External and Internal Environment Audit of Stenders - Essay Example

Marketing Plan Table of Contents Environment Audit 3 External Environmental Analysis 3 Internal Environmental Analysis 4 Marketing Strategy 4 STP Analysis 5 Marketing Tactics 6 7Ps of Service Marketing Framework 6 Contingency Plan 9 Critical Evaluation 10 Application of Concepts, Practices, Philosophies and Principles 11 Future Marketing Customer Segmentation Strategy 12 Recommendation for Monitoring and Controlling the Proposed Action Plan 13 Monitoring Action Plan 13 Controlling Action Plan 14 References 16 Appendices 18 Situation Analysis 18 PESTEL Analysis 18 Porter’s Five Forces 20 SWOT Matrix 22 Environment Audit Stenders can be considered as one of the leading multinational cosmetics and face and body beauty products manufacturing organizations based in Latvia. The organization has its business presence in more than 20 countries. The organization is operating with 250 retail stores. The organization has effectively followed the franchisee model in order to ensure positive business growth. This part of the report will conduct both external and internal environment audit of Stenders. External Environmental Analysis The management of the organization has decided to enter in the UK market. They are eyeing to open franchisee retail stores in London considering the prospect of the market. The social demand for body and face cosmetics and beauty products is increasing significantly in London. Moreover, favourable technological environment will help the management of the organization to enhance its manufacturing, distribution, selling and promotional practices. Availability of skilled and low-cot suppliers and supply chain option can influence the management to develop and implement unique strategies in business operation process. recent financial crisis and economic environment affected the purchasing power of people (Proctor, 2014, p.22). Therefore, it can affect the overall business output of Stenders in London. Apart from this, too much intense market competition can make it difficult to develop potential customer base initially. Strict employment and environmental regulations and legal policies can be considered as significant external challenges for the organization. Moreover, the intense market competition and strict entry lawsuits can help the management of Stenders to face limited threat of new entrants. Huge market competition and availability of differentiated and substitute products can increase the threat of bargaining power of the consumers. Internal Environmental Analysis Stenders has both internal strengths as well as weaknesses. Strong brand name, high customer loyalty, potential customer base across the globe and significant international business diversification strategy can be considered as the major internal strengths of the organization. Affective product differentiation strategy and strong financial also can be considered as one of the important strengths of the organization. Apart from this, the organization has developed decentralized decision making model that enhance efficient and quick strategy development and decision making process (Pringle, 2008, p.89). In terms of weaknesses, franchisee model can be considered as the major weakness of the organization as the organization will have limited autonomy. In addition to this, franchisor’s operations manual can affect the relationship between the management of the organization and franchisor. It can affect business operation process and business output (peter and Olson, 2005, p.19). Marketing Strategy The adopted and implemented marketing strategy of Stenders will be discussed through the implication of STP analysis, marketing tactics and 7Ps of service marketing framework. STP Analysis STP analysis can be considered as one of the important and significant marketing strategy of an organization that includes marketing segmentation, target marketing and product positioning strategy. In terms of market segmentation, the organization will consider geographic, demographic and behavioural segmentation strategy. In terms of demographic segmentation, the management of Stenders will target people aged between 25 and 45. They will target both male and female populations due to wide range of products. In addition to this, they will target people with middle class, higher-middle class and upper class income group. Young executives, corporate officials, single households, married couple and middle-aged business professionals will be targeted by the organization. In terms of geographic segmentation, the organization will target people of Central and Sub-urban London (Panda, 2009, p.109). In terms of Behavioural segmentation, the organization will target brand conscious and loyal customers, who think that the products of Stenders are superior in quality. In terms of target marketing, the organization will try to target both male and female brand conscious consumers. People, who love to use natural beauty products, will be also targeted by the organization. Consumers, who like to buy differentiated and high quality beauty products, are the major target customers of the organization. People aged between 25 and 45 will be targeted by the organization. Last but not the least, people of urban and semi urban area with higher class and middle class income group will be the major target customers (Mohr, 2010, p.32). In terms of positioning strategy of the products and brand, the management of Stenders will try to consider both market segmentation and target marketing. The organization will implement cost based pricing strategy and the products will be of superior quality and attractive in design. Therefore, the products will be positioned as high quality and reasonable priced products in the London market (Kotler, 2008, p.28). Marketing Tactics The marketing department of Stenders will try to consider differentiated marketing approach for each and every product line. Marketing of the products involve promotion, mix strategy of products and price, target marketing, product positioning and market segmentation strategy. The marketing department of the organization should consider each and every product line for the marketing approaches and will develop differentiate marketing planning for each and every product. Most importantly, it will be effective for the organization to implement push marketing tactics for all the products (Keegan, 2002, p.91). It is true that the London market is highly competitive as well as saturated. Different organizations have developed their own customer base. Therefore, it will be difficult to pull the customers. Therefore, it is highly important push the products towards the target customers. 