Strategic Marketing Plan for Laura Ashley - Assignment Example

Strategic Marketing Plan for Laura Ashley covering the period 2007 to Introduction Laura Ashley is one of the most prominent s when it comes to bed linens, house furnishings and durable and classic designs during the era 1970s to 1980s. In order to bounce the company back to its glorious days, it is necessary to address internal and external changes that will impact on its current and future place in the business industry. Many business practices have changed since the 1990s which need to be addressed by established companies in order to maintain and increase their market share. Many companies that failed to do so had to close shop, no matter how robust they had been performing for decades back. This has also been the case for Laura Ashley which saw its sales plummet in the past few years. Internal as well as external factors are contributory for this scenario. Task 1: Strategic Marketing Objectives & Strategies Laura Ashley, the brand that originated from Welsh designer Laura Ashley, is a household name popularised by its colourful fabrics for clothes and home furnishings. Laura Ashley Plc. is a small family company with very specialised products spread in the Europe, UK and US. Started by the Ashleys in 1953 the company kept on embracing new products and companies and integrated vertically. The key for the significance and the competitive edge of the company was the design philosophy of Laura Ashley. Although the company faced a shock after the death of Laura Ashley but the company followed the line of Laura's designs. By 1985 the company established its own supply chain and kept on supplying the products at shops. The Company also implemented the Information system for effective communication with in the company Sales practice: The Company established the shops with the same design and undertaken research and development activities in order to analyse the consumer preferences regarding the brand. As a result of the surveys conducted the company found the brand name as the major asset of the company, which could prove to be the main source of competitive advantage of the company. Using the Ansoff matrix which is a framework for identifying corporate growth opportunities with two dimensions determining the scope of options between products and markets, this study shall develop SMART strategic marketing objectives. It will identify four generic growth strategies: Market penetration of Laura Ashley means that the company need to aim selling its existing high-end products from accessories, beds, bedlinen and bedspreads, curtains, cushions and throws, fabric, furniture, lighting, mirrors, rugs, sofas and chairs, and wallpapers within the markets it is currently serving but in increasing numbers. Greater effort in sales and marketing to achieve higher product sales is needed for a bigger market share attained possibly through improved product quality or cost reductions. In this process, Laura Ashley must take the opportunity to capture high-end markets in emerging economies such as India and China. As LA's market has declined, more marketing efforts are needed. Market development means selling to new customers for existing products which could require market segmentation. New market in this instance could include previously un-served geographical areas, or another market segment which was not previously catered to. For Laura Ashley, considering its classic home furnishing and fabrics, new markets such as those seeking luxurious abode overseas could be a target. Age, for instance could also be factor for consideration in this process as it has been suggested by various studies that older age indicate diligent shoppers and pursue sedate lifestyle (Zeithaml, 1985 and Hisrich & Peters, 1974). LA could also go for full nesters indicative through movement in household as this group prefer consumer durables and are basically home-oriented (Shanginger and Danko, 1993) Product development through new designs of existing products capitalising on existing knowledge and skills for the market it once dominated. This is less risky than new market development and requires general marketing and market knowledge skills. Laura Ashley, nevertheless, needs to keep in touch with its core customers so as not to lose them in the process, while also in consideration of product and design evolution. Diversification for new products and new customers that occur when Laura Ashley decides to sell newly developed products within a new market. Among the four strategies, this has the highest risk as there will be experimentation on both product and consumer. This may be applicable for LA as when the time there was a huge drop of sales. Source: Strategic Assets, 2006 Task 2: Implementation and Control It has been pointed out that LA top management (Gabor, 2004) had been the force to reckon with in the unsteady recovery of the company prior to present management MUI Asia Ltd. In 2005 and 2006, LA products were sold at Sears and Kohl's that diluted the value of the brand (Wikipedia, 2007). Likewise, it has also been reported that "Ms Lillian Tan, who has been chief executive since January, plans to reduce fashion from 22 per cent of sales to 14 per cent this year - with stores cutting back the space they give to clothes in favour of home furnishings, now the most profitable part of the business," (qtd. from Wikipedia, 2007). With this consideration, the following are expected: As earlier pointed out, Laura Ashley when it comes to target market and customers, will have to try to consider new design criteria to keep their existing customers and gain new ones. Market Positioning - position itself within the retail and home furnishings market of above standard products. Nevertheless, as the brand name has been diluted, Laura Ashley would benefit to expand through segmentation that will address not only high-end