect. This is exactly that happened
with online shopping websites. Abans was too busy focusing on its traditional competitors like Singer and
Softlogic, while entirely new players entered the market and took away Abans’ market share.
 Put an initiative on every risk. Most companies have a portfolio of strategic initiatives. It should become the engine
that drives your organization into adaptability—and it can, with a couple of simple enhancements. First, every
significant source of uncertainty should be addressed with an initiative. Depending on the nature of the uncertainty,
the goal of the initiative may be responding to a neglected business trend, creating options for responding to it
down the line, or simply learning more about it. In managing these initiatives, Abans should be as disciplined with
metrics, time frames, and responsibilities as it would be for the product portfolio or the operating plan.
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 Increase the clock speed. The speed of adaptation is a function of the cycle time of decision making. In a fast-
moving environment, companies need to accelerate change by making annual planning processes lighter and more
frequent and sometimes by making episodic processes continual.
Table 4: Focused Recommendations
Change In Customer/ Recommendations
User Behavior
Customers do not visit Use innovative and creative methods to build up a shopping website which can be promoted as
the store anymore the one stop site for all “electronic needs”. The disadvantage that companies like [Link] and
[Link] hold is that they are not specialized in electrical items. However Abans is one of the
most trusted household electronic item providers in Sri Lanka and a website from Abans will be
more trusted by the consumer than a site that sells different kinds of items and are not
specialized at electronics.
Customers do their Abans as mentioned is one of the most trusted household electronic item providers in the
research of products country. Even though the company holds a large number of tech experts people prefer visiting
using the third-party online sites to learn about electronic products and not consult tech experts at Abans. To solve
websites without this issue a database of electronic products that Abans hold need to be set up. Here all the
consulting tech details that a customer needs to know about any product can be found. Comparisons of different
experts at Abans products should be available, to give a better understanding to the customers and for them to
select the right product for them. This database will contain video reviews, customer feedback
expert analysis etc. The database can be linked up with shopping website to make it easier for
the customer to understand about the product and purchase it then and there.

Task 1 Word count: 4330

2.0 The Creative climate within the Marketing Function

2.1.1 What is Creativity?

Creativity has been defined by Gilliam (1993) as a process of discovering what has not been considered – the act of making
new connections. However, the definition could further expand by different authors as the concept creativity consists of
many dimensions and an overall concept of creativity is the ability to think differently to generate new ideas and requires
freedom, inspiration, originality and ingenuity. Creativity does not happen in an intellectual vacuum nor in the emotional
icebergs that many companies fashion for themselves.
Research around creative culture and general climate has led to the identification of key areas on which companies can
focus to develop an effective climate in which people are not only creative, but where they are motivated to develop these
ideas into value-adding contributions to the success of the whole organization.

2.1.2 Components of the Creative Climate

Following are a few broad factors required to create a creative climate according to Denti (2011):
Motivation: To do anything, people must feel motivated, an internal need to act.
Empowerment: Once people are motivated to be creative, they need the environment in which they can be creative.
Dynamism: Alongside a motivated and empowered organization, a harder edge is needed that drives towards success.
Openness: An organization to build a creative climate finally requires openness to new ideas and risk taking.

In the table below there are a few components that have been narrowed down from the broad factors explained above.
According to Denti (2011) there are various components of the creative climate that could be identified. A few of these
components are listed in the table below and shows how each component is related with the marketing function of Abans.

Components of the
Creative Climate
Freedom Abans has a close watch over its employees to maintain a certain authority within the company. At
(Empowerment) the end of each month a performance evaluation of each employee is done. Even the branch
manager has to consult higher level management to perform changes in his own branch. (Branch
Manager Abans). This has inhibited the creative climate within Abans.

