Retail Marketing - Essay Example

INDIVIDUAL RETAIL MARKETING REPORT (PUT HERE) CONTENTS Item Page Abstract 3 Introduction 3 Analysis 5 2. 1. Retail marketing paradigm 5 2. 2 What does retailing amount to on this transport hub? 8 Conclusions/recommendations 10 References 11 Appendix I 12 INDIVIDUAL RETAIL MAREKTING REPORT Abstract Retail marketing consists of a wide array of goods and services sold and bought at different points in the retail chain of distribution. In a tripartite transport hub – train interchange, bus interchange and an airport – retail businesses operate on the basis of individual spoke-specific parameters, i.e. a transport hub has spokes such as a bus interchange and a train interchange. These spokes are serviced by retail operators who have to provide a specific good or service suitable to the spoke. Retail marketing businesses that operate at each spoke adopt their own marketing strategies to achieve profit and growth. However, it is the customer base which determines pattern and content of the network. Both international and domestic travelers go through a given transport hub. Thus a wide network of retailers – commercial banks, tour operators, airlines, taxi-cab operators, insurance companies, healthcare providers, restaurateurs, hoteliers, transporters, liquor sellers, motel owners and so on – could be seen operating at different points. Introduction I have chosen the following transport hub for this analytical report on retail marketing: Train interchange Bus interchange Airport Paddington Elephant and castle Heathrow terminal 3 Paddington, as a pivotal train interchange, in London in particular and the United Kingdom in general, provides one of the most important focal points for the analysis of the retail marketing business in this transport hub. Paddington is part of the City of Westminster, in Central London, England. The township, along with the station, provides a much needed boost to the Central London’s economy and way of life. Paddington station has a commuter service to the west of London, connecting Slough, Swindon, Reading, Maidenhead and so on. There is also a main-line service to Bristol, Bath, Oxford, Exeter, Taunton, Plymouth, Cornwall, South Wales, Swansea and Cardiff. Then there is the main bus route to Elephant and Castle. Finally there is also the Heathrow Express service to Heathrow Airport. The Elephant and Castle is a major road interchange in the interior of the south London area. In short it is called “The Elephant” and has of two big roundabouts which in turn are connected by a short road called “Elephant and Castle”. The Castle Shopping Centre is at the northern roundabout, with Hannibal House, a shopping centre on top. It also has a large residential block known as “Metro Central Heights”. The Heathrow Airport is located 24 kilometers west of central London and has five Terminals. The 3rd Terminal is connected to both the Elephant and Castle by bus and to Paddington by train/tube. The retail marketing sector plays a much wider significant role here. The Continental traveler is not so much distinguishable from the average North American traveler except the former might be interested in a job in the UK but then the significance of it all is to be found in the individual traveler’s ability or inability to spend on retail products. Thus as Freathy recognizes in his book (Ibid Freathy) there is a core group of retail products on which the average traveler spends so much or the greater percentage of his expenditure while on the move. This is due to the fact that such expenses are inevitable. For instance food, clothing, consumer electronics such as televisions, laptops, i-pods and so on are essentials nowadays. Analysis 2. 1. Retail marketing paradigm Transport hubs within the perimeters of a region serve as commercial and social centres of interaction as well. They are the commercial and social nerve centres or arteries in a region and therefore the regional economy depends much on their strengths or/and weaknesses to sustain itself (Freathy and O’Connell, 2000, pp.102-111). The nodal network is completed by shopping centres, banks, offices, government departments and numerous other services provided by retailers. These retailers function as sellers of goods or sellers of services. For instance Paddington has been witnessing an unprecedented surge in commercial activity, specially retailing. Both continental and trans-Atlantic travelers pass through Paddington to other near-by counties such as Oxford, Bath, Exeter, Plymouth and Cornwall. It’s also the gateway to South-Wales. Some of the more important landmarks in Paddington are the Paddington Basin and the Grand Union Canal, the Edgware Road, the Sussex Garden and the Victoria Pub in the Gloucester Square. Its sum total of commercial and retailing activities annually easily surpasses billions of pounds. Its multifaceted life is invitingly gorgeous and luxuriantly picturesque. The average traveler or the tourist is more likely to stay overnight at a three