Marketing
Forum in 'The
Herald'
In 1996 the Staff of Marketing
Management Services Ltd wrote a series of articles which
were published in the Herald under the title of
"Marketing Forum". These articles are
reproduced here in the form that they appeared in the
Herald.
The articles were designed
to promote the role of Marketing in all areas of business
from MBOs to PFI as well as giving a marketing angle to
other areas of activity such as the new unitary council
of Glasgow. Marketing Management Service has staff
experienced in all aspects of marketing, from planning to
research and exhibitions to sponsorship.
Contents
-
Consultation
is key to challenge of the changing market - by
Gerald Michaluk.
A guide to choosing and using a marketing consultant
-
Using experts
to plan the way ahead - by David Primrose.
The advantages of using interim and facilities managers
-
Marketing key
to good MBO - by Gerald Michaluk.
The need for marketing assistance an MBO bid
-
Value of
exhibiting the right attitude - by Jacqueline
Bamborough
How to ensure exhibitions are run successfully and effectively
-
Unravelling
the secrets of network building - by Michael Woodcroft
The importance of networking for professionals
-
Value
for money is priority for sponsors - by Alan Grant
Why sponsors must plan their strategy
-
City shake-up
means a fresh start - by David Primrose
How the marketing of Glasgow City Council will be managed
-
Valuable opportunity
to take the financial initiative - by Michael Woodcroft
How to take advantage of the Private Finance Initiative
-
In touch
with a shopping-mall revolution - by Albert Naismith
The new Videonet concept
THE
HERALD
Consultation is key to
challenge of the changing market - By GERALD MICHALUK
<Top>
MARKETING consultants have
helped numerous organisations meet the challenge of
change in the market place while their use has doubled
between 1994 and 1995, according to the annual report of
the Management Consultants Association.
The overall increase in
the use of strategy, marketing and human resources
consultancy — all traditional indicators of an
expanding economy — suggests that industry and
commerce are gearing up for an anticipated end to the
recession. However, public sector work fell by £71m to
£182m in 1995.
With this growth in use
and the need to ensure that you company gets the best
value for money from your chosen marketing consultants,
what are the practical steps you should consider.?
First of all, one needs to
be fully aware of what marketing is. It is not just
selling although an increase in sales and profit are
usually the ultimate aim. Marketing is a collection of
activities which aim to identify, anticipate and satisfy
customer requirements profitably.
As this involves a
multitude of tasks, there are specialist consultants in
many of the various marketing fields as well as
generalists and one-stop shops. There are, for example,
specialists in strategy, sales promotion, advertising,
public relations, market research, merchandising.
Secondly, what exactly do
you want out of the assignment? This could be convincing
investors that a market exists, or assessing the effects
of closing a surgery in terms of patient loss to a GP
practice or determining the international demand for
floor coverings, or designing a strategy for the
introduction of a new service to the building industry.
An easy way to determine
what you want the consultant to do is simply to draw up a
list of questions which if answered would improve the
business and result in you taking actions that would
increase sales. This is often a valuable starting place,
but remember to ask yourself what you would do with the
answers, don't ask questions if you could do nothing with
the answers. Next determine if you are eligible for
Government grant assistance. If so, provided you can make
the final consultant choice, this can half the cost.
Never accept a consultant
without looking at several unless you are an experienced
buyer of consultancy services.
Any consultant being
considered should be a member of a professional body such
as the MCA, CIM, MRS or similar. They should ideally
offer a service backed by a recognised quality standard,
such as BS EN ISO 9001. They should have had experience
in your area, or a similar area, and have the relevant
academic qualifications.
The consultant should
provide a detailed proposal explaining what they will do.
This should include a project schedule, costs, named
staff contributions, clear project milestones, paying and
reporting arrangements. The audit commission considers
these to be the basic elements which should be present in
a consultancy project proposal.
The consultancy report
will normally only represent a part of the work the
consultants undertake, often as important is the
interaction between the organisation and the consultant,
so ensure there is adequate time for this to happen built
into the proposal.