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Challenge Abans has failed to challenge its employees to reach out for more than where they are at now. The
(Motivation) marketing function at Abans was not challenged over the years and they missed out on a valuable
opportunity to remain as the market leader by going online.
Energy Getting an idea from first notion to final product can be a long and arduous process. This requires a
(Dynamism) dynamic environment in which people are energized and constantly pushing forward. You can walk
into many workplaces and feel the lack of energy and enthusiasm, whilst others have a definite,
almost palpable buzz about them.
Trusting Employees Having trust on your employees is an important aspect for an organization. Keeping a close track on
(Openness) its employees and not trusting them inhibits them from taking creative decisions. The trust that
Abans keeps on its employees is minimal. The employees are closely monitored and the slightest of
irregularities are looked up. (Branch Manager Abans)
Positive supervisor Support for new ideas by the supervisor or team leader is critical for the further development and
relations implementation of these ideas. Especially supportive leaders listen and give feedback to ideas, and
(Empowerment) tolerate a certain degree of experimentation.
Table 5: Components of the creative climate (Source: Denti, 2011)

2.1.3 Dimensions for Innovation and Entrepreneurship

According to Tidd and Bessant (2009) there are 4 dimensions of innovation as shown in Figure 8. The behavioral changes
of customers as discussed above can be put into one of the four dimensions of innovation to help Abans keep a track of the
planned changes without facing a strategic drift in the future.

In the case of Abans the only innovation dimension that Abans needs to focus on is the
Process dimension.

Aspect for Dimension Change in Customer Behavior

change for
Innovation
Convenience Process Change from purchasing items from visiting the store to
purchasing online.
Research Process Customers do their research of products using the third-
Figure 8: 4 dimensions party websites without consulting tech experts at Abans.
Table 1: Four Dimensions of Innovation Tidd and Bessant (2009)

2.1.4 Strengths and Weaknesses in adapting to the changing nature of Customer behavior

1. Customers do not visit the store anymore

Strengths Weaknesses
The Abans brand name which has Running an online shopping website is completely different from running
become a household name over the showrooms. Abans who does not have the expertise in this wing will have to
years would help Abans attract employ digital media experts and online shopping experts which will incur a lot
customers to their online shopping site. more costs monthly.
Abans has at least one delivery vehicle Even though Abans already has an informative website, it would be difficult for
per showroom which would solve the them to put out an online shopping website as there are so many important
delivery problem as they have a large foundations that need to be built upon a shopping website. For example the
number of showrooms island wide. security of the website needs to be over the mark unlike a typical website since a
shopping website holds large amounts of details of customers.
Table 6: Strengths and Weaknesses internally to overcome behavioral change 1

2. Customers are doing their research of products from home

Strengths Weaknesses
Abans has the best experts in the country who are Language Barrier. The tech experts however lack the fluency of
under-utilized by the company. They can be used to speaking English which could be a weakness as more people will
develop the database of information of products. have to be employed to make sure is passed across accurately.
Financially strong to fund a database as the Even though the knowledge is there the know-how to build such a
proposed. database is not present.
Table 7: Strengths and Weaknesses internally to overcome behavioral change 2

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2.2 Current external networks used by the marketing function in developing a creative and innovative environment.
2.2.1 Communication Platforms
Abans uses their communication networks depending on the type of customer they are trying to reach out to. Sri Lanka
consists of different people from various backgrounds and each of these different types of people needs to be
communicated. Abans uses innovative and creative communication platforms that suit different segments in the market to
pass their message across. The use of communication platforms in this way has allowed Abans to create an innovative and
creative environment.

2.2.2 Working with new brands

Abans has worked with the global brand LG for over a decade now. However in recent times Abans has expanded its
horizon to work with other global brands in the IT industry such as HP, Dell, Lenovo, Toshiba, and Panasonic. The latest
addition to Abans’ list is Apple. Abans from 2013 is an Apple reseller and has been able to explore new horizons with the
innovative and entrepreneurial nature of Apple.

2.2.3 Hiring a Social Media Manager

Even though Abans failed to keep up with the online giants like [Link] and [Link], Abans has been able to play a
competitive role in social media marketing. Since December 2014 Abans has a separate person title “Social Media
Manager” outburst of social media marketing happening in Sri Lanka. This is a new dimension for Abans who has been
slow to accept change and shows that Abans is moving out of old practices and to develop a creative an innovative
environment.

2.2.4 Customer Feedback

Every month after a purchase customers are contacted by Abans and are checked on how much they are satisfied with their
new product. What the customer experienced from first visiting the store to getting the product delivered is documented
and if it is a bad experience the relevant individuals involved with the transaction are communicated to not allow another
bad experience occur in the future.

