External Environment of Curry's - Term Paper Example

Part B: Report External environment of Curry’s 1. Opportunities Opportunities that Curry’s has include those related to the pricing strategy, product placement/launching strategy, preemptive mover advantage and supply chain related advantages. Curry’s current opportunities are determined by a highly competitive environment for consumer electronics and electrical goods (Walters, 1977). Equally well the British market is characterized by a number of other factors including the regulatory environment. In the first place Curry’s has a very good opportunity in its pricing strategy which is based on market penetration. For instance Curry’s pricing policy is based on selling many units of a product in the longer term. The opportunity that Curry’s has to penetrate niche market segments across a number of cities in the UK cannot be denied. Its current product launching strategy is associated with making use of niche markets that exist in many parts of Britain. For instance its recent product launches in Britain were highly successful due to the suddenness and the associated surprise. Customers were caught unawares by these very attractive offers. Thus Curry’s has adopted a strategy of launching products in cities where consumers were little or no used to such windfall bargains before. The net result of this unsatisfied demand is that it presence an opportunity to retail chains like Curry’s to identify and target enormous markets across the country. The company has a still greater advantage in such opportunities as preemptive entry in to niche markets. For example the management of Curry’s has rightly identified the relative weakness of bigger competitors in moving in to niche markets before consumers are totally attracted by smaller operators. The recent marketing successes of Curry’s in Europe come from this strategy in which, opportunities for large scale marketing campaigns do not exist. In fact smaller scale marketing campaigns like what Curry’s carried out in provincial towns would be ideal. Consumers in these cities are not so much compelled by the presence of big stores like that of Tesco and therefore the tendency is to identify bargains with real value. It is here that Curry’s has been successfully operating. Finally Curry’s has made use of supply chain related opportunities to achieve its product marketing goals. For instance it has successfully adopted a strategy of procuring supplies form little known suppliers who are more likely to offer big discounts to supermarket chains. In fact as theory would have it supply chain related constraints have not deterred Curry’s from adopting a strategically maverick policy of sourcing products from even hit and run suppliers. This policy has helped Curry’s to position itself better against bigger rivals. Customers have time and again relied on Curry’s for timely bargains. 1.2. Threats Threats that Curry’s is faced with can be identified as those coming from smaller retailers and very big chain stores. Successful individual smaller retailers have acquired a foot hold in Britain over the past few years mainly due to the inability of big retailers to offer bargains to their customers on a consistent basis. Such small retailers are very particular about the negative impact of carrying bigger price tags therefore they do not charge higher prices. Next big retailers have been held back by the current economic recession from opening stores in every possible city and town. This is only a temporary setback. When the recession is over the threat would become real. Finally there is the threat of the current economic downturn and the financial crisis. Consumer credit is becoming more expensive and scarce. As a result commercial banks and other financial institutions do not issue credit cards with the same degree of liberty that they used to do in the past. 2. Market size, growth and trends within the market The electrical goods market share of the total market stood at 3.9% in 2008 in the UK. In monetary terms computer games and related software are expected to increase by approximately £1.4 billion. On the other hand the demand for white goods such as LCD television sets and audio systems has been falling. According to predictions by the end of 2009 total sales of these goods would have registered a net fall of 7.7%. In the year 2007 the decline in sales was estimated at 3.5%. The trend is expected to continue till the middle or the end of 2010. How best Curry’s would face these downward trends will be determined by two factors. In the first place price elasticity of demand for white goods like MP3 players and advanced laptops will be determined by bargains (Brownlie & Lemond, 1992). Where there are bargains first time consumers are more likely to be attracted. Thus the current marketing strategy of Curry’s favors it. Secondly government taxes on white goods have been increasing thus forcing consumers to postpone consumption. 