Having interviewed at
least three consultants, all qualified to deliver the
work, then your final choice has to be based on value for
money, reputation the individual consultants’
personalities, and your trust in their abilities. Unless
you can trust your chosen consultant then the project
will not be satisfactorily completed.
Having chosen the
consultant then it is essential that you provide them
with all the information you have available so that they
don’t waste their time and your money finding out
what you already know.
Ensure your staff has been
informed as the unexplained presence of consultants has
been know to alarm some members of staff.
Do not let the agreed
timetable slip. You must reserve your time for the
consultants as most delays can be blamed on the client if
you have not been available for scheduled meetings. The
consultancy has to be taken seriously and time allowed
for your input and that of your staff.
A consultant can’t
produce an effective plan without your input. They may be
experts in marketing but they don’t have your years
of specific industry experience so you must work with
them to produce a plan of action that you believe in and
can completely see the logic while understanding the
risks.
Do not sign off the final
report at the last meeting. Take time to read it.
Only after you have given
it due consideration and had any misconceptions corrected
should you sign off the report.
Do not lose contact with
the consultants — keep in touch as you implement the
report and do not forget to get them involved again when
the report needs updated or there is a sudden unforeseen
change in the market.
Working with consultants
can benefit your business provided you make the right
choice of consultant. Only get consultants involved if
you are going to work with them to provide real solutions
for your organisations.
Gerald
Michaluk is managing director of Marketing Management
Services in Glasgow.
THE
HERALD
Using experts to plan
the way ahead BY
DAVID PRIMROSE
<Top>
The idea of letting
someone with no direct relationship with your company run
one of your departments would be enough to make most
board members reel in horror. There can, however, be real
benefits in employing a person or team from outside to
"Facilities Manage" a department in your
company.
Every company has to be
flexible and responsible to change and can often be
constrained by the personnel it does or does not employ.
It is a solution that is
most appropriate at a time when a company is going
through a period of change. In a time of rapid expansion,
takeover or management buy-out the resources are simply
not available internally to carry out all the work
required.
The direct employees of
the company are primarily concerned with maintaining
levels of service and customer care. To establish
operating procedures and strategic plans it is necessary
to import specialist knowledge.
A conventional use of
consultants would be inappropriate for this because once
they had carried out their research and produced
appropriate strategies the plans could gather dust
because there would be no-one to implement them.
With Facilities Management
the company would employ a team of experts to set up and
run a department. This approach prevents time being
wasted at crucial stages when direct staff have to
acquire new skills. Once the department was running and
systems were in place the company could then switch over
to its own staff.
In one of the newly
privatised rail companies the management was successful
in its buy-out but the newly independent company, which
had previously employed the support of Railtrack
headquarters’ functions, rapidly had to acquire the
expertise to compete in the market-place. To do so it
employed a firm of marketing consultants to carry out all
the functions of a marketing department.
The new company gained
immediate access to professional staff who worked
in-house and adopted the identity of the company.
Customers and potential customers remained under the
impression that they were dealing with staff and
management directly employed by the company.
Any company employing
facilities managers should ensure that it is working in
accordance with that company’s objectives. Where
possible the company should have a clearly defined
time-scale for moving from facilities management to
directly employing its own staff. It should set Key
Result Areas which should be delivered by the facilities
management team. This gives the management measurable
targets against which it can gauge the performance of the
facilities managers.
Unlike its own employees
the management can terminate any agreement very quickly
if standards are not being met. When the facilities
management is a great success, it is not unknown for
consultants to leave their own company to take up
permanent positions in the companies they were previously
facilities managing.
An alternative to
employing a team as facilities managers would be to
employ an individual as an interim manager. The interim
manager becomes a direct employee of the company and is
primarily a trouble-shooter, taking over line
responsibility for managing as chief executive or acting
head of marketing, production, finance or IT.
The practice of interim
management originated in Holland but has since spread
across Europe and the USA. Because the people employed as
interim managers are good there can be a tendency to
over-estimate the time they are needed for. The danger is
that companies can become too dependent on interim
management and have to ensure that once the key result
areas are achieved then they know when to terminate the
arrangement.