2.3 Internal Marketing

2.3.1 Where are we now?
Internal Marketing Figure 10: The Marketing Flow

Employees as a Job as a Employee Internal Attract and maintain

customer product Engagement Satisfaction customer oriented employees

Perceived Customer Competitive Perks of working at Abans:

quality Satisfaction Advantage  Attractive remuneration package
 Magnanimous welfare scheme
 Personal insurance with family covers
External Marketing
 Purchasing schemes for all sorts of
[Link] What is internal marketing? appliances offered by the Abans
Internal marketing is orienting a motivating customer contact employees and
supporting service people to work as a team to provide customer satisfaction. - (Kotler and Armstrong 2010)
With an internal marketing strategy, employees are treated as “internal customers” who must be convinced of a company's
vision and worth just as aggressively as “external customers.” The goal of internal marketing is to align every aspect of a
company’s internal operations to ensure they are as capable as possible of providing value to customers. If a company can
operate in a coordinated and standardized way, that company can provide a more consistent experience to their customers.
Figure 10 above shows how internal marketing and external marketing are linked together. It is clearly visible how internal
marketing helps the organization to grow and also how it helps to satisfy the company’s customers.

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[Link] Internal marketing approaches taken by Abans

Abans always encourages their own employees to develop their skills and competencies which will then pave the way
towards higher career prospects within the company itself.

Staff Motivation
 Abans works with their employees to bring them under  Rewards hard working employees who have shown
the company’s vision. above average results for the company.
 Does not compete for the best talent. Believes that if the  Gives training and education to its employees giving
employees are able to mix into the culture of the them intrinsic motivation as they feel that they grow as
organization, they can be nurtured to become the greats individuals working for Abans.
and take the company forward.  Selects the best employee of the month at every branch
giving them recognition.
Collaboration & Unity Meetings
 Annual awards ceremony to bring all the departments  District meetings. Branches from each district come
and branches together to reward the achievers. together to talk about the future activities of Abans in the
 Annual trips district.
 Birthday parties  Department meetings.
 Top-level meetings
Evaluation System
 Personal Evaluation
 Unit/Team Evaluation
Table 8: Internal Approached of Abans (Source Head of HR, Abans)

Abans has been able to have a great workforce over the years and it would have not been possible without the great it has
taken on its employees. Mr. Berugoda Arachchi who is the head of HR believes that in a working culture like Abans you
always feel like giving “200% of your capacity”. Once recruited, employees will undergo an induction training program
which is conducted by professional Trainers and these newly acquired uncut diamonds will be kept as an understudy of a
senior officer who will cut and polish them in to perfection in their respective career paths.
A performance appraisal is conducted annually where the management spends about 30-45 minutes with every employee
where the career goals, paths and plans of each employee will be discussed in detail and the path in which the employee
chooses to trod down and the qualifications that he or she wishes to achieve which will be fully or partially sponsored by
the Company depending on the company requirements rather generously in the development of the competencies of its
own people, thus lending a helping hand in the upward climb up the ladder of success.

Abans holds annual get-togethers both for its administrative and operational staff where every employee, irrespective of
positions and job roles participate, incorporating their families in to this rewarding working experience.

The open door policy of Abans is such that even the most junior of all employees is well capable of approaching the
highest officers of the company, without even taking the trouble to make a prior appointment. Open communication
between the management and the employees is encouraged to such an extent that the employees are given a mobile
connection from the company corporate package itself where communication within the group is given absolutely free of
charge. At Abans, every employee is allowed to bring their grievances to the very top of the company by themselves
without the assistance of a senior officer. Mr, Arachchi commenting upon the open and harmonious relationship between
the employees and the management, said that "People feel the need to get unionized when their problems are unanswered
and individual issues are not entertained. So if they are listened to personally and remedies are provided accordingly, there
is no need for workers to unionize".