3. Competitor analysis. Consumer electronics and electrical goods markets are subject to heavy competition from other electrical and electronics retailers and wholesalers. Currently, Comet can be regarded as the Curry’s main competitor and there are other competitors such as Tesco, Tempo, Agros, Asda, John Lewis and Dixons. Basically these competitions are coming from different distribution channels including department stores, mass merchandisers, warehouses and other online retailers. There are less entry level barriers to the consumer electrical and electronic markets and it will continue to threaten retailers like Curry’s. Except Tesco and Asda other retailers mentioned about have more or less depended on the absence of entry level barriers such as big capital investments to capture niche market shares from existing retailers. Right now Curry’s has to adopt the same strategy though, it can be very difficult given the strength of established retailers. 4. Buying Behavior Purchasing behavior of British consumers of consumer electronics and electrical goods is determined by price elasticity and income elasticity of demand plus a variety of external factors. The first two and cross elasticity of demand are common to any market situation and buying behavior of consumers (Varley, 2006). However there are some exogenous variables that affect buying behavior of consumers in different local markets. The average British consumer of electronics is known for referring low priced high quality and technologically innovative products. Despite this preference they are also influenced by the relative cost of credits. For instance when the relative cost of credit increases such as those purchases on credit cards, they postpone their consumption. Secondly they are influenced by the government policy such as fiscal policy measures. When the government increased purchasing taxes there would be fewer sales of electronic goods. Therefore Curry’s is more or less affected by government policy. 5. Brand loyalty, corporate image and repeat purchasing Brand loyalty among consumers of electronics and electrical goods cannot be determined with reference to product quality alone. For example there is a difference between the product brand and the seller brand. It is the latter that matters now. Thus Curry’s has effectively utilized the dependency on seller brand rather than the product brand. Many big retailers selling popular brands have failed to make a dent in the small retailers’ niche markets where little known brands are being sold. This success of smaller retailers is determined by the hard choice that the customer has got to make between the product brand and the seller brand. The latter prevails over the former when it comes to the reliability on after sales service of the seller. Corporate image of Curry’s is determined by its ability to penetrate and hold niche market segments for longer duration of time. As a result the corporate image of the company receives a boost. Curry’s has been seeing a rise in its corporate image among European consumers over the past few years. Corporate image depends on the company’s corporate social responsibility (CSR) related strategies and initiatives. Curry’s has been consumer focused and is well known for its concern for community welfare. Thus there is a considerable amount of positive impact on its marketing campaigns. Repeat purchases are made by customers under extreme circumstances in the electronic and electrical goods market because potential customers are attracted by bargains and technology. As much as the price of the product matters technological innovation also matters. Enhanced product specifications and performance act as a compulsion on potential repeat purchasers who weigh both price and quality on one hand and technological innovation on the other. Curry’s has succeeded here. 6. Techniques for assessing customer response There are very few metrics to measure the customer response in electronic and electrical goods markets. However a realistic assessment can be made with reference to point-of-sales volumes at stores during busy times and not so busy times. Similarly customer response can be evaluated by focusing on customers habits of making a purchase on a regular basis and making regular visits to the same store. However the company must employee well trained staff to make these assessments. 