The Importance of Marketing to Organizations in the Twenty-First Century Harrods - Assignment Example

The Importance of Marketing to Organizations in the Twenty-First Century Harrods is a department store located in Knightsbridge that deals mainly in selling luxury goods in London, UK market (Tim 2006, p.6). The Harrods brand applies also to other enterprises in collaboration with the Harrods group of companies that include Harrods Bank, Harrods Aviation, Harrods Estates, and Air Harrods. Harrods is therefore, a diverse company providing services and goods in a variety in the market locally and across the globe. Being the second-biggest shop around UK, dealing with luxury products, Harrods has to have the best marketing in London and beyond borders to reach out to customers. In the current global market for luxury products, there have been many and upcoming suppliers who are presenting fantastic offer to customers and are winning the day by getting more and more customers by day making the business quite competitive and one that needs serious approaches in marketing (Dennis 2001). This paper is a case study of Harrods as a company selling luxury products highlighting how marketing in the 21st century has been of importance in the company operations and the state of the company as expected in the future following the marketing trends. It also in the next part of the assignment highlights five of the most used marketing strategies by Harrods including internet marketing (establishment of a website), Rewards system, social sites marketing (face book, twitter), online shopping and free delivery, community engagement (offering opportunities for career development) among others. To Harrods as a company marketing means reaching out to customers via all means to advertise the luxurious products and convincing the customer beyond every doubt to make a choice of the respective product from the company in the presence of many other upcoming and vibrant industries across London and global. They include Pink Zebra UK Ltd, Lets Just Create Ltd, Gemstone Bears, and Mongoose Moon among others (Philip & Kevin 2009, p.65; Paul, Chris & Kelly 2008; The London Insider 2008). In the 21st century, many things have changed and marketing is not an exemption because there are new trends in marketing and new mediums developed (Tim 2006, p.6). The global shift in the 21st century has rendered many organizations as without options in the introduction of Modern Marketing Systems. It is the most relevant marketing strategy in maximizing profits and reaching the goals of respective organizations (Dennis 2001). This has been the challenge for many organizations including Harrods. The company works moderately in reaching such heights and using the approach to enlarge the niche and increase the number of customers (Philip & Kevin 2009, p.65; Paul, Chris & Kelly 2008; The London Insider 2008). Modern Marketing Systems is generally an industry leader involving the use of Micro site Marketing. Modern Marketing Systems (MMS) majorly specialize in developing highly monetized niche micro sites and this is what Harrods has been working on to go in line with the new advances (Chris & Colin 2000, p.34). The company has developed websites and linkage to the same with a goal of maximizing Internet marketing and making the best out of this initiative. Because of this, the last years’ Harrods fiscal report indicates an increase of sales by an approximated 12% as compared to the previous fiscal year (Tim 2006, p.6). The Marketing mix model has been in application by Harrods and supremely crucial in determining the success of the institution (Dev & Don 2005). This is a 21st century model necessary for al organization marketing approaches where competition is on a high. The use of statistical analysis for instance multivariate regressions on marketing and sales time, series data in estimating the impact of the company’s promotional tactics on sales and forecasting the impact of future promotional tactics sets has been in line with the strategies of Harrods as a company (Philip & Kevin 2009, p.65; Paul, Chris & Kelly 2008; The London Insider 2008). The company uses the model in optimizing promotional tactics with respect to profit or sales revenue. Being a luxury goods provider, the company features many promotional strategies key in succeeding and increasing sales some of them including free delivery after purchase, discounts on products of and in season and many other prominent approaches required to keep customers coming for more and building name for the company (Dev & Don 2005). The 21st century has brought up well-informed consumers who know exactly what they want, when and how they want it. It is therefore, a Herculean challenge for many companies like Harrods to go line with customers and not own decisions in production. Marketing in this case happens to venture as a rescue to the situation by incorporating new strategies. Following a shift in many businesses and suppliers of same products as Harrods, there has been a need to shift to make the marketing better and increase the reach. Harrods associate with renowned brands including for men Matthew Williamson, Ralph Lauren, Aquascutum, Paul Smith, Mulberry, D&G, Gant, Santiago Gonzalez, John Medley and many more (Chris & Colin 2000, p.34). For women they associate with other quality brands including Max Mara, St. John, Ralph Lauren, Hervey Leger, Escada, and Paul Smith Black among many other renowned brands with reputation. The idea behind this is to reap from the associate with heavy duty brands all in the pursuit of making a name and having their brand get popular among many customers and increasing their sales. Following the establishment of this approach, a case study on consumer behavior