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Effectiveness Of Using Different Channels Featuring Emarketing Marketing Essay

Marketing » Effectiveness Of Using Different Channels Featuring Emarketing Marketing Essay

Effectiveness is the adequate to accomplish a purpose; producing the intended or expected result. There are different channels for communication which may be effective to consumers as Television; Magazines, Radio and more, but nowadays internet is becoming the most important and effective tool. Belch (2009) Television Advertising and other tools are paid, expensive tools form of non-personal communication which means that there is no opportunity for immediate feedback, therefore before the message is sent, and the advertiser must consider how the audience will respond to it. As Blackeman (2007) believe that Television advertising can bring the product or service’s story to life, set a mood, demonstrate a use, create a memory, initiate a trend or define a style. As for the Magazine advertising concentrates on the creation of an image or mood through visual and verbal relationships. However, Radio advertising we are exposed to it everywhere because radio had the distinction of being one of the few media vehicles that can be used to reach the targeted audience close to the time of purchase.

Traditional off-line marketing similar to the promotional mix tools that is used to accomplish an organization communication objectives which comprise advertising, direct marketing, sales promotional, Publicity and public relations, personal selling and all these tools costly as compared to Internet marketing or e-marketing which already exist in the promotional mix tool . With traditional off-line marketing the company can only reach a small chunk with each campaign, and may target its buyers in a specific town or city through newspapers, local TV channels, local trade magazines, Banner ads on the streets, etc. Each time it runs a new campaign, it ends up spending more money. With most large or even small businesses, money is tight, and spent with the highest thought and care. Marketing can either swallow up hard earned resources with little effect or can drive a business farther than imagined, depending on the execution. Marketing business on the internet is in many ways simpler and arguably much less expensive than more traditional marketing media, but has its own set of considerations.

Source: Internet World Stats – www.internerworldstats.com; September 30, 2009.

Moreover, using different marketing channels featuring E-marketing will demand more evaluation for the whole marketing communication campaign and highlighting the importance of e-marketing.

Marketing can be considered as one of the most important element foundation successful business creation. Perhaps because of its complex applications, marketing has been defined in a variety of ways. The marketing concept was first promulgated in the late 1950's. The importance of marketing concept incorporates oft-repeated elements such as: customer orientation; integrated marketing efforts; and consequential profitability. In terms of managerial perspective in marketing, Kotler (1972) is the only pioneer as he adopted the concept, when he proposed a generic concept of marketing concerned with how transactions are created, stimulated, facilitated, and valued. Sheth, Gardner and Garrett (1988) on the other hand, believe that the main purpose of marketing is to create and distribute values among the market parties through the process of transactions and market relationships.

Furthermore, the American Marketing Association has defined marketing as the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives (Hills, 1994).

However, with the introduction of new technologies especially the Internet, marketing ways have been changed greatly. Its impact cannot be denied and can be said to have revolutionized business. The Internet provides an effective interactive on-line tool that allows business processes to be aligned with growing demands for increased speed and efficiency at lower cost.

The aim of this paper is to define e-Marketing and to review certain factors associated with it including e-marketing strategies, identify the advantages and disadvantages of marketing through the internet, give suggestions on how on-line marketing communications can be most effective to certain types of industries (if any), particular cultural considerations and assess the difficulties faced by e-marketing, etc.

The development of the Internet gave rise to a more recent marketing strategy known as on-line or electronic marketing. E-marketing is a powerful tool used by different business organizations around the world. It is defined as the process of achieving marketing objectives through the use of electronic communications technology. Smith and Chaffey (2001) suggest there are five broad benefits, reasons or objectives of e-marketing. This framework of 5 Ss is useful since it presents a comprehensive range of objectives. Marketers will decide whether all or only some will drive e-marketing:

Sell – Grow sales (through wider distribution to customers company can’t service off-line or perhaps through a wider product range than in-store, or better prices)

Serve – Add value (give customers extra benefits on-line: or inform product development through on-line dialogue and feedback)

Speak – Get closer to customers by tracking them, asking them questions, conducting on-line interviews, creating a dialogue, monitoring chat rooms, learning about them

Save – Save costs - of service, sales transactions and administration, print and post. Can the company reduce transaction costs and therefore either make on-line sales more profitable? Or use cost-savings to enable the company to cut prices, which in turn could enable to generate greater market share?

Sizzle – Extend the brand on-line. Reinforce brand values in a totally new medium. The Web scores very highly as a medium for creating brand awareness, recognition and involvement.

E-marketing is also known to be the on-line marketing strategy utilized by different company whose objective is to be the best company in their field. In different countries worldwide, more and more business firms have been using e-marketing strategy in order to be competitive. From books, foods and beverages, automobiles and other products and services, various companies, irregardless of their company sizes, are trying to survive by means of e-marketing strategy. Aside from being a promotional medium, the internet is a tool for marketing communications promotional mix as well. Due to its interactive nature, the internet marketing is an efficient method used in communicating with the consumers nowadays more than other promotional traditional tools compared to the Belch (2009) Advertising as it is a valuable tool for building company or brand equity as it is a powerful way to provide consumers with information and influence perception, Direct marketing it is a way in which organization communicate directly with target consumers to generate a response and a transaction, Sales Promotion are marketing activities that provide extra values to the sales force and can stimulate immediate sales, Publicity/Public Relations as for publicity it refers to non-personal communications regarding an organization, product, service or idea not directly paid for in addition to the Public Relations purpose is to establish and maintain a positive image of the company among its publics. Finally, with the Personal selling it’s a form of person to person communication in which a seller attempts to assist or persuade prospective buyers to purchase the company’s product or service or to act on an idea. As for the interactive/internet marketing it allows for a back and forth flow of information whereby users can participate in and modify the form and content of the information they receive in real time, as it allows users to perform a variety of functions such as receive and alter information and image plus making purchase besides through the internet marketing companies can advertise online, have a direct marketing with customers through mails or online communication, offer sales promotion on web sites and can have a PR which evaluates a public attitudes, identifies the policies and procedures of an organization or individual through the internet in order to earn public understanding and acceptance and in conclusion, Personal selling which involves direct contact between buyer and seller as this interaction gives the marketer communication flexibility . Belch (2009) Companies afterward started to concentrate on designing web-related strategies and employing interactive agencies that will facilitate their development of specific company web sites as part of their integrated marketing communication strategy. All there can have a great different impact and value to the advertising campaigns using E-marketing as their main tool of communication.

On-line marketing is considered to be the most comprehensive marketing communication strategy that every company wants to implement and apply. At present, people, particularly those in the business field, is likely to engage them within the trend of rapidly growing technology so as to stay competitive.

Also, online branding or E-branding, Chernatony and Christoudoulides (2004) said that mainly the frequency with which an ad is served impacts brand awareness. Regularity also impacts whether or not an association between a message and a brand is made by a consumer. Thus, aspects of company brands should be emphasized in online branding.

Moreover, it is only recently that the term “corporate brand” has appeared and has captured many academics attention, as it is claimed that research is now shifting from product to company branding, Hatch and Schultz, (2001) The Company and its corporate and product brands can help to substantiate the credibility of the firm’s corporate image Dowling, (1986). Corporate brand differs from product branding as it stresses the importance of brand values.

Upon surfing the internet, various companies have put up their official sites on-line for customers and potential consumers to view. On-line or e-marketing is the latest marketing approach for any company who wants to effectively market its products and services. In addition, e-marketing enables the company to be known worldwide since more and more people are able to access information resulting from the internet. Within the business world, where competition is strict, internet marketing is one essential marketing strategy applied by most companies.

While e-marketing had been applied in order marketing goods local and internationally, this strategic option has also been used effectively by business operators in order to communicate with their customers. One common technique based on e-marketing is electronic mailing; through this tool, companies can send in letters to the clients in order to obtain useful information in line with their specific product needs or preferences. This techniques has in fact been realized an effective instrument for driving revenues as well as obtaining customer retention and loyalty. While direct mailing techniques use the telephone, fax or send posts to gain information, e-mails offer lower contact costs.

However, without the provision of customer control, direct and e-marketing approaches can affect customer relations. For instance, direct e-mailing can be considered by other consumers as unwanted communication; as users do not have the control as to how this unwanted communication can stop, customers are often left motivated. Moreover, this issue often delayed others from filling up on-line forms or replying to company e-mails. Hence, it has been suggested that marketers should provide sufficient information about themselves; users should also be informed of the purpose for the data collection, how the information will be used and in what ways they could control the use of their personal information.

Fortunately, measuring marketing effectiveness is very easy to begin in the internet space. Site statistics reports are readily available on-line and virtually real-time, providing information such as: actual number of mouse clicks, unique visitors, and/or repeat visitors, geographic location, time of day, etc. all naturally collected, compiled and presented so that you can know exactly who/where/when/how often, and even how long the potential customers are visiting each portion of your site. Such site statistics packages are available through the Web-site developers or can be found by on-line search and usually a small subscription fee.

Sell – Grow sales (through wider distribution to customers company can’t service off-line or perhaps through a wider product range than in-store, or better prices)

Serve – Add value (give customers extra benefits on-line: or inform product development through on-line dialogue and feedback)

Speak – Get closer to customers by tracking them, asking them questions, conducting on-line interviews, creating a dialogue, monitoring chat rooms, learning about them

Sizzle – Extend the brand on-line. Reinforce brand values in a totally new medium. The Web scores very highly as a medium for creating brand awareness, recognition and involvement.

For the experimental research, around three to four Web sites or Companies will be selected, to assess more fully practices and policies in accessibility support within different e-marketing, with practical study (e.g. via system testing using industry normal specifications) and research activities to gain user perspectives on system usability (e.g. via questionnaires or interviews); universities will be chosen to reflect leading facilities (e-learning and blackboard). Oracle Company that enables technology services for marketing, Human Resource, sales and all business activities will be used in our research to demonstrate the effectiveness, activities of using e-marketing or internet marketing for example one of the systems we will cover in our thesis paper is the Oracle’s Siebel Email marketing enables organizations to take advantage of the superior economics of e-mail, while building customer trust, respecting their preferences, and creating profitable relationships trust, respecting their preferences, and creating profitable relationships. Besides, we will use another multinational company Vodafone which perform several e-marketing activities in order to construct superior online channels for higher customer satisfaction and stronger customer loyalty. As they delivered new interactive online tools, comparison tools and micro sites leveraging Vodafone brand, duties, product and services for excising customers. All these activities will be mentioned into great extent details and information in the final thesis paper, which will facilitate in establishing the importance of E-marketing nowadays.

