Marketing Phase 2

MKTG 361, 001

21 October 2018

Team #4
Christopher Buxton
Daniel Macdonald
Helen Matz
Stacie Moore
Caroline Wells
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Company & Industry Description

Life Cycle & Growth Rate
The Customer Relationship Management (CRM) computing industry has a strong outlook,
expecting steady expansion over the next five years. Revenue for the entire market is expected to
increase by 11.4% due to small businesses’ increased implementation of cloud computing
products ​(see Table 5​). The industry as a whole is relatively young and is growing significantly
faster than the national GDP rate of 2.1%. This is because companies are becoming increasingly
aware of the necessity and profitability of real-time data tracking at both the micro and macro
scale. Salesforce continues to dominate the total market share of the industry with 46% control.
Although Salesforce is a relatively young company compared to competitors like Oracle, it is in
the mature phase of its life-cycle due for the CRM industry due to its level of economic stability
within the CRM industry and growing breadth of partnerships both internationally, and
domestically (Carnette).

Competition/NAICS
The NAICS code for Salesforce and its competitors is 51121c: Business Analytics and Enterprise
Software Publishing in the US (IBIS World). The life cycle is currently at the growth stage
specifically for the business analytics sector with a rapid increase in sales and aggressive pricing.
Due to an increase in competition, product proliferation has been apparent in Salesforce through
their innovation, consistent customer support, and unique branding through their "Trailhead
Experience."

Salesforce is has the most complete portfolio in this industry compared to the top two
competitors, Oracle and SAP. The NAICS code of 51121c is same for both major competitors.
Refer to chart 4 for what immplemtation systems Salesforce surpases their compeitors. Although
currently owning most of the market share, Salesforce needs to evaluate all competition to
remain the number one new and improved CRM system.

Environment & Seasonal Trends

The most relevant date for Salesforce customers is January 31st because this is Salesforce’s
fiscal year end date. Salesforce account reps will have allowed leeway on negotiating with their
customers and on February 1st the account executives typically adjust for and increased number
of accounts. Customers may have a different renewal date, but January is still the perfect time for
a customer to plan it’s growth in their Salesforce account. The account managers will analyze the
companies needs, additional users, functionality, and work negotiations (Mowat, 2014).

Product/ Service Description

Salesforce’s Customer Relationship Management platform allows a company to understand their
needs, decipher their problems, and retain insight on their current and future customers through
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several features. The Sales Cloud Pricing feature allows a company to sell faster and smarter
with a fully customizable platform. The marketing section of the platform delivers personalized
customer journeys powered by the intelligent marketing platform for email, mobile, social, and
digital advertising. Under the Marketing feature, we have the Data Management Platform and
Marketing Automation. The Data Management Platform allows you to capture, unify, and
activate your data to build valuable customer experiences. Marketing Automation is the pipeline
for driving sales between Business to Business companies. Salesforce also offers a solution that
tailors to your specific industry needs to transform every aspect of your business. This offer
allows you to better your company's financial services, healthcare, and philanthropy. Quip is
another attribute that is offered, which allows automatic up to date documents, spreadsheets, live
apps, and slides for your company (Salesforce.com, 2018).

Unique Selling Proposition

Salesforce’s biggest strength stems from their USP of a strong niche in CRM technology, which
allows for cloud-based, mobility, and social integration systems. The company's products allow
for uncompared adaptability that can be tailored specifically to individual businesses’ needs.
Salesforce’s unique “trailheads” equipt users with the ability to easily manage their systems and
train administration. The company also connects users through the “App exchange”, allowing for
further flexibility by not making users settle with one supplier, unlike their direct competitors
who only allow their customers to connect with oner supplier (Smits).

SWOTT ANALYSIS
SWOTT Analysis
Salesforce is a dominant force in the CRM market space from them creating a strong niche in
CRM technology services. Their implementation costs and lack of data centers restrict them from
capturing new customers. Customer retention is a growing focus in business’ strategy, leading to
high CRM market growth projections, yet, there is a tight fight for business analytics market
share and a growing concern over data privacy. However, a growing trend of cloud-based
subscriptions has guided Salesforce’s recent decision to implement cloud-based subscriptions.
Refer to ​Table 1: SWOTT Analysis​ for more details.

