International retail marketing - Essay Example

? International retail marketing Table of Contents Executive Summary 3 Introduction 4 Marketing Mix 5 Retail and International Marketing Mix for Retail 7 Retail Marketing Mix of Office Shoe 9 International Marketing Mix for Office Shoe 10 Conclusion 11 Reference 12 Executive Summary The paper has attempted to present a critical evaluation of the marketing mix for international retailing business. The marketing mix is the core aspect for developing marketing strategy for any kind of business organisation. As per the traditional concept, the marketing mix has four major components i.e. product, price, promotion and place. However, with emerging complexity of servicing industry, many academics have identified additional three Ps in marketing mix for services which are people, process and physical evidence. Moreover, the concept of marketing mix has become more specific and consumer centric for better business management by creating value for the consumers. Hence, four Cs i.e. consumers, cost, communications and convenience is more relevant for effective business management. Office Shoe is a popular shoe retailer chain of UK and it is planning to expand its marketing in the Swedish retail market. In order to successful market entry and for long term growth, it is very necessary to analyse the multiple macro-economic and consumers related factors. Considering these factors, Office Shoe should develop a set of plausible marketing mix strategies. Identification of culture and features of the prevailing consumers is the priority of the retailer. Moreover, it also needs to restructure its business organisation through the method of retailing which is the best as it is very helpful in figuring out the necessary areas for retail business development. Introduction The task of handling the strategic business management has changed significantly due to a number of factors. Globalisation, increasing international trade activities has upgraded the business management process. The post-modern organisations have realized the importance of distinct management structure and strategic process for different types of business. For example, service industry and manufacturing industry have their different value chain process and organisational structure which required a focused and specific management system. Moreover, the interactions with customers are also very different as in most of the cases service providers have a direct interactions with their consumers; whereas, the manufacturing organisation have very limited scope in this respect (Greasley, 1999, p.2). However, the core essence of the business management remains the same i.e. to maximise the wealth of stakeholders through value creation method. This paper will attempt to present major aspect of international retail marketing focusing on the structure of domestics and international marketing mix of retailing business. The discussion will involve the Office Shoes, a popular U.K.-based domestic shoe retailer. This shoe retail chain store was established during 1981 and experienced an extreme successful business growth all over UK. It is present in more than 15 local regions of UK (Office Shoe-a, n.d.). It offers more than 100 ranges of international and domestic shoe brand like Adidas, Reebok, Nike, Converse, Puma, Swedish Hasbeens and many more for males, females as well as kids. Besides, it also offers leather accessories like bags, belts etc tots female consumers (Office Shoe-b, n.d.). This paper will present a set of proper international marketing mix for the Office Shoe’s expansion in Sweden’s market. Marketing Mix Marketing mix is a celebrated term and theory in the field of marketing management practises. With constant changes in management theories practises, many new concepts have been incorporated in the concept of marketing mix. Primarily, marketing mix consists of four basic elements of marketing i.e. product, price, promotion and place. It is the core essence and requirement framing effective marketing strategies. Frank has described that marketing mix is a “combination of stages or elements necessary to the planning and execution of the marketing operation” (Frank, p.29). Therefore, the term’ marketing mix’ is a broader term that covers nearly all necessaries criterions for developing an effective marketing plan. The four Ps of marketing involves and is associated with the overall business environment. Kotler has presented it through a diagram which is given below. Figure 1: Marketing Mix and Marketing Strategy (Source: Kotler and Armstrong, 2008, p.45) The above figure shows the relationship between marketing mix and marketing strategy. These four P’s marketing mainly prevails in the manufacturing business but in case of service industry, the marketing mix consists of seven Ps. In this seven Ps, the extra three components are people, process and physical evidence. Considering the nature of service business, two American scholars, Boom and Binter (1981) identified these extra three Ps for service business management. The core four Ps are present in all type of business organisation but in case of services people, process and physical evidence are also crucial. In service providing organisations, services are delivered by the people (employee who are directly serving consumers) through a set of process, and in the presence of physical evidence like stores, furniture, ambiance, and environment etc (Chaffey and Smith, 2008, p.52). The four Ps of marketing for manufacturing firm and seven Ps of marketing for servicing firms are traditional concepts which focuses on the commercial aspects. As per the post-modern business concept, the managements are focus more on the consumer related factors and they are trying to develop a customer centric business management. Hence, Lauterborn has developed four Cs instead of four Ps. He described that four Ps defines the marketing strategy from seller point of view, but an efficient set of marketing strategy must be developed by considering the consumers’ point of view (Kotler and Keller, 2007 p.31). The four Cs correspond to the prevailing four Ps of marketing and it given in the table below. Table 1: Marketing Mix (Four Ps and Four Cs) (Source: Kotler and Keller, 2007 p.31) These four Cs are clearer and is very useful to develop a customer centric strategy through a proper value creation process for the consumers. Retail and International Marketing Mix for Retail The above section have described multiple form of marketing mix for the manufacturing and servicing industry. As this paper primarily deals with retailing, a brief description of the marketing mix for retailing is necessary. The retailing business belongs to the service industry as retailers provide services to the retail consumers by selling goods manufactured by the manufacturers. Therefore, as per the above stated theories for marketing mix, the seven Ps of the marketing which include product, price, promotion, place, people, process and physical evidences are applicable. In the process of retailing business, a retailer has to deal with the seven Ps of service market. However, the nature of these marketing elements is different. For example, in retailing business, products are not manufactured by the retailers and hence, retailer’s