Services Marketing - Case of Paul Smith - Essay Example

?Services Marketing. Case of "Paul Smith" Table of Contents Introduction 3 Fashion Retail Sector of the United Kingdom 4 The Size and Competitive Structure of Fashion Retail Sector 5 Opportunities and Threats Prevailing for Paul Smith in the UK Fashion Retail Sector 7 Opportunities 8 Major Threats 9 Commonalities and Differences between the Current Service Marketing Strategies of the Major Players in the Fashion Retail Sector 10 Identification of the Organisation’s Key Strategic Service Marketing Issues for the Next 5 Years 12 The Relationship between Customer Relationship with Relevant Service Marketing Theory 14 Conclusion 15 References 16 Introduction In keeping with the rapid growth of modern business scenario, services marketing can be observed as one of the leading elements, which considerably provides immense support for the global marketers. Service industry extensively involves those organisations which deal with services or in various scenarios the services are often regarded as the core products of these organisations. Services as the core products represent a wide series of intangible elements for which the consumers render considerable value within the marketplace (Fashion United Group, 2009). From this perspective, the paper intends to relate the concept of services marketing with Paul Smith, one of the leading fashion retails based in the United Kingdom. The fashion retail unit was started by Paul Smith, a UK based fashion designer. In the year 1970, in Nottingham, Paul Smith started a boutique with small portion of his savings. By the year 1976, in Paris, Paul Smith brought in his inaugural menswear collection, which was rendered within the label of Paul Smith. Since then, in a long-standing successful tradition the company along with Paul Smith have placed themselves as among the eminent British retailers and fashion designers. Global collection of the company is presently wholesaled to around 66 nations. In the UK, there are 17 shops rendering Paul Smith collection (Paul Smith, 2012). In relation to Paul Smith, the identified strategic service marketing issues comprise ensuring effective customer relationship and loyalty, insecurity of the potential customers and uncertainties emerging due to the trend of fast fashion among others. The discussion will encompass an assessment of the fashion retail sector in terms of its size and competitive structure. The assessment will also encompass the opportunities and threats which can severely impact on the activities of Paul Smith. Moreover, the discussion will further involve summarising the commonalities and differences between the present services marketing strategies of the major players in the fashion retail sector. Identification of the organisation’s key strategic services marketing issues for the next five years will be portrayed within the analysis of the paper. In addition, the paper will also demonstrate the relationship among the issues affecting services marketing strategies. Fashion Retail Sector of the United Kingdom The fashion retail sector in the UK can be regarded as one of the major industrial sectors, which has encompassed rapid and continuous growth by a considerable extent. It can be observed from the assessment of past few years that the global retail sector is considerably shaping an independent and successful position through well build business strategies including sales and marketing, innovation and effective business policies. According to the present performance of the fashion retail sector in the UK market, it can be observed to have acquired a large amount of consumer preferences and expenditures through delivering exceptionally manufactured of textiles, clothing along with footwear and leather items. The steady growth in the fashion retail sector can be identified to have taken place due to cutting-edge innovation of products along with effective and convenient supply chain management of the service rendering companies which considerable play major roles within the industry. Moreover, the fashion retail sector also witnessed increasing growth through providing clothing, textile and footwear products for women, men and children. Furthermore, the fashion accessories are also a considerable element in the fashion retail sector which has attained a significant growth in the UK market (British Fashion Council, 2012). From the perspective of the present condition of fashion retail sector in the UK, it can be observed that the industry had garnered €59 billion of total consumer spending in the year 2009. The consumers in the UK spent around €900 in consuming fashion products per year (Fashion United Group, 2009). Moreover, the fashion retail sector of the UK also creates sustained employment opportunities in its various retail segments including clothing, textile as well as footwear products. According to the present day context, the industry involves around 435,000 active employees across the different segments of the fashion retail sector in the UK (Fashion United Group, 2009). The Size and Competitive Structure of Fashion Retail Sector According to the characteristics of the UK retail market, it can be observed that there are a number of distinctive features which have considerably influenced the evolution of the overall retail industry during the last 20 years. These evolutionary changes depict a major contrast with the traditional patterns which had been observed in the UK fashion retail industry (British Fashion Council, 2012). In the context of the UK retail sector, the industry has emerged to be a major contributor to the economy through contributing 16% of total Gross Domestic Product (GDP) which is worth around GBP 150 billion as of the year 2010. The UK retail industry is quite influential and is an enormous sector which contains different channels of distribution including