Facilities and interim
management are not the final solution to a company’s
problems but are the way to start moving towards that
solution. If companies are needing a department at a time
of change or needing a trouble-shooter to address
short-term problems then they should consider employing
outside help rather than incur the overheads of employing
and training their own staff.
Expertise is available in
the market and companies can control their spending by
employing these people short-term contracts. Companies
can also afford to be results orientated in employed
outsiders. Putting your business in their hands could be
the beginning of the answer to your problems.
David
Primrose is a consultant with Marketing Managerment
Services in Glasgow.
THE
HERALD
Marketing key to good
MBO By GERALD
MICHALUK
<Top>
In the current British
Rail Infrastructure Services privatisations there have
been three successful MBOs or MEBOs out of the nine
companies sold to date. This demonstrates a willingness
of management to take on the responsibility for their own
destiny.
The secret of a good MBO
is simply a sound business, excellent management,
committed institutions, the optimum financial and
management structure and a clear exit route.
It is established in a few
relatively simple sounding steps:
- Getting the
management team together.
- Appointing the
advisers.
- Undertaking a
feasibility study.
- Preparing a business
and marketing plan.
- Agreeing a price.
- Approaching the
investors.
- Negotiation with the
seller.
- Agreeing a final
price.
This all has to be done
taking into consideration the structure of the funding,
the banks’ requirements, due diligence requirements,
the tax implications and legal considerations. The
question of insurance must also be addressed and all this
has to be done without effecting performance in the
management role for the seller and in free time after
work.
In one deal the MBO team
would have faced an advisers’ bill of £40,000 if
their £10m acquisition had been unsuccessful. As it
happens it was successful and the bill was £70,000. It
is not surprising that there are very few managers
willing to go through the process more than once in a
lifetime. Success usually brings the reward of financial
independence. Success or failure will be determined by
how well the MBO team has read the market.
Knowing the market and
accurately judging its potential is essential in an MBO
and will be one of the areas in which investors will want
a great deal of re-assurance. The due diligence team will
have particular interest in this area.
As important as choosing
your financial and legal advisers will be the accuracy
and quality of your marketing information and systems.
The use of a suitably qualified and experienced marketing
consultant can often smooth the way because the
information on the market will have been gathered
independently. Investors’ needs are considered in
terms of verifiability of data, stringent recording of
sources and rational behind estimates, assumptions and
success probabilities.
It can help the management
team, who can often only see one side and can fool
themselves into believing the company is worth a lot more
than it actually is. They must avoid saddling their new
company with debt and the inherent effects this will have
on competitiveness and profitability. Marketing promises
are often included within the funding agreement and to
ensure the continued support and trust of the backers any
promises made should be based on the best market
intelligence available at the time.
In the many recent
privatisations marketing has often been a problem to the
MBO or MEBO teams because the companies historically have
less need to find work as part of a nationalised
industry. In these cases the need for marketing expertise
has gone a lot further than the preparation from a
marketing plan and has involved the setting up of a
marketing department from scratch.
This is the most exciting
type of project for a marketing consultant. The optimum
systems have to be designed and installed. Some of these
new departments will outperform the more traditional
competitors because they have been designed to include
the latest in marketing software and to BS EN ISO 9000
standards.
They are often set-up and
run, over the critical first few months, by the
consultancy firm involved. They are key results
orientated and not limited by a single marketing
manager’s abilities. They are flexible and can call
on specialists in all areas of marketing
(public relations,
advertising, journalists, designers, etc.) to ensure a
performance which can outshine competitors and result in
achievement of the MBO’s objectives more efficiently
and with less expense than would have otherwise been the
case.
In all MBOs the need for
effective marketing is paramount to see the team through
the buy-out process. It should convince investors that
the market is sound and that the company is capable of
achieving the sales projections and, after the MBO, it
should ensure that promises made are met and the business
grows at the desired rate.
Gerald
Michaluk is managing director of Marketing Management
Services, based in Glasgow.