star or four star hotel where an all inclusive day will not cost much. Its fame for the Paddington Bear and Waterside is far-spread. Its trendy bars and restaurants still have the grand-old appeal by way of gustatory excellence. Paddington still remains an attractive destination for the tourist irrespective of his/her origin, i.e. Continental, North American, Arab, African or Asian. Those travelers who pass through Paddington are unlikely to leave without tasting it all. The Elephant and Castle bus interchange provides another connecting link to this tripartite network. It serves as the hub in system of South-Central London bus service. The underground too is connected here with Bakerloo and Northern sector. Once a derelict district, the Elephant and Castle is now a rejuvenated entity with commercial activities such as banking, insurance, retailing and education occupying the foreground in all. Retailing here is carried out on a more casual basis, though the credit card and the internet play a much bigger role in payments and commercial transactions involving travelers. The district has successfully attracted a few investors from other regions as well as other countries. When institutions of higher education are set up in a region, the infrastructure is bound to multiply thus paving the way for a rapid expansion in commercial activities, specially retailing. With the demolition of the Elephant and Castle Shopping Centre in September 2008, its historical roots might be completely erased though (McAuslan, 2008, www.timeoutlondon.com). Its marketing dimension is rooted in the newly opened shopping complexes, cinemas, banks, insurance companies, travel firms, universities and colleges, restaurants, theatres and night clubs. South London is not only a the busiest in the London transport network, but also the most sought after area for casual outings. It offers one of the most varied lifestyles and community living examples. Noted for its high concentration of Asian student population, the district is regarded as one of the fastest growing retail marketing centres in the UK. This has also brought with it some other positive developments such as a growth in Continental tourist traffic. Infrastructure in the Elephant and Castle still remains at a much lower level when compared to the rest of the city. South London needs a very big change to go on a retail marketing spree. A considerable amount of its existing infrastructure is almost obsolete now. The most glaring example is the Shopping Centre, voted the ugliest structure by Britons. Heathrow Airport Terminal 3 is the international link with the domestic network and the government’s development plans to refurbish it over the coming years, show how important the Terminal is as a connecting link between both international and domestic travelers and the rest of the country on the transport hub of Paddington and the Elephant and Castle. Its Express Link with Paddington enables the system to take off some pressure off the traffic flow to and from Airport. As for retail marketing activities at the Airport, they are all traveler-centric with a very high concentration of banking and travel agency work. The shopping arcade and the rest of the built up area just outside the perimeter give a totally aesthetic view of the Airport. As a highly concentrated commercial centre Heathrow acts as the retailer’s paradise. It’s the third busiest airport in the world, with passenger traffic handled per day as the third highest in the world after Atlanta and Chicago. These data loudly speak for themselves and the Heathrow Airport is also known for its efficiency in ground handling and connected work. Approximately 471,000 aircraft touch down at Heathrow annually (www.mahalo.com). Visitors from the Continent mostly go through Heathrow just because it’s the focal hub in the region. Travelers from Asia have to go through Heathrow, Frankfurt, Paris, Rome, Madrid or Munich. Out of all these airports, Heathrow stands out and the Terminal 3 is the only gate way to the South of the country. Such a highly served sector necessarily has some good retailer network. Retailer services that travelers, both domestic and foreign, demand have to be provided on a pre-calculated profit margin. There is nothing much that can be done to increase sales volumes by retailers. This particular philosophy runs through the very system of trade elsewhere as well. Heathrow’s predominant presence on the transport nexus is unquestionably great. This network serves thousands of customers daily. 2. 