7Ps of Service Marketing Framework 7Ps of service marketing mix framework will help the management of Stenders to identify and develop potential marketing strategies. Following is the recommended service marketing mix. Products The organization is popular for its product differentiation and diversification strategy. Luxurious and high quality natural beauty products are the major product lines of the organization. The brand has a strong and differentiated products portfolio and it offers products for both male and female consumers (Havaldar, 2005, p.72). Price The organization has adopted and implemented cost based premium pricing strategy. Recently, the economic environment of UK is slightly affected by the financial crisis and economic recession. Therefore, it is highly important for the management of the organization to think about cost leadership strategy to back the affected purchasing power of the customers (Hamilton and Webster, 2012, p.44). Place or Distribution The organization will develop centralized supply chain network and will depend on external supply chain management agencies to supply the products. The organization will develop own retail stores across London. Apart from this, the products will be available at several large retail chain organizations (Fyall and Garrod, 2005, p.8). Promotion The management of Stenders will go for both online and traditional promotional strategies. Online and traditional social media marketing and promotion will help to attract internet and social media users. On the other hand, print media, digital media and word of mouth promotional strategy will help to create significant awareness among target customers (Dibb and Simkin, 2013, p.45). Process In this case, process means service marketing process. The management of the organization will develop a different PR team that will take care of the quarries of intended customers. Moreover, this PR team will take care of the after sales service issues quite efficiently and seriously. This strategy will enhance effective and high customer loyalty (Devashish, 2011, 15). People Here people mean both consumers and employees. In terms of consumers, the management of the organization will try to develop effective business operation and service marketing strategy based on the nature and expectation level of the target customers to meet their satisfaction level. On the other hand, the organization will develop top-down and bottom-up communication approach for the employees in order to motivate them to perform effectively (CIA, 2011, p.52). Physical Evidence The management will instruct the franchisee owners to use similar colours, symbols, logos and get-ups for all the stores. Moreover, the dress code of all the employees in the store will be similar to maintain physical evidence aspect of the brand. This aspect will motivate the buyers to visit stores frequently (Blythe, 2012, p.28). Contingency Plan It is true that there will be some possibilities of revenue exceed as well as revenue miss projection. On the other hand, product positioning might not help the organization to gain success initially. Therefore, it is highly important for the management of the organization to focus on aggressive and havoc promotional activities to create serious product and brand awareness in the mind of target customers. In addition to this, the organization will have to ensure the frequent investment in marketing activities as this aspect will help the organization to push the products towards the customers (Armstrong, 2002, p.21). Then, the organization will succeed to pull the customers effectively towards the brand. Critical Evaluation It is clear from above analysis that the management of Stenders is trying to develop an effective marketing plan based on the nature of the target market. Moreover, it is important that the organization will consider each and every external factor while developing the marketing plan. The economic environment of UK is slightly unfavourable. Therefore, they should consider the process of cost leadership strategy in the positioning and pricing strategy development process. The management of the organization has decided push marketing strategy. It will be effective as the industry is highly competitive. It is true that the push marketing strategy will help to create significant awareness for each and every product line. Moreover, it will also help to develop a significant customer base for overall product portfolio. But, it is both time and cost consuming as the management of the organization has to bare huge marketing cost. Product differentiation strategy will also help the organization to get success. It is true that the demand for high quality and differentiated products has increased significantly. In addition to this, the London market should justify this developed product differentiation approach. The centralized supply chain model can help the organization to keep the entire control on the marketing and distribution activities. But, it can be considered as both time and cost consuming approach. Therefore, it is highly important for the organization to develop contingency plans for each and every approach in order to overcome possible issues in near future. Application of Concepts, Practices, Philosophies and Principles It is highly important for the management of Stenders to have the ability and knowledge to apply important marketing concepts. Several leading organizations are trying to develop and implement unique marketing strategies in business operation process in order to gain potential customer base for the products. Marketing has become an important aspect for each and every organization within the industry in order to ensure positive business growth rate as unique marketing strategies, activities and practices generally help the organization to attract customers towards the brand. The competitive nature of the industry has forced the organizations within the UK beauty product industry to develop effective and aggressive marketing strategy to attract customers. There are two types of marketing concepts, such as traditional marketing or old-school marketing and