2.3.2 Where do we want to be?

In external marketing, a product is anything that companies can offer to their markets to satisfy a want or need. In the
simplest conceptualization, an internal product is the job (Collins & Payne, 1991). Treating jobs as products means going
beyond tasks that need to be performed and giving consideration to factors other than financial remuneration. It means also
considering training needs, levels of responsibility, involvement in decision-making, career opportunities and the working
environment (Ahmed & Rafiq, 2002).

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With the changes Abans is about to embark on it is important to keep its employees on track. To do this they will have to
create a good internal product and keep the motivation that they currently carry forward. At the current stance, Abans
needs to apply itself to moving into the putting their products online and building up a knowledge base about their products
to compete with the change in nature of its customer/user behavior explained earlier.
Following are a few aspects that could be taken up to improve internal satisfaction and employee engagement.
Dimension Current Proposed
Strategy Build an Online Shopping site and Product database
Element

Structure De-centralized Structure

Soft

Systems Financial, Logistic, Procurement and RD system should be revamped to keep up with changing
HR Systems are well in place. technology.
Shared Abans has a few core values that With the change happening in the company innovative
Values would be beneficial when going methods should be practiced to communicate the shared
towards a change. However these values entire staff. So that these values stay intact to Abans.
values are not communicated to the
Hard Elements

lower level employees.

Skills External environment analysis skills Develop a better analyst team or hire experts.
are lacking in the function.
Style Laid-back Should be Proactive
Staff The front-line sales staff does not seem Young, dynamic individuals should be added to the top
to be having the right knowledge about management to create diversity. The lower level staff needs
the products. The top management to be educated more about Abans’ products.
does not consist of any young blood.
Table 9: McKinsey’s 7s model
[Link] Internal Market Segmentation
In section 1 of this briefing paper Abans was proposed to go through two changes in order to counter the changes in
customer behavior. However to go through this change it is important to understand if it is feasible with the employees
Abans hold. The internal segmentation shown below would help us understand how well the employees would be able to
adapt to these changes.
SEGMENTS
The middle management at Abans can be defined as the Metaphiles. These are the branch managers, the
Metaphiles marketing managers etc. who embrace change will willingly, are natural leaders and focused on action.
They are task oriented but tend to lack reflective skills.
The executive level at Abans can be defined as the Metamaniacs as this area consists of the core young
Metamaniacs blood of the organization. They tend to be highly creative, have great imaginations and some have to be
changing to function.
The Metaphobes can be defined as the ground level staff of Abans that consist of employees who have
Metaphobes been part of Abans for the longest time. This group consists of both young and old personnel who have
ideas and opinions but they are often reluctant to share these because of the change that may result.
The top management which consists of the chairman, the CEO and the board of directors can be pointed
out as the Metamorons of Abans. They are great and inspirational figures but lack the ability to change.
Metamorons
The metamorons of Abans is one major factor that prevented the company to adapt to the changing
behavior of the customers.
Table 10: Internal Market Segments - Robbins and Finley (1998)

[Link] The relationship between the core functions of Abans and the company’s objectives.
Figure: 11
Corporate Objectives

Marketing Objectives Operations Objectives Finance Objectives HR Objectives

As to figure 11 it is clear that all the core function of Abans is interrelated to one another. To achieve the company
objectives all the other functions should achieve its own objectives. At Abans the HR department works together with the
marketing department as Abans believes to attract profitable customers, it is a must to recruit marketing personnel with
top-talent. The HR and marketing departments works well in this regard with good communication (Marketing knows what

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HR wants and HR know what Marketing wants).

The marketing department faces a problem of not been funded enough by the finance department to bring the marketing
strategies to life (Source: Marketing Manager). The marketing department consists mainly of young blood who are
motivated to do things in a new way and are focused to be innovative and creative in their marketing planning processes.
One reason for this is because the plans and ideas of the marketing department are not communicated in the right way to
the finance department. The Metamorons (Refer table: 10) who are the top management can be found as the next reason.
As explained in table 10 the metamorons lack the ability to change and this has boiled down to the finance department who
are skeptical in moving forward with change.

The operations department and the HR department have had issues between the two departments. At Abans usually
problems arise from a lack of preparation for employee appraisals by the line management. This in turn brings about failure
to provide employees with regular, honest and candid feedback that can improve employee performance. The time human
resources spends constructing a performance management system seems like time lost when line managers do not use the
system and the result is conflict between operations and human resources.