primary product is the ‘retailing service’. Therefore, for product mix, apart from the product selection as per the market demand, services development is also another major task for the retailers. Many academics have also defined retail mix as a specific marketing mix for retailing business. Mathur has described that “the retail marketing strategy and positioning strategy is put into effect by the retail mix” which includes “a set of controllable variables” for achieving the optimum level of consumer satisfaction (Mathur, 2010, p.211). Lamb, Hair and McDaniel identified six variables in retail mix consisting of product, personnel, place, presentation, price and promotion. The following diagram represents these variables. Figure 2: Retailing Mix (Source: Lamb, Hair and McDaniel, 2010, p.237) As per the above figure, the retailers should try to develop these controllable variables as per the target market. In case of international marketing mix for retailing business, a retailer has to consider a number of factors due to the difference in the market features and characteristics. However, every retailer must focus on the seven Ps of marketing for their retailing business but the development of each element should be based on the characteristic of the prevailing market. In recent years, there have been significant improvements and developments in the global retailing business. However, in this process, the retailers may have to restructure its ‘retailisation’. Lincoln and Thomassen have identified the seven steps for retailing which is presented in the following diagram. Figure 3: Seven Steps for Retailisation (Source: Lincoln and Thomassen, 2007, p.66) For international expansion of the retailing business, retailers must considering the above stated seven steps and for the new market, it is necessary to define the market followed by restructuring of organisational and operational process. Retail Marketing Mix of Office Shoe Office Shoe is in the retailing business in UK and currently, it has developed its retailing strategy including the seven Ps of the retail marketing based on domestic market. A description of its seven Ps is given below. Product: A wide collection of different brands of product is the most important strength of this retailer. Consumers visiting its store are highly satisfied as they are able to find trendy products of their preferred brands. Price: The price of the branded product is mainly influenced by the suppliers. However, it also offers discount to attract large number of consumers (Office Shoe-c, n.d.). Promotion: Office Shoe primarily uses e-marketing for promotions and advertising. Besides, it also uses social network sites like Facebook and Twitter for promoting its retailing services. Place: It has identified major areas where demand of the shoes is higher and in accordance, it has established its 74 retail stores all over UK. People: Office Shoe has a number of sales personnel who assist and provide services to the visiting customers. Moreover, it also offers free delivery services on UGG® Australia products in the mainland UK regions. Process: The retailer follows the operational process of a core retailing within its retail stores. However, it also offers e-tailing services through its website for selling shoes. Physical Evidence: It has maintained a proper retailing ambiance in its shoe stores which also adds value for customers visiting its stores. International Marketing Mix for Office Shoe Sweden is a stable and emerging market for retailing business and Office Shoe must enter this market for better business opportunity. The purchasing power parity in terms of GPD is $39,000 and it indicates higher availability of consumers. Moreover, their services industry is also quite developed and important contributing 72.2% of total GDP (CIA, 2011). However, for entering in this market, Office Shoe needs to analyse multiple factors like political, social cultural, legal framework etc. The foremost important task in an international market expansion is to identify the business culture and to analyse the taste and preferences of Swedish consumers. In order to develop marketing mix for Swedish market, Office Shoe must focus on consumer centric marketing mix. In this process, the understanding of retail consumer behaviour in Sweden is inevitable. In this course, a major consideration for Office Shoe will be their demographic features and economic conditions. Assessment of their demographic features will help to identify their taste and preferences and considering these factors, Office Shoe should frame its product mix strategy. Moreover, for promotional and communicational process, it is also necessary to understand the proper medium for advertising. Based on their economic parameter like income level, consumption spending by product etc., Office Shoe should determine the pricing strategy. On the other hand, consideration of the competitors’ price is also very important. For serving the consumers visiting in the store, the employees must be trained as per the prevailing cultural diversity. Shoe Office should try to recruit Swedish employees for direct interaction with local consumers. However, for incorporating the above stated recommendations for international retailing, it must retailise its entire organisation and operational process as per the Swedish culture and prevailing retail trend. Conclusion This paper has primarily focused on the marketing mix for retailing business. Marketing mix or four Ps is the most popular aspect for developing a comprehensive marketing strategy. In case of retailing business, retailer must develop their strategy as per the seven Ps of service mix. On the other hand, for international expansion of retailing business, Shoe Office should focus on retailisation for developing marketing mix for retailing. On the other hand, Shoe Office also needs to analyse certain macro-economic factors like political, economic, consumer behaviour, cultural diversity etc. Reference Chaffey, D. and Smith, P. R. 2008. eMarketing eXcellence: planning and optimizing your digital marketing. 3rd ed. Butterworth-Heinemann. CIA. (April 6, 2011). The World Factbook: Sweden. [Online]. Available at: https://www.cia.gov/library/publications/the-world-factbook/geos/sw.html. [Accessed on April 14, 2011]. Greasley, A. (1999). Operations management in business. Nelson Thornes. Kotler, P. and Armstrong, G. 2008. Principles of Marketing. 12th ed. Pearson Education India. Kotler, P. and Keller, K. L. 2007. Framework For Marketing Management. 3rd ed. Pearson Education India. Lamb, C. W., Hair, J. F. and McDaniel, C. 2010. MKTG. 4th ed. Cengage Learning. Lincoln, K. and Thomassen, L. 2007. How to Succeed at Retail: Winning Case Studies and Strategies for Retailers and Brands. Kogan Page Publishers. Mathur, U. C. 2010. Retail Management: Text and Cases. I. K. International Pvt Ltd. Office Shoe-a. (No date). About: Office History. [Online]. Available at: http://www.office.co.uk/info/about.html. [Accessed on April 14, 2011]. Office Shoe-b. (No date). Home. [Online]. Available at: http://www.office.co.uk/perl/go.pl/home.html. [Accessed on April 14, 2011]. Office Shoe-c. (No date). Shoe Sale. [Online]. Available at: http://www.office.co.uk/perl/go.pl/sale_main.html. [Accessed on April 14, 2011]. Read More