The main purpose of this thesis is to find out the effectiveness of Internet marketing or e-marketing as one of the marketing mix where we will try to answer the questions such as:

What makes the e-marketing communication strategies different from traditional methods?

Are companies using e-marketing more direct to customers?

What are the communication tools or mediums that companies use?

Is marketing through the internet an effective means of building a brand or getting new customers?

Is on-line marketing less costly than off-line marketing?

Is on-line marketing faster to implement than off-line marketing?

March to April Design Research Surveys Questionnaires approved with the Supervisor

April to June Collect Data (Start SPSS) Preparation Framework

Analysis& Interpretation of the Data to come up with the proposed suggestions

The importance of developing an effective e-marketing strategy is indicated by Michael Porter (2001) who has said: ‘The key question is not whether to deploy Internet technology – companies have no choice if they want to stay competitive – but how to organize it.’

An e-marketing strategy is needed to provide consistent direction for an organization’s e-marketing activities that integrates with its other marketing activities and supports the overall objectives of the business.

For many companies, the first ventures into e-marketing or Internet marketing are not the result of a well-defined, integrated Internet strategy; rather, they are a response to competitors activities or customers demand.

After a site has been in existence for a year or so, marketing staff and senior managers in a company will naturally question its effectiveness. This is often the point at which the need for a logical Internet marketing strategy becomes apparent. As a result, the starting point to e-marketing strategy is when a company that has an existing site and it is reviewing the current site and its effectiveness with a view to future improvements. And as a motivated tool for the thesis that the in Internet revolution has changed the way companies do their business and communicate to their customers. As Internet penetration rates continue to increase world-wide and Egypt is not an exception, therefore, e-marketing as a new innovative marketing approach will benefit.

Source: Internet World Stats – www.internerworldstats.com; September 30, 2009.

Literature Review (References)

Chaffey, D. (2002). E-business and e-commerce management. Financial Times/Prentice Hall. Harlow, UK.

Dave Chaffey, Fiona Ellis-Chadwick, Richard Mayer and Kevin Johnston

(2006). Internet Marketing: Strategy Implementation and Practice – Third Edition. FT Prentice Hall.

Hills, G.E. (1994). Marketing and Entrepreneurship: Research Ideas and Opportunities. Quorum Books, Westport, CT.

Kotler P. (1972). "A Generic Concept of Marketing." Journal of Marketing

Michael J. Baker (2003). The marketing Book Fifth Edition. Butterworth Heinemann.

Porter, M. (2001). Strategy and the Internet - Harvard Business Review. March 2001, 62-78.

Sheth J. N., Gardner, D.M. and Garrett, D.E. (1988). Marketing Theory: Evolution and Evaluation. New York: John Wiley & Sons.

Christodoulides, G. and de Chernatony, L. (2004), “Dimensionalising on-and offline brands composite equity”, Journal of Product and Brand Management

Smith, P.R. and Chaffey, D. (2001). eMarketing eXcellence: at the heart of e-Business. Butterworth Heinemann, Oxford, UK.

Hatch, M.J. and Schultz, M. (2001), “Are the strategic stars aligned for your corporate brand?”, Harvard Business Review,

Dowling, G.R. (1986), “Managing your corporate images”, Industrial Marketing Management,

http://dictionary.reference.com/browse/effectiveness

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Co Relationship Between Fast Fashion And Impulse Buying Marketing Essay

“Fast fashion” is a term that represents the strategies which retailers adopt to respond to the current and emerging trend promptly effectively in current merchandising assortment (Fernie et al., 2004). Fast fashion is becoming more popular in all around the world. Famous fast fashion companies like Zara, H&M, mango and Top Shop are expanding worldwide. The European largest fast fashion retailer, Zara, which have 1483 stores in different countries, is going to open its eighth branches in Hong Kong on January, 2011.

Referring to the case of Zara, its success is mainly contributed by the latest designs and flexible supply chain that support by sophisticated IT systems. Merchandise appear and disappear in the stores in a fast pace. People visit the stores more often to search for new items change in merchandise, store display and the return policies motivate people to purchase even they did not plan for and this regard as impulse buying.

Impulse buying creates a substantial volume every year across a broad range of product categories (Bellenger et al., 1978; Cobb and Hoyer, 1986; Han et al., 1991; Kollat and Willet, 1967; Rook and Fisher, 1995; Weinberg and Gottwald, 1982). Rook and Fisher review the research papers in the last few decades and the studies show that 90 percent of people make impulse purchase occasionally (Welles, 1986). This is the reason to study more in depth for the impulse buying behavior especially in the fast fashion industry.

The theoretical framework that suggested by that are provided by a number of researchers for examining impulse buying related to psychological variables (e.g. personality, self regulation), hedonic experiences (e.g. shopping enjoyment, emotional state, mood) and situational variables (e.g. available time, money) in a shopping context (Beatty and Ferrell, 1998; Burroughs, 1996; Rook and Fisher, 1995). Researchers find that impulse buying mainly fulfills the hedonic needs for fun, social interaction and gratification (Hausman, 2000; Piron, 1991).

To study about fashion-oriented impulse buying behavior, fashion involvement is an important element. As fast fashion industry is focusing on fashion trend, studying it helps us to have more understanding on how fashion involvement and other variables affect consumers’ impulse buying behavior. Since apparel is a kind of sensory experimental product (Park, Kim and Forney 2005), the interaction with consumers’ hedonic or emotional experience in the market environment decide if consumers would pay for the product or not.

In this study, a model of studying the relationship between impulse buying behavior in fast fashion industry and fashion involvement, hedonic consumption tendency and positive emotion will be used. The result will be suitable as the reference to develop marketing strategies in the fashion retailing industry.

Chapter 2 Literature Review

2.1 Fast fashion industry

Fast fashion is an revolution in the recent decades. Many famous retailers like H&M. Zara. Benetton and topshop is now using a strategy called fast fashion. Fast fashion is know as retail strategies that allows fashion retailers to bring in merchandising assortment which is trendy and affordable to the market in a fast and efficient way. Fast fashion has changed the designer push model to the opportunity pull approach. The market is the one which decide what to produce and the retailers have to respond to it within a few weeks unlike the industry average of six months (Sull and Turconi, 2008).

Fast fashion can help retailers to avoid markdown. It is also expanding faster than the industry as a whole. And even capture the market share from the traditional competitors. The sales and profit is growing more than 20 per cent each year. The market share is increasing from none in 1980 to over 20 per cent in Spain an d 5-10 per cent in United Kingdom, Germany and France. The profit marg8ins of fast fashion leaders is averaging at 16 per cent comparing with 7 per cent of the traditional apparel retailers.

2.1.1 Industry leaders

2.1.1.1 Benetton

Benetton is the one who first started to offer different colours of merchandise according to different places. It also priced it items below its competitor with the similar quality. Since it integrated production with retailing, it makes dyeing to a later stage so that it can respond to the customers demand for desirable colours. It franchised a lot of stores after its first store opened in 1968. By the end of 1995, Benetton have 8000 stores in 110 countries. However, Benetton suffer from sales stagnate and profitability plummet in the following decade, it cut many retail stores and re-engineer its supply chain.

2.1.1.2 Zara

Zara is founded in 1975 which aimed at producing clothing in latest fashion with medium quality and reasonable price. 80 per cent of it merchandise is the fast fashion apparel and the remaining is the basic lines. It was first a regional player with most stores located in Spain. There are several features that help Zara to respond to the rapidly changing market demand; they include vertical integration design, just-in-time manufacturing, delivery and sales, flexible structure, low inventory rule, quick response policy and sophisticated information technology (Castellano, 1993, 2002).

The two key factors of Zara’s business model is adapting to the market demand by using the store as an information source while delivering unique service to the customers.

The retail stores of Zara are not only acting as a point of sale but also the starting point of the business system (Lopez and Fan, 2009). Zara’s designers would travel around fashion cities and collect the information by observing people on the streets, browsing publication and visiting the places which their target customers usually going (Fabrega, 2004). The store managers of each retail store would also collect feedback from the customers and report the customers demand and the sales trend to the headquarter everyday. The design team will then use the batch of information to create new merchandise or make amendment of existing merchandise (Martinez, 1997). This is how they build situation awareness in first step by absorbing real time data in multiple sources (Lopez and Fan, 2009). The price of the merchandise is decided using the market-based pricing strategy to see how much the buyers are willing to pay. The target price and profit margin which the management wants to achieve are then used to set the cost of raw material, production and suppliers (Bonache and Cervino, 1996; Mazaira et al, 2003). New staff of Zara is having on job training of meeting the service standard. Senior sales assistants are responsible to teach the new staff about company policy and daily operation. The quality of the service and store environment including temperature, music and display of merchandise are accessed by using mystery shoppers (Monllor, 2001)

2.1.1.3 H&M

H&M is founded in 1947 is Sweden which aims to offer fashion and quality clothing at the best price. It is focusing on the price of products, convenience of store location, flexibility in production and promotion by celebrity. Collaboration with Madonna has drawn much attention when it first launch in Hong Kong. Recently, the collaboration with Lavin also creates noise from publics as all the products are sold within one morning. Unlike Zara, H&M embrace promotion rather than store layout and window display.

H&M is more internationalized compare with its competitors. 90 per cent of its turnover is from overseas in 2005 (Lopez and Fan, 2009). To keep its fast fashion buying cycle, the production of H&M is outsourced to 700 suppliers

2.1.1.4 Gap, Inc.

Gap, Inc. is established in San Francisco in 1969. It is a local player with over 3000 stores in five countries including the USA, Canada, the UK, France and Japan. The production of Gap, Inc. is outsourced to 1100 suppliers with it control over the design, distribution and sales. Brand development is used in expansion, some new brand names are formed due to new markets found during expansion, examples are Banana Republic, Old Navy Forth and Towne.

2.1.2 Successful factors of fast fashion

2.1.2.1 Timing factors

In the fast fashion industry, the time from designing clothing to putting the finished product into store should be as fast as possible. Distance is controlling the speed of production. Therefore, retailers start to move their production plant from China to Eastern Europe, India and Turkey which have the shipping time more than two weeks faster (Financial Times, 2005a, b, c, d, e, f). There is also a trend of increasing the numbers of “seasons” and this make the shipping time of suppliers increased (Mintel, 2002a, b) Except the production cycle, the development cycle is also shortened to make the whole process more efficient (Birtwistle et al, 2003).

