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Name: Ahmed Rasheed Student ID: 7511
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Assignment Title
Study and analyzing marketing environment of STO
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30th May 2018
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Mandhu College | RahdhebaiHin'gun | Mahchangoalhi | Malé | Rep. of Maldives

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EXCUTIVE SUMMARY
This is a research based on assignment on the module of Marking Management in the
course of Masters of Business Administration, Mandhu College, Male’, Maldives. We are
supposed to complete the report in the module period.
This report is purely centered on, “Marketing Environment in State Trading Organization”
The report is mainly concentrate on marketing segment of STO, SWOT an analysis of
company. Moreover, report includes customer buying behavior analysis and factors
influence on it. Furthermore report include life cycle of different segment in STO and
customer loyalty. Finally it has recommendation for business strategies and business
sustainability.

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Contents
EXCUTIVE SUMMARY ............................................................................................................... 2

1. INTRODUCTION ................................................................................................................. 5

1.1. INTRODUCTION TO THE MANAGEMENT REPORT .............................................. 5

1.1.1. Vision: ....................................................................................................................... 5

1.1.2. Mission:..................................................................................................................... 5

1.2. OUTLINE OF RESEARCH PRIMARY AND SECONDARY SOURCES: .................. 6

1.2.1. Primary Research: ..................................................................................................... 6

1.2.2. Secondary Research: ................................................................................................. 6

2. PORTFOLIO ANALYSIS AND RECOMMENDATION ................................................. 7

2.1. MARKET SEGMENTS AND PORTFOLIO ANALYSIS ............................................. 7

2.1.1. EXISTING CUSTOMER SEGMENTS / PRODUCT OR SERVICE /


POSITIONING: ....................................................................................................................... 7

2.1.2. IDENTIFY ISSUES / WEAKNESSES AND OPPORTUNITIES IN THE


SEGMENTATION, TARGETING AND PRODUCT POSITIONING CONSIDERING
THE MAREKT TRENTS ....................................................................................................... 9

2.1.3. RECOMMEND ACTIONS FOR BUSINESS SUSTAINABILITY ...................... 11

2.2. IN-DEPTH ANALYSIS OF A SELECTED SEGMENT ......................................... 12

2.2.1. ANALYZE CUSTOMER BUYING BEHAVIOR FOR THE SELECTED


SEGEMENT .......................................................................................................................... 12

2.2.2. IDENTIFY THE TRENDS IN THE ENVIROMENTAL FACTORS THAT MAY


INFLUENCE CHANGES IN BUYING BEHAVIOR. ......................................................... 14

2.3. MARKETING STRATEGY / ACTIONS FOR CHANGING CUSTOMER


BEHAVIOUR .......................................................................................................................... 15

2.3.1. IDENTIFY MARKETING STRATEGY AND ACTIONS FOR ADDRESSING


THE CHANGING BUYING BEHAVIOR ........................................................................... 15

3. BUSINESS GROWTH AND INNOVATION ................................................................... 17

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3.1. IDENTIFY LIFECYCLE OF THE PRODUCT / SERVICE ........................................ 17

3.1.1. TRADING CEGEMENT PRODUCT LIFECYCLE.............................................. 18

3.1.2. STO GAS SEGMENT PRODUCT LIFE CYCLE ................................................. 19

3.2. DISCUSS INNOVATION TO ACHIEVE BUSINESS GROWTH AND PROPOSE


INNOVATION STRATEGY .................................................................................................... 20

4. BUILDING CUSTOMER RETENTION AND LOYALTY ........................................... 21

4.1. REVIEW THE CURRENT STATE OF CUSTOMER SERVICE, CUSTOMER


RETENTION AND LOYALTY ............................................................................................... 21

4.2. PROPOSE CUSTOMER RETENTION AND LOYALTY STRATEGY ..................... 22

5. RECOMMENDATION AND EXPECTATED OUTCOMES ........................................ 23

5.1. SUMMARY OF THE CURRENT ISSUES / WEAKNESSES AND OPPORTUNITIES


IDENTIFIED IN SECTION 2................................................................................................... 23

5.2. RECOMMENDATION TO IMPROVE BUSINESS. ................................................... 23

5.3. EXPECTED OUTCOMES FOR THE RECOMMENDATION ................................... 24

Bibliography ................................................................................................................................. 25