THE
HERALD
Value of exhibiting the
right attitude By JACQUELINE BAMBOROUGH
<Top>
ARE you under pressure to
deliver more for your company’s money, despite
marketing budgets being slashed? Have you asked yourself:
"Am I getting the most out of attending trade fairs
and exhibitions?"
Many managers and
companies launch into exhibitions without properly
considering the role they have in their marketing plans.
You should evaluate every year the contribution each one
is making to your particular plan. If you are not doing
this, the full potential of exhibitions might not be
realised.
When properly used, trade
fairs can be a cost effective medium. Those attending at
least have a specific interest in your sector. This
offers you, as an exhibitor, a targeted audience. It is a
unique opportunity to reach key decision makers, service
existing clients and contact new prospects all under one
roof.
Research shows that
exhibition audiences are quality targets with 84%
possessing buying influence. Their expenditure reached in
excess of £483m in 1994.
It is surprising some
companies still regard attendance at key industry evens
as unnecessary, falling to realise they can be an
excellent sales and marketing opportunity.
To take full advantage of
this, companies are increasingly using consultants to
provide advice, organisational and publicity skills.
These experts will guide you through the planning process
to maximise returns and deliver better value for money.
Exhibitions that are
properly planned, organised and publicised prosper. A
successful trade fair is dependant not on luck but on the
effective implementation of the following guidelines.
The establishment of your
aims is critical to deciding what products to feature and
how to present the company. Everyone involved must be
aware of what you need to achieve. A clear statement of
objectives also helps in post-even evaluation.
To choose your exhibition
you should focus on audience quality and quantity,
relevance, stand location and other logistical aspects.
The Audit Bureau of Circulation can provide verified
attendance figures as well as visitor profiles. Some
local and national funding bodies offer information and
subsidies for companies wanting to invest time and money
in exhibitions.
Decisions regarding stand
display and design must be taken early, and you will need
to return contractor forms well before deadline dates.
An ineffective stand is
often related to personnel. It is vital the staff
selected have the knowledge, training and enthusiasm to
make an impact. They must behave in a professional
manner, which means not eating, smoking and chatting to
friends.
A system for identifying
and recording visitors should also be put in place, as
well as procedures for contacting the office and the
eventual debriefing of staff.
It is essential to produce
some pre-exhibition publicity to ensure potential
customers visit the show and, more important, your stand.
This could be direct mail or trade journal advertising.
Publicity should be organised as soon as possible to take
advantage of production schedules in magazines and
achieve maximum exposure.
Running raffles and
competitions, giving away free samples and sponsoring
seminars all help to entice visitors. you could invite
the industry’s top 20 prospects and give them passes
to a special business lounge organised during the
exhibition, treating them like VIPs for the day. This can
generate valuable goodwill.
After an exhibition the
biggest crime committed by companies is not following up
prospects. The reliability and speed with which enquiries
are handled is a direct reflection of company standards.
All that is usually required is a letter thanking the
person for their visit, answering any specific queries
raised and offering a sales call within two weeks.
Once contact has been made
the capability of professionalism of your company should
be demonstrated. These actions will help obtain feedback
from target groups and allow for direct evaluation of the
exhibition’s effectiveness. The analysis of each
element against your previously stated objectives should
eliminate any flaws in the organisation of the next show.
Long-term planning and
effective participation at exhibitions can not only lead
to increased profits but can establish your company in
the marketplace.
Jacqueline
Bamborough is a consultant with Marketing Management
Services in Glasgow.
THE
HERALD
Unravelling the secrets
of network building By MICHAEL WOODCROFT
<Top>
NETWORKING is a way of
increasing your business by sharing information,
referrals, endorsements and assisting others to your
mutual benefit. It is based on the idea that if you can
do more than just deliver your core service, for example
by introducing your customers to new business, they will
refer work to you.
In the professions
networking has always been acknowledged as an important
source of business. Although there are increasing
opportunities for promotion, networking has retained its
importance and, if anything, this has grown.