2.1.2.2 Cost factors

Cost is the greatest concern in making the buying decision. Companies are having cost advantage by producing their products from developing countries like China, Turkey, Portugal and Far East. (Vinhas Da Silva et al, 2002). Since China has joined the World Trade Organization and many countries have removed the trade quotas, companies are now enjoying the advantage of low-cost overseas manufacturer. However, due to the speedy characteristic of fast fashion, it is a question of how to balance the cost of production and the time of producing a product. Calculation of cost in overseas sourcing should also include the cost of losing sales because of long lead-time (Mattila et al, 2002).

2.1.2.3 Fashion buying cycle

The buying cycle of fast fashion can be happened very ad hoc due to the changing market. Unlike the traditional buying cycle that happens a year before the product launches (Birtwistle et al, 2003), the fast fashion buying cycle is occurring every week (Kline and Wagner, 1994). The shorter buying cycle helps to reduce the percentage of mark down and stock out which harm the company’s profit. The new fashion buying cycle is stressed on the market demand rather that the forecast base on previous data. This requires a close supplier-retailer relationship (Birtwistle et al, 2003). By using the quick response strategy, company can has the accuracy of forecasting sales up to 95 per cent (Mattila et al, 2002).

2.2 Impulse buying behavior

Impulse buying is a kind of unplanned buying which is sudden, compelling and hedonically complex (Bayley and Nancarrow, 1998). Though impulse buying may leads to emotional conflicts sometimes, number of researches show that consumers do not regard impulse buying as wrong but a favorable evaluation instead (Dittmar et al, 1996; Hausman, 2000; Rook, 1987). Ko (1993) even states that impulse buying behavior can be a reasonable planned behavior in the means of objective evaluation and emotional preference in shopping. Refer to the research of Han et al (1991), there are four types of impulse buying which are planned impulse buying, reminded impulse buying, fashion-oriented impulse buying and pure impulse buying.

Fashion-oriented impulse buying is defined as an innovative design or style that creates the awareness or affects perception of fashionability (Han et al, 1991). It occurs when consumers are motivated by suggestions to buy a new product (Han et al, 1991). Fashion oriented impulse buying happens more often on people with high fashion involvement. The emotional factors like satisfaction during shopping and positive feelings count heavily in fashion-oriented impulse buying.

2.2.1 Fashion involvement

Fashion involvement represents the degree of interest with fashion products. The degree of involvement motivationally state the interest aroused by a particular stimulus or situation (O’Cass, 2004). It can also be seen as the interaction between consumers and fashion products.

Fashion involvement can be classified in five dimensions; they are fashion innovativeness, fashion interpersonal communication, fashion interest, fashion knowledgeability and fashion awareness (Tigert, Ring and King 1976). In a later research by O’Cass (2000, 2004), he found that personal characteristic and fashion knowledge is strongly related to fashion clothing involvement and influence the confidence of consumer to make the buying decision. There are papers showing that a the degree of fashion involvement is positively related to purchasing apparel hence making fashion-oriented impulse buying (Fairhurst et al, 1989, Seo et al, 2001)

2.2.2 Emotional factors.

Emotion and mood are affecting the decision making and it is also changed by the decision made on the other hand. Consumers are being uplifted and energized after having shopping as shown in many previous researches (Bayley and Nancarrow, 1998; Dittmar et al, 1996; Cobb and Hoyer, 1986; Rook, 1987).

Emotion is one of the main factors that control our action hence buying behavior (Beatty and Ferrel; 1998, Hausman, 2000; Rook and Gardner, 1993; Youn and Faber, 2000). With a higher level of positive emotion, consumers will be more likely to have a speedy and less complex decision making process (Isen, 1984). The positive emotion can be formed by the pre-exist mood before shopping, cheerful personal characteristics, social interaction, store environment and promotion or sales. These things can come up with a freely mood, a desire to reward their own and an elevated level of energy (Rook and Gardner, 1993). The emotion can vary when consumers are shopping in the store and this affects not only the money they spend but also their perception of quality and value of the products and even the brand (Babin and Babin, 2001).

2.2.3 Hedonic desires

Impulse buying can fulfill a number of hedonic needs like the needs for fun, novelty and surprise (Hausman, 2000; Piron 1991; Rook 1987). The satisfaction in hedonic needs can be come from the happiness gain in wearing the apparel (Hirschman and Holbrook, 1982) and the enjoyment of bargaining (Sherry, 1990). Instead of the demand of the product itself, the whole shopping experience is more important in generating hedonic feelings and encourage consumer to purchase the product.

Hedonic needs can also be the higher level of needs like the needs for self-esteem and self-actualization (Hausman, 2000). These needs are effectuated in a way of showing the fashion consciousness (Hausman, 2000). The up and coming fashion styles and favorable brand image that result in hedonic shopping experience and motivate fashion-oriented impulse buying (Goldsmith and Emmert, 1991).

As impulse buying can satisfy the hedonic desires that connected with hedonic consumption (Hausman, 2000; Piron 1991; Rook 1987), consumers are more easily to encounter impulse buying when they are motivated by those hedonic desires.

Chapter 3 Methodology

There will be a number of hypotheses listed and being tested in this research by developing and administering a questionnaire. A convenience sample will be used in testing the hypotheses. The data will be then generated by the SPSS and finally reach the result of the hypotheses being tested.

3.1 Research model and hypotheses

H1. Fashion involvement has a positive effect on fashion-oriented impulse buying of fast fashion

H2. Positive emotion has a positive effect on fashion-oriented impulse buying of fast fashion

H3. Satisfaction of hedonic desires has a positive effect on fashion-oriented impulse buying of fast fashion

H4.

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Life In Information Age And The Digital Divide Marketing Essay

Nowadays, computers are very common for human, many young [B2]kids know how to use a computer very well. They are able to use the to listen to music or play online games etc. Computers can be use in lots of ways. The first computer [B3]can only calculate sums with a very huge size compare to out computers now. With the invention of Internet, it brings us to a new kind of life style; we can do anything with Internet. These years[B4], The technology of computers are really developing well, we can do more with a computer and the computer [B5]speed itself is getting faster and faster, they are smaller [B6]and smaller, and the size of it [B7]is really small. But the functions that Internet provides are called online services.

Online services mean all kind of things that we can do online; it is all the services that provided on Internet, like eBay, online bank account, online communications, online games. Online services also include government online service, paying [B8]bills online too.

With online buying and selling system, we can serve [B9]the net and pick up the goods that you like than you can pay with your online banking (which is also a kind of online services) and order it from the website, the website will deliver it to where you live or where you want it to be send[B10]. You can also buy and sell things online through a website like eBay. eBay is one of the most successful online shopping websites[B11]. User can create a user [B12]account and start window shopping through the website, the website will have all kind of products that you can think of, even secondhand goods, you can really spent [B13]a lot of time in it. On the other hand, you can also sell things through eBay, with the same account, you can upload the pictures of the product that you are trying to sell, and you have to set up a lowest price to let others to bet on, the user that offer the highest price will be able to buy that product, so is really a convenient system for people who don't like shopping on a street or people who leave [B14]far away from the shops. For some people who are lazy, this service really fit them well, this kind of websites can make the people stay at home, seating [B15]on the sofa with a drink and choose what they like. This is the new way of the youngsters to buy things they like. Therefore, some of the brands will sell their product online and save money on hiring shopkeepers and rent a shop[B16]. But with this service, although it is a very useful system, but there are still people try to cheat people from buying the bad quality product or they will over charge the buyer. Anyway, this is not like shopping in a shop, you can only check the product's pictures through a screen, if you a buying a shirt, you will not be able to touch the material and try it on. But in general, I think this is a service that is good and useful.[B17]

What are you going to do when you have to transfer money to another bank account if the bank is closed, or if you want to bring a huge amount of money to another one's account and lining up at the bank[B18]. Nowadays, there is a kind of online service that can provide the service of managing your bank account by serving the net [B19]and do all kind of payment for user's bills and with the function of transferring money from one account to another account. With online banking[B20], you just need to create a bank account and with a online account, than you can have your bank account detail display on your computer screen; you can transfer money from a online bank account to another one. With this service, you can serve the net to check about all different kinds of information about stock market, and some of the bank will also be able to invest to the stock that you want to with the online banking.

What is you evaluation of online backing? Is it getting better? Worse? Is it worth using?

One of the function that is most common for everyone is online communication service, online communication service mean that you will be able to have connection [B21]to any other PC users. There are many kinds of online communication service, they all have they own benefits. For example, chat room, MSN, blogger and facebook [B22]etc' Like Facebook, it is a communication website which contain the service of chat room and blogger which also provide mini games. In facebook, users can sign in their account and chat with the others, you can write a diary with facebook and share it with your friends, you will be able to upload photos to facebook and you can tag someone you know from the photo on facebook. Facebook also provide the service of online mini games, most of the games are really fun, I used to spend a lot of time on them too. Facebook is now one of the hottest communication [B23]website because it is a website with chat room, information sharing and blogging all in 1, this website have over 500 million active users and the number of users is still getting higher and higher. About emails, we can sent [B24]mail to each other and with attachment (such as photos, music files, or docs) which is convenient for us, with other communications like facebook, msn or chat rooms, we can chat online and also share your knowledge and share your information (like what you thinking of or pictures). It is a really good online service so really a lot of PC users are using it. But when users are using this service, they have to be [B25]care of someone sending you a junk mail with virus inside, so, don't open the files that you are not sure what it is.

What is you evaluation of online communication? Is it getting better? Worse? Is it worth using?

With online working, it is a new way of working, with that, you just need internet connection and a computer, there are many benefits of using the online working, you don't have to waste time on traffic and also save money for bus fees (if you take a bus to your office), Like British Telecom, they now provide teleworkers to be able to work at home and do they work at home[B26]. According to a survey[B27], working online will also make the worker 10-20% more productive, company also do not have to spent money ranting [B28]a office. For employees, they will also like working at home more, because they will be more comfortable to work in their own place. If they are working at home, they will not be late for office; they even will have more time with their family or more personal time.

There are still many kinds of online services, and it is still getting more, some of the services are really good and useful, but some of them are not so good, so you have to judge what want and what is right.[B29]

Missing 'life in the information age and the digital divide'. Can you please give me something by Wednesday and I'll give it back to you on Friday. You are generally going in the right direction but you are not providing enough specific examples or sources. You need to evaluate each service and provide a balanced picture of the current limitations of the services.