modern contemporary marketing concepts. It is highly important for the management of Stenders, to apply modern era contemporary marketing concept in order to maintain its competitive edge and ensure potential sales growth rate. The management should develop a strong marketing team and will try to focus on effective segmentation, targeting and positioning strategies. In addition to this, the organizations should try to develop an effective marketing mix strategy. According to the contemporary marketing philosophy, promotion and pricing are the most important aspects of marketing. The organization should have the knowledge to implement traditional as well as online marketing and promotional strategy quite effectively. Se of online social media, digital media, lifestyle magazines, several print media channels and word of mouth marketing processes should be used effectively and expertly. In addition to this, the management of the organization should focus on discounted pricing strategy during festive seasons as it will help the brand to penetrate the market place. These processes need to be followed and each and every individual in the marketing department should be flexible enough to adopt differentiated strategies considering the change in situation. Future Marketing Customer Segmentation Strategy It has been mentioned earlier that the London beauty product market is becoming competitive and saturated day-by-day. On the other hand, the opportunity for the organizations and marketers is also increasing due to the growing need for the high quality and differentiated products for the customers. In last two decades, the concept of female beauty products and male cosmetics has shaped dramatically. Therefore, several organizations are eyeing on this prospect of London market. Similarly, the management of Stenders are trying to capitalize on the potential business operation opportunities in order to gain success through the developed marketing plan in London. In terms of Future segmentation, the management of the organization should try to focus on demographic segmentation most importantly. They are only trying to target people aged between 25 and 45. On the other hand, still they are mainly focusing on female consumers. The concept of beauty products and cosmetics is changing. They should increase the age ration. It should be people aged between 18 and 55 as the demand for these products among young college goers and school students are also increasing. On the other hand, the people of middle aged people have also started to demand high quality natural beauty products. In terms of male consumers, they should also offer variety of differentiated products as early as possible as the competitors can capitalize on this particular opportunity. Last but not the least; the management of the organization should try to focus on lower-middle class income group as the competitors in London also have started price war with the competitors. Therefore, cost leadership strategy will help the organization to create significant brand awareness among target customers. The geographic segmented location should be increased more from Central London to several nearby small towns and sub-urban areas in order to increase sales growth rate. Recommendation for Monitoring and Controlling the Proposed Action Plan This part will propose an action plan of marketing activities and will also recommend monitoring and controlling process of the proposed action plan. Monitoring Action Plan This part of the report will mention the responsible individuals, who will monitor each and every activity. Monitoring Activities Frequency in Year Responsible Individuals Business operation expenses monitoring. Quarterly in 12 Months. Human Resource, marketing and distribution manager. Business revenue monitoring. Half-Yearly in first 12 Months. Sales Manager Customer satisfaction monitoring. Every Month. Product and service Manager. Retail sales monitoring. Quarterly in first 12 Months. Sales Manager. Promotion effectiveness monitoring. Every Month. Promotion Manager. Controlling Action Plan This part of the report will mention the responsible individuals, who will control entire action plan Activities Frequency in Year Responsible party Profit Calculation and Revenue. Twice in a year. Sales Manager. Labour expenses Controlling. Quarterly in first 12 months. HRD, Distribution and Promotion Manager. Distribution Expenses Controlling. Quarterly in first 12 months. HRD, Distribution and Promotion Manager. Advertising Expenses Controlling.. Quarterly in first 12 months. HRD, Promotion and Distribution Manager. Survey of Customer satisfaction vial mail. Every Month. Product Manager. Survey of Customer satisfaction via e-mail. Every Month. Product Manager. Survey of Customer satisfaction via telemarketing. Every Month. Product Manager. Digital and Print Media Promotion. Every Month. Promotion Manager. Social Media and Online Promotion. Every Month. Promotion Manager. Public Campaigning Controlling. Every Month. Promotion Manager. Retail Sales Evaluation Controlling. Quarterly in first 12 months. Sales Manager. References Armstrong, G., 2002. Global Marketing Management. New Jersey: Pearson. Blythe, J., 2012. Strategic Marketing. London: Kogan page. CIA., 2011. The World Factbook 2011. Virginia: CIA Publications. Devashish, D., 2011. Marketing. Stamford: Cengage Learning. Dibb, S., and Simkin, L., 2013. Market Segmentation Success. London: Routledge. Fyall, A., and Garrod, B., 2005. Marketing: A Collaborative Approach. New Jersey: John Wiley & Sons. Hamilton, L., and Webster, P., 2012. The International Business Environment. London: Oxford University Press. Havaldar, K., 2005. Industrial Marketing. New York: McGraw-Hill. Keegan, J., 2002. Global Marketing Management. New Jersey: Pearson. Mohr, J., 2010. Marketing of Products and Innovations. London: Sage. Panda, T., 2009. Marketing Management. New York: McGraw-Hill. Peter, J., and Olson, J., 2005. Consumer Behaviour and marketing Strategy. New York: Springer. Pringle, H., 2008. Brand Immortality: How Brands can live long and prosper. London: Kogan Page. Proctor, T., 2014. Strategic Marketing. New York: Springer. Appendices This part of the report will conduct a situational analysis considering the above mentioned facts in the report. Situation Analysis PESTEL analysis and Porter’s five forces analytical tool will represent the external environmental audit. On the other