[Link] Internal Marketing Mix

Dimension Change from purchasing items from visiting the Customers do their research of products using
store to purchasing online. the third-party websites without consulting tech
experts at Abans.
Product New shopping website where people can buy products A database of information of products with tech
from Abans online experts from Abans giving complete analysis on
the products
Price With the introduction of this website there is a Chance for a change of roles. Sales representatives
likelihood that low income generating Abans who have a good knowledge of the Abans products
showrooms will have to be closed down to cut down are likely to get the post of tech expert in order to
on operating costs. This means that there is a chance help with building the database.
that employees might lose jobs.
Place Seminars and presentations should be carried out to Informal meetings with tech experts on how the
explain the new way of how selling is going to be database should be done. This database should be
done by Abans. Notice boards should communicate among a close group of people as a larger change is
the change and keep the staff optimistic. happening with online shopping site that is
affecting the entire business function.
Promotion This change should be promoted as a positive factor This idea of the database should be communicated
for both the company and its employees. The benefits to all the employees and shown the positives of it.
of the new shopping website should be clearly
communicated.
Process There will need to be a few discussions with the Tech experts and sales representatives will have to
marketing team in order to figure out the best possible be brought together for implementation of the
ways of going forward with the website. As mentioned website. This is because as much as Abans needs to
in section [Link] the marketing team consists of give quantitative and quality details of each product
young blood who think creatively and innovatively. there should be an element of convincing to make
the customer buy the product.
Physical The marketing team should be sent to digital Technical staff will have to be a part of the videos
Evidence marketing conferences so that they can learn important that are intended to be uploaded into the database
aspects in the digital marketing segment. Other and their communication skills will be need to be
departments also should be given special training in improved. Thus professional communication
the relevant areas. This would show the employees experts can be brought into Abans to run seminars
how important this change is for the senior about effective communication methods.
management and would be more motivated.
People In both these changes it is important to have senior management effectively involved. This would develop
good relationships from the top to the bottom of the management. It will also give a better feeling of
togetherness to the entire staff as a company which would in turn bring about more motivation to bring about
success at any cost.
Table 11: Internal Marketing Mix - Diasz (2014)

Task 2 Word count: 3578

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3.0 Internal Podcast

Creating an innovative environment throughout the organization – Podcast Notes
3.1 Overview
Make sure you greet everyone well and develop a good connection with everyone. Please greet the chairperson first.
When introducing yourself make sure you communicate to everyone where you work and why you are qualified to come
and talk to everyone.

Key Point:
Chairperson’s name: Mrs. Aban Pestonje

3.1.1 Scenario
Abans is a well-established household electronics provider in Sri Lanka. Abans for a number of years has been able to
hold a large share of the market and stand as the leader in the household electronic industry 1. However it is evident that
Abans started losing a considerable amount of its market share in recent times. When a research was conducted it was
noted that the Sri Lankan consumer has changed his/her behavior when it comes to the purchasing of electronic items.
Aspects of change in behavior 2:
 Customers do not visit the store anymore
- With the introduction of online shopping sites in Sri Lanka, people are able to purchase products at the
convenience of their home at any time during the day as comfortable as possible.
- This convenience factor has made customers not visit Abans showrooms but do their purchasing from home.
- The fact that doorstep delivery is there is also a convenience factor that the consumer is more inclined to
purchase products via online.

 Customers do their research of products using the third-party websites without consulting tech experts at Abans
Abans has the best tech experts in Sri Lanka and they not utilized to their potential. Back in the day people
visited an Abans showroom and got an idea about the product they considered to buy from the tech experts at
Abans. This resulted in the customer becoming more loyal and eventually purchased the product from Abans.
- However with third party websites giving reviews of products, the consumer does not consult Abans tech
experts that they used to consult 5 years back.
- The customer gets detailed video reviews of the product, user reviews etc. that is helpful to do their research
than visiting an Abans store and speaking to a tech expert.
- The online shopping websites that currently operate does not have proper technical expertise as Abans but
they are still able to obtain more sales.
Summary:
The two behavioral changes of customers which have resulted in Abans losing its market share are explained in this
section. The stakeholders of the company should get a good understanding of why Abans has lost its market share over
the years.