The first steps in any
formal networking system are to establish: who you know;
who is important to know and why; how best to meet them
and who is best suited in your organisation; how to form
a genuine business relationship with them, be it mutual
referral, peer group recognition or something else.
Always view any network
relationship from the other person’s point of view.
What do they want and how can you ensure a balanced
relationship serving both parties?
In most networks people do
not tend to keep score of the referrals or assistance
given. However, those who do not reciprocate are soon
dropped, as are those who do not provide a quality
product or service or who lack credibility.
The secret of good
networking is knowing and trusting the services supplied
by those you network with. If you refer a client to
another member and they are let down, it reflects on you
as well as on the service provider. Likewise, if you make
a referred client unhappy, it reflects not just on you
but on the referral agent. Networked client referrals
come with a "handle with care" label which you
ignore at your peril.
You can always spot a good
networking-based organisation from its in-house journal
which will have around 80% of its stories about its
clients’ businesses. Putting your clients in the
spotlight and taking a back seat is one of the most
effective networking activities you can indulge in. You
must be your customer’s champion.
Ensure your network know
what you do, where you are positioned in the market and
what type of client you can help most. Do not try to sell
yourself to everyone you meet. Determine first what their
needs are and if you can meet them. If you can, explain
how you can help and give a network member as a
reference. If you can’t, say so, and refer the
person to a network member you know can meet their needs.
Do not underestimate the
need for friends in business. It is much more difficult
to sell your service to a stranger than it is to a
friend. However, it is far more demanding, requires
greater ability and skill and is much more important to
deliver a quality service to a friend.
If you can make the grade,
networking will give you buyers for life and reward you
with a lot more than just money and power; it will give
you respect, recognition and trust.
To ensure your networking
efforts are successful, you must put in place systems and
controls which will allow you to manage your network.
Some of the information in this article is taken from the
syllabus of the University of Strathclyde’s
certificate in entrepreneurial studies.
If your needs, however,
are solely those of network building, it is possible to
use consultants to help you create and control it.
Michael
Woodcroft is a consultant with Marketing Management
Services in Glasgow
THE
HERALD
Value for money is
priority for sponsors By ALAN GRANT
<Top>
ALTHOUGH sponsorship and
philanthropy are in theory quite separate, in practice
there is a great deal of confusion and conflict.
In some companies, the
decisions on sponsorship are taken by the marketing
department and the money comes from the marketing or
promotional budget. But for many others sponsorships are
routed through the same channels as charitable appeals,
and some even pay out their sponsorship money in the same
way as a donation through their company trust.
What is clear is that
sponsorship available in the UK today is in excess of
£300m, with sport and the arts taking the lion’s
share. More recently consumers will have noticed the
trend towards the endorsement of television shows,
particularly by national newspapers.
In Scotland those avid
fans of High Road will have no doubt spotted that their
favourite programme is brought to them by Scottish Blend,
and commercial weather bulletins are sponsored by
Kwik-Fit.
From a virtually standing
start in 1989, television sponsorship in 1994 was worth
£30m, with predictions that 1995-1996 will top out at
between £45m and £50m.
As companies seek to
target even more elusive consumers, London Underground,
for example, is creatively seeking to brand its prime
stations. Harrods’ Knightsbridge perhaps, or could
we go one better and have phone company Orange sponsor
the Glasgow Underground trains.
So what does all this
mean? Quite simply sponsorship is big business, with
those prepared to consider endorsement becoming
increasingly demanding, certainly at the top end of the
market. Philanthropy has gone and been replaced with
hard-nosed negotiators seeking value for money as a top
priority.
Providing objective
appraisals to clients and consultants on the
effectiveness of their sponsorships is not an easy task,
and the role of the market researcher cannot be
overestimated in assisting the negotiating process at
both ends of a deal. If a company believes that
sponsorship is the right strategy to follow, it needs to
be sure the proposals are worthy of entrusting a brand
image to. Event sponsorship can be a risky business, as
Philip Morris and Fosters discovered when they watched
their £1.2m support of the America’s Cup challenge
One Australia sink off the coast of San Diego.
