Importance of Marketing at Fortnum and Mason - Case Study Example

Table of contents

Introduction3

Background of the Brand3

Importance of Marketing3

Marketing mix4

PESTLE Analysis5

Porter’s Five Forces7

SWOT Analysis8

STP Model9

Consumer Behaviour10

The Importance of Market Research11

Recommendations11

Conclusion11

Introduction

One would make no mistake suggesting that if a company is willing to achieve success, it should be fully aware of the processes that taken place in the environment where it operates. This paper will provide an in-depth analysis of the external conditions that affect the performance of Fortnum & Mason, paying particular attention to the background of the brand, importance of marketing for it, 7Ps of the marketing mix, utilizing PESTLE, SWOT, Porter’s Five Forces frameworks, focusing on STP model, consumer behaviour, and importance of market research and making recommendations.

Background of the Brand

To begin with, it must be noted that Fortnum & Mason can boast an extremely long history. Dale and Hendershott (2004) report that "the store was established in 1707 by Mason, an experienced grocer, and Fortnum, one of Queen Anne's footmen" (p. 134). Over the centuries, the story supplied the Royal family with the finest goods. Now, it mostly specializes in exotic and high-quality food.

Importance of Marketing

It is rather obvious that since a company has lasted for more than three centuries, it makes a great use of marketing. Kaufmann and Panni (2013) insist that the latter helps the company to reach the customers and build loyalty. This is particularly important for the brand in question.

Marketing Mix

If one takes a close look at the products that are sold by Fortnum & Mason, one will be able to see that they are mostly exotic or specialty. In any case, they are known to be of extremely high quality. One should also keep in mind that the store also sells some "basic" goods that might attract more people.

The place where the store is situated has historically been one location – 181 Piccadilly. Nevertheless, recently there was another place opened in the United Kingdom – the one at St. Pancras railway station. Therefore, there are only two stores and they all are located in London. There is yet another store which can be found in Dubai. However, the company provides shipping all over the world.

Speaking of the promotion, one should note that the brand in question mostly relies on mass media as well as social media. Thus, since it creates printed advertisements that are placed in magazines that are suitable for the audience. As for the social media, the brand has active user accounts in the five most popular ones. It is quite understandable that the main purpose of these accounts is to raise the awareness of the company.

As it has already been mentioned, Fortnum & Mason is a store that sells experience items, that it why it is obvious that the price of the products is quite high. It is obvious that there are numerous alternatives that may charge several times lower, but the high price of the brand in question is justified by its quality. Therefore, some people are ready to buy products from it.

If one considers physical evidence that is associated with the company in question, one will have to point out that Fortnum & Mason are famous for them unique hampers. Draper-Stumm and Kendall (2002) insist that the latter have become an irreplaceable part of the picnic culture and are quite desirable by the people. These hampers have a unique design and the brand's insignia. Moreover, one may also point out that the main store is decorated in a rather expensive way.

The process that characterises the brand may be presented from different dimensions. First of all, one may go to the store and gain full customer experience there. In addition to that, there is a fully functional online store that allows people to browse and choose items that they are willing to buy without needed. In addition to that, a person may also use a gift card to buy products.

Finally, one should consider the people who are engaged in business processes. Thus, the company currently employs roughly 5,000 people which is quite a big number, keeping in mind that there are only three stores. There have been conflicts with some environmental and union organisations which were settled. As for customer service, it is known to be quite high.

PESTLE Analysis

Now, it may be particularly beneficial to apply PESTLE framework to understand the external conditions under which the brand is operating. Thus, speaking of the political dimensions, one should point out that there is a special piece of legislation that regulates luxury goods that are sold in the country. That is why the price for them will be high in order to comply with the requirements of the law.

As for the economic element, the World Bank acknowledges the United Kingdom to be a country with high-income and envisions that its GDP will increase in the following years (“United Kingdom” 2016). All this leads to the understanding that people will have more disposable income and they are more likely to buy luxury goods that they used to overlook while making their purchases.

The social element is also important since some might suggest that the goods that are sold by Fortnum & Mason provide people with the much-needed comfort, especially at these days when the situation in the country and in the world is quite stressful. In other words, the shopping experience that people get while visiting this store may be perceived as a form of leisure.

It is rather obvious that technology also has a significant impact on the business operations of the company in question. Thus, it allows it to ship goods all over the world and set up an effective online store that accounts for a reasonable portion of sales. In addition to that, the technological progress positively influences the process preservation of goods. As a result, the brand can expand its operations greatly.

It may be important to take a look at the legal aspects of the operations. Earl and Waddington (2013) point out that various organisations insisted that Fortnum & Manson violate the applicable legislations in various ways. For example, PETA UK accused the brand in cruelty to animals based on the actions which were performed by the suppliers. Labour unions also protested the expected cuts. One should point out that all these conflicts were settled peacefully.

Lastly, there is the environmental element. One would make no mistake that the company in question does not produce any particular product that directly pollutes the environment or contributes to the greenhouse effect. Nevertheless, much attention should be paid to the packaging that is used by the company since it is ultimately thrown away and may become a hazard for the environment.

Porter’s Five Forces

Porter’s Five Forces framework is a great tool that can be used to understand the competition in the industry. First of all, one should take a close look at the bargaining power of the suppliers. Fortnum & Mason mostly cooperates with small firms that are not able to affect the business operations of the former. Moreover, should they insist on a conflict, the company may easily switch to another one. All this leads to the understanding that this power is relatively low.