REFERENCE ................................................................................................................................ 26

Figure 1: Trading Segment, Revenue generation rates. Source: STO, annual report 2016 .......... 13
Figure 2: STO Market share and revenue generation rate (%). Source: annual report 2015,
STO).............................................................................................................................................. 17
Figure 3: Product Life Cycle in Growth Stage ............................................................................. 18
Figure 4: Product life cycle in STO Gas Company ...................................................................... 19

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1. INTRODUCTION
1.1. INTRODUCTION TO THE MANAGEMENT REPORT

In 1964, a fully state-funded business was set up


by the Maldivian government with one key
mission to begin with strengthening national food
security. The main task of the company, then
named Athireemaafaanu Trading Agency (ATA) (Stomaldives.com, 2004). State
Trading Organization PLC with its subsidiaries, a joint ventures and associates in a
nationwide leader in the business sector. It has significant and focused interest in
petroleum, construction materials, and electronic items, cooking gas, cement, roofing
sheets products, home appliances, super markets and insurance. The company is
geographically diverse, with operation and developments in Maldives and Singapore.
STO is the biggest trading company in Maldives who cater for different customer base
with distinct demands from different geographical locations throughout the country.
STO has various departments of this State Trading Organization like their procurement
section, Information and communication centers, Ware house, logistics division, and
HR department and to their various outlets and subsidiaries. Even though the work
culture practiced in State Trading Organization was excellent.
Today business is reshaping and strengthening the foundation of STO for further
investments, thus will generate good returns for our shareholders in a more sustainable
manner. STO new business model will support diversification and improve our current
lines of businesses by making day-to-day operations more efficient.

1.1.1. Vision:
 Enriching lives through expansion and accessibility.

1.1.2. Mission:
 Lead through expansion of existing businesses, diversification,
exploring new possibilities and entering into new ventures.
 Explore beyond our borders, expand our markets and establish ourselves
as an international player, respected by the international business
community.

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 Ensure accessibility with our presence nationwide; offer peace of mind
and assurance to the public of uninterrupted provision and affordability
of essential goods and services and those that contribute to a full filling
modern lifestyle. (STO, 2017).

1.2.OUTLINE OF RESEARCH PRIMARY AND SECONDARY SOURCES:


1.2.1. Primary Research:
Primary research is undertaken by companies or a hired research firm to gather
data and information to be used for their own purpose. In this report, primary
research consists of information collected from potential customers through
interviews, direct observation, field-testing, and any other method that provides
on word of mouth. Though, primary research enables the researcher to address
specific research issues as they can control whether a research design fits to the
specific needs of the research. This also leads to a high degree of control over
how data is collected, for example, method, size of project, goal or time.

1.2.2. Secondary Research:


Secondary research involves searching for existing information, such as
demographic data and industrial statistics that have already been collected and
possibly analyzed. It is usually less expensive and takes less time to gather than
primary research. Existing businesses may use historical invoices and purchase
receipts as sources of information. Furthermore, in this report secondary data
collected from websites, journal, and statistical report and publish books.

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2. PORTFOLIO ANALYSIS AND RECOMMENDATION
2.1.MARKET SEGMENTS AND PORTFOLIO ANALYSIS
Conceptually any business strategy should be based on understanding, meeting and
even exceeding the needs of target segments. At the core is the identification of the
existing and potential customer base, an understanding of underlying heterogeneity and
the evolving needs and wants of target segments. In State Trading Organization, the
company 2016, served its purpose of solidifying the company’s reputation as the main
forefront business enterprise in the country (Organization, 2016). Expansion was
observed in the product portfolios of almost every segment and the subsequent service
quality offered with these products were maintained and worked upon which led the
company to successfully achieve a fruitful sales figure.

2.1.1. EXISTING CUSTOMER SEGMENTS / PRODUCT OR SERVICE /


POSITIONING:
In 2016 and 2017, STO Group continued to grow in all business segments.
Although market conditions varied between the business segments, net revenue
improved significantly in all segments. (STO, 2017). Overall the past couple of
years, the performance of most business segments under the umbrella of the
STO Group. According to Kotler says, for the difficult to serve all the customer
in a particular market, the company have to analyze which market segment can
serve most effectively and keep main focus on those segment. Form STO
Company most customers are sever in below segments.