entrepreneurial businesses, franchised stores and online stores among others (Burt & et. al., 2010). In order to clearly identify the size and structure of the UK fashion retail sector, the study of British Fashion Council (BFC) will be more beneficial which provides adequate evidence to recognise the present size and growth of the UK retail industry. According to BFC, the UK fashion retail segment has considerably extended in terms of its size and structure which plays an effective role towards the country’s economic growth. The fashion retail industry significantly encompasses various segments including women’s wear, menswear, footwear, lingerie items, jewellery and watches, bags and luggage, hair products, perfume and cosmetics as well as children clothing products. Moreover, the competitive UK fashion retail industry involves a number of highly eminent organisations which have exceedingly focused on manufacturing high-street fashion products targeting both national and global consumers (British Fashion Council, 2012). At present, the phenomena of fast-fashion as well as disposable clothing have been playing crucial roles for the modern day fashion retailers, which facilitate to boost the sales of fashionable products. Predominantly, the phenomena are quite prevalent in the UK fashion retail sector and have been acting as an influencing aspect for enhancing the growth in the women’s clothing sector. With this concern, it can be recognized that the fast-fashion trends in the fashion industry radically focus on women’s wears and accessories which can further observed to be interchangeable than men’s products (Key Note Limited, 2012). Opportunities and Threats Prevailing for Paul Smith in the UK Fashion Retail Sector Paul Smith is one of the renowned fashion retailing companies which has significantly focused towards promoting unmistakeable Englishness through its range of fashionable products. The organisation involves 14 different collections of offerings which are distributed through different channels including Paul Smith stores, Paul Smith flagship stores as well as Paul Smith franchise shops across 66 nations of the world along with operating 17 fashion retail shop in England. It renders major opportunity for the company. Moreover, the organisation also has its online shop which is one of the preferred aspects for the modern consumers in terms of purchasing any product or service. The stores of the organisation reflect the personality and nature of its founder Paul Smith and his innovative designs. The organisation has established its global position through delivering exceptional experience of British culture throughout its each product. The products of the organisation are manufactured primarily in the England and Italy as well as distributed to its different selling points located across in different regions (Paul Smith, 2012). The major opportunities for Paul Smith in the UK fashion retail sector emanate from incomparable product design and quality, brilliant presentation of the products along with exceptional online business which are its major competitive advantages in the global fashion retail industry. Therefore, the organisation ensures to attain feasible opportunity in the global market through implementing its core business policies of focusing on exceptional collection of high-street fashionable products (Apax Partners, 2011). Opportunities Global Fashion Trends From the perspective of the present trends in the fashion retail segment, the customers are highly focused towards prioritising on the aspect exceptional presentation of the products through incorporating new designs. Moreover, the customers of developed countries prefer high-street fashionable products which also reflect their cultural involvement with the products. Therefore, there are opportunities for Paul Smith’s fashionable products to attain large numbers of consumer preferences with the virtue of quality products which shall be distributed through high street fashion merchandises in the UK and aboard. In recent times, substantial growth has been observed in the women related fashion product sector which is one of the largest sectors in terms of high sales of merchandises. It ensures a significant opportunity for Paul Smith as it possesses a large collection women related fashion merchandises and accessories (Apax Partners, 2011). Emerging Global Retail Industry The emerging growth of global retail industry can also be stated as one of the major opportunities for Paul Smith to achieve substantial benefits. In keeping with the present day context, the global retail sector for fashionable products is considerably providing ample opportunities for the marketers. The global fashion and apparel industry is expected to increase its growth to € 1.1 trillion by the year of 2020 due to a rapid successful development of the sector. The emerging financial growth will fuel the rapid increasing performance of the fashion retailing sector. Moreover, the global retail market in the recent years has demonstrated a paradigm shift which is significantly leaning towards product differentiation strategy to capture a broad customer base. Therefore, the steady growth of the retail sector is further beneficial for Paul Smith to sustain its position in the global fashion retail market (Technopak Advisors Pvt. Ltd., n.d.). Increasing Demand for Online Shopping An immense growth in terms of technological advancements has resulted in rapid growth of online business. The customers’ buying decisions are progressively being made in computer-based surroundings. E-commerce or web-based stores present buyers with massive variety of offerings along with a great convenience. According to the present developed scenario in the fashion retail segment, the online sources of transactions of the organisations are highly utilised by the modern consumers in terms of purchasing any