7. Customer Satisfaction Survey Customer satisfaction strategies of Curry’s right now are pitched on the rivals’ strategies. For instance brand marketing strategies of Comet, Asda and Tesco aren’t much different from that of Curry’s current strategies. Therefore what’s needed right now is a strategically varied approach to motivating the average potential customer of the brand/product to throw in with the lot. The customers who were surveyed were of the opinion that Curry’s did not have any product quality improvement strategy. The suppliers were either supplying on the basis of a certain quantity during a certain period or Curry’s did not convinced suppliers to focus on quality. However seller brand has made a good impact on many consumers. Brand loyalty is determined by what’s the customer gets by way of after sales service. As a customer satisfaction survey reviews Curry’s is in a favorable position due to its better customer relations. Recommendations Curry’s has to improve on its product quality and promotion campaigns. Curry’s present marketing strategy is heavily biased in favor of moving fast in to niche market segments and then holding them. However a company with an eye on mass marketing should concentrate more on effectively fighting off competition from bigger rivals. For this Curry’s must adopt a multi-prone mass marketing strategy. Next Curry’s must carry out a survey throughout Europe to determine what potential customers think about ever changing technologies. Finally electronics and electrical goods markets are highly characterized by supply chain related constraints. Curry’s should develop methods to overcome such snags. Conclusion Curry’s strategic initiatives in marketing and related fields have been remarkably well executed. As for opportunities the company has made use of its market intelligence to adopt a successful market penetration pricing strategy because it knew all along that big rivals were not targeting some of the niche market segments in the UK. Similarly it adopted a preventive strategy in capturing niche market shares and holding on to them because there were and there are sizable unsatisfied market segments. As for threats both small retailers and big retailers have strategically reoriented to recapture some of their lost market segments. Finally as the customer satisfaction survey reviews, potential customers do not depend too much on product brand. In fact the seller brand matters to a greater extent. Curry’s has a definite advantage here. As the current size and the future potential in the UK show Curry’s has been orienting itself towards meeting the demands arising from contingency situations. For example though the market for electrical goods is growing fast the market for white goods is declining. In the same manner big competitors like Tesco and Asda have adopted similar strategies but smaller competitors like Dixons have not been able to match Curry’s first mover strategy. REFERENCES 1. Brownlie, DT & Lemond, KA 1992, ‘Electrical Retailing In The 1990s: Towards A New Retail Formula’, International Journal of Retail & Distribution Management, vol. 20, no. 3. 2. Varley, R 2006, Retail Product Management Buying and Merchandising, 2nd edn, Routledge, Oxon.Rosemary Varley (Author) 3. Walters, D 1977, ‘Approaches to retail management: CURRYS: The largest consumer durable retailer’, International Journal of Retail & Distribution Management, vol. 5, no. 6, pp. 10 – 16. › Visit Amazons Rosemary Varley Page Find all the books, read about the author, and more. See search results for this author Are you an author? Learn about Author Central Appendix Questionnaire 1. How often have you been visiting this electrical retail store? □ Once a week □ Once a month □ Rarely □ Occasionally 2. Are you aware of any customer satisfaction practices and initiatives at this store? If yes please specify. □ Yes □ No ……………………………………………………………………………………………………… ……………………………………………………………………………………………………… 4. What would motivate you to visit this super market? □ Monetary benefits □ Non-monetary benefits 5. How would you rate the success of monetary benefits at this store, if any, on a scale of 1 to 10? □ between 1 to 3(the lowest) □ between 4 to 6 □ between 7 to 8 □ between 9-10(the highest) 6. How would you rate the benefits such as cash discounts and promotion material available at this store on a scale of 1 to 10? □ between 1 to 3(the lowest) □ between 4 to 6 □ between 7 to 8 □ between 9-10(the highest) 7. What significant factors motivate to make a repeat purchase at this store? □ Low price □ Staff efficiency □ Product quality □ After sales service □ Convenience □ any other (please specify)……………… 8. What are the customer rewarding mechanisms adopted at Curry’s? □ Loyalty cards/ point redeems □ Free issues □ Discounts □ any other (please specify)……………………. 9. How do you assess the impact of brand awareness on your satisfaction on a range of 1 to ten points? □ 1to 4 □ 5 to 7 □ 8 to 10 10. Do you think that the management at this store has been more concerned about customer service and their satisfaction? If yes, please specify. □ Yes □ No ……………………………………………………………………………………………………… ……………………………………………………………………………………………………… 11. In comparison to other stores what are the advantages available at Curry’s? □ Low price □ Better quality □ Convenience □ I’m not sure 12. In comparison to other stores is there any disadvantages at Curry’s? If yes, please specify. □ Yes □ No ……………………………………………………………………………………………………… ……………………………………………………………………………………………………… Read More