Target Segmentation
Enterprise Retail Businesses
Salesforce’s primary target market is enterprise based retail companies who earn a revenue of
less than $25 billion, engage in international business, and philanthropic activities. Salesforce
has five main companies who fulfill these segmentations, which are Adidas, Crossmark,
Westfield, Pernod, and Macy’s. These five companies utilize Salesforce solutions in each step of
their business to create a seamless customer experience and consistent, reliable data.
Specifically, Crossmark uses Salesforce’s technology to innovate in the retail solutions space.
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Macy’s wanted a Premier Success Plan to ensure a smooth implementation of its new Human
Resource platform. The common thread between these five companies is they rely on their
products to resonate with their customers, thanks to Salesforce customer management systems.
They each position themselves to actively participate in volunteer and philanthropic activities,
which is a major aspect of what Salesforce believes in (Salesforce.com, 2018). (​See Table 2​) for
numerative information on the Target Market.

Lower Mid-Market Business Services

Salesforce’s secondary target market is Lower Mid-Market Business Services who earn a
revenue of fewer than $25 billion dollars annually, operate internationally, and engage in
philanthropic activities. After our three segmentation bases, we found five companies that fulfill
these requirements. These companies are 2U, The Chapar, Les Mills, and Maersk. 2U’s CTO
James Kenigsberg describes Salesforce’s impact saying, “It gives us a 360-degree view of our
partners, students, their needs, and their full history with us, which is invaluable”
(Salesforce.com, 2018). The Chapar wanted a way to track the most popular items by
demographics and after enabling cloud usage, it noted a 650% growth rate in the past 12 months.
Maersk aids in providing greater accountability and visibility for customers. Salesforce enables
Les Mills to track workout statistics in their workout plans, including their “Les Mills Fund for
Children”, an event centered at health and wellness, a philanthropic service that Salesforce
values in our customers. Due to the smaller size of these companies, Salesforce has enabled rapid
growth to larger operations through increased connectivity as essential data tracking
(Salesforce.com, 2018). (​See Table 2​).

Upper Mid-Market Media Providers

Salesforce’s tertiary target market is lower mid-market businesses who again earn a revenue of
less than $25 billion, engage in international business, and philanthropic activities. Salesforce
has three customers who meet these segmententations, which are Maersk, Vox Media, ASCAP.
These three companies utilize Salesforce solutions in each step of their business to create a
seamless customer experience and consistent, reliable data. Salesforce has enabled Vox Media to
produce superior advertisements. Maersk’s visibility on delivery and actionability to their
customers and employees alike have all been bettered by Salesforce. John Johnson, SVP for
Licensing at ASCAP, said, “Salesforce has transformed our business as our yearly equipment
costs are down $300,000. Revenue is up 40% and license processing has grown 75%”
(Salesforce.com, 2018). All three of these companies partake in philanthropic activities
throughout the year as well (Salesforce.com, 2018). (​See Table 2)​.

Competitive Analysis
Salesforce is the dominate platform in the business to business customer relationship
management market presence and in terms of technical execution. The platform is a fresh take on
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the original cloud-based programs including Oracle and SAP Se., and has continued to hold a
larger part of the market. Refer to (​Table 4)​ to see what categories Salesforce rises above in. For
Salesforce to remain the powerhouse cloud-based service, it is crucial to recognize and market
towards competitors' weaknesses. This can continue to been done through the companies
innovative brand through implementation costs, philanthropy and international expansion.

The most prominent competitor is Oracle Siebel. Marc Benioff, the founder of Salesforce, is a
former Oracle executive. Internally, Oracle has retained top retail services such as Peoplesoft,
Profit Logic, and Micros Systems through their transparent prices. Salesforce only highlights the
cheapest price on their website, and implements the "pay as you go method." Salesforce should
reflect Oracle's methods to avoid hidden fees and maintain their lower budget customers.