in London, recently indicated that Harrods remains a choice for over 40% of the young people in purchasing luxurious products (Philip & Kevin 2009, p.65; Paul, Chris & Kelly 2008; The London Insider 2008). The BCG Portfolio Model is a cogent explanation for Harrods increase of profit resulting from reduced marketing cost (Dev & Don 2005). Harrods has retained most of its customers and gained more without spending excess of the budget and to some instances, spending less. The concept makes assumptions that, with the increase of experience the production cost goes down. For Harrods, the company has been in the market for long and has ample experience in the marketing field to ascertain the best approaches required for effective marketing and increasing sales. Henderson, the compounder of this model coined the "experience curve" phrase suggesting that total company costs ultimately decline as it gains experience in the field. This has give Harrods the roots and continues to thrive as a market leader with the largest share of customers but less budget for marketing (Philip & Kevin 2009, p.65; Paul, Chris & Kelly 2008; The London Insider 2008). Marketing diversity has been the secret for Harrods all along in the field of luxury goods suppliers. There is nothing short of quality and diversity in the 21st century markets where consumers are spoilt of choice following many investments in all fields. The approach taken by Harrods is committed in making sure they satisfy the customer by attending to the respective needs, which is the secret to effective marketing. It is the 21st century spirit that, customers go for nothing short of satisfaction, quality and distinctive products. Harrods Provide all products for both sexes to cover the broad customer including men’s wear (Polo’s, T-shirts, Shirts, Knitwear, Denim, Trousers, Outerwear, Active wear, Swimwear, Underwear & Loungewear, Footwear, Men's Accessories and Men's Grooming among others. Women products provided include Jumpsuits, Dresses, Tops, Knitwear, Skirts, Lingerie & Nightwear among many others products meaning that the stores covers almost every part of women and men’s accessories under one roof The Parfitt & Collins Model explains Harrods case in that it expounds on marketing strategies adopted of late by the company (Dev & Don 2005). The model is essential in predicting the ultimate market share precisely for new repeat-purchase products for consumers using input data from respective consumer panels. Internet marketing has been essential in this case for Harrods when data on shoppers list is available highlighting some of the most sought products and aiding Harrods in providing the same in large quantity. The model demands actual market data that is available from the company’s Internet. The company also uses the reward system that always gains positive remarks from many marketing agencies. Rewards are particularly effective any marketing for companies especially dealing with consumer products. They encourage the customer to visit the store more often and are extremely welcoming. This is strength for Harrods as a company that requires the trust and confidence of many customers globally to escape the wrath of high competition among many other suppliers. Harrods provides customers with cards, not exactly like a credit card, but somehow with the same concept of usage (Clegg 2005). Harrods offer gifts to customers who buy goods from the online store. The company offers 1-dollar gift for every 10 dollars spent on purchases. Harrods argues that this is their way of showing their appreciation for the customer’s custom through rewarding them every time they shop at Harrods store. The customer earns points for every pound they spend in-store, regardless of the means of payment (Clegg 2005). The company later converts the customer’s points into a cash balance that he or she can spend in shopping at Harrods store. Harrods offers that for every 500 points the customer earns, he or she receives £5 that he or she can spend on whatever they want to purchase. This form of marketing is exceedingly modern and with many organizations and features as one of the most effective methods in the current global market (Philip & Kevin 2009, p.65; Paul, Chris & Kelly 2008; The London Insider 2008). Harrods has adopted Internet marketing as a great marketing strategy to increase and reach many customers. This is the latest of all marketing strategies for many organizations, has been extraordinarily fruitful. Harrods has developed a website (Harrods.com) to necessitate direct marketing for the customers. Harrods majors on the concept of direct marketing to advance sales for the company. Harrods have a well-designed website with a great feature and appealing images of the respective advertised luxurious products (Philip & Kevin 2009, p.65; Paul, Chris & Kelly 2008; The London Insider 2008). The website has easy navigation features and principal directions for any customer in accessing all types of products. To make it even better, the products on each page have their own reviews describing in detail what a customer would expect in purchasing the product. Harrods is therefore, maximizing on Internet marketing as one of the most effective strategies used in marketing. On the same line of Internet marketing, Harrods online store has many other marketing strategies including email marketing. This is necessitated through sending emails to customers on the latest features and products in the store as updates. The customer can sign up to Harrods.com making him able to receive the latest news from Harold’s store. Harrods is also into using social sites as a great strategy of linking people to the site and increasing the number of customers all the same. The establishment of social sites