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

  1. Consultation is key to challenge of the changing market - by Gerald Michaluk.

    A guide to choosing and using a marketing consultant

  2. Using experts to plan the way ahead - by David Primrose.

    The advantages of using interim and facilities managers

  3. Marketing key to good MBO - by Gerald Michaluk.

    The need for marketing assistance an MBO bid

  4. Value of exhibiting the right attitude - by Jacqueline Bamborough

    How to ensure exhibitions are run successfully and effectively

  5. Unravelling the secrets of network building - by Michael Woodcroft

    The importance of networking for professionals

  6. Value for money is priority for sponsors - by Alan Grant

    Why sponsors must plan their strategy

  7. City shake-up means a fresh start - by David Primrose

    How the marketing of Glasgow City Council will be managed

  8. Valuable opportunity to take the financial initiative - by Michael Woodcroft

    How to take advantage of the Private Finance Initiative

  9. 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

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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

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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

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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

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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

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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

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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

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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

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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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