2.1.1.1. Trading:
In STO, trading is the largest business
segment in terms of its offering under
different product groups. It include
wholesaling and retailing of supper-mart,
home improvement, medical and
construction materials. It is the largest
business segment in terms of the number of products offered. In this
segment, business achieve lot of competitive advantages form different

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competitors, like Agora, Redwave etc. According to annual report 2016
says that, trading segment earn 33.8% of share revenue in every year
(Organization, Market segment , 2016). This is the segment that make
second high percentage of profit in business organization.

2.1.1.2. STO Gas:


This segment provides its
customers with LPG for
households and medical gas
solution, essential to healthcare
industry (STO, 2015). In this
segment of business, leading
supplier of gas and has its
distribution networks across multiple sectors including the resorts as well
as numerous restaurants. Business achieve 2.5% share of revenue in every
year. In maladies market the biggest competitor of this segment can be villa
Gas Company.

2.1.1.3.Fuel and Lubricants:


This segment comprises selling, distribution and marketing of petroleum
products. The aim is to provide clean and reliable petroleum products to its
customers both in domestic and international market. It is the most
profitable business segment in terms of the share of revenue generated with
a figure of MVR 3.9 billion generated within the year (STO, 2015).

2.1.1.4. Insurance:
The Allied Insurance Company of the Maldives provides tailor-made
insurance solutions and coverage to a diverse range of customers (STO,
2013). This includes life insurance and general insurance plans along with
health, diving, travel, accident and third party motor insurance. Today with
a local management, the company is one of the largest financial institutes

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and the most prominent insurance brand contributing to the growth and
development of the country. The company generate 2.2% of revenue of
share in business market.

2.1.1.5.Fisheries:
From 2016, The Maldives Industrial Fisheries Company (MIFCO) was
incorporated under the umbrella of the STO group. (MIFCO, 2017). The
company is engaged in the processing and exportation of tuna, tuna
products, reef fish and other fishery products. MIFCO’s products are in
increasing demand by discerning customers, especially in Europe due to its
high quality (MIFCO, 2017).

2.1.2. IDENTIFY ISSUES / WEAKNESSES AND OPPORTUNITIES IN THE


SEGMENTATION, TARGETING AND PRODUCT POSITIONING
CONSIDERING THE MAREKT TRENTS
The company are focusing on target marketing and divided their customers into
different segments and then focus on one or more of these segments. By having
those different segments, STO can have different marketing strategies and
marketing mix for achieving competitive advantages. The trading and fuel
supply segments are the largest profit making area which sells different
products in the market. In this report researcher has selected for above segments
in 2.1.1 for identifying SWOT analysis in company. There are three major steps
for the company to take before making the target marketing strategy. Those are
market segmentation, target marketing and market positioning.
The SWOT analysis is a method widely used in marketing audits. SWOT is grid
that plots internal strengths and weaknesses in one-half of the grid and external
opportunities and threats in the other half.

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Strength of Business Weakness of Business
 Continues to strengthen its position in the  The distribution is not very
trading segment, expand in its high margin effective for their customer.
product categories, develop  Many market segments are
 Trading is the largest business segment in running under one management.
terms of its offering under different product  Political influence on market
groups. environment for changing the
 Strong emphasis was made on creating price of product / services
customer value and reduce costs  Sometimes product are fail in
 Practices latest innovation and services market for not conducting product
 Customer loyalty trial in environment
 Strong and knowledgeable market
awareness management for operating
Opportunities of Business Threats of Business
 Company have choice of diversifying  Increasing number of strong
business and introduce tourism sector. competitors in Maldivian market
 Attract more foreign investors / agents  Competition challenges for
 Started business in international market tourism sector
 In trading segment, the largest segment  Increase number of global
which satisfied customers in different business with private party.
product.
 Less number of challenging competitors
 Business can easy to wide around the world.

