Canary Wharf Group
Student’s Name
Professor’s Name
Course
Institution
Date
Should Canary Wharf Group invest more in social media marketing strategies to increase its annual revenue and market share?
The mode of advertising and the intensity of advertising employed by a company forms a major factor in determining the profit levels and the revenue-generating abilities by the business. Businesses that practice more advertising and those that advertise on a large scale make more revenue and profits as compared to businesses that do not invest in advertising as a method of increasing sales revenue and profits. Advertising helps to make a business known to potential customers in terms of the goods sold or the services offered. Property management groups are businesses that invest in enabling easier interactions between property owners and tenants by acting as intermediaries. Property management groups can either link a property owner to the customers or build properties for hire or for sale directly to tenants. Some of the services offered by property management groups include marketing a property, leasing a property, screening a potential tenant to enhance compliance to all regulatory requirements for a tenant, and collecting rent. These groups, in exceptional cases, engage in trust accounting on behalf of the owner.
Canary Wharf Group is a public limited company by shares (Gillham, 2019). This property management group is one of the major companies headquartered in London and majoring in property management. Canary Wharf Group occupies the highest market share in the UK based on the number of properties it manages and the office space it manages in London in square feet. The company makes significant revenue and profits as compared to its competitors, including Minerva limited, Land securities group plc. and Quintain Company limited. This research seeks to evaluate the marketing levels and strategies employed by Canary Wharf Group to determine whether the company should invest more in marketing for improved sales revenues and increased profits. Specifically, this research aims at evaluating the online marketing levels by Canary Wharf Group in considering of two social platforms, Facebook and Twitter, to evaluate whether the company should invest further in online marketing for improved sales. This research, therefore, seeks to answer the research question, “should Canary Wharf Group invest more in social media marketing strategies to increase its annual revenue and market share?
Hypothesis
In answering the research question, various factors will be considered, including the levels of marketing in Facebook and Twitter, as the considered social media platforms for Canary Wharf Group. The levels of marketing will be evaluated by the number of posts made by the company on these social media platforms and the number of reactions to these posts. The reactions will be considered as the comments, likes and shares to the posts made by the company. This evaluation will provide insights on whether the company employs sufficient marketing levels in these platforms to increase sales. In answering the research question, this research will consider the following hypothesis:
Hypothesis 1: Canary Wharf Group employs sufficient marketing levels through Facebook and Twitter.
Hypothesis 2: An improvement of the marketing levels through social media platforms would constitute an increase in sales revenue and market share by Canary Wharf Group.
Methodology
Primary Data
This research will employ both primary and secondary data. Incorporation of primary data and secondary data lays a platform for obtaining comprehensive results on the research question. Primary data will be obtained through an interview with the CEO of Canary Wharf Group as well as an observation of activities in the social media platforms for the company under consideration. The interview with the CEO will seek to obtain data on whether Canary Wharf Group invests in social media marketing. This interview will also seek to determine the levels of importance placed on social media marketing as a marketing strategy by the company, in comparison to other marketing methods applied by the company. The CEO will also provide information on other marketing methods applied by the company to improve sales and profits, as well as increase the market share of the business. The interview will seek to determine the market share controlled by the company in the UK market from the perspective of the number of customers served, to determine the levels of customer preference to Canary Wharf Group instead of other companies. Some other important piece of information that will be obtained through this interview is the revenue-generating abilities of Canary Wharf Group. The interview will seek to determine the revenues and profits generated in 2018 and 2019, to evaluate the changes in revenue between the two financial years.
An observation of the social media accounts owned by the company will be evaluated to determine the levels of marketing employed on these platforms. These social media accounts under consideration are Facebook and Twitter. The observation will specifically obtain information on the levels of activity in these accounts and the customer reactions to the various posts made by the company on these accounts. These levels of activity in the accounts will be evaluated as an average of three to four accounts. This average will be an average of number of likes, comments and shares to a post made by the company.