fashion product (Punj, n.d.). The online retailing service of Paul Smith is a major strength for the organisation in terms of performing its global fashion retailing operations. The online retailing concept of the organisation extensively provides efficient facilities to the global consumers to select their appropriate choice(s) from a large number of fashionable products (Paul Smith, 2012). Major Threats Increasing Competition From the perspective of considering the major threats of Paul Smith, the global fashion retail competitors and their prevailing products and services can be identified to be the major threat for the organisation. In the UK, there are a large number of retail brands which considerably deliver fashionable products to the customers. A few of the major competitors of Paul Smith in the UK market are Vivienne Westwood, Burberry and Mulberry and Stella McCartney which also provide a range of designer products to the global consumers. Moreover, the other global brands such as Gucci, Armani and Louis Vuitton which also provide fashionable products and apparels in the UK market can be recognised as a major threat for Paul Smith to achieve competitive advantage in the UK fashion retail sector (British Fashion Council, 2012). Unstable Position of the Global Economy The unpredictability aspect of the global economy can also impact on the overall performance of Paul Smith to practice its fashion retail business operations. According to the present day context, the organisation has been witnessed to achieve steady growth in the global markets. However, Paul Smith is also facing significant challenges due to unstable economic development of the host countries. For instance, the organisation has been observed to face significant challenges in the Asia Pacific regions due to the unstable economic scenarios of the countries in the region (A.T. Kearney, 2012). Commonalities and Differences between the Current Service Marketing Strategies of the Major Players in the Fashion Retail Sector The current major players engaged in rendering services in the fashion retail industry of the UK include Paul Smith, Marks and Spencer, French Connection UK, Montblanc, Burberry and Dorothy Perkins among others. These organisations have adopted various common strategies on one hand while on the other hand they have also implemented strategies as opposed to their competitors (Robert, 2012.) The fashion retail industry in the UK is constantly booming. Customers’ tastes as well as preferences are continuously changing with the passage of times. Consequently, organisations involved in offering various products have been constantly altering their strategies in order to meet the changing demand patterns of the large customers. The strategies of Paul Smith revolve around providing durable as well as luxury products to its discriminating customers. The organisation offers wide range of products at attractive prices to retain its customers and attract potential customer segments for its range of fashionable products. At the same time, the organisation involves in strengthening its brand image. Moreover, the strategies of Paul Smith essentially emphasize on product designing and further intend to use fabrics and colours that give wearer an elegant look. It is worth mentioning that despite the enhanced quality of products offered by the organisation the price of its products are much affordable than its competitors price. Being in the fashion retail industry, the company accounts cautiously the seasonal factor and directs its strategies accordingly in order to meet its customers demand efficiently and sustain its business profitability (Meemi Ltd., 2013). As stated earlier, fashion retail industry is highly dynamic. Contextually, the products that are designed and offered to customers often tend to get obsolete quickly. Consequently, Paul Smith significantly focuses its strategies towards the selection of colour, style and fabrics. Furthermore, the company also undertakes certain offers and discounts in order to remain viable in the marketplace (Meemi Ltd., 2013). On the other hand, its competitors as stated above make considerable efforts towards consolidating their brand image. Similar to Paul Smith, its competitors operating in the UK marketplace consider seasonal factor to be crucial for framing their strategies. At the same time, both Paul Smith and its competitors recognise the product utility and luxury to be essential components of their strategies. In addition to these, both Paul Smith and its competitors’ strategies are formulated in certain ways that facilitate them in improving organisational relationship with their customers. In the same way, all the major players (including Paul Smith) in the UK fashion retail market intend to offer a large range of versatile products at much affordable price than their competitors in order to attract and retain large customer base (Karra, 2008). Eventually, all the major players in the UK are rapidly involving through digitalization of their business. While on the other hand, there also exist certain variations in strategies of Paul Smith and its major competitors. In this regard, other competitors of Paul Smith are extensively involved in promoting their products. Conversely, Paul Smith places less priority on product promotion than its major competitors. Thus, it can be stated that the major players in the UK fashion industry bear more commonalities in their strategies than variations. Identification of the Organisation’s Key Strategic Service Marketing Issues for the Next 5 Years The strategic service marketing concept provides immense advantages to the organisations to achieve substantial growth in the highly competitive market. Therefore, a strategic marketing plan is an effective set of practices for an organization to generate value to the customers along with ensuring proper communication and