consumers but also middle class consumers Store Planning and Design Concept must be in line with their product range and lifestyle image. Classy and elegance as well as durability must always be a present theme. Laura Ashley need to succeed in offering their particular target customer a well branded store experience offering entertainment, inspiration and comfort Product range should target various different lifestyle aspirers Understand the concept of 'mixing and matching' as a method of success. Brand marketing communication and customer service has to rethink their brand communication and consider the new development within their market segment Limit the product range: the product range was broad Extend of geographical coverage: it was an international firm supplying mainly Europe, the U.K. and the U.S. Laura Ashley need to consider expansion in key Asian and formerly Russian as well as South American cities Number of marketing segments served: Furnishing and Clothing Extend of vertical integration: Quite high in relations to other firms Brand power: Very significant and well known R & D capacity: Huge finance available for investments and improvements. Rand D should also address outsourcing as many available as well as useful but not costly information and data could be gathered and provided by R&D companies from Asia as compared to the US and Europe Product or service quality: Quality was at a good standard but dilution has affected Laura Ashley's brand name as it got sold at Kohl's or Sears. Technological leadership: Laura Ashley is trying to be a leader not a follower, investing a substantial amount in technological improvement through information and communication technologies Ownership structure: Separate company, quitting services like Mail Ordering. Laura Ashley is believed to be majority owned by MUI Asia Limited and now has an Asian sounding chief executive Lillian Tan Size of the organisation: a multinational firm. With most retailers in US and Europe, Laura Ashley is considered multinational. But it could maximize its international recognition through retailing in major cities around the world and not concentrate in the West. Bristow and Mowen (1998) pointed out that brands tend to acquire favourable evaluations and provides value by enhancing the confidence of consumers in forming purchasing decisions. Brands provide assurance to consumers and are not easily compared to alternatives. LA could use on its previous popularity as a brand of high quality home furnishings. As for its leadership, change of major stock holders and chief executive at LA could denote changes that move towards the planned market development stated above. Internal marketing strategies should be outlined towards achieving goals that reach out to new markets as core market is maintained. As there had been growth of market outside core geographic locations, LA should be bullish and use its Asian leader(s ) to penetrate using inherent skills and knowledge of its present chief executive Lillian Tan. Considering the identified market of LA, bullish could be tamed in a way that it is conservative but value and durable seeking market, or target market for growth will find marketing communications and strategies as subtle but rich, full but not noisy or loud, and elegant. Print advertisements in glossies that cater to middle age, family and middle and upper class markets are important as the internet could be daunting, if not flashy. Marketing Communications As for its marketing communications, there are a lot of available tools that Laura Ashley could use. Print media using publicity and advertisements are very important as most consumers who are planning to build homes, re-decorate or re-furnish often consult home decorating and design magazines available in the high street. This has a lot of advantage: Ease of use as one only needs to flip through pages to refer to a design presented which could interest the reader Ease of reference as the magazine simply lies on the rack or coffee table or corner table and could be retrieved and used while a consumer estimates and inspects perspectives for decorating and furnishing a house Complete data needed as magazines supply addresses and telephone numbers besides the data included in paid advertisements More convincing as printed matter of photos shows exact replica of a furnished and decorated interior and exterior of houses as compared to internet images which could be blurred by flash effects and multi-media electronic or graphic designs. Task 3: Reflective Essay The progressively important role that corporate responsibility plays in an increasingly competitive marketing environment is a key element in the business process. Stakeholder issues are very important in the current business climate and companies that ignore the wide range of stakeholders may encounter difficulties in particular situations. It is therefore necessary to identify stakeholders from investors, suppliers, employees, and customers. It is necessary to employ Total Quality Management approach as value for money has been a necessary marketing approach that actually helped build Laura Ashley. As organisations are challenged to develop and practice socially responsible marketing strategies that take into account various stakeholder issues throughout the value chain, strategies such as green marketing, value for money, total quality management, segmentation, and other definite approaches are used. As for Laura Ashley, implementing these strategies could be effective when used congruently with each other, but a single approach such as TQM could prove more useful as LA built its name and reputation that way. Innovation, nevertheless, coupled with the right marketing mix that emphasise classic but new, durable but innovative products which are take-offs from previous and existing Laura Ashley items are the best prospects. Laura Ashley is