The benefits of using primary data in this research include obtaining accurate data and reliable information for effective research results. This primary data is however disadvantageous in that it is time-consuming to collect as compared to secondary data (Karale, 2020).
Secondary data
Secondary data will be evaluated in the form of researches done on the topic of online marketing and the benefits of this marketing strategy in increasing sales and improving the market share controlled by a company in the market. Secondary data from research articles will also consider the roles played by increased social media marketing in improving the competitive advantage of a business compared to the major business competitors. To obtain the most relevant and accurate information, this secondary data will be obtained from peer-reviewed journal articles on the topic. Secondary research is beneficial in that it is easier to obtain secondary data and it is also cost-effective as compared to obtaining primary data. Secondary data also offers the advantage of containing expert opinions from a large pool of experts, compared to primary data. However, the limitation of secondary data occurs in difficulty of obtaining specifically relevant information on the research topic. It is hard to obtain specific data on the research topic.
Findings
The results of the interview with the CEO revealed that Canary Wharf Group invests in social media marketing through Facebook and Twitter platforms. The CEO however, revealed that the company prefers other forms of advertising such as the use of print and electronic media with the option of social media marketing being the last. Other marketing methods used by the company as revealed by the CEO include advertisements and referral marketing where a satisfied client refers other clients to the business for similar services. The CEO also revealed that the company operates a market share of approximately 50%, owing to the number of customers served and the revenue amounts generated. In revenue generation, the CEO revealed that the company made a revenue of $517.84 million in 2019, which was a decline from a revenue of $607.35 million in 2018. This data shows that there was a decline in revenue between the two financial years. The gross profits for the year 2019 and 2018 were revealed as $136.96 million and $151.7 million, respectively.
An observation of the Facebook and Twitter accounts operated by the company revealed that there was reduced levels of marketing in these platforms. In regard to Facebook, a post by Canary Wharf Group attracts an average of 50 likes, 20 comments and 10 shares. In addition, the Facebook page has been liked by 1888 people. In consideration of the large number of customers served by this company, these reactions are significantly low. In consideration of Twitter, Canary Wharf Group’s account has 6136 followers, and a post by the company attracts an average of 10 likes, 8 comments and 14 shares. This information shows that there is limited consideration of social media platforms as effective marketing platforms by the company.
Secondary data from journal articles revealed that social media platforms have significant marketing power due to their ability to reach a high number of people in a short duration (Tuten, 2020). Secondary data also showed that social media marketing platforms draw their efficiency from cost-effectiveness, in that it is cheaper to market through social media platforms than it is to use other marketing methods (Kaur, 2016).
Discussion and Analysis
The research revealed that the company had a decline in both the revenues generated and profits earned between the financial years 2018 and 2019. The research also showed that there is a significant decline in the usage of social media platforms to market Canary Wharf Group’s services to potential customers. This analysis will be done using two analytical tools, including SWOT analysis and gross profit margin ratio analysis.
Gross Profit margin
This ratio represents the profitability levels of a company and the ability of a company to maximize profits after subtracting the expenses incurred (Husain & Sunardi, 2020). An increase in the gross profit margin shows that a company has abilities of reducing expenses and maximizing profits. The gross profit margin is a ratio of gross profit to sales proceeds.
Gross profit margin= gross profit/ revenue
Gross profit margin for 2018= 151.7 million/ 607.35= 24.98%
Gross profit margin for 2019= 136.96/ 517.84= 26.45%
There is an increase in the gross profit margin according to the results obtained. This increase can be demonstrated graphically as below,
This increase shows that Canary Wharf Group has an ability of managing expenses despite a reduction in expenses. This ability shows that despite a reduction in the revenue generated by Canary Wharf Group, the company can manage its expenses to increase profits.
In relation to the research question, the company can invest more in social media strategies to increase the revenue generated and profits earned by the company. The applicability of this statement is based on the fact that Canary Wharf Group can reduce its expenses and maximize revenue. The research showed that owing to the 50% market share controlled by the business, an investment in social media marketing would yield better results.
