Shoe Zone Ltd. is one of the top footwear retailers in Great Britain and Republic of Ireland, now selling from more than 400 locations. This Market Report examines the UK footwear market to find a new strategic marketing direction for Shoe Zone Ltd. The recent recession made a considerable impact on all sectors of the market of footwear excluding the value items, sales of which grew during the and after time of a crisis, as consumers preferences shifted to cheaper alternatives. Despite of it, Shoe Zone Ltd. was not able to retain its position in the market during economic recession, whereas the leading competitors of Shoe Zone Ltd. Remained competitive in the market despite recession. Certainly, Shoe Zone Ltd. requires a new marketing strategy to strengthen its market position and restore its large share in the shoe industry.
1.1 Marketing Concept and its Elements
In order to examine the marketing concept (customer focus), first of all, it is necessary to understand the term “marketing concept”. This concept defines the main tasks of the organization – the needs and requirements of target markets and clients satisfaction more effective, than competitors, in ways. (Brown, 2008)
The marketing concept is based on the following elements:
- Target market
- Consumer needs (requirement of the customer)
- The integrated marketing
1.2 The Costs and Benefits Evaluation for the Selected Company
Ehrlich and Rohn (2012) examined the cost and potential benefits of better usability with respect to company, customer and end user.
They argue that both the company and clients receive benefits from certain areas by including the usability activities into the project of product development. In comparison with others usability benefit models, Ehrlich and Rohn (2012) explain the most compact discussion regarding various aspects of usability cost-benefits.
According to the authors, the company can derive benefits from three areas:
1. Increased sales;
2. Reduced support costs;
3. Reduced development costs.
In certain cases, the co-ordination between better usability and increased sales can be observed, but it may not be possible to associate the effect of better usability directly to increased sales. One of ways to distinguish the influence of usability to sales is to examine the importance of usability in the buying decision. The cost of product, in case of usability, can shoot to be a central feature of a product, and the product has a substantial number of users. By concentrating on using usability techniques and better product usability, Shoe Zone can reduce time and costs of development (Brown 2008).
2.1 Factors in Macro-Environment and Micro- Environment Influencing Marketing Decisions
Micro- Environmental Factors.
Micro factors are those problems which occur within the organization field of activities. They are as following:
Customers cannot easily stick to one design or one product, as wants and needs of various individuals are subject to frequent changes. When a new design is launched, customers can stick to Shoe Zone without switching over to competitor’s product, as such Shoe Zone should maintain a consistent level of new products to gain customer’s loyalty.
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Suppliers are always interested in company’s growth as it will increase the volume of raw materials supplied by them. The suppliers also look for large companies with stable financial background, in terms of their secured payments and regular supplies without interruption (Narver 1990).
Skilled and technical employees are assets to the company, and Shoe Zone Ltd. needs stable revenue and high profits, for retaining them, The demand for an increase in their salaries and incentives should not be overlooked by the company, due to the rising cost of living. Motivation, promotion, training programs and giving equal opportunity to individual to show their calibre are some areas where Shoe Zone Ltd. needs to improve.
Competitors holding a strong brand image are a threat to Shoe Zone Ltd., as strong brands would restrict the entry of new products of Shoe Zone Ltd. into the market, also making them difficult to increase their market share. Advertising strategies and creative promotional methods would enable the company in competing with competitors and bringing brand awareness to the consumers.
Media plays a crucial role in attracting the attention of the customers. It is necessary for Shoe Zone Ltd. to hold press and publicity conferences occasionally during the launch of their new products. These events when published in news papers, magazines and journals, help the customers in evaluating the company’s performance.
PEST & Macro-Environmental Factors.
The macro environment consists of those factors that influence Shoe Zone Ltd. for a long time. Macro factors can be national or global measures and influence many industries. Macro environment factors include the legislation and economy, for example, inflation, VAT changes, minimum wage, anti discrimination laws and recession. Moreover, company is exposed to the influence of technological changes, such as new technology and the internet. Macro factors are uncontrollable factors, which influence the company’s marketing strategy (Narver 1990).