[B1]Headings would make this whole document easier too read.

[B2]Source?

[B3]Be specific. Source.

[B4]Wrong word

Check [B5]grammar

[B6]Check grammar

[B7]Of what?

[B8]Check grammar

[B9]Wrong word

[B10]Wrong word

[B11]Source?

[B12]Example?

[B13]Wrong word

[B14]Wrong word

[B15]Wrong tense

[B16]Is this better worse?

[B17]Your evaluation needs to give a clear picture of the limitations and advantages of the service.

[B18]Check grammar

[B19]Check grammar

[B20]Provide a specific example of online backing.

[B21]In what way?

[B22]Screenshots? How are they the same? How are they different. In more detail'

[B23]Source?

[B24]Wrong word

[B25]Wrong word

[B26]Source?

[B27]Which one?

[B28]Wrong word

[B29]You have only talked about 4 online sources. You need at least 5.

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Market Analysis Of The Uk Retail Sector Marketing Essay

The retail sector comprises almost 8 per cent of the Gross Domestic Product (GDP) of the UK.In 2007, the retail sales were approximately ?265 billion in UK, which is larger than the combined economies of Denmark and Portugal. Over 3 million people were employed by the retail industry. It equates to 11 per cent of the total UK workforce. A verdict research center predicted that the UK retail market in size will rise by 15 per cent over the next five year, taking its value to just over ?312 billion.

It had achieved an about ?110.4 billion of grocery sales by nearly 100,000 grocery stores in the UK in 2007.UK grocery retail sector is divided 4 parts: food and drink, tobacco, non-food grocery and non-grocery. In particular, food and drink part hold the key post in the grocery retail sector. It accounts for 65 per cent of the total. It is very important to take fresh food for keeping our body in good condition. Therefore, consumers always try to buy the best items in the grocery stores and they are very sensitive and changeable. In addition, the grocery retail market is extremely competitive and unpredictable. Moreover, a wide variety of products gradually have increased over the years as customers’ demand. While even common products could be bought in a seller’s market. However, the retailer ought to be careful to display their commodities inventively on the shelves in order to catch the attention of customers. This fact has increasingly compelled retailers to think about how they structure, control and amend supply chains to ensure they are effective and efficient (Sparks, 2006).

The purpose of this research is to identify the reason why it happen the product shortage of fresh food sector in a supply chain perspective at the two major supermarkets, Tesco and Sainsbury’s, in the UK. The paper examines the supply chain availability of Tesco and Sainsbury’s through reviews of academic journals, books, institute reports and web pages. Finally, two supermarkets in this respect will be compared their availability in supply chain management through case studies.

The paper is structured so that the next section on the products shortage in a supply chain perspective is followed by a section discussing a supply chain strategy and policy of two major retailers, namely the supply chain availability. The final section of the main part is trying to find the competitive advantage and disadvantage by studying a pair of case studies. The concluding section considers different perspectives such as cost, consumer service and efficiency in a supply chain management.

?. Products shortage in a supply chain perspective

An effective management of inventory flows is one of the most important dimensions in supply chains for success the business. The balance of supply and demand is one of the goals in managing inventory. A company always tries to keep enough inventories to satisfy its customer demand. However, if a company holds too much inventory, it would be happened in inventory carrying cost. In other words, it is a key factor to hold enough but not too much.

The market trend already has changed seller’s market to buyer’s market. "In a seller’s market, whatever had been stocked was eventually sold. However, in the dawn of a buyer’s market, only the right inventory would produce growing sales. Moreover, only when demand was accurately read and forecasted could ‘right’ inventory be stocked at all." (Lal & Han, 2005)

To manage the flow of inventory effectively, several fragmentations in supply chain management such as information system, demand forecasting, procurement, production planning, warehousing, logistics and customer services should be considered. The section focuses on the concepts and the characteristics of the key factors for successful inventory management above mentioned. The study will find the correlation between the reasons of products shortage and these key factors.

Coyle et al. (2003) defined the concept of procurement as:

Depending on the circumstances, procurement can defied in a narrow sense and in a broader perspective.

In a narrow sense, procurement can be defined as the act of buying goods and services for a firm.

In a broader perspective, it can be described as the process of obtaining goods and services for the firm.

Porter (1985) confirmed the importance of strategic procurement in his value chain, since it includes such activities as qualifying new suppliers, procuring different types of inputs, and monitoring supplier performance (Coyle & Bardi & Langley, 2003). Well-organized procurement provides an effective performance in supply chain context. The quality of raw material by procurement affects final product quality, profits and customer satisfaction. In addition, an under-estimated quantity of raw materials leads to the shortage of stocks in the store. Procurement and inventory management belong to materials management and if there are problems of the planning and control of procurement, the store could run out of supplies and have nothing to sell.

According to Blackwell and Blackwell (1999), demand management may be thought of as “focused efforts to estimate and manage customer’ demand, with the intention of using this information to shape operating decisions.” To understand the relationship between customer demand and inventory correctly, it is essential to review a viewpoint of how supply-demand misalignment impacts whole effectiveness of supply chain. Figure 2-1 provides overall supply-demand misalignment.

Figure 2-1 Supply-Demand Misalignment

2 Real

Shortage

4 Returns/

Cancellation

Unit per period

Launch

date

End of

life

Production

Channel

orders

1 True end-customer

demand

3 Channel fill and

Phantom demand

Over-supply

Source: Accenture, Stanford University, and Northwestern University, Customer-Driven Demand Networks: Unlocking Hidden Value in the Personal Computer Supply Chain(Accenture, 1997), 15.

1. True end-customer demand.

2. Production cannot meet initial projected demand, resulting in real shortages.

3. Channel partners over-order in an attempt to meet demand and stock their shelves.

4. As supply catches up with demand, orders are canceled or returned.

5. Financial and production planning are not aligned with real demand; therefore, production continues.

6. As demanded declines, all parties attempt to drain inventory to prevent write-down.

Examining more closely at Figure 2-1, the first stage is a new product launch, true end-customer demand is peak and profit margins are highest at the moment. Unfortunately, PC companies cannot supply sufficient product quantities against demand and retailer and distributors often order than need be. In the next phase, as production increase gradually, producers ship product to meet increased demand and they take priority of price. As stock is filled with over-ordered products at their shelves, price competition begins to be installed, orders are cancelled or returned in the end. In the last stage, as end-user demand begins to decline, all related parties attempt to get rid of their inventory to prevent write-down. “This is largely due to the industry’s planning processes and systems, which are primarily designed to use previous demand as a gauge. Since much of the previous period’s demand was represented by the phantom demand, forecasts are distorted.” (Coyle & Bardi & Langley, 2003)

Information system has become extremely important factor for success in supply chain management. The information in supply chain is mainly comprised of sales data or demand, it is a useful criterion of replenishment and the basis of forecasting. A significant degree of supply chain information exchange or share on a real-time basis leads to less uncertainty and, therefore, less safety stock. Efficient IT can reduce transaction costs and risk to enable firms to engage in more collaborative activities (Sodhi & Son, 2009). High quality and well-organized information about demand can remove inventory. If point-of-sale (POS) data were available from the retail level on a real-time basis, it would help eliminate the bullwhip effect associated with supply chain inventories and would significantly reduce cost.

Retail practice at Seven-Eleven Japan’s case studies performed by Stanford University and Harvard University is very helpful to understand the availability of information system in supply chain management.

“In response to the customer demographic, SEJ’s retail strategy emphasized freshness. The information system was designed to support freshness - meaning not only the quality of perishable products, but also the provision of a fresh set of merchandise to keep up with the changing preference of customers. SEJ’s freshness focus was extended to incorporate the timely accommodation of the changing needs and tastes of customers. To make sure customers did not tire of the same offering, old items were constantly retired, giving shelf space to new items. Of 3,000 SKUs carried by each store, about half of them were replaced every year. SEJ tended to retire items as soon as they noticed a decline in sales, which was generally earlier than other stores. SEJ’s freshness strategy was supported by the company’s information systems.” (Stanford University, 2006)

Logistics has been called by several ways, including the following:

Business logistics

Distribution

Logistical management

Physical distribution

Supply Chain Management

Materials management

What these terms have in common is that they deal with the management of the flow of goods or materials from point of origin to point of consumption, and in some cases even to the point of disposal (Grant et al., 2006). The Council of Supply Chain Management Professionals (CSCMP), one of the leading professional organizations for logistics personnel, defines logistics management as:

“the part of Supply Chain Management that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customers’ requirements.”

Three key activities of logistics in supply chain management are transportation, inventory maintenance and order processing. These activities are important to implement the efficient logistics management, since they most directly affect the total cost of logistics or they are critical to the effective completion and performance of the logistics mission. Commonly, it is impossible or impractical to produce products on the moment or distribute to retailers (customers) instantly. In order to achieve a reasonable degree of product availability, inventories need to be maintained as buffers between supply and demand. Whereas transportation adds “place” value to a product, inventories add “time” value (Ballou, 1987). If unexpected problems happen in process of transportation, it could cause more or less inventory in warehouse and even store.

?. Supply Chain Availability (Cost, Efficiency, Customer Service)

It has long been recognized by some that the key to major cost reduction lies not so much in the internal activities of the firm but in the wider supply chain (Christopher & Gattorna, 2008).

Reducing cost or efficiency is an important objective of supply chain management. The aim of the enterprise management should be reduce the total cost of logistics activities, often called the landed cost at the end of the pipeline, rather than focusing on each activity in separation. Lowering cost in one area, like transportation, can raise inventory carrying cost according to more inventory is needed to cover longer transit time, or to balance against greater uncertainty in transit time.

There are six major cost categories which cover the key logistics activities in Figure 3-1. It indicates how the logistics activities affect the six major logistics cost categories.

Figure 3-1 how logistics activities drive total logistics costs

? Customer service

? Parts and service support

? Return goods handling

? Traffic and transportation

? Inventory management

? Packaging

? Reverse logistics

? Warehousing and storage

? Plant and warehouse site selection

? Material handling

? Procurement

? Order processing

? Logistics communication

? Demand forecasting/planning

Source: adapted from Douglas M. Lambert, The Development of an Inventory Costing Methodology: A Study of the Cost Associated with Holding Inventory. Chicago: National Council of Physical Distribution Management, 1976, p. 7.