hand, SWOT analytical framework will determine the core competencies of Stenders. PESTEL Analysis It is an effective strategies analytical tool that will help to determine the impact of external environmental factors on the business performance of Stenders. Political London is politically stable city. The government of UK are supporting the business operation processes of the beauty product retailers as this industry is significantly contributing to the economic and social growth of the country. In addition to this, this specific industry is significantly associating other industries. Therefore, it can be stated that the political environment is favourable for Stenders. Economical Recent Financial crisis and global economic recession affected the economic environment of London. Low disposable income and limited purchasing power are the major consequences of this economic slowdown. Therefore, it is highly important for the organization to consider the pricing strategy within the industry as people are trying to limit the purchasing activities. In addition to this, they are trying to avoid the consumption of some unnecessary beauty products. This aspect and challenge can hurt the overall sales growth rate of the organization. Therefore, it can be stated that the economic environment is slightly unfavourable for Stenders. Social Social demand for high quality cosmetics and natural beauty products is significantly increasing among the consumers across London. Stenders is offering cosmetics and natural beauty products for both men and women. Therefore, it can be stated that the organization will fulfil the demand of the target customers. In addition to this, day-by-day the market volume for the particular products are also increasing. These aspects can prove that the social environment is favourable for Stenders. Technological London is technologically developed city. In addition to this, it is true that the business operation process of Stenders will require implementation of advanced technological applications and tools in the manufacturing, distribution, marketing and promotion of the products. The organization will try to use effective and advanced technological applications to ensure effective business growth rate. The organization will get the support of advanced technological applications as the industry is booming. Therefore, it can be stated that technological environment is favourable for Stenders. Legal The government of UK has developed several strict business operation regulations including employment regulations, environmental regulations and ethical guidelines for the organizations. It is highly important for the management of Stenders to follow these regulations as it will help the organization to avoid several issues that may affect the brand image and business growth rate of the organization. Therefore, it can be stated that the legal environment is slightly unfavourable for the organization. Environmental Government of UK has developed environmental regulations for the business organizations in order to maintain environmental sustainability and reduce carbon emission significantly. Therefore, it is important for the management of Stenders to follow the environmental regulations and maintain industry standards in each and every business operation process to ensure business sustainability. Therefore, it can be stated that the general environment is slightly challenging for the organization. Porter’s Five Forces Porter’s five forces analytical tool can be considered as one of the important strategic analytical tools that will help the organization to determine the impact of the external competitive factors on the business performance of Stenders. Buyers’ Bargaining Power The threat of the bargaining power of buyers is high for Stenders due to the presence of several leading organizations within the industry with the existence of large and differentiated product lines. It gives opportunity to the consumers to consume economic priced and high quality products from market. Suppliers’ Bargaining Power The threat of the bargaining power of the suppliers is low due to the availability of huge suppler base across London. The organization can choose most efficient and cost effective suppliers for a long-run in London. Threat of Substitute Threat of substitute is moderate for the organization as natural herbal beauty products are considered as the substitutes of the products of Stenders. The, demand of these substitute products are always increasing at a constant rate. Threat of New Entrants Threat of New Entrants is low for the management of Stenders as it is difficult for the new comers to get success initially. In addition to this, huge legal entry barrier, entry cost and too much competition in the industry can affect the business performance of new players. Degree of Industry Rivalry Degree of the industry rivalry is high due to presence of several leading organizations and all the organizations are trying to develop and implement unique strategies in business operation process to gain potential competitive advantages. SWOT Matrix SWOT is an important marketing strategic analytical tool that will help Stenders to identify its internal strengths, weaknesses and external opportunities and threats. Strengths High brand Image is the major strength of the organization.. Strong global presence is another strength of the organization.. High product portfolio can help to meet customer satisfaction level. . Effective implementation of product differentiation and diversification strategy can be considered as important strengths. Weaknesses Franchisee model can affect the strategy development and decision making model. Lack of established supply chain can create issues in business operation activities. Opportunities Effective adoption and implementation of cost-leadership strategy can support the purchasing power of consumers. Online and social media marketing will help to create significant brand awareness among target customers. Introduction of more differentiated products for the male consumers can penetrate overall London market. Threats Economic slowdown can affect the business growth rate of the organization. Too much industry competition and market saturation can create issues initially. Strict legal and environmental challenges can create issues for the organization. Threat of substitute products can hamper the acceptance level of the products. Read More