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2.1.3. RECOMMEND ACTIONS FOR BUSINESS SUSTAINABILITY
Sustainability marketing is the development of marketing that integrates aspects
of economy and the new concept of relationship marketing, and social, moral,
environment perspectives. It also includes outlooks among the period of
sustainable development that are an improvement of marketing through intense
understanding and strength of diverse prospects. In pursuing strategic goals,
STO is prepared to take considerable risk related to business expansion and
sustainability. STO regional stores are strategic business units which are run on
a cross subsidized business model.
Recommending for promote the stakeholders of STO and have been known for
a long time by those who want success in business. The stakeholder becomes
increasingly important for the Maldivian economic entity and agents for
promoting company image, this an important cogwheel for company
management mechanism. Moreover, stakeholder will help to support and
communicate importance of business sustainably in market.
By building brand equity to its customers, STO different market segments can
be develop and increase the sales. Having emotional connection can link
customer and keep build strong market. In order to build image for customers,
STO conduct market mechanism for need of customers and collect information
/ provide information of different products though social networks.
By undertaking a strong segmentation, targeting and positioning process is
probably one of the most important processes that STO management should
undertake both at the onset of a new offer creation as well as part of a periodic
revision of the portfolio of offers and strategies used by the organization. The
process can be one that tests one’s ability to think creatively and so that is one
important reason why frequently companies seek the assistance of an outside
researcher to help them through the process. Moreover process can help to
identify market environment and cultural of Maldivian market.

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2.2.IN-DEPTH ANALYSIS OF A SELECTED SEGMENT
2.2.1. ANALYZE CUSTOMER BUYING BEHAVIOR FOR THE SELECTED
SEGEMENT
In all business environments but especially in competitive markets, businesses
need to practice constant marketing to build a bridge between the product and
the customer. In other words, good business can only be created through
understanding customer needs and wants and the marketplace within which
they operate. Kotler and Armstrong (2006: 5) have defined marketing as “the
process by which companies create value for customers and build strong
customer relationships in order to capture value from customers in return”.
Kotler defines consumer buyer behavior as the buying behavior of the
individuals and households within the consumer market that buy goods or
services for personal consumption (Kotler et al. 2017). In STO, aim of the
company has always been to create and remain as a sustainable and responsible
business by maintaining long-term value based on strategic development and a
solid economic model that provides a satisfactory return for both the customers
and consumers. In this report, researcher can analyze customer buying behavior
on trading segment in STO Maldives. It is the main underlying factors that
contribute to sustaining high volume of sales in all sectors of the trading
segment is the priority given by the company in strategically placing customers
in positions that incite memorable experiences (Organization, Trading
segement, 2016).
The buying behavior is determined by consumers’ own characteristics as well
as by external factors. Consumer’s characteristics encompass cultural, social,
personal and psychological traits. The external factors that most directly
influence consumer’s buying behavior include marketing and environmental
stimuli. In STO, the organization itself, is the high valued company which
achieve external factors. Moreover, most of the customer well know
availabilities of product and its type.

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Figure 1: Trading Segment, Revenue generation rates. Source: STO, annual report 2016

In State Trading Organization, trading business are STO Home improvement


and STO People Choice. STO Home Improvement sells and promotes paints,
power tools, office furniture and cooling systems for office and homes. STO
Home Improvement also sells DAP (Domestic Appliances and Personnel Care)
items such as juicers, cookers, refrigerators, washers, shavers, etc. (STO 2016).
According interview, conducted from random customers, most of the customers
says the STO home improvement and STO people choice are one of the trusted
business in Maldives. Furthermore, some of customer says that those two
business are available different types of branded product. The products under
main brands are covered by warranty, the service center has also been renovated
and upgraded to a modern facility.
The customers are making buying decision from collecting information
throughout internet, environment and advertisement. For those information,
customers are change their belief and attitude of particular product. A key
objective of STO Home Improvement is to help improve living standards by
providing quality and environmentally friendly products at affordable prices.
(maldives, 2017). STO Home Improvement has achieved a good reputation and
continue to work on consumer experience in order to maintain the high level of
trust.

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2.2.2. IDENTIFY THE TRENDS IN THE ENVIROMENTAL FACTORS THAT
MAY INFLUENCE CHANGES IN BUYING BEHAVIOR.
In the fast changing retail environment, where technological inventions follow
up rapidly, it is interesting to know how a new retail concept can be adapted to
the environment. Because it is impossible to predict if the concept will be a
success, gaining knowledge about the retail environment, shopping motivations
and consumer buying behavior was necessary.