Japan was a seller’s market until the 1970s, but as profits stagnated and declined in the late 1980s, a buyer’s market began, necessitating reform in the retail industry. The reason for this shift was that ownership of objects was very high among Japanese consumers.

- Toshifumi Suzuki, Chairman and CEO of Seven & I Holdings Co.

“Beyond newness, building and sustaining store loyalty is a factor important to retailers in a buyer’s market. If customers consistently have positive experiences at a store – as measured by image, trustworthiness, reliability, friendliness and fulfillment of a saying shopping experience – they are more likely to purchase the same product at one store, rather than another.” (HBR, 2005) Managing customer service and demand forecasting is a key factor for both efficiency and effectiveness in a buyer’s market.

Table 3-1 characteristics of a seller’s market versus a buyer’s market

Product functionality

Buyer preference

(Moderated by marketing)

Product is made, at manufacturer level, upstream in product flow

Buyer selects product from

Pool, at retailer level

Distribution and retail costs are minimized

Demand is satisfied

Cost center

Profit center

Source: Created by casewriter based on: Tomoyuki Ogata (Ed. Daniel Costello). Grasping Customer Demand with Tanpin Kanri. Tokyo: Office 2020 Publishing, 2002. 15.

While customer service has no single widely used definition, customer service is often viewed in three principal ways. These are customer service as an activity, customer service as performance measures, customer service as a philosophy (Lalonde, 1985). However, the definition of customer service that is used in this paper is as follows:

“Customer service is a process for providing competitive advantage and adding benefit to the supply chain in order to maximize the total value to the ultimate customer.” (Coyle & Bardi & Langley, 2003)

We have to consider that information is a key factor to improve customer service. In other words, there is a synergy between information and customer service. High quality and on time information affects positive influence and also reduce cost. Finally, reducing cost brings them satisfaction and happiness.

In case of customer service, there are three identified levels in a supply chain and logistics perspective. The lowest level is reliable, on time and right quantity delivery. In order to maintain customers, this minimum lever is basic in these days. Moreover, to create large customer, it is essential to meet the customers’ unique needs and special demand. The next level may involve, for instance, advanced shipment notices, tail-made pallet packing, scheduled deliveries and so on. In order to continue and increase market share, the highest and maximum level of customer service is needed, that is, adding value for regular customer. Examples of previously mentioned concept may entail supply chain visibility of inventory, VMI (vendor-managed inventory), forecasting and so on.

?. Case studies (Tesco and Sainsbury’s)

In 2008, there were roughly 49,530 convenience stores in the UK, this figure stands for decrease of 2.4% every year. Whilst the number of co-operative convenience store remain unchanged, the number of multiple convenience store and symbol groups stores have increased (See figure 4-1). The UK grocery market was worth ?134.8 billion in the 12 months to May 2008, representing an increase of 4.1% over the previous year. In view of market structure, top brand list and market share in the UK are core indication to recognize supermarkets’ position.

Figure 4-1 the Consolidation of the UK Grocery Market, by Value Market Share

Source: Economic Note on UK Grocery Retailing 2006. 2010 is IGD estimate. The ‘multiples’ category appears to include symbol-group convenience stores.

Table 4-1 shows the top 10 most valuable retail brands in the UK in 2008. In 2008, Tesco had been named the most valuable brand in UK retailers, the value was ?8.6 billion, whilst Sainsbury’s value was ?4.9 billion, beat other “big four” supermarkets ASDA and Morrisons into fourth and fifth places, respectively.

Table 4-1 the top 10 most valuable retail brands in the UK

Tesco

8.6

Sainsbury’s

4.9

Marks & Spencer

3.9

ASDA

3.6

Morrisons

2.6

Boots

1.9

Argos

1.4

Co-operative

1.4

Waitrose

1.2

John Lewis

1.1

Source: http://news.sky.com/skynews/Home/Business/

Figure 4-2 market shares within the non-convenience grocery market

Source: TNS Worldpanel, march 2006.

Tesco was top position in 2006, market share was about 30.6 percent of the non-convenience UK grocery market (See figure 4-2). During the 1990s, Tesco and Sainsbury's enjoyed similar market shares ( of 20 to 25 percent). However, Sainsbury’s has since lost ground.

“Most of the multiples’ growth has been organic, with the exception of Morrison’s acquisition of Safeway in 2003. ASDA was acquired in 1999 by Wal-Mart, the world’s largest retailer. The other market leaders are all UK companies.” (defra, 2006)

Based on above mentioned statistical factors, Tesco, 1st place in UK, and Sainsbury’s, 2nd position, are selected to study their supply chain performance. The key factor in supply chain perspective will be performed through some case studies, and then their supply chain availability might be analyzed by different perspectives such as cost, customer service and efficiency.

One of the powerful grocery retailers all over the world, Tesco, now has expanded from Eastern Europe to Asia. The supply chain management is one of key factors as succeeding off-line and on-line business. Tesco stores tend to be better stocked that those of its competitors, while costs are still kept down (Datamonitor, 2005).

First case study is a specific product, for example, strawberry. It is very difficult to meet demand during the peak season or some special event such as the Wimbledon Tennis Championships. To solve the problem, the head office of Tesco approached the concept of collaborating with the other partners in supply channel. First of all, the company made a small team and tried to find several problems. They found a technical problem which is relative to the preparation of package material, called mould. The suppliers had to order the mould several days in advance to be provided in time and if package suppliers don’t have enough time or enough materials at the agreed moment, they would inform their situation and discuss about some alternative sources. Moreover, the head office had changed last order amendments time at 17:00 as requested by other channel partners. All action points consisted of agreed and implemented.

The second case study is about logistics, especially, sustainable distribution through integrated transport. The department of transport had a plan to make a policy of sustainable distribution for freight in 1998. The new programme should base on the energy saving at the corporate level. For instance, vehicles which are Tesco owned and 3PL companies picked its pallets on the way of inbound movement after deliver to their retail stores. This practical policy was very useful to reduce vehicle miles. As results, it gave positive effects in the environmental policy of the company.

The Third one is connected with information technology. Tesco had developed the Oracle Retail Planning to cut more maintenance costs and risk in spite of a traditional IT solution. The new Oracle system had provided various functions. IT department could change options very easily, it had fine turning function to meet special needs. It is possible to predict by using the programme in the system. The company also used it to recognize seasonal demand. Therefore, they could provide customers’ demand with generally accuracy.

Sainsbury’s has been a leader in retail innovation since 1869 (Hall, 2006). In order to overcome a severe market and provide good quality products to their customers, Sainsbury’s made a “Partnership in produce” agreement with ENFRU Ltd in 1995. The agreement was included under seven key provisions. “Not only can the immediate needs of the marketplace be met, often when seasonal factors require an imaginative response to specific availabilities, but also, new directions and opportunities can be mapped out for the future.” (Hughes & Merton, 1996)

The next case is related to the change of transportation system in connection with between Sainsbury’s and Nestle. Their transportation route was very complex because of via various points and multimodal transports. They solved the problem through 3rd party logistics and Driver shift. Two companies saved total 64,200 km per year.

The last case is Sainsbury’s RFID trial. They had set up the vision to enrich information and cope with their major problems. In the first trial, they chose chilled goods and tracked it. The trial was mainly concentrated in one ready-meal supplier, a single depot and a retail store. “The most notable benefit for the supplier is the potential to reduce the out-of-stock rate of suppliers’ products. The reduction of the rate of stock-outs often benefits suppliers more than the retailer, as the consumer almost invariably picks a substituting product.” (Kärkkäinen, 2003)

?. Conclusion

Factors such as population trend, life style (eating out), relationship with customers are driven for grocery retailers to very severe situation. In consequence, supermarkets always try to establish competitive strategies. They should check competitors’ price every day, do their best for customers’ satisfaction, develop new premium goods to preoccupy niche market and new formation of store (e.g. convenience store). According to IGD research, low prices are still a key motivation for customers’ royalty. It is very important to perform their supply chain management because it is not easy to accomplish their goal without the harmonized collaboration.

In price policy, Tesco and Sainsbury’s have pushed different slogan. Tesco is “Helping you spend less every day”. They provide price information that is based on their competitors’ price which is on competitors’ homepages. Sainsbury’s is “Great food at fair prices”. In order to supply high-quality products at reasonable price, they carry out “Great offer” instead of indiscriminate low price policy.

The basic of customer satisfaction is to conduct an effective inventory management, that is, right, enough goods on the shelves and at the right time. Tesco maximize customer satisfaction by running Oracle retail system. Marcel Borlin, the manager of Tesco customer service, said “If we can improve product availability by just 1%, then we will have a great many more satisfied customers.” Meanwhile, Sainsbury’s have centralized their business ability to the rationalization of logistics.

Can you differentiate between the two? In my opinion, the main point is just supply chain availability. It’s not marketing or brand positioning. “Tesco’ supply chain works, Sainsbury’s doesn’t, and the smaller firm appears unable to fix its long-running logistics problem.” (Datamonitor, 2005) Finally, grocery retailers in the UK try to establish the programmme for satisfying customer needs which is to understand well how certain changes affect demand on each product basis. POS system will be an effective solution to build for managing inventory programme. Furthermore, they have to execute logistics system on demand. Joint delivery programme from supply distribution center, delivery operations management, diversified mode of transportation are good examples.

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Introduction To Blue Ocean Strategy Simulation Marketing Essay

Before entering Blue round 3, the biggest problem faced by the product that it was priced too high for the audiences it was supposed to be targeting. The reason being, through Blue Box, we attempted to add in as many features as possible to attract various non – customers. Due to this, the cost of production increased, which in turn drove up the final pricing of the product. Due to extensive built – in product features added in the first blue round itself, the price of the product could not be reduced and the production level was also way more than the sales expected in order to attain achieve a production X price value that could sustain the product through the year.

Ptah’s strategy through blue rounds 1 and 2 was to establish a sustainable USP that could attract audiences mainly from the ‘sports loving’ category. Exer – gaming being our biggest investment, Blue Box had other features like multiplayer capabilities, etc. Some more features were added targeting the parents group. However, by trying to expanding the distribution of the product in the first few runs itself, the pricing of the product became extremely high. The marketing budget too did not match the level of distribution. These factors brought down the sales every year spirally, and as a result, there was a drastic fall in the stock price index.