on the Internet has been a notable feature of marketing in many businesses in the 21st century. Harrods has a link to face book and twitter and invites members across the globe to join and navigate through the website giving Harrods a better chance to reach many people globally. Reaching out to people is even harder in the new century because physical campaigns only reach a few people with many people busy in schedules and only make time for such social sites (Philip & Kevin 2009, p.65; Paul, Chris & Kelly 2008; The London Insider 2008). Harrods has been remarkably successful in using social sites as a way of linking members to the site and current has over 10, 000 members locally following news and latest features from these social sites. It means that, marketing is soon becoming easy for Harrods as a company dealing with luxurious products since the social site members are the best category for market such products. Harrods has also relied on online shopping as a strategy for effective marketing. Harrods.com offers Buying Guides, Delivery & Returns Information, Frequently Asked Questions, and International Shopping, Request a Catalogue as well as Terms and Conditions in marketing for the online shopping use for customers and advancing to the new era of technology. This is the new version of customers in the 21st century where the Internet has made things easy and customers now shop online waiting for delivery right in their homes. Marketing of this nature is the new experience for many customers globally and in pursuit of making a greater reach and increasing the number of customer, Harrods has facilitated online shopping (Philip & Kevin 2009, p.65; Paul, Chris & Kelly 2008; The London Insider 2008). Harrods has utilized community engagement as a strategy in effective marketing. There has been a considerable change in Harrods marketing strategies especially with the introduction of career development strategies that has boosted the reputation of the company. The company of late has introduced marketing strategies in the form of career development that many customers attach themselves to the company and identify with their products. The company gives opportunities for many people across the globe to develop careers in management and suppliers and opens doors to thousands of jobless people across the globe (Philip & Kevin 2009, p.65; Paul, Chris & Kelly 2008; The London Insider 2008). This is an exceptional opportunity and an enthusiastic approach in marketing for Harrods giving the approach a boost and increasing its popularity not forgetting the annual sales. Harrods also facilitates more on marketing by detailing more information on visiting the Store. Some of the guidelines provided include Store Guide, Visitor Guidelines, Restaurants, News & Events as well as Contact information making it easy for customers to reach the company easily and clarify on anything contentious as well as make orders (Philip & Kevin 2009, p.65; Paul, Chris & Kelly 2008; The London Insider 2008). The store lately reported that over 300,000 customers visit the Harrods store on peak days, and this is the highest customer’s proportion actually from non-English speaking countries in the London store all thanks to effective Internet marketing and proper customer relations. It is also apparent that in the latest advancement, Harold’s has gone international. The company now delivers goods and services not only locally, but also in the international market. The company lately reported to be operating in over 40 countries providing goods and services of high quality and soon, it plans to add more to the list and probe for more customers locally and internationally (Chris & Colin 2000, p.34). The pressures of the new marketing age have developed changes as discussed above for Harrods. Some of the recent changes in marketing include Internet marketing; rewards and gift system and offers for instance free delivery (Dennis 2001). There are even more to expect from Harrods especially because of the competitive nature of business in London where a recent case study indicates that 30% of the shops in London stock luxurious products. Effective marketing is the only remedy in this situation and the coming decades and century has a lot to store (Philip & Kevin 2009, p.65; Paul, Chris & Kelly 2008; The London Insider 2008). Harrods is well prepared and well equipped in the provision of the best marketing as well as reaching out to many customers, therefore, has a vast potential of remaining as the giant in the luxury products providers. With the current 40 countries of operation and the starting up of online marketing, there is a probability that the area of operation will grow bigger and better the number of customers identifying with Harrods, thanks to effective marketing in the current 21st century. References Chris, B & Colin, C 2000, Behind the Scenes at Harrods, Andre Deutsch, p.34 Clegg, B 2005, "Hot Shops: Retail Revamps". Businessweek.com, from, http://www.businessweek.com/innovate/content/dec2005/id20051213_744054.htm Dennis, H 2001, "Introduction" Marketing: principles and practice (4th Ed.), p. 15, from, http://books.google.com/books?id=hQ8XfLd1cGwC&lpg=PP1&pg=PA15#v=onepage&q=&f=true Dev, C & Don, E 2005, "In the Mix: A Customer-Focused Approach Can Bring the Current Marketing Mix into the 21st Century". Marketing Management 14 (1) Paul, B Chris, F & Kelly, P 2008, Marketing, Oxford University Press (2008) Philip, K & Kevin, L 2009, a Framework for Marketing Management, Pearson Prentice Hall, p.65 The London Insider, 2008, "Harrods Starts Selling Gold Bars", from, http://www.london-insider.co.uk/2009/10/harrods-starts-selling-gold-bars-ingots-coins Tim, D 2006, Harrods: the Store and the Legend, Pan Publishers, p.6 Read More