Pepsi had a similarly
upsetting experience, beating a hasty retreat from first,
Madonna and then Michael Jackson after bad publicity.
Most sponsors are looking
for the opportunity to raise the profile of a brand or
have it associated with events that are well known and
people enjoy, but they may also want to make things
happen or create events which might not otherwise take
place.
Sport is the most
expensive area because of television coverage, but there
are many more opportunities for sponsorship at a more
modest level of expenditure. Almost any form of activity
affords the opportunity for sponsorship. Ingenuity,
creativity and enthusiasm can ensure that a modest budget
can achieve target audience penetration.
Opinion is divided on the
benefits of sponsorship, but for building brand
awareness, image improvement and building customer
loyalty there is a sustainable argument.
So those chairmen and
chief executives seeking board approval for their
favoured causes, or those who are seriously interested in
using or seeking sponsorship to build awareness or make
things happen, should allocate a budget for market
research.
Research can go a long way
in both presenting a "winning" proposal and for
assisting in the assessment of the impact. This, inturn,
may create the feel-good factor and confidence that
sponsorship is an important tool worth keeping in the
marketing tool box.
Alan Grant is
a director of Marketing Management Services based in
Glasgow.
THE
HERALD
City shake-up means a
fresh start By
DAVID PRIMROSE
<Top>
GLASGOW’S marketing
has evolved over the years and the public, both within
and outside Glasgow, is familiar with the Mr Happy image
and the slogans promoting the Dear Green Place.
The reorganisation of
local government has provided the new Glasgow City
Council with the opportunity to examine the marketing
drive and make a fresh start.
After just over a month
the new council’s marketing team has still to fully
develop its plans and strategies. Already, however, there
have emerged three clear areas where it hopes to improve
its service.
Coordinating activity and
spending has not always been a feature of city marketing
initiatives and John Brown, new head of public relations
and marketing, has already started to pull together the
marketing officers from the city departments into a
Marketing Forum where policy and co-operation can be
developed. The city is keen to maximise the benefit that
can be gained from its internal resources.
Carol Matthews, chief
marketing officer for Glasgow City Council, defined the
challenge facing her team as "to ensure that Glasgow
flourishes as a great international city".
She sees the job of
marketing the city in the same way as would somebody
marketing a product and a service. One of the main
differences is the number of "customer groups"
she has to serve. Glasgow City Council is serving its
staff, the citizens of Glasgow, tourists, Glasgow
businesses and it is trying to send messages to people
and businesses all over the world telling them why
Glasgow is a great city for "living, learning,
working and playing".
As well as coordinating
the City’s marketing effort, the new department is
also dealing with communication. The aim is to ensure
that all the target audiences receive clear positive
messages about the City.
One of the main priorities
that Carol Matthews has identified is the need to
communicate more information to the people of Glasgow
about how they benefit from the council’s spending.
This year’s Festival
of the Visual Arts is expected to generate an additional
£9.8m for the city which brings spin-off benefits to the
hotel, restaurant, retail and tax businesses among
others.
Glasgow’s marketing
strategy is based around "Pacing" events (The
Garden Festival, City of Culture, Festival of the Visual
Arts and the Year of Architecture and Design) and the
marketing team has to devise linked plans for all the
target audiences.
The third theme for the
new marketing department at the city council is
partnership. Sponsorship has already been used for the
benefit of city and business in many large and small
projects. Joint initiatives with tourist bodies, hotels
and other business groups are planned to promote Glasgow.
John Brown has already
spoken to marketing officers in other new unitary
authorities to explore ways of working to their mutual
advantage. They are all experiencing new problems and
challenges and are trying to work together rather than in
opposition.
Glasgow City Council is
hoping to continue working with Glasgow Development
Agency and other agencies promoting Glasgow as a business
location, to develop joint initiatives and to ensure that
Glasgow gets a fair share of inward investment publicity.
It is intended to align the city’s corporate
identity with good news stories.