Team Ptah realised that among all blue ocean offerings, Blue Box had a higher market share value, sales value and highest returns. Hence, the strategy we tried to employ for round 3 is not to lose the existing market share and build upon it and try to consolidate the Stock Price Index value above 700 by the end of the year 2016, by offering properly planned and targeted services and delivery competing factors.

Fig1: Market shares and Market sales value at the end of Blue Round 2

The obvious goal of this round was to drive up the sales without changing the existing price of the product. This could be done only by increasing the value offerings on the product. The size of the sales force was also reduced to focus more on delivering value first, rather than improving reach.

Service offerings:

The major service offerings added to Blue Box this year were ‘Ease of Repair’ and ‘Warranty Offer’. Ease of repair was added at level 4, wherein the customer would not have to worry about not having a console when it is damaged, as the company would provide him / her a replacement until the damaged console is fixed.

However, other service offerings like extended warranties and loyalty cards, rewards, etc., were not provided this year as we decided that this ease of repair offering, although a bit expensive, would be a unique selling point for the Blue Box. The mistake made in this case was not anticipating the competition’s choices which were mainly in the direction of providing extended warranties and loyalty cards, apart from having a very valuable warranty offer. With almost the entire market offering these services, Blue Box suffered as the audiences were expecting a similar level of service from it. Also, being highly priced, the sales of Blue Box also took a beating.

Delivery offerings:

At the point of sale, we thought that it is essential for the customer to have a good understanding of the product being offered and hence, we decided that the best delivery offering we could add to the product was to have informed salespersons at the POS, informing and communicating the message of the company and the features of the product to the potential customers. Introducing this offering at level 4, we wanted to ensure the customer gets the correct and desired information relevant to the product from the salesperson or a representative of the company itself. No other company had this feature at this level.

However, the competition decided to use attractive deals and price promotion offers to attract the customer. These were features the team felt was not necessary at this point of time, but again was mistaken because the entire competition brought out these same offerings at almost the same levels.

Result: The service and delivery offerings were not satisfactory enough to attract customers and hence, the sales took a dip this year.

Due to a project implemented for the red box unit, the COGS value for the red box offering was continually reducing. Also, the reduced sales force further reduced the COGS value giving opportunity to increase the value of the product even further. The strategy for this year was not to have a ‘follow the crowd’ mentality with respect to the competition, but create a unique place for the product in the market by offering a service in an avenue that has not yet been properly explored by the competitors. There was no change in the sales force and marketing budget.

Service offerings:

No changes were made in the service offerings this year as we anticipated more potential in the delivery offerings. Also, due to a drastic fall in sales in the previous year, we were working with a very limited budget. An addition in service offerings would mean to reduce either the sales force or the marketing spends which could again affect the total sales in the year.

Delivery offerings:

Dedicated stores were launched this year for the Blue Boxes at the level 3. A competitor, shiny station already had dedicated stores for itself, but their products were priced much higher and this, we felt was where we could establish Blue Box with a unique selling proposition. A decent store with refreshment facilities and comparatively lower priced products than Shiny Station could give Blue Box a push in the market, on which we could consolidate and build upon in the final year. Also, a new distribution pattern was also introduced wherein, the product was displayed in other locations like pubs, sport stores, etc., with trained spokespersons explaining its features. A trial and return offer was also introduced at a low level.

Result: Though still not reaching customer expectations, these new offerings did convert more sales in favour of Blue Box this year. There was a modest surge of sales and interest in the market for Blue Box, which is exactly what the strategy intended to do, especially in tight – budget circumstances.

Encouraged by the slight surge in sales, we decided to continue keeping the price constant and add in more offerings with the product that could attract more customers and consolidate Blue Box’s position on top of the Blue Ocean competitors. There was no major change made in the already existing offerings, and also the sales force and marketing spends remained the same.

Service Offerings:

An Entertainment Assistant offering was added to the Blue Box bundle at level 2. The rationale behind this was that the competition did not yet introduce this feature with any of their products and this addition could greatly benefit the overall offering package of Blue Box.

Delivery Offerings:

The first decision made in the delivery offering section was to finally introduce Deals and Price Promotion packages at the same level as the competitors. A guide to online services was also offered this year to further consolidate on the already prevalent online gaming feature present in the product. We believed that the Deals and Price Promotion offering, prevalent among almost all competing products, coupled with the other new offerings would definitely make the product stand out clearly in the market and push sales to a much higher scale, especially when the price of the product remained the same.

Result: The sales of Blue Box increased to a record 5 year high and consolidating itself as the market leader among other blue ocean products. The final Share Price Index for Blue Buddies at the end of the simulation was 716. The market share by unit was 24% and the market share by value was 21%

Leo Burnett is one of the oldest and most successful ad agencies in the world. Its rise to success was associated with the inherent American and family feeling brought about in its communication, which was not prevalent in ads by other agencies which were making sophisticated and therefore, confusing advertisements that lost hold of the customers. Simplicity, a good understanding of the company – customer relationship that was required to be established and a good imagination, together, brought about some of the most memorable advertising campaigns and icons like the Marlboro Man, Pillsbury Doughboy and Tony the Tiger.

The online advertising space today is the fastest growing medium for brand communication. It is also the easiest medium to target specific customers without incurring large costs with the help of social networking. In Europe and North America, every major advertising campaign is accompanied by a very well designed website containing every detail of the campaign, explaining the significance of the brand communication for the target audience and offering games,attractive prizes and contest opportunities. Examples of such sites are: http://www.nespresso.com/variations/ and the Tippex youtube campaign (http://www.youtube.com/watch?v=4ba1BqJ4S2M). The entire idea of such websites is to engage the customer and give the customer easy tools to share the communication with his friends and colleagues through the digital medium.

In India, there is still a huge fixation on television and print as the biggest advertising media. According to my strategy, Leo Burnett needs to establish a department specifically designed to create and maintain campaign websites for every campaign they undertake before any other established Indian agency does so to gain the first mover advantage and attract more and more brands to the digital medium.

Eliminate: Outsourcing the website design to another web design outfit

Reduce: Reduce cost of hiring new graphic designers by training in – house creative designers

Raise: Quality of internet advertising to international standards

Create: Working conditions and training modules to develop the standards of internet advertising

micromax-mobiles-logo.png

Though the blue ocean strategy to be presented in this assignment can be meant to be used for the Indian cellular phone industry as a whole, the example of the MICROMAX Q55 Bling Phone brand has been used to give clarity and direction to this strategy.

As a brand focussed to create and deliver products that is, at the same time, both innovative and moderately priced, Micromax has rapidly gained popularity and market share in the cluttered Indian cellular market which already include established international brands like Nokia and Motorola, along with many local brands like Maxx mobile and Onida. With a brand promise - “Nothing like anything!”, its products and pricing together aim to ‘bowl over’ the Indian consumer.

The brand has a youthful feel to its communication, though its products are usable by people of all ages. Its product portfolio currently includes –

G4 Gamolution phone

With motion sensor gaming like Wii

X1i Marathon Battery phone

With 30 days standby time & 17 days Talk time

X235 With Universal Remote

Control TV, DVD, AC with your phone

X600 Gravity Sensor Dual SIM phone

Change networks with a flip

Q55 Bling phone

First women’s phone with a swivel form and Swarovski navigation keys

The Q55 Bling is the first mobile phone targeted at the female audience exclusively. Its brand is built on the beauty and exclusivity of the product design. With no other female – exclusive mobile phone present in the current market, Bling has a lot of potential to consolidate its position as the best mobile phone for the ladies.

Women usually have a high independent streak and would prefer owning something that other women do not have. Hence, a device as important as a mobile phone should also reflect this individuality in its features and style. Micromax can exploit this characteristic for Bling by developing customisable mobile phones. Similar to the service Dell provides to its customer, Micromax could allow its customers to customise their Bling to their requirements.

The customisation could range from the features of the phone to its outer design and styling. The features could include selecting applications, games, type of camera and speakers, etc, while the styling lets the customer choose the colour of the phone or even allow putting a picture of their choice on the phone body. Through this, the customer feels the satisfaction of owning a phone exclusively created for her and will also provide an emotional attachment with the phone. The customisation options could be provided on Bling’s website and the completed product could be delivered to the customer’s home. The pricing of the product would depend, naturally, on the extent of customisation.

This concept could later be extended to other products, not necessarily targeted at the female audience. For example, the MTV phone could be another product on which customisation could be done. Today’s youth too has a high degree of individuality and this again can be leveraged on a brand that has always been representing youth – MTV.

This product may have a high aspirational value attached to it, and hence, care should be taken to see that the product is affordable as Micromax is all about providing innovative mobile solutions to the masses, and hence, it should not enter the niche segment.

Eliminate: Cost of unsold goods are eliminated as the phones are made – to - order. Cost of excess inventory, extra shelf space and an extensive distribution network is also eliminated.

Reduce: In – store personnel can be reduced as most of the orders or customisation is done online or through mail order forms.

Raise: The options and features that can be added to the phone should be increased in order to give the customer a wide range of choices. These features should be raised to a level that the final product is almost unique and the customer finds an emotional connect established with the phone.

Create: A web portal that provides the features with minute details and specifications in order to guide the customer to exactly what he / she wants the phone to be like. A home delivery service can also be added to eliminate the need of the customer getting out of home to buy a cell phone.

Though customisation is an old concept, its utilisation in mobile phones could open up a whole new blue ocean especially with the 3G spectrum opening up in India with the falling price of cellular communication. Customisation, I believe, would be a very unique way for driving saliency and preference to a mobile phone.

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Current Practice In Golden Sands Resort Penang Marketing Essay

Golden Sands Resort Penang by Shangri-la is Penang’s top family deluxe resort. It situated along the coastline of Batu Ferringhi, a tourist destination, famous for its beautiful beaches offering rice stretches of glittering sand and calm sea. In the year of 2009, Golden Sands Resort, Penang has achieved the “Best Family Holiday / Resort Excellence Award" from Expatriate Lifestyle and "The Best of Malaysia Awards”.

The resort has 387 luxuriously furnished rooms and suites from a range of six categories of rooms. Every single category of room has an additional family version of it. Two categories of the rooms are the Superior Hillview and Superior Hillview Family Combo, Deluxe Seafacing and Deluxe Seafacing Family Combo. The resort is also home to the biggest contemporary family-sized rooms for a resort of its class, the six 'Family Combo' consists of two interconnecting rooms which can simply accommodate up to six guests.