2.2.2.1.Social influences:
Social factors affect consumer behavior significantly. Every individual has
someone around influencing their buying decisions. The important social
factors are: reference groups, family, role and status (Perreau, 2014.)
Usually, those reference group provides some points of comparison to
consumers about their behavior, lifestyle or habits. Family members can
influence individual consumers’ buying behavior. A family forms the
environment for an individual to acquire values, develop and shape
personality. This factors are mostly influence on business when customers
form different atolls Maldives, when someone need to buy some goods,
other may not like it.

2.2.2.2.Cultural influences:
Culture, subculture and social class have a particularly marked influence on
consumer behavior. Culture and the corresponding values are the most
fundamental factors in determining what a person wants and how she/he
behaves. Within each culture there are subcultures that provide more
specific identification for their members. In STO business can influence
through on different areas of people meet form Maldives, their buying
behavior can be different. Most of the time it different on person occupation.

2.2.2.3.Personal factor:
Personal traits encompass age, stage in the life cycle, occupation, economic
circumstances, lifestyle, personality and self-concept. Consumer’s
purchasing behavior is heavily influenced by their economic circumstances,

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reflected by their spendable income, savings and assets, debts, borrowing
power, and attitude toward spending vs. saving. Some of the young
generations are living in resort and some others are un-educationally living
in society. So, as an individual life style and occupation also influence on
buying behavior of product from STO business.

2.3. MARKETING STRATEGY / ACTIONS FOR CHANGING CUSTOMER


BEHAVIOUR
2.3.1. IDENTIFY MARKETING STRATEGY AND ACTIONS FOR
ADDRESSING THE CHANGING BUYING BEHAVIOR

In State Trading Organization, changing consumer behavior is a big challenge


in sustainable growth of the business. In developing country like Maldives,
there is need to formulate and successfully implement strategies related to
consumer behavior because there are fewer resources to meet the basic
requirements of the business. Changing consumer behavior is an obstacle in the
growth of business because it leads to heavy losses due to obsolete stock of the
organization. There different marketing strategies and techniques changing
buying behavior in Maldivian environment. STO’s sales & marketing activities
play a key role in achieving sales targets of the Company. These activities are
carefully aligned with the overall sales strategy and the company’s core values.

In recent year, consumers have difficult for buying product form STO. As a
reason is that, only capital city STO trading business are involved. Changing
technology, all segments are wide and it involved different atolls. By providing
online shopping, can be much more increase the number of buyers. As the
environment is globalizing, most of the customers are use mobile app and it is
good marketing strategies for STO as future to gain recorded number of
customers. Furthermore, today technology and the prevalence of available
information empowers consumers by more product and increase customer

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satisfaction level by knowing delivering process and product rooting
information.
By implementing total quality management (TQM) should be applied by
business concern to improve the quality of production and services so that
changing environment can not affect the demand of customers and consumers
can sticky with the particular business brand. It involves the proper coordination
of work processes which allows for continuous improvement in all business
units with the aim of meeting or surpassing customer’s expectations.
Moreover, by identifying quality of product can be help for build trust among
customers.
One might credit with starting empowering consumers on social media
marketing strategy can be one best technique for increase the number of buyer
in 20th century. Fast forward to today and how social media platforms such as
Facebook, Twitter, enable consumers to share and research product info on their
smartphones and other devices. Implementing a social media strategy will
greatly increase your brand recognition since you will be engaging with a broad
audience of consumers.

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3. BUSINESS GROWTH AND INNOVATION
3.1.IDENTIFY LIFECYCLE OF THE PRODUCT / SERVICE
All products and services have certain life cycles. The life cycle refers to the period
from the product’s first launch into the market until its final withdrawal and it is split
up in phases. During this period significant changes are made in the way that the
product is behaving into the market. The understanding of a product’s life cycle, can
help a company to understand and realize when it is time to introduce and withdraw a
product from a market, its position in the market compared to competitors, and the
product’s success or failure. Product or segment life cycle can analyze the total
portfolio of product and how market share and revenue generated in product / segment.
In this report, have identified many business segment of STO. Such as construction,
fuel and supply, trading, STO gas, insurance and MIFCO. From those segments,
researcher has to explain life cycle on STO trading segment and Maldives Gas company
segment. Below shows the market share and revenue generated in different segments
in STO.

Figure 2: STO Market share and revenue generation rate (%). Source: annual report 2015, STO)

From the above segments, shows that share of revenue generated in market. Every year
company starts with new strategic plan for increasing the sales on different segment
run in company. Most of the segment are on growth stage of product life cycle.