The new Glasgow City
Council has many marketing challenges ahead. At present
none of the methods or ideas are cast in stone and there
are plenty of opportunities for new ideas and concepts.
The reorganisation has given the marketing team a rare
chance to start afresh looking a all aspects of its
marketing activity. Once the new team is in place, it
will assess the needs of all the customer groups and
develop the action plans accordingly.
Carol Matthew’s says
that although the plans are not yet in place, they will
be "exciting and dynamic", portraying Glasgow
as a "truly great city".
David
Primrose is a consultant with Marketing Management
Services in Glasgow
THE
HERALD
Valuable opportunity to
take the financial initiative By
MICHAEL WOODCROFT
<Top>
THE Private Finance
Initiative (PFI) was launched by the Conservative
Government in 1992. Since then Piffles have been
increasingly considered for major projects requiring a
high level of capital investment.
A number of projects are
now under way or completed, notably in areas such as
healthcare and transport. The PFI means companies have to
be ready to react when tenders are advertised. The
encouragement is also there to seek out opportunities and
put forward proposals.
Private sector involvement
in what were traditionally public sector projects is
likely to continue even if there is a change of
government — Labour’s proposed initiative, the
Public-Private Investment Partnership, has many
similarities to the PI.
There are two fundamental
requirements for the use of private finance: the sector
must genuinely assume risk, and value for money must be
demonstrated for any public expenditure.
The PI aims to minimise
risk to the public sector and to give the private sector
incentives to deliver cost-effective and efficient
services.
The Scottish Office is
keen to encourage proposals in three sectors.
The Health Service needs
privately financed facilities where it can be shown these
are in the best interests of the patients and offer good
value for money. These might include nursing home care
for the elderly, patient hotels, support services and the
leasing of medical, laboratory and office equipment.
The Roads Directorate is
looking for proposals to relieve traffic congestion and
to speed communications. These are in addition to the
road projects already under discussion.
Water and sewerage
services are still in the public sector but the new water
authorities in Scotland face the same pressure for
investment as the private sector elsewhere. Regulations
on improved drinking water standards and EC directives,
for example on urban waste water treatment, have to be
met.
Work must continue on
providing for new and expanding development needs,
maintenance of existing networks and upgrading overloaded
treatment facilities.
To take part in a PFI
project you will normally have to form a consortium,
whether or not you are a major company. Each member
should bring individual skills suited to the project.
The identification of
partners should be well thought out, since the failure of
one affects all others, particularly when a project might
last 10 years or more. There are some key areas that
should be considered in your choice.
- Financial strength
and stability — to ensure effective risk
management.
- Operational
excellencies — working well with employees
and unions.
- Business management
capability — managing process and change.
There are broadly three
types of private finance projects.
- Financially
free-standing — when the private sector
undertakes the project on the basis that cost
will be recovered entirely through charges for
the services to the final user.
- Joint ventures —
when the private and public sectors work
together. The public sector supports a project
where the returns are too low for the private to
cover the risk or initial investment alone. The
private sector retains overall control and its
initial outlay is reduced.
- Services sold to the
public sector — when the private sector
becomes the contractor providing services
previously supplied by direct labour. PFI is most
suitable where a significant part of the cost is
capital expenditure.
For firms which have
already positioned themselves well within the market and
established relationships, PFI provides a golden
opportunity. Companies who have not researched the
possibilities should consider taking action now before
others do.
Michael
Woodcroft is a consultant with Marketing
Management Services
in Glasgow
THE
HERALD
In touch with a
shopping-mall revolution - by ALBERT NAISMITH
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Don’t get on your
bike, get into that booth. User-friendly Videonet sites
are coming - to make direct contact between consumer and
company as easy as being there, says Albert Naismith
JUST when you imagine the
future has arrived something happens which makes you
realise technology’s box of tricks is only half
open. It happened again last week and the word is that
the police are making inquiries.
They, along with leading
banks, building societies, travel agents, insurance
companies and supermarkets, are more than interested in a
touch-screen system which will allow the public to report
crimes, check in their driving licences, talk to their
bank, buy insurance policies, and book and pay for their
holidays from hi-tech but user-friendly booths.