A large lush of greens occupies garden area, making this resort a tropical paradise for travelers and families. There are 2 restaurants and 2 lounges where guests can satisfy their gastronomical needs. The Garden Café is the resort’s open-air coffee house which serves international and local cuisine. Sigi’s Bar and Grill on the Beach is the resort’s family-style restaurant situated on the beach of Batu Ferringhi. It has a wood fire pizza oven and an open BBQ grill kitchen. The Cool Lounge, covered by floor to ceiling glass panels, serves light snacks while the Lobby Lounge allows guests to relax in a contemporary environment with a range of refreshing beverages and light snacks.

A wide range of facilities is available to both its young and adult guests. The resort provides enjoyable recreation facilities including 3 swimming pools, water sports, tennis courts and a Par 3 golf course. The fitness center allows guests to overlook the garden area and pool while carrying their work out sessions. The resort has a “Dive in Movie” night where guests will watch a movie while soaking themselves in the swimming pool. Team building activities can also be carried out in the resort. Dragon boat racing, beach volleyball tournaments and exciting water sport are a few of the many team building activities offered by the resort.

The Adventure Zone is a one of a kind family entertainment center for not only toddlers and children, but adults as well. The highlight of the center is the Drop Slides which are custom made and comply with the safety standards. Guests can also have fun in the arcade center and in the Game Zone with the Nintendo Wii Game Console. Adventure Zone also hosts birthday parties.

The resort is located approximately only 45 minutes away from the Penang International Airport and 20 minutes away from George Town, a UNESCO World Heritage Site. Guests who arrive by plane can easily hire a taxi or a private limousine which can be found at the arrival halls. To get to George Town, guests can choose to either take the free daily shuttle provided by the resort or hop on a bus from the bus stand located just outside of the resort. During the night, there will be a long stretch of small stalls selling an extensive of goods, from clothes to food to souvenirs.

The resort’s peak season is during the months of June, July and August. These are the months when most of the school students will have their school break. During these months, the resort is occupied with guests from not only Malaysia but from other countries like Australia and Middle East as well. During the year end school holidays which are in November-December, the locals come with their families and crowd this resort. However, the monsoon season in Malaysia, which is around the months of September until November, causes the occupancy rate of the resort decreases. The other low season is during the months of March, April and May.

A market is where a collection of populace including individuals or organizations, have needs for products or services and have the capability, willingness and authority to purchase the products or services. The term target market refers to the particular group of customers at which the resort aims its services and products. There are two types of markets, which are the consumer, where the objective is to consume or benefit but not to make profit, and the organization or business for resale or for direct usage.

The resort’s main target market is leisure travelers from not only from Malaysia but from around the world as well, particularly from Australia, Europe, the Middle East and Japan. Most of the travelers do not travel alone as they travel, either with spouse, family or friends.

There are also many tour groups who stay in this resort, some of which travel under the tour agent Kuoni, Gulliver’s Travels, Thomas Cook and many others. The resort also targets on corporate who want to have conferences in a resort. At times, corporate choose to stay in this resort for conferences and team building activities. Being located along the beach, this resort is an idyllic location for team building activities to be conducted, including dragon boat race, kayaking, and beach volleyball.

Nowadays, many people are looking towards experiencing something new in their lives, whether it is a modified menu in a restaurant, or even a newly built resort in the area of their planned vacation destination. Many individuals yearn for something to be done quickly and seem convenient for them. Most travellers, whether alone or in groups, favour a vacation which allows them to relax and not have to worry about anything. A resort provides a laidback environment for its guests who want to escape from the hustle and bustle of the city or unwind themselves from their hectic job lives or spend valuable entertaining time with their families. Resort guests are usually spending time out of their room for fun activities in the resort area or discovering places nearby. Some prefer to just relax in the resort’s garden or in one of the Food and Beverage outlets. For those who are always occupied with outdoor activities, they will have to find a safe place to keep their belongings and cash seems to be most valuable. At times, one of the individuals of a group will have to be left out from all the fun for taking care of the belongings. Room key cards work fine in numerous hotel environments since the key cards can be easily fit into a wallet. However, in Golden Sands Resort, Penang, the guests do not regularly carry a wallet. At times, large crowd can be seen at the reception area as guests are trying to obtain another replacement for their dysfunctional key card or requesting to exchange currency at the cashier. At the point-of-sales in the food and beverage outlets, guests make payments by cash, credit card, or bill-to-room. There have been incidents whereby wrong postings were made to the wrong room number or the wrong amount has been charged to the guests’ room. To eradicate these issues, a wristband which contains a RFID tag will be implemented. This report will assist in discovering how this implementation will benefit both the resort and its guests. The capability and success of Golden Sands Resort, Penang to retain its market place as a family friendly resort in the very competitive hospitality industry generates my interest to make advancement in serving the guests better and creating a positive unique experience and memories in which the guests will remember for a lifetime.

Upon checking into the resort, each guest will be given a resort key card which will allow them to unlock their room door. The resort key card has replaced metal keys for increased security. This is because, metal keys could be duplicated easily and most of the metal keys had the room number stamped on it making it easy for someone who has found the lost key to enter the room. Resort key cards have no indication of the room number on it. Because of this, anyone who has found the lost card will not be able to know which door the key card will be able to open.

The resort uses the Vingcard lock system. The key card is made of plastic and has a magnetic bar. The magnetic stripe on the resort key card, which is located 0.223 inches (5.56 mm) from the edge of the card, and has a width of 0.375 inches (9.52 mm), can be programmed to store certain information. The difference between a resort key card and any other debit, credit or ATM card is that the information is stored directly and maintained directly on the stripe and is not recovered from a remote database. This magnetic bar is programmed tp store information about the room number, check-in and check-out dates. The main function of the resort key card is that it acts as a key to the door. The key card will need to be inserted in the lock of the door in order to unlock it. The magnetic stripe is read by physical contact and swiping past a magnetic reading head.

Every resort door lock has a precise identity that can only be altered with a special piece of equipment which is directly connected to the door. The card is only valid as a resort key during the time period that it is valid for which is the period from the time when the guest checks in until the standard check-out time which is at 12pm, on the date that the guest checks out. The key card will not work after its expiration date and will not be able to open the room door. It is almost impossible to amend the settings of the key card using a regular reader or writer as the settings are secured with cryptographic method like encryption. The door reader works by reading the code from the card and can only be unlocked if it retrievers the right code. If a guest losses the card, an entire new key, with an altered code than the one encoded on the lost key, is formed for each room with every change of guest. The codes programmed from the previous use are deleted by the computer and restored with a new pattern which is also transmitted electronically to the room lock.

The plastic resort key cards that are found today at resorts and resorts have developed from the old and plain conventional white plastic format. These key cards now come in an extensive assortment of unique colours and designs.

When a guest decides to leave the resort compound to spend their day in the surrounding area, guests can choose to keep the key card with them or leave the key card in the reception. If a guest chooses to leave the card in the reception, the guests do not have to worry about misplacing the key card outside the resort.

In food and beverage outlets, payments are made by cash, credit card or bill to room. Payments by cash or credit card are settled right on the spot. For bill-to-room method, guests are required to provide their room number to the cashier and sign on the bill. The system used in the food and beverage outlets is the MICROS RES point-of-sale system.

Resort key cards are more secure than the previously key system which is the metal key system. When a guest losses the key card, the guest do not have to worry about the fact that someone might enter their room. The room number of the key card cannot be identified, making them anonymous, as key cards do not have any visible identification on it whereas the old metal key had the room number stamped on it. It is also more lightweight and can be easily kept in the wallet or pocket.

The change of code on the key card can be easily done. Hence, once a key card is lost, it will no longer be valid when its loss is reported and a new key card is made. Once a guest checks out from the resort, the key card will not be able to function anymore. This is because whenever the card expires, which is the date that the guest checks out, the code on the card will not be valid anymore.

When there is an incident of either a break-in or a security issue, the resort is able to perform a lock examination. The activity of the opening of the room door monitored and can be traced. A report will be generated according to that specific lock and the resort will be able to indentify the exact keys which have been in that lock and the time of usage. The maintenance and housekeeping staff who own master keys, will also appear in the report.

When a guest reports that the belongings in the room have been stolen after having their room cleaned, the case might be solved by tracing whose key has been used to open up the door and the time of entry and exit.

A resort key card is coloured and has its own design, which makes every resort key card to be different from one resort to another. The resort can include its logo, and have its own identity associated with the key card. The resort key card is also user friendly. This is because; the back of the key card is imprinted with simple instructions on proper usage and it is so easy to use. There’s also images which informs guests on the way to insert the key card into the lock on the door to have it unlocked. Guests will only need to swipe the key card by inserting the card into the small opening on the door lock and turn the door knob when the small light blinks as green.

Whereas, for the payment system in the food and beverage outlets of the resort, the cash, credit card or bill-to-room method, the cashier will have a familiarity with the current system as it has been used for a long period.

Resort guests are always on the move and spending enjoyable time out of their rooms. Guests are seen spending most of their time around laying under the sun in the garden area, taking a dip in the swimming pool, satisfying their taste buds in the restaurants or having fun undergoing recreational activities around the beach area. Guests have the hassle to find a safe place to keep their belongings when they are doing some activities. In this case, the two most important possessions are resort key card and most importantly, cash. It will be an inconvenience for them to have something stored in their pockets while having fun as they will need to constantly check if their belongings are still present in their pockets. At times, guests are seen holding their key cards in their hands or placing them on the seating area around the garden when swimming. This result in key cards being forgotten after the guests’ recreational activities, lost or dysfunctional due to being exposed to harsh conditions like sun or beach sand. Since the magnetic stripe of the key card is magnetically charged, the key card will be deactivated due to the disruption of magnetic field if the card is placed near mobile phones or magnets.

The issue of wrong postings of food and beverage charges to room often arises in the resort. Guests occasionally protest that the amount of food and beverage expenses which are charged in their room statement do not telly with the actual amount that they have spent. Another incident which occurs is that wrong postings have been made to the wrong room number.

Room key cards are made from plastic which makes them the least environmentally friendly. The room key cards are being frequently disposed when they are physically damaged or lost its functionality. The key cards are also often being misplaced and lost. Plastic requires hundreds of years to biodegrade (dissolve effortlessly in the environment without destroying nature)

The room key card is used in almost every single hotel or resort in the market. Therefore, false rumours from any part of the world about the type of information which is stored in the key card cause doubts from guests on the security of the room key cards. There have been claims that the room key card is encoded with guests’ personal information, including the credit card number. Rumours claim that details such as the guest’s name, address, room number and credit card number and expiration date of credit card are programmed into the key card. Some believe that the resort employee are able to access the information by taking a few key cards home and obtain the information using a scanning device or a card reader. It is said that the hotel or resort do not remove these information on the key card until the card is encoded for the usage of the next guest who checks into the resort.