3.1.2 Recommendation
As a company you have to respond to this change in customer/user behavior. [Link] is a company that converted itself
from an offline department store to an online shopping website and today it is the number one online shopping website in
Sri Lanka. The recommendations for Abans are as follows:
 Build up a shopping website which can be promoted as the one stop site for all “electronic needs” in Sri
Lanka. It should be a website that is going to be specializing only in electronic items and not anything other
products like all the other shopping websites in Sri Lanka. It should be the only and number one online stop
for electronic items.
 Build up a database of all the products that Abans sells using the technical knowledge of the tech experts in
Abans. This database would have detailed review videos, expert analysis and comparisons between different
products which would help customers get a good understanding about the products they are going to
purchase.
Summary:
Two main recommendations proposed for the two aspects of customer/user behavior are explained in this section. For
the first aspect a shopping website is proposed and for the second aspect an online database is proposed.

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3.2 Communication of Internal Functions

Internal communication is an important factor not just to Abans but to all companies because it enables companies to be
productive and operate effectively.

If the communication within the different functions is done right, employees experience an increase in morale,
productivity and commitment.

Abans currently uses a structure where several teams are handing different areas of the business and not one centralized
authority. Under this structure, Abans utilizes individuals with a variety of expertise and knowledge for running various
business operations.
Summary
Brief introduction of why internal communication is important and what kind of structure Abans is currently using.

3.2.1 Communication of Internal Functions - Strengths

1. A strong relationship is seen between the HR department and marketing department where it has been observed
that both departments understand what is required from each other. HR works with Marketing to employ the best
candidates for jobs in the marketing department while the Marketing department also helps HR attract people to
apply by using innovative and creative methods of advertising.

2. A lot of collaboration is seen among the young executive teams of all the departments of Abans. They organize
parties and social gatherings among themselves to build the togetherness.

3. The meetings that are held inter-branch in every district has been able to help analyze the changing practices of
customers within each district from the viewpoint of each branch.

4. Within the marketing function there is a large amount of idea generation occurring which are creative and
innovative that can take the company forward. The marketing team consists of young individuals and they seem
to be coming up with new and exciting ways to promote the company’s brand.
Summary:
The strengths of the communications within the internal function of Abans.

3.2.2 Communication of Internal Functions - Weaknesses

1. Lack of communication between the finance department and the marketing department has brought about an
issue where the marketing department is not getting funded enough. Even though the marketing department is
putting creative and innovative plans to promote the brand, the lack of ability to communicate the ideas to the
finance team has resulted in the finance team not granting enough funds to the marketing department.

2. Operations department and HR department has continuously had issues due to lack of communication. It is an
ongoing issue and a solution has not yet been found.

3. The top level management that consists of elderly individuals does not seem to be communicating well with the
lower level young executives.

4. The ground level staff (that consist of drivers, distributors, security personnel etc.) does not seem to want to
communicate with the management. It is important to get them involved in adapting innovation and they have the
best idea of how operations take place.
Summary:
 The weaknesses of the communications within the internal function of Abans.

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3.3 How communication should be used to simulate the creation of innovative ideas
Employee creativity is something that is very important for an organization to grow. Thus in today’s business world
employee creativity is highly encouraged by organizations.

It is studied that the more engaged the employees are, the higher the creativity among them.

The top management can play a large role in building an engaged creative climate.
Summary:
A brief explanation on why employee creativity is important for an organization.

3.3.1 Recommendations on how to improve inter-functional communication

1. Include personnel from the finance department during the decision making process of the marketing department.
This would give a proper understanding to them of what the marketing team is planning on and thus make it
easier for the finance team to release funds. The involvement of the two departments would help in solving the
weakness that was shown as weakness 1 in the previous page.

2. The operations department and the HR department need to come together and discuss about the different issues
that the two departments hold and try to ease out the problems and work together for the uplifting of the
company, Abans.

3. Organize brainstorming sessions. This is another great way to bring together the staff from different departments
and help them work on brainstorming ideas among each other. IBM uses something called “innovation jam” and
it has allowed hundreds of thousands of IBM employees around the world to connect and come up with
innovative solutions for company problems.