If one considers the bargaining power of the buyers, one will have to say that it is also quite low. Indeed, the brand in question has a long history and has a firm image. That is why it is highly unlikely that customers are able to change its course of actions. Moreover, they are likely to buy exactly what is offered.

Speaking of the substitutes, one should mention several points. First of all, Pitt and Koufopoulos (2012) insist that Fortnum & Mason are well-known for their quality which means that it may be rather difficult to find a decent substitute. Moreover, some products that are sold by this brand are indeed unique and a person will simply not be able to find an alternative. All this leads to the understanding that this force is also low.

The threat of new entrants is the force that should be carefully considered to understand the competition in the industry. Peng (2006) insist that it is highly unlikely that any other company is able to compete well with Fortnum & Mason that enjoys a history of more than 300 years. That is why this force is low and the brand should not worry about the new entrants.

All this leads to the conclusion about the last force, namely competitive rivalry. It is quite obvious that Fortnum & Mason is not the only player in the industry; that is why there is quite obviously a competition. However, the brand occupies a niche and is close to dominating it which means that it does not struggle with the competition much.

SWOT Analysis

If one considers the strengths of the brand in question, one will have to mention quite a few. The first and the most obvious is the unrivaled quality of the products: the company could not have lasted so long if it had not delivered what it had promised. Therefore, there is a cohort of loyal customers who are going to buy the product in the future. Furthermore, the brand enjoys the superior knowledge of the industry due to its experience.

Nevertheless, there are some weaknesses that can be identified as well. O’Connor (2013) believes that Fortnum & Mason may be too conservative and will have a hard time keeping up with the pace of time. Moreover, as it has already been mentioned, the company occupies its niche within the elite market which makes it rather difficult to expand.

Speaking of the opportunities that the company in question may use to its advantage, one should mention the following. To begin with it may be important to organise events that would promote appreciation of fine goods that are sold by the brands, for example, tea. In addition to that, it should consider expanding into countries that have a similar tradition. Moreover, it is highly likely to be successful in the environment where the "country of origin" effect has a positive impact on the consumers.

As for the threats that can be identified, one should note that the brand in question mostly relies on wealthy individuals who are capable of buying the products. That is why it is quite obvious that in times of economic downturns the desire to buy luxury goods is likely to be reduced. So, financial problems may be quite devastating for the purchasing power of the customers and, consequentially, sales figures.

STP Model

One should also take a close look at the market itself in order to improve the marketing message of the company. If one considers the issue of segmentation, one will have to point out that Fortnum & Manson decided to focus on the segment of the market that includes wealthy people who live in the United Kingdom and in Dubai. They are willing to enjoy life and possess a high social status.

All this brings up the second element of the model, namely targeting. The brand in question has created a marketing mix that appeals to a particular segment of the market. Of course, some people who do not fall into the above-mentioned category may also be able to buy these products. However, it will be most appealing to a concrete group of people.

Therefore, the positioning of the brand reflects this idea. Fortnum & Manson is perceived as the best store in its category and people rely on its quality. Moreover, it is generally suggested that the brand in question features the best variety of goods. As a result, it is recognised as the leader in the industry and sets the standard for it.

Consumer Behaviour

The consumer behaviour can be best understood if one carefully examines each stage of consumer buying process. The first stage is needed recognition. In this case, it may be suitable to recall hierarchy of needs, developed by Abraham Maslow. Thus, it may be so that by buying exotic food, people are satisfying their physiological needs as well as esteem needs (Goble 2004).

After the need was recognised, a consumer searches for the information. It is quite obvious that Fortnum & Mason is a rather famous store. That is why there will be no problem in obtaining the information about it. Moreover, given the presence of the store in mass media as well as social media and an effective online store, it is understandable that a person will easily find it if one wants to buy something from it.

The next stage focuses on the evaluation of alternatives. As it has already been mentioned Fortnum & Mason are perceived as the leaders of their niche. That is why any alternative that a person finds will be less appealing than the brand in question. As a result, it is highly improbable that a potential customer will choose a different brand than the one in question.

The purchase is made when all the above-mentioned stages are completed. The analysis has shown that there are several ways in which goods can be obtained from the company in question. First of all, one may go to the two stores in London. In addition to that, one may access the online store and wait for the goods to be delivered to one’s location.

Finally, there is a post-purchase evaluation. One would make no mistake suggesting that the company in question would not have lasted for such a considerable period of it if the quality of the goods had not been indeed extraordinary. Therefore, during this stage, a person can compare the actual experience as well the experience that one way promised. If they match, there is a high chance that a person will develop loyalty to the brand,

The Importance of Market Research

When it comes to conducting a market research, a company should have a clear vision why it may need it. Kotler and Armstrong (2010) argue that it will help a brand to develop itself, its image as well as improves the marketing message that it sends to the people. Therefore, it may be regarded as one of the most crucial elements of the marketing strategy.

Recommendations

The following recommendations can be given to the brand in question. First of all, it may benefit from opening a handful of stores in the country. It should not dilute its exclusive status, but it is clear that the people may be willing to see more shops that they can attend. Furthermore, it may be logical to lower the prices a little bit in order to make the products more affordable to a larger number of people.

Conclusion

Having examined all the points that were mentioned in the paragraphs above, one is able to come to the following conclusion: Fortnum & Mason is a successful brand that was able to expand its success over three centuries. It is currently the dominant player in its niche and the conditions for its operations are quite favourable. Nevertheless, it may benefit from expanding into more cities and lowering the prices in order to capitalise on its status.