2. What does retailing amount to on this transport hub? The amount of retail business on this particular transport hub is grossly underestimated. Thousands of passenger kilometers are done daily on this hub connecting the three elemental nodes. Travelers on this route come from a variety of destinations. The average Continental traveler whose interest lies in seeing a resurgent land mark would not miss this particular route while the average trans-Atlantic traveler would have something still interesting to see in South London and then at Paddington. I personally talked to a few tourists from Asia and North America. What I noticed most are the striking similarities between the two groups – Asians from India and China, mostly belonging to the upper-income brackets or/and the business community while Americans and Canadians are casual travelers with enough money to spend on a self-paid holiday abroad. Their lifestyles are determined by their incomes. Very few of them are interested in visiting museums, opera houses and art galleries, the kind of old-fashioned traveler’s interests. These travelers purchase retail services on the instinct rather than reasoned economic judgment. In economic jargon it’s known as “impulsive buying”. They mostly buy travelers’ cheques, credit cards, accommodation at three-star class hotels, train/tube tickets, an occasional ticket to the cinema or the roller-coaster, banking services such as money transfers to and from their own countries and a visit to the ‘Star-Bucks’ or the pub. The traveler from the Middle East, on the other hand, has a much different agenda in his/her hands. This traveler’s needs are basically determined by his status. The ordinary student from the Arab world does not spend the same amount of money that causal traveler from this region is able to spend on retail goods and services. Freathy and O’Connell in their book (Ibid Freathy and O’Connell) suggests that the nature of the customer as more important than anything else. With the ever increasing European integration process, the Continental traveler has become, not the casual visitor, but a resident in the country because he is employed here. Thus the retail sector growth has registered a series of highs in the recent years. Served by an underground railway system on the Piccadilly Line, Heathrow Terminal 3 has much greater commercial prospects. For instance new students from Asia use this particular Terminal to travel to Southern London. Though their traffic density is limited to an occasional passing through, these students from Asia and also some from Eastern Europe make up the bulk of the traveler category at Terminal 3 at times (Freathy, 2003, p.50). There is a considerable amount of expenditure by them too. Their expenditure on retailing can be as high as millions of pounds at times – credit cards, travelers’ cheques, stationery, text books, equipment, instruments, clothing, consumer electronics, accommodation, leisure travel and food and drinks. It’s unlikely that these students would shop away from the transport hub’s retail network to procure supplies. Retailers of these products generate many more sales through universities and colleges. Word-of-mouth advertising brings in more potential customers for them. Overall, the Paddington-the Elephant and Castle-the Heathrow Airport Terminal 3 nexus represents a veritable network of retail marketing for the British economy. Despite its many merits, the government has only now waken up to the reality and is now taking some steps to develop it. Developments must be centred on the customer-centric paradigm of retail marketing (ibid Freathy, 2003). The author has analytically evaluated the retail marketing paradigm in the European airport retail sector with remarkable success. Conclusions/recommendations The administrative authorities have not been able to successfully implement a retail marketing strategy to achieve growth in this transport hub due its own inability to realize the full potential of its commercial and economic strength. The retail sector, specially the banking, insurance and retail trade should receive much greater attention than this. Inviting investors to put money into the Railway Network is not enough. In fact, Paddington and the connected spoke-nodes to the outlying regions of the country can be well developed through a systematic long term investment plan. Cultural aspects of the retail marketing sector such as regional or district-centric aspects of national culture could be converted into a marketable proposition by creating an industrial/manufacturing base. Socio-economic development must be put on the card as a priority. Regional and area-specific architectural legacy must be preserved. Retail marketing on this nexus must be promoted through a private-public company participation pargramme. There is a very urgent need for a psychological push to increase the appeal of this nexus of transport because it has been neglected over the years. Finally, a development authority with full executive powers must be entrusted with the task. REFERENCES 1. Freathy, Paul, (2003), The Retailing: Principles and Applications, Essex, Pearson Education Limited. 2. Freathy, Paul and O’Connell, Frank, (2000), Market Segmentation in the European Airport Sector, Market Intelligence and Planning, Vol.18(3), pp.102-111. 3. McAulson, Fiona, (2008), Elephant and Castle Shopping Centre, Time Out London, retrieved on August 12, 2008, from www.timeoutlondon.com. APPENDIX I Read More