4. Encourage employees to think outside the box and implement ideas without interference. It is important for
Abans to try and create a better environment for its employees where their innovative and creative skills are
excelled.

5. The upper management needs to keep a track of the company innovations. Knowing how many employee
innovations have been implemented and how successful they are, presents a clear picture of the financial benefits
of employee creativity.

6. Encourage communication between departments: Collaboration between members of different departments often
results in creative solutions for problems. Interdepartmental communication facilitates trust and prevents conflict.
Departments that do not communicate are more likely to blame each other when problems arise.

7. Keep a direct and open dialogue between the top management and the employees. This would effectively
motivate employees and engage them in actively participating in company decision making me processes. The
top management resisting change is an issue at Abans, however an open dialogue with the creative and
innovative young staff at Abans may allow the top management to develop creative ideas to take the company
forward.

8. Creativity and innovation cannot be forced out of employees but it should come naturally. Innovative ideas could
be rewarded financially, with opportunities for advancement or any other incentive you have found effective for
your employee base.

9. Team work is a key factor to improve relationships among employees and bring out creativity as decisions are
taken by a few people together rather than one person.
Summary:
These are the proposed recommendations to help Abans improve on its internal communication, develop creativity and
motivate the employees at Abans.

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3.3.2 How can the staff get involved with the proposed changes?

[Link] What are the proposed changes?

1. Customers do not visit the store anymore
It is proposed to have an Online shopping website to counter the change in behavior of the consumer of
purchasing items from home.

Abans is late for this change but it is important that at least now Abans have decided to embark on an online
shopping website which is the practiced trend by the consumer.

Abans can be the biggest specialized online shopping website for electronics in Sri Lanka.

2. Customers do their research of products using third-party websites without consulting tech experts at
Abans
It is proposed to have a database of electronic products where people can learn directly from the tech experts of
Abans through the database.

The database will hold detailed review videos, comparisons of different products and detailed expert analysis.

It would be the one stop place to learn about electronic items in Sri Lanka.
Summary:
The proposed changes for each aspect of customer change in behavior should be explained in this section.

[Link] How can everyone help?

 It is a great opportunity for everyone to work together to bring about this change in the company. As everyone
has a good understanding of how Abans works it is important that everyone pitches into make this change a
success.

 The top management will need to be always open to ideas to take Abans to the next level

 The marketing department primarily will have a lot of work with both the website and the database.
- The creative thinking of the marketing team can be utilized to make the website according to the best
possible standards making it attractive to the masses.
- The database would be something new to both the consumer and to the company. Thus extensive marketing
should be done both internally and externally.

 The technical staff will need to be consulted when going forward with the database as they are the ones who
have the best knowledge about electronic products.

 The sales representatives will also be needed when moving forward with the database as there should be an
element of selling in the database to eventually make the person buy that product from Abans.

 The HR department will have to work closely with the operations department in order to hire new staff and
train the existing ones with the upcoming changes.
Summary:
How each and every individual should help with this change is explained in this section in terms of the department.

[Link] Conclusion
“Finally to conclude, I believe that it is an interesting few months ahead of you all with massive changes about to happen
to the way in which Abans used to do business.

I thank you all for taking your time to listen to me and understand what your company will be moving forward into in the
days to come. I hope everyone will face this as a family to take your company to the next level in the household
electronic segment in Sri Lanka. I wish you all the luck! Thank you!”

Task 3 Word count: 2145

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References

Marketing Manager, Abans PVT. LTD.

Diasz, L (2013) Strategic Marketing, Colombo, Sri Lanka

Denti, L (2011) 'Top Six Components of a Creative Climate', Innovation Psychology, (), pp. [Online]. Available at:
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change. Chichester, Wiley

ROBBINS, H. and FINLEY, M. (1998) Why teams don’t work. London: Orion Business

Senanayake, J. C. (2012) 'Merging HR with creativity at Abans Pvt Ltd.', Sunday Times, 1st April, p. 4.

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Bessant, J. (2003) High Involvement Innovation: Building and sustaining competitive advantage through continuous
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