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3.1.1. TRADING CEGEMENT PRODUCT LIFECYCLE
In order to reach sales targets, the Group continues to strengthen its position in
the trading segment, expand in its high margin product categories, develop
service, and increase the offering of quality products. (Organization, Market
segment , 2015). According to financial statistics in STO report says that total
revenue for trading segment increased by 30% to approximately MVR 2.1
billion, with significant improvement in medical services.

Growth

Figure 3: Product Life Cycle in Growth Stage

The growth phase offers the satisfaction of seeing the product take-off in the
Marketplace. In trading segment, STO has sell different kind of product with
unbeatable price. And also most of the product are unique and rare available in
other business shop. From this achievement, STO trading segment has
continuously in growth stage. Business accelerate the customer services and
streamline business process in across all the business units especially in
Supermarket and Home improvement. All business units achieved significant
improvements in terms of sales volume, income and operational reliability.

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3.1.2. STO GAS SEGMENT PRODUCT LIFE CYCLE
Maldives Gas Private Limited (MGPL) began the organization's voyage as a
joint endeavor between State Trading Organization Plc (STO) and Champa Gas
and Oil Private Limited to provide Condensed Petroleum Gas with its
movability, productivity and wide accessibility. Apart from delivering the gas,
company provide different services to their customer like, LPG Cylinder
Refurbishing and Re-qualification, Hydro Testing, Sandblasting and etc. from
those services and product, business segment generate more than 171 million
RF net revenue each year.

Growth

Figure 4: Product life cycle in STO Gas Company

Its unmatched networks of distribution units and authorized agents throughout the
country enable the Group to supply gases to almost all the islands and guarantee
customers maximum reliability. The Group delivers customer satisfaction based on
close relationship and mutual trust reflected through its commitment to moving
forward. The distribution network covers more than 95% of hospitals in the
country. Based on statistical report, the STO Maldives, increase number of revenue
generation every year and have growth stages on product life cycle.

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3.2. DISCUSS INNOVATION TO ACHIEVE BUSINESS GROWTH AND PROPOSE
INNOVATION STRATEGY
Today, innovation performance is a crucial determinant of competitiveness and
national progress. Moreover, innovation is important to help address global challenges,
such as climate change and sustainable development. In view of the changing
environment for innovation, it is also important to consider whether the current system
of rules and practices continues to stimulate innovation while allowing access to
knowledge. In business environment, changing technologies and bring new innovative
function, marking areas must develop and updates with latest technologies.
Furthermore advertising areas has to change the way of advertising product and service
to its customers.
Strong political leadership and efforts to develop a clear understanding by the various
stakeholders of the problems and the solutions including the costs they involve can all
help to communicate the need for reform and facilitate acceptance. In STO company is
the government company which operates according to government standards. So as a
top level management it is importance for understanding stakeholders and shareholders
of company for future development.
Introducing new application for each segment, can increase competitive advantages.
The application of advances in technology, in conjunction with entrepreneurship and
innovative approaches to the creation and delivery of goods and services, which
translates scientific and technological advances into more productive economic activity
(OECD, nd). This results in economic growth if market structures and the regulatory
environment enable the more productive activities to expand.
Introducing cloud marketing technology is also a good example of innovative
marketing method which originated from innovation technology (Kharchuk, 2014).
Cloud marketing was born by cloud computing technologies. Secondly it is the increase
of personal marketing in contrast to mass marketing. This approach includes also the
known referee marketing strategies. This help for STO to develop and move to global
market in business.

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4. BUILDING CUSTOMER RETENTION AND LOYALTY
4.1.REVIEW THE CURRENT STATE OF CUSTOMER SERVICE, CUSTOMER
RETENTION AND LOYALTY