delivery of the products and/or services. The process also ensures to maintain feasible relationship with the clients in ways that offer profit assistance for both the organization and its stakeholders. However, the service marketing sector can be affected by certain possible problems concerning the service deliverance of the organisation (Lovelock & et. al., 2007). Therefore, the following factors can be determined as the major strategic issues for Paul Smith for the next five years. Impact of Fast Fashion The fashion retail industry highly faces the risk of rapid changes in design of the fashion brands and products. In keeping with the increasing competition of the fashion retail industry, the organisations are frequently facing turbulent conditions due to rapid changes in the fashion products and accessories. Therefore, it can be a major threat for Paul Smith to offer its fashionable products to its range of customers. With this concern, the organisation must need to practice an effective strategy of designing as well as manufacturing of the products in order to mitigate the possible risks from the fast fashion products (Hines & Bruce, 2007). Issue Concerning Insecurity of the Potential Customer This type of issue can be caused primarily due to the intangible nature of the services provided by the organisation i.e. Paul Smith which can result in creating quality related issue of the products. Therefore, in order to mitigate such issues, the business strategy of Paul Smith will have to be focused on ensuring potential security to each customer in terms of purchasing any products from the organisation. Moreover, the value derived from adequate feedbacks related to the product design and quality will further facilitate to enhance potential customers’ satisfaction level (Hines & Bruce, 2007). Issue Concerning Consumer Relationship and Loyalty Consumer relation and loyalty is one of the major concerning factors for any service providing organisation to achieve sustainable position in the global market. It facilitates the organisation to attain substantial value of the customers along with ensuring customer retention with the organisational offerings. In the context of service marketing strategies of Paul Smith, it needs to be focused on retaining each customer of the organisation to stay allied with the fashionable products offered by the organisation. Moreover, the strategy of retaining customer will further ensure to enhance customer loyalty so that competitive advantage can be ascertained in the global fashion retail industry (Lovelock & et. al., 2007). The Relationship between Customer Relationship with Relevant Service Marketing Theory The notion of service marketing highly necessitates upholding consumer relationship on a sustained basis through providing various beneficial activities or services to the customers. However, building an effective relationship at times becomes a major challenge for the organisations such as Paul Smith as the company has a large number of its buyers who interact with the organisation’s activities through various ways including face-to-face conversation, email as well as websites along with online service centres. An effective Customer Relationship Management (CRM) system of an organisation provides efficient support to the managers in order to recognise and understand the needs and the desires of their customers and subsequently tailor proficient requisite services. Moreover, an effective practice of building customer relationship further supports the organisation to enhance customer loyalty. Customer loyalty is one of the major elements for any service providing company to achieve substantial profits as well as it also provides efficient support to attain long-term sustainability (Lovelock & et. al., 2007). Conclusion From the entire discussion, it can be recognised that the prevailing market opportunities in the UK fashion retail market can be characterised into various factors. A few of the major influential opportunities include emerging development of fashion retail industry and extended level online shopping activities which are significantly identified to be the crucial factors for Paul Smith to achieve competitive advantage and sustainable position in the UK fashion retail sector. The observed continuous changes in the global fashion retail scenario are considerably creating different challenges for the organisation which can drastically affect the performance of Paul Smith. Therefore, a continuous progression in terms of business strategies and advanced designing of the fashion merchandises and accessories can play a major role to reduce potential risks for the organisation. Moreover, the organisation should also aim to focus on its global expansion initiatives to reduce possible risks that might arise in its local market of operations i.e. the UK market. With this concern, Paul Smith should increase the number of its fashion stores through its global retail chains which further can help the organisation to ascertain long-term benefits within the specified industry. In addition, an effective model of online shopping can also be regarded as an increasing opportunity for Paul Smith to achieve competitive advantage in the global fashion retail industry. References A.T. Kearney, 2012. Global Retail Expansion: Keeps on Moving. 2012 Global Retail Development Index. [Online] Available at: http://www.atkearney.com/consumer-products-retail/global-retail-development-index/full-report/-/asset_publisher/oPFrGkbIkz0Q/content/global-retail-development-index/10192 [Accessed January 02, 2013]. Apax Partners, 2011. Global Opportunities in Fashion Retail. Global Fashion Trends. [Online] Available at: http://www.apax.com/media/200146/Global%20Opportunities%20in%20Fashion%20Retail%202011.pdf [Accessed January 02, 2013]. British Fashion Council, 2012. 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