SWOT Analysis
| Strengths
· The company has a high market share · Canary Wharf Group maintains a significant competitive advantage · A pool of well-trained employees · The company has an established brand in UK. · An improving gross profit margin.
|
Weaknesses
· The company has limited social media marketing. · Canary Wharf Group has reducing revenue levels. · The company has limited products and service lines.
|
| Opportunity
· Possibilities of further growth of the business. · There exists an opportunity in creation of further products and services. · Increased social media marketing to increase sales revenue. · Increased online marketing to reduce costs.
|
Threats
· There is stiff competition in the property development industry in the UK. · There is a possibility of bankruptcy for the company. · The company may lose its competitive advantage · There could be a loss of market share by Canary Wharf Group. |
This SWOT analysis shows that there exists an opportunity in increased social marketing would form an opportunity for Canary Wharf Group to increase its revenue and profits and to increase the market share in the industry. The analysis also shows that one of the threats that Canary Wharf Group could face is a loss of its significant market share due to the failure to adopt social media marketing as a strategy to increase the revenue generated and the earned profits. Reduced levels of social media marketing is also identified as a weakness by the company. The strengths identified in the analysis include a high market share and the company being an established brand. The analysis shows that the company should increase its social media marketing strategies to increase the revenue and profits and to increase the market share in the UK market. This analysis shows that the first hypothesis is wrong since it stated that there are increased marketing levels in the social media platforms. The second hypothesis is however proven true since improved social media marketing by Canary Wharf Group would according to the research, increase the revenue generated and the market share by the company.
Conclusion
Marketing is one of the most important aspects in a business that aims to maximize profits and grow its market share. Social media marketing is a vital marketing tool owing to its ability to reach a high number of customers and its cost-effectiveness. This research aimed at evaluating whether Canary Wharf Group should invest in social media marketing to improve its annual revenue and market share. The research employed both primary and secondary data to answer the research question. Primary data was obtained through an interview with the CEO of Canary Wharf Group to obtain data on the marketing methods applied by the company. Primary data was also obtained through observation of the social media accounts owned by Canary Wharf Group to evaluate the levels of marketing applied by the company in these accounts. Secondary data was obtained from journal articles on the research question. The results show that Canary Wharf Group does not apply significant social media marketing and this could be the reason why there is a decrease in the revenue generated between 2018 and 2019. The results also show that the gross profit margin is increasing, showing that the company has significant abilities to manage expenses. As a recommendation, Canary Wharf Group should invest in social media marketing to increase revenue and profits and to improve Canary Wharf Group’s market share in the UK and globally.
References
Tuten, T. L. (2020). Social media marketing. Sage.
Kaur, S. (2016). Social media marketing. Asian Journal of Multidimensional Research (AJMR), 5(4), 6-12.
Husain, T., & Sunardi, N. (2020). Firm’s Value Prediction Based on Profitability Ratios and Dividend Policy. Finance & Economics Review, 2(2), 13-26.
Gillham, B. (2019). Was the development of Canary Wharf a social success?
Karale, U. (2020). Research Methodology: Introduction to Research; Advantages and Disadvantages of a Questionnaire; Questionnaire Development and Characteristics of a Good Questionnaire; Advantages and Disadvantages of Primary Data and Secondary Data; Difference between Primary and Secondary Data; Primary Data and Secondary Data: Meaning and Explanation.
Appendices
Appendix 1: Interview questions
- Does the company employ social media marketing strategies? To what level? (Kindly indicate as a percentage)
- Does the company prefer social media marketing method or other conventional marketing methods?
- What are the other marketing methods applied by the company?
- In your view, what is the company’s market share in the UK market?
- How much revenue and profits did the company make in 2018 and 2019?
Appendix 2: Observed Facebook account
Appendix 3: Twitter Account