They will speak
face-to-face to the person at the other end, with both
participants in the conversation able to see each other
and thus establish the person-to-person relationship
which other technologies apparently seek to destroy.
Videonet sites could be
established at the local shopping mall, rail station,
supermarket, or anywhere with reasonably heavy pedestrian
"traffic". They have yet to arrive in Scotland
but last week’s demonstration at Glasgow Royal
Concert Hall made it clear that the proposed trials will
be the forerunner to another revolution in the way we
approach everyday tasks.
The system — both
hardware and software — is designed, built and
supplied by PFA UK Ltd whose managing director, Ian
Cotterill, told me of significant success with the 25 or
so terminals now situated in conurbations such as London,
Hull, Manchester, Sheffield, Cardiff and Newcastle.
Existing clients of PFA
include the Co-operative Bank, the Cheltenham &
Gloucester Building Society, Thomas Cook, and Nat West.
All are benefiting from a situation where a bank customer
can use the branch Videonet to book a holiday, on the
spot — or a Thomas Cook customer can employ the
agency’s site to arrange finance or a
current-account statement with his or her bank.
Daewoo, the direct-sales
car maker, is also involved; so we have a scenario where
the purchaser can talk to his bank from the showroom to
see who is giving him the best loan arrangement.
In all cases, the
information exchanged is totally confidential. A
print-out is supplied to the client for his records,
reflecting exactly the information he has input, and
after the negotiation is over all the data goes downline
to be stored in the call centre. For the customer’s
part, he/she has identified himself via a signature on an
electronic signature pad, and/or a swipe of his bank or
credit card through the same outlet.
Some versions of Videonet
also have scanners, which can be used for the
aforementioned driving licences (eg, when one has to
report in after being caught speeding), for other forms
of identification, or for the transmission of documents.
Introduction of Videonet
north of the Border is being undertaken by PFA and
Marketing Management Services, the Glasgow-based
marketing consultancy which is intent on testing the
project in a highly cost-effective way while offering six
target organisations the opportunity to be in on the
ground floor.
"We have already
generated considerable interest among the Scottish
Business Shops network", says project manager Ralph
Risk. "We envisage this technology as of significant
help in an organisation specialising in providing advice
to existing businesses and start-ups.
"Anyone with a
business idea but living in a town which doesn’t
have a Business Shop might be reluctant to spend a lot of
time travelling to investigate an idea which could well
be a non-starter. But contacting the nearest shop via
Videonet, in-putting the basic information through the
menu which appears on the screen, talking directly to an
information officer and then face-to-face to a business
adviser, is a different matter.
"Similarly, the
various business experts in the network would be
accessible from remote locations. It would be an
efficient and cost-effective solution for everyone
concerned".
He is also anxious to
secure the interest and support of the private sector in
order to achieve the proper "mix". His six
targets are supermarkets, banks, travel agencies,
utilities, police forces, and insurance companies.
"We are offering a two-year partnership under which
each member would pay set-up costs of about £6950 each,
with monthly costs of £1346 and a bill for the actual
calls. For that they will receive specially developed
software, an operating system designed for them, and an
on-going evaluation under which Marketing Management
Services would establish how successful each site is
proving for each individual host organisation.
It is understood that
grants might be available to the private sector. Each
partner would have one site at one of its own premises,
plus an input into discussion on the siting of the five
others. Extra sites would also be available, with unit
costs reduced.
At the end of the two-year
period it is anticipated there will be a national
"roll-out", accompanied by an appropriate
publicity and information campaign based on the
statistics from the trial period.
Risk anticipates the
technology will bring its own revolution and that the
evaluation period will prove highly instructive —
not so much as to its desirability but more in regard to
how best it should be used.
"Within five to 10
years I expect it will be widespread, even having made
inroads into the home, "he says. "By then the
Internet and cable will have been developed to the extent
that Videonet negotiations from one’s armchair will
be quite commonplace."
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