Customer experience is the total of each and every experience that a client goes through with a merchant of goods or services, during the period of the customer’s relationship with that particular supplier. As we have progressed into the 21st century, consumers are not looking back to the decade of 2000 but are now always on the look-out for something new and dynamic. People want to be adventurous and would travel hundreds or thousands of miles just to get to somewhere to experience something new and different. During the first Formula One Grand Prix Race which was held in Singapore for the first time, there were approximately 40 000 tourists who visited Singapore just to experience the Formula One Grand Prix race because it is the one Formula One race which is held during the night.

A recent study by the Cornell University in America exposed that consumers have a preference of experiences rather than products. This shows that resort guests are not paying only for the products (room, amenities, food and beverages) but also for the experiences that they will be able to gain during their entire stay in the resort. Based on the study, experiences are so successful at making people happy because a person truthfully owns the experiences which will be incorporated into a person’s character. Material items can only be possessed and are infrequently become a part of the user in any momentous way.

Consumers are constantly keeping up with the trend and latest technologies. Every now and then, every establishment tries to discover methods to satisfy their customers in every single way possible. An establishment's capability to provide an experience that makes it unique in through judgment of its clientele will be able to profit from the increase of expenses of the client with that particular establishment. This will then encourage loyalty to its brand name.

A superior customer experience is achieved by understanding the customer's point of view. In this today’s modern world and the era of stiff competition between industries, convenience is what encourages clients to carry out business with a particular establishment. Individuals determine or measure the quality of merchandise and services through a company’s willingness to extend convenience to its clients. A company will be able to gain more profit if shopping is made easier for its customers.

RFID was invented in the year of 1969 has given us the ability to cater to our guests in a completely new way, while also allowing us to improve their safety, privacy, and convenience at every turn.

Many resorts are located along the coastline of Batu Ferringhi and each of the resorts are catered to a specific target market.

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Effect Of Counterfeit Branding On Sales Of Edhardy Marketing Essay

This research proposal is objectively aimed at understanding all the hurdles currently experienced by Ed Hardy in expanding their business in India. The business organization with intent to expand in different market entered India in the year 2007 as part of its expansionist policy to explore the commercial viability of the market objectively aiming at high profitability (Khilnani 2009).

In the year 2002, Ed Hardy who initially commenced his career as a tattoo artist entered into an agreement with Ku USA, Inc. to carry out and market a clothing line with the basis of his tattoo art design which was extraordinarily popular in the U.S.A. In a span of just two years, the international corporate giant Saks expressed interest in Ed Hardy clothing line. Hardy and Ku USA created the Hardy Life LLC, an organization possessing trademark ownership in addition to copyrights to all of Ed Hardy’s images.

Christian Audigier entered the Ed Hardy scenario in 2004 gaining rights for the clothing line production based on the artistic designs of Ed Hardy. Ed Hardy in today’s day and age has a commanding global position with outlets in New York, Los Angeles, Seattle, Honolulu, the Gulf Nations and India.

Iconic Brand Group made an acquisition of 50% of shares in Hardy Way, LLc. Iconic Brand Group made a payment of $ 17 million for major share in the Hardy Way as it estimates sales revenue to be to the tune of approximately £110 million by 2011.

Ed Hardy is undoubted recognized as an organization of high repute with its product lines having immense popularity especially among the younger generation. In European nations such as the U.K., U.S, Germany and France, the organization commands a high market share as its varied line of products such as t-shirts, shirts, shoes, belts and deodorants are highly consumed by the consumers. The organization has branches globally and has recently set up branches in India. (Chaudhari 2009)

India as a market is attracting a great number of Multinational as the high populace makes provision for a ready market for the merchandise dispatched for sale. Though Ed Hardy has numerous outlets at strategic consumer locations in India especially Mumbai that is the capital centre of the country, the business is primarily plagues with issues relating to counterfeiting. (Kotler 2007)

This decision for conduct of this research was essentially taken to highlight the issues faced by Ed Hardy. This brand has been a victim to Counterfeit Branding. Counterfeit Branding is highly prevalent in countries like India and China and these results in economic losses to the respective governments by way of taxes and the business are affected in terms of profitability. Ed Hardy T-shirts which are a rage amongst the college-going consumer and young adults commence at a pricing range of approximately Rs 1000 (20 USD) which is relatively on the higher side in terms of pricing. The pricing, though is not directly a contributing factor for the declining sales of the brand, counterfeiting of Ed Hardy products cause a massive impact on the sales and consequently the revenue (Keller 2007).

http://www.bestshoeswomen.com/images_products/Ed_Hardy_Original_Lowrise_100_Women_Shoes_Sneakers.jpg http://www.celebrityclothingline.com/wordpress/wp-content/uploads/2009/12/Ed-Hardy-Tshirt-Beautiful-Ghost-Graphic-Original-62-4499.JPG http://eleven.se/files/w/wallet-black-1_250x250.jpg http://www.funkytrend.com/wp-content/uploads/2009/02/ed-hardy-true-love-belt-thumb.jpg http://www.clothingcheapprice.com/images_products/Ed_Hardy_Emerald_City_Elphaba_Tote.jpg http://www.newwavefragrances.com/images_up/1239994301_art_EH-M-LINESHOT-450x400.jpg

Comparative Analysis of the Ed Hardy’s original and counterfeit products: http://www.revolveclothing.com/Brands.jsp?c=Ed+Hardy&sc=Shoes

Ed Hardy Product Line

Original

£ (Pounds)

Counterfeit

£ (Pounds)

Pricing Difference

£ (Pounds) (Approximately)

T-Shirts

Shirts

Converse Shoes/Heels

Belts

Wallets/Purses

Handbags

265

240

Perfumes

109

Ed Hardy commenced its retail chain at Mumbai, India in 2007 and has in continuity reported declining sales for the last three financial years citing counterfeiting issues as the primary reason for the failure of the brand to succeed in the Indian market. There is a huge pricing difference between the original and counterfeit product leading prospective consumers to continue the purchase of counterfeit products. The counterfeit products are reported almost similar to the original in terms of design, dimensions and labeling but lacks quality of the original yet it this factor does not prove to be discouraging for consumer who continue to patronize counterfeit Ed Hardy products. Ed Hardy, Nike, Rolex, Louis Vuitton, Dior, Yves St Laurent, Prada, Hermes and Cartier are generally the brands that are highly counterfeited. These brands have not reported higher profits in the last several years. (Simon 2005)

Year

Sales Revenue (Pounds)

2007

40 million pounds

2008

28 million pounds

2009

10 million pounds

The above table is clearly indicative of a constant and steady decline in the sales of the Ed Hardy Mumbai Outlet wherein at the first year of establishment of the outlet the reported sales was at 40 million pounds which declined to 28 million pounds and finally to 10 million pounds in the accounting year of 2009 (Kumar 2009).

Anti-counterfeiting laws and legislations though in existence have not been strictly imposed. The ACTA Act which is an Anti-Counterfeiting Trade Agreement Act between global trading nations of the world such as U.S.A. , U.K., Japan, France, India and many Asian countries has been ineffective in reducing if not totally eliminating the production and sale of counterfeit products. Counterfeit products in India are a booming industry which is crippling the economy and business ventures of especially fashion brands such as Ed Hardy. The Indian Judicial System is not as stringent and enforceable as the European counterparts. Strict punitive action is not taken against individual or firms indulging in counterfeiting reputed brands and hence this activity continues to flourish cause huge financial losses for organizations such as Ed Hardy and many more that have invested highly in the Indian market in terms of setting up retail outlets, promotion and advertising and all related expenditure. (Hakan 2009)

At times there have been recorded cases of legal action taken against offenders who are let off after an imposition of a penalty charge which is very minimalistic defeating the very purpose of the exercise. (Nayadu 2009)

India is generally characterized as a cost conscious economy with the general tendency of the consumers to buy or patronize products which are specifically low on cost. Quality of the product is a second consideration after the pricing factor of the product. Hence, international fashion brands such as Ed Hardy target a certain market segment which is the upper middle class wherein affordability of the product does not pose a problematic issue. This results in a narrowed target market segment. This segment would have issues in buying the high priced Ed Hardy product but with counterfeit Ed Hardy products flooding the market, the credibility of the original product is at stake as its exclusiveness is lost in the market of this product. The consumers that cannot afford the original product line of Ed Hardy turn to counterfeit substitutes to gain satisfaction of possessing the product and this has a negative effect on the limited market segment consumers of Ed Hardy as the novelty of the product is lost. (Puri 2009)

Besides high level counterfeiting of Ed Hardy product, the business House faces severe competition from other popular and well established brands such as Levis, Spykar, Adidas, Nike, Louis Phillip and many more that entered the Indian Market several years ago and have successfully gained good market prominence. These brands are well aware of the price conscious mentality of the Indian consumer and constantly indulge in competitive pricing strategies and promotional techniques to increase sales and subsequent profitability. Ed Hardy being relatively new in the Indian Market Scenario is hence confronted with hurdles in this form of excess competition thereby retarding growth and progress in the process. (Armstrong 2005)

The Government of India taxation policies toward FDI (Foreign Direct Investment) especially of luxury brands is comparatively and competitively high thereby creating a need for such multinational business organizations such as Ed Hardy to have higher sales to sustain themselves in the Indian market and grow simultaneously. The taxation rates of such brands amount to 40% of the product price which is ultimately borne by the consumer. Such taxation policies towards fashion brands are imposed with the intention to protect local and national entrepreneurs and their businesses form highly popular reputed brands such as Ed Hardy that command a high percentage of clientele globally.

This taxation policy of the Government of India has proven to be a deterrent factor contributing to slack in growth for Ed Hardy. (Keegan 2002)

To understand the obstacles faced by Ed Hardy and strategize ways to counter attack these problems

To identify the hurdles confronted by the Fashion Brand Ed Hardy in business expansion in the Indian Market

To ascertain if the business house been in a progressive state post-commencement in India

To establish what the future business prospects of the organization are

To gain knowledge if the Indian business market scene too competitive for the survival of Ed Hardy

To analyze if the Indian business market scene too competitive for the survival of Ed Hardy

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