An additional micro case is risk of intellectual privacy. Oracle prides themselves in customer
security as they have posted a lengthy privacy policy under their "legal notices" section on their
website (Oracle, 2018). This builds trust with their customers and stakeholders. Trust is the
number one core value for many cloud-based business, thus protection of privacy should be
marketed clearly.

Externally, through this trust, Oracle has successfully marketed internationally with their
consultancy arm whose current main objective is to facilitate Oracle implementations in China
(Walker). Oracle's website highlights its ​430,000 customers in 175 countries (Oracle, 2018).
North China Oracle Managing Director, Roger Li states, ​"Our mid-market business has been
one of the key drivers for Oracle's overall business growth in China" (Financesonline, 2018).
Salesforce fails to provide a total reference number of their customers on their website, instead
has "company success story" section on their website.

SAP Se. is Salesforce’s second biggest competitor. SAP Se. is a multinational German-based
enterprise software company that focuses on business operations and customer relationship
management. Internally, SAP Se. has many big-name American customers who are loyal to their
services, companies like 7-Eleven, ConAgra Foods, and Alpine Electronics of America, Inc stay
with SAP year after year. SAP Se., is able to retain these companies through offering their
customer relationship management systems within their business operations software.

Externally, SAP Se. has seen major success reaching markets all over the world. They currently
operate offices in over 130 countries (SAP, 2018). SAP has also entered the Chinese market to
further their R&D efforts. Today ​China is SAP’s third largest R&D hub in the world (​Baur,
2018​). This is relevant since Salesforce has yet to enter the Chinese market, something they have
been looking into.
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Salesforce has more philanthropy than both of their top competitors. This corporate social
responsibility and diverse atmosphere sets them apart and should be continuously marketed
towards. Businesses and employees don't just care about the work they are doing, but how it
impacts the world for the better good. Their narrative as "the ​first global platform to connect
employees, customers, and partners with causes they care about (Salesforce, 2018)," will remain
competitive, and inspire other businesses to do the same.

Introduction to Problems and Solutions

First
Having target market segmentations for Salesforce to depict their target markets, has lead to
findings of several problems being associated with the target market outcome. The first problem
being misleading implementation costs. The range of solutions for this include to be more
transparent about hidden fees, have minimal implementation cost increases when upgrading
subscriptions, and to remind target markets about their upcoming subscription bill.
Second
The second problem is that the target markets do not value philanthropy as highly as Salesforce
does. To emphasize the importance this aspect has on the company, a range of solutions for this
include to promote the philanthropic events Salesforce participates in, share Salesforce’s passion
for philanthropy publically, and to discuss potential social and profitable opportunities from
participating in philanthropy.
Third
The third problem identified is being limited in global data centers. Potential solutions for this
issue include to create a Chinese Data Center, collaborate with global partnerships’ data centers,
or provide more accessibility to the current global data centers.
The range of solutions for each problem will allow the target markets’ to have a full
understanding of what aspects Salesforce wants to improve communicating and marketing upon
with the segmented target markets. See ​Table 3​ for more detailed information.

Conclusion
Salesforce is the world’s number one CRM platform, which comes with great customer respect
and business success, however, it also provides Salesforce with many obstacles. The company
continues to make dramatic progress in the market and will continue to grow if they remain
attentive to minor issues, specifically, when marketing themselves to their target markets. These
minor issues include, communicating implementation costs promptly, spreading database centers
internationally, and hyphenating the value of philanthropy. The issues identified in ​Table 3​ offer
possible solutions by understanding the company’s strengths, weaknesses, and trends. Salesforce
is in a probable favor to overcome these target market challenges and will continue to lead as the
prominent cloud-based platform provider.
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Attachments

Table 1: SWOTT Analysis

Table 2: Target Market Table 4: Competitors Product Advantage

Table 3: Problems and Solutions Chart Table 5: Revenue Outlook

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Works Cited

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