2.2 Segmentation of Two Products in Various Markets
According to demographic segmentation the people differentiate according to gender, income, age and family life cycle, along with other variables. When people grow old their needs change. Many footwear companies launch specific products, which are targeted at definite age groups, such as shoes for children, sports shoes for teenagers, fashionable shoes for ladies and so on.
Geographical segmentation is applied to divide the markets into different areas according to their geographical locations. Companies use geographical segmentation because customers in various areas can show different characteristics and behaviour that are typical for some certain areas; for example, in London; certain areas of West part of London are richer than city’s East End.
Though demographic and geographical segmentations are essential, experts in marketing can apply alternative variables of segmentations, which are directed at the development of more exact profiles within the target segments. Psychographics segmentation has sub-groups according to social class, lifestyle and personality traits (Kotler 2007).
2.3 Strategy for Targeting Selected Product or Service
After segmentation, the next step for Shoe Zone Ltd. is to focus, how the company will target these groups. There are three options, which Shoe Zone Ltd. can adopt.
Apply undifferentiated marketing, which is usually referred to as mass marketing. Shoe Zone Ltd. can decide to aim its entire resources and hit the entire market with one particular brand. One product is introduced for the mass market in the hope that it would attract a large number of buyers.
Apply differentiated marketing strategy. With this strategy, Shoe Zone can target several segments and develops various goods / services with different marketing mix strategies, which are aimed at various groups. To illustrate an example, Shoe Zone can offer footwear according to lifestyle and income of the different people and introduce products from economical to expensive prices to attract the different groups of customers (Kotler 2007).
Apply concentrated marketing. In concentrated marketing, the organizations focus their marketing efforts on privileged segment. The company will develop a product, which serves requirements of one privileged group. This strategy is not suitable for Shoe Zone Ltd. as it will reduce their turnover, ultimately affecting its market share.
2.4 Effects of Behaviour of Buyers upon Marketing Activities, as far as Various Buying Situations are Concerned
The consumer behaviour depends on many uncontrollable factors. The culture is one of factors which influence behaviour. In simple language, the culture is defined as attitudes and beliefs of groups of people; for example, footwear made from cow soul are not worn by Indians due to their religious beliefs. Culture is developed from internal and external environment that helps people develop attitude, influence and opinion (AIO). These factors determine the consumer behaviour; however other factors, such as groups of friends, or ideals such as brand ambassadors and famous personalities, such as singer Lady Gaga, influence purchase behaviour of consumers(Brown 2008).
2.5 New Positioning Proposal for Selected product or Service
Positioning strategy is developed after analysing the competitor’s position in the market. Shoe Zone Ltd. can develop “me too” strategy and position itself close to rivals, so consumers can distinguish a product easily when they purchase; or Shoe Zone Ltd. may adopt a strategy, which positions itself away from the competitors. Offering a benefit, which surpasses the product or service of competitors, in many respects, relies on a marketing mix strategy of Shoe Zone Ltd. Finally, positioning is how Shoe Zone Ltd. wants clients to perceive its foot wears and what strategies it would implement to attain final goal (Brown 2008).
3.1 Development of Products for Sustaining of Competitive Advantage
When an organization launches a product into a market, it should set a number of questions to answer.
1. Whom the product is aimed?
2. What advantages will be clients expect?
3. How the company plans to position a product in the market?
4. Which are advantages of the company’s product, in comparison to products of competitors?
Kotler offered that the product should be considered at three levels: Core Product, Actual Product and Augmented Product. For sustaining competitive advantage, many factors are taken into consideration, such as product quality, product design, product features and branding (Kotler, 2008).