Business rely on customers for their survival. The pressures of competition dictate that
customers must be at the center of everything that a business does. The STO Group
operates nationwide with the long-term commitment to contributing the country’s
community by creating value and enriching the society’s livelihood through the
distribution of quality products and services. The close relationship developed by the
frequent interaction between the company and the customer provides valuable
information for the company to use as a foundation for the expansion and improvement
of its product mix and offer new and innovative solutions. One of the main reasons
behind the effectiveness of the company’s sales and services strategies is the
understanding of the customer’s needs, wants and behaviors throughout all the
segments. The company conducted a number of customer on the products and services
supplied to customers. The results of this survey provided the company with important
data that enabled the better understanding of customer needs, the performance areas
they value and where improvement is required in the company’s services.
To increase customer value and create demand, the company focuses on delivering new
and attractive products and services. Moreover company provide after sales services to
their customers. Additionally, to increase customer loyalty business provide some
special areas of services to customers. Like the identification of market pitfalls lead to
the creation of tailor-made insurance packages such as the specialized scheme for
guesthouses was introduced which offered protection (STO, customer enhancement ,
2016).
True loyal customers are less interested in competitors’ brands or products. True loyalty
can be characterized as condition of overall involvement to the brand. STO conduct
different customer loyalty program for build up their trust to company. Eco-friendly air
conditioners, refrigerators and other home appliances are available at the company’s
home improvement outlets, educating customers to become more energy efficient.

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4.2.PROPOSE CUSTOMER RETENTION AND LOYALTY STRATEGY
Customers are always been important for the business. With the high rate of
competition in every market, it is critical to retain the customer/ loyal customers.
Customer loyalty can be loosely defined as the predisposition of any given customer to
purchase your goods or services over comparable ones available in the marketplace.
Customer Retention is the activity that a selling organization undertakes in order to
reduce customer defections.
By understanding the value of life time product is one of important strategic methods
for increasing customer loyalty. Business know how much business and profit you are
going to gain with a customer over the lifetime. Once the analysis for a customer is
done, it is easy to understand the importance of the customer retention in the business.
When STO business selling some electric product or food, tell the life time of product
to customer. That will bring good image building and loyal to business product.
Loyalty programs will keep on adding the points when they make any purchase. There
are several retailers who gift their customer when a threshold spent amount is reached.
Giving big surprise to customer can be strategic methods to increase their buying
behavior. From those surprise, customer feels, there are so important and repeat buy a
product.

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5. RECOMMENDATION AND EXPECTATED OUTCOMES
5.1.SUMMARY OF THE CURRENT ISSUES / WEAKNESSES AND
OPPORTUNITIES IDENTIFIED IN SECTION 2.
The company’s progress towards long-term success is reflected by how the company
confronts forthcoming challenges with precision and grasps business and social
development opportunities that are innovative and relatively cutting-edge compared to
our competitors. Having a choice of diversifying business and introducing tourism
sector can be one of important opportunities for growth and development of business.
Moreover, STO have financial capability of moving business to international and gain
more competitive advantages on branding, loyalty etc. Currently STO product
distribution channels are not strong for delivering goods to different atoll. Moreover,
one political issues rising in management can be one of serious issues in STO.

5.2.RECOMMENDATION TO IMPROVE BUSINESS.


By effectively planning and controlling the people and processes for which they are
responsible, managers provide a positive and professional environment. This can
generate similar attitudes in their teams. It help to remove political issues in
management and every department top level management can be work on to achieve
one target and goal.
Moving to international, can be easily for company as STO. STO is a government
organization and management can work on according to government rules. With the
help of government, it help to attract more investors from global world and easy to
move business on international.
In order to make good distribution channels, STO can open every atoll to their business
branches. It will help to increase buying behavior of product and will generate more
customers to business. Customers feel there is no any difficulties for buying quality
goods to homeland.

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5.3.EXPECTED OUTCOMES FOR THE RECOMMENDATION
From those changes are implemented, organization boost its environment and increase
productivity of business. It will result development of a shipping line which caters for
both STO’s imports and private parties in future. This will solve distribution issues in
business and make best delivering services to its customers.
It help for increasing public demand to cater for wider choice and variety in our product
offer, and to showcase our products, all under one roof, undoubtedly would bring us
numerous advantages. More over business environment can be good and have
competitive work environment in each and every segments of business.

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maldives, S. (2017, nd nd). Over view . Retrieved from www.stomaldives.mv:


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OECD. (nd, nd nd). Innovation. Retrieved from www.oecd.org:


https://www.oecd.org/sti/inno/39374789.pdf

Organization, S. T. (2015, nd nd). Market segment . Retrieved from www.sto.mv:


https://www.sto.mv/Uploads/Report/Annual%20Report%202015.pdf

Organization, S. T. (2016). Company Market Segmentation. Male' city: STO.

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