considered a brand name that has an impact on above middle class market. This market is growing at a rapid pace in most Asian countries, formerly Russian countries, and even South American countries. These are all new markets that could be addressed through market segmentation. While existing brand products could easily target high end consumers, as well as above middle class section, new products or new designs through segmentation could address to supply needs for middle market. Classic Victorian designs, lush fabrics, clean and elegant furniture become vogue, at one time or another. It is simply a matter of instilling to target consumers the presence of such designs, as well as new ones in Laura Ashley retailer shops. Emphasis should be on the durability and exclusivity of designs. Otherwise, new entrants and existing competitors could easily chunked out. Lillian Tan is right to reduce sales forecast for fashion clothing. The clothing industry is very much saturated and extending on fashion and clothing had been quite disastrous for Laura Ashley, not to include costly suits against its suppliers. One thing that has been noticeable about Laura Ashley is its outsourcing from other costly and most probably, using outsourced materials brands. This is a process being cut by most competitive firms as cost-cutting add up value to products in this age of globalisation. Reference: Bristow, DN and Mowen, J.C. (1998). "the consumer resource exchange model: theoretical development and empirical investigation." Marketing Intelligence and Planning 16 (2/3) pp 90-99. Gabor, Andrea (2004). "Review: The Support Economy." From http://www.thesupporteconomy.com/reviews15.html Hisrich, Robert and Peters, Michael (1974). "Selecting Superior Segmentation Correlate." Journal of Marketing 38 (July), 60-63. Schaninger, Charles and Danko, William (1993). "A Conceptual and Empirical Comparison of Alternative Household Life Cycle Models." Journal of Consumer Research 19 (March), 580-594. Strategic Assets (2006) "Ansoff Matrix - Strategic Management." From strategicassets.com Wikipedia (2007). "Laura Ashley." From Wikipedia.org Zeithaml, Valarie (1985). "The New Demographics and Market Fragmentation." Journal of Marketing 49 (Summer) 64-75. Appendix: SWOT Analysis PEST Analysis Political/legal issues Economic factors Social cultural issues Technological factors Environmental policy: 1. To adopt a programme of continual environmental improvement 2. To obey all relevant environmental legislation 3. To prevent pollution and reduce its impacts in the operation 4. To encourage divisions to report energy, waste and fuel consumption 5. To monitor waste production, and seek to reduce, reuse and recycle waste possibly 6. To encourage suppliers and contractors to implement policies to protect the environment; Employment law: 1. Child labour: no worker can be under 14 years of age 2. Freedom of choice: free choice in employment 3. Freedom of Association: workers have right to join a trade union without discriminated against 4. Wages: an minimum national legal wage or a reasonable sum and payment without unlawful and unreasonable deductions 5. Working hours: ordinary working hours or overtime must comply with applicable laws *Stability of Internal & External political environment. *Change in the outsourcing trends. Inflation rate: According to Appendix 1, for the second successive month, because of transport costs, the CPI annual rate has the largest downward effect. On the other hand, due to university tuition fees, there is the largest upward effect on the CPI annual rate. GDP growth: According to Appendix 2, there is 0.7% growth in GDP in the third quarter of 2006, which is same as in the previous three quarters. The level of GDP is 2.7% now that is higher than the third quarter of 2005. Unemployment: According to Appendix 3, the trend of unemployment rate continues to increase. It was 5.6%, which goes up 0.1 over the quarter and goes up 0.8 over the year. The population of unemployment increased by 27,000 over the quarter and increased by 263,000 over the year. Now it will reach 1.71 million. * Economic environment (Job market / UK's market economic stability) affecting the business performance / future. * Allocation of Monitoring system budget. * Interest / Inflation rates fluctuation affecting the profit margins. * Long term future of the business in its present state, (referencing economic changes). Ageing: According to Appendix 4, there are 16% of UK population are aged 65 or over. The UK population is ageing. Lifestyles: According to Appendix 5, the proportion of households, who have a broadband connection, increase form 8% to 31% between April 2003 and July 2005. There are 57% of households to receive a digital television service in May 2005. Otherwise, nearly 90% of adult viewers watched television every day in 2003. Moreover, UK people made 42.9 million holiday trips abroad in 2004. There is an increase form 6.7 million in 1971. Income and wealth: According to Appendix 6, there is below 60% of median disposable income that has been stable between January 2000 and April 2003. However, the proportion of people living in households is only at 17%. *Opposition by the people in case of increasing burden in shape of increased prices. * Feedback information of the company's performance from the customer's perspective. *Change in the taste of people. There is an online publication of key science engineering and technology indicators. It includes science, engineering and technology expenditure and employment statistics. There are government research and development survey that are conducted annually. The survey is a census that collects data on research and development within all Government Departments. *Increase in competition due to technological advancement. * The benefits that new technology could bring to improve the production and distribution methods. Read More