3.2 Distribution Arrangement to Provide Convenience for Customers
There are two types of the channel of distribution. Indirect distribution includes product distribution by means of the intermediary, while direct distribution includes distribution directly from the producer to the consumer. The advantage of direct distribution is that it provides a complete control over the product (Kotler 2008). Other strategies are as following:
1. Intensive distribution.
2. Exclusive distribution.
3. Selective distribution.
3.3 Prices Policy for Reflecting Company Objectives in Line with Market Conditions
The price is one of the most crucial elements of the marketing mix, as it is said to be only mix, which generates turnover. Expenses incur since it costs to produce and create a product, it costs to promote and distribute a product; therefore the price should support these elements of a product mix. The pricing needs careful analysis of the market and should be based on supply and demand relationship. Pricing a product too low or too high can result in loss of sales for the organization (Kotler 2008). While pricing, following factors should be considered:
1. Constants and variable expenses.
3. Goals of Company.
4. Offered strategy of positioning.
5. Target group and readiness to pay.
3.4 Integration of Promotional Activities to Achieve Marketing Objectives
Effective communication campaign should consist of well thought message strategy. What information does the company try to put across to its target audience? How will the company deliver this message? Will it follow suit with branding? Is there a logo or slogan design? The message should strengthen the favouring of a product, and also should help Shoe Zone Ltd. in enforcing the positioning strategy of a product. The effective message strategies are, for example, as follows:
Nike: Just do it.
Coca-Cola: The real thing.
Media Strategy concerns how Shoe Zone Ltd. is going to deliver its message. What kind of promotional mix will Shoe Zone Ltd. use to deliver their message strategy? Where will they advertise? It is obvious that Shoe Zone Ltd. should take into consideration the general behaviour of the target audience before choosing the media strategy.
3.5 Analysis of Additional Elements for Marketing Mix
The three additional elements of extended marketing mix are as outlined below.
Important element of service is the use of right personnel and people. Recruiting the talented and skilled staff and training them properly in providing the services is necessary, if the organization wants to achieve and maintain its competitive advantages.
Process is a systematic procedure used for delivering the service. For an example, a person walks into Shoe Zone store and, within 10 minutes, can select footwear of personal choice and within an affordable budget.
Where service is to be delivered? Physical evidence is last service element, which gives insight to the consumer about organization (Kotler 2008).
4.1 Planning of Marketing Mix For Two Segments in Consumer Markets
E-Marketing Mix: Significant increase of internet sales has changed the method of the marketing mix, adopted by companies. On internet, physical appearance of products disappears; however, is it a disadvantage? In past years, UK has shown tremendous growth in internet sales, due to number of factors such as saving time, a wider choice, as well as enhanced product description.
Ecological Marketing Mix: An increased concentration on environmental problems promoted an increase in demand for non-polluting products and services. A new terminology, “carbon footprints”, has evolved with the surfacing of ecological products (Morgan 1996).
4.2 Marketing of Products or Services in Terms of Businesses, and not Consumers
What are the characteristics of a service? How a service differs from a product? Many organizations do not possess service elements of a product, which they sell, for example, Shoe Zone Ltd. sell physical products, which are footwear. However, consumers are also concerned about quality and speed of service, are employees cheerful and hospitable, and do they serve consumers with a smile on the face? Service cannot be stored like a product and is employed for a certain period of time.
4.3 Difference between International Marketing and Domestic Marketing
As the competition in the national market becomes too intensive and a product reaches a stage of saturation, sales and profits decrease, in the domestic market. Companies search for other markets, where they can market their products. The international marketing allows companies expand internationally and offer those products which are not available in the host country. The international marketing activity can be designed specially for each country, it occurs because requirements and demands of consumers in one country can differ from requirements and demands of another country (Morgan 1996).
An effective company design matches workforce and work responsibilities in such a manner that they are best suitable for performance of marketing strategy of the firm. The decisions as to how assemble workforce into organizational divisions and designate responsibilities to various marketing mix components, which finally constitute the marketing strategy, are decisive factors influencing productivity. Organizational structures and processes should be coordinated with marketing strategies, which are developed and realized.