Key Strategic Service Marketing Issues - Coursework Example

Individual Assignment Table of Contents Introduction and problem definition 3 Originality and appropriateness of UK fashion retailing sector by size and competitive structure (DRETS Analysis) 4 Breath and quality of opportunity/threat analysis 6 Service marketing strategies commonalities and differences among major players 7 Key strategic service marketing issues for the next 5 years 9 Ability to solve company’s problems based on relevant services marketing literature 11 Conclusion and recommendations 13 References 16 Appendices 18 Introduction and problem definition The fashion industry of United Kingdom can be characterized by the broad segments of retail and manufacturing, fashion and boundaries within the industry. The market has a highly competitive landscape with the major players being Marks and Spencer, Next Plc, Primark Stores, Arcadia Group, H&M, Zara, Cruise Fashion, Topshop, Matalan, River Island. The industry is a highly competitive industry where every company is implementing new strategies to take up more market share. The variety in the UK fashion industry is a significant factor that determines the trends and success of the different players in the industry. The UK fashion industry is a $45 billion pound industry which has seen accelerated growth driven by competitiveness. The industry is expected to grow at a high rate over the next few years as consumers become more fashion conscious and as their purchasing power increases. The industry is adopting innovative techniques like digital marketing with the changes in the evolving customer behaviour scenarios. The highly competitive nature of the industry is increased by the increased global expansion processes of different international fashion retail companies. The market of UK is considered as a market with high potential and has been a preferred market for different multinationals for expanding their business into. The industry is a highly concentrated sector with major influence of the large businesses in organizational terms. The sector is dominated by large international fashion retail businesses. London is the largest contributor of revenues for the fashion retailing industry of United Kingdom. UK fashion retailing is a significant driver of the global economy. Originality and appropriateness of UK fashion retailing sector by size and competitive structure (DRETS Analysis) Demographic Demographic factors are major indicators of expenditure as it has been observed that expenditure decreases with the increase in age of the consumer group. It is observed that the young age group is more fashion conscious and tends to spend more on fashion retail whereas the higher age group tend to spend lesser on the fashion retail and are more focused on spending in traditional brands. Fashion consciousness is more observed in the young age groups as well as the fashion conscious parents who buy apparels and accessories for their children (Burts and Sparks, 2003, p.4). Regulatory The international trade agreements like the Economic Union Quotas; Multi-fibre agreement has been incorporated to facilitate the growth of the UK fashion retailing industry. The government focuses on supporting and encouraging the growth of the industry as it is a major contributor to the economy of United Kingdom (UK Trade and Investment, 2012, pp.7-9). The regulatory policies include planning regulations that provide for new locations suitable for fashion retailing. The political framework of UK is highly focused on campaigns against the exploitation of cheap labour. The regulatory policies include provisions to eliminate sweatshops, child labour and on enforcing the worker’s right which are applicable to the fashion retail industry as well. Economic The increase in VAT and the characteristics of the UK industry to offshore their production activities have caused a decline in the economy of UK. The economy helps in boosting the impact of the large businesses rather than the small business enterprises within the fashion retailing industry. Expenditure on the fashion apparels and accessories remain stable and constant irrespective of the level of income (Douglas and Cohen, 2004, p.67). Technological The boom of digital marketing and electronic commerce has influenced the use of high end technology within the UK fashion retailing industry. The industry has become more dependent on the use of internet as an effective medium of promotion as well as selling. Customized tailoring is a technological concept that has been adapted by various companies in the fashion retailing industry to encourage the growth of the online marketing through the assurance of good fitting for the customers. Social The social structure of UK is evolving with changes in the lifestyle patterns of the consumers. The social network and the friends of an individual are critical in deciding the retail purchase behaviour of the individual. The increasing focus on the different sections of the garment retailing including leisurewear, accessories, sportswear etc. influences the shift of the industry from standardization to customization according to the needs of the customer groups. The customers prefer to buy from different brands to complete their outfit rather than purchasing from a single shop. The increase in purchasing power and the change in buying patterns influence the purchasing behaviour of the customers. Breath and quality of opportunity/threat analysis The key trends driving the UK fashion retailing industry are fluctuation in exchange rates, Recession, trends of eco-fashion, digital marketing and online retail, aging population and the changing attitude of males towards fashion. The sector experiences a number of opportunities with the evolving trends of globalization and the boom of electronic commerce. Online retailing is the biggest opportunity for the UK fashion retailing industry. The shop in shop facilities are another source of opportunity for the fashion retail businesses. The increasing interest of the consumers towards buying branded retail garments especially from the UK high street fashion brands is an opportunity for the different companies in this industry. The increasing number of competitors entering into the United Kingdom market poses as a threat for the existing companies in the market (Richardson, 2010, p.410-412) . Diversification, vertical and horizontal integration are the key strategies that can boost the United Kingdom fashion retailing sector. The United Kingdom fashion retailing market is already highly concentrated. Also, the barrier to entry in this market is low as the supplier and customer base is very wide. The high potential of the United Kingdom makes it the most desired location for the companies to expand their business. As such, the industry experiences as high level of foreign direct investments and is enormously affected during the economic downturns. Then factors of shifting consumer expectations and polarisation of demands are other threats faced by the industry. The pressure of increasing costs of manufacturing and store maintenance and the decreasing prices of the products are posing as major problems of the United Kingdom fashion retail industry. Service marketing strategies commonalities and differences among major players Service marketing can be considered as a particular field of marketing that used to cover the marketing strategy and activities of both products and services. It is true that UK fashion retail industry has become highly competitive as well as saturated due to intense market competition and growing customers demand. There are several leading organizations in this UK fashion retail industry are competing with each other in order to increase the market share and develop potential client base. It is true that several organizations are trying to implement unique business operation strategies in order to meet the market demand and satisfaction level of the target customers. Marks and Spencer, Next Plc, Primark Stores, Arcadia Group, H&M are the leading retail chains within the UK fashion retail industry. These organizations are constantly implementing unique and differentiated service marketing strategies in the business operation processes in order to meet the satisfaction level of the target customers. Three Ps are highly important in the service marketing. These three Ps stand for people, process and physical evidence (Figure 1). The organizations generally try to ensure effective customer service through the adoption and implementation of effective service marketing strategies. Physical evidence is one of the key service marketing strategies that help the organizations to ensure effective intangible customer service. Effective and similar physical evidence help the customers to increase the familiarity about a brand that is highly important in this UK fashion retail industry. Each and every leading fashion retail organization tries to invest heavily in the interior design to enhance memorable customer experience. These unique and similar decorations throughout the retail stores in different parts of the country as well as globe help the organizations to provide unique and tangible experience to the customers. Therefore, it can be stated that all the fashion retail organizations within UK fashion retail industry implement effective service marketing strategies to strengthen the physical evidence aspect. However, the service marketing strategy used to vary from a fashion retail organization to another fashion retail organization based process aspect under service marketing. It is important for several organizations within the industry to enhance effective customer service management process as the demand for quick and efficient customer service has increased among the target customers (Hisrich, 2000, p.59). People can be considered as defining factor in the service delivery process. Different organizations have implemented different strategies. It is true that the leading organizations are trying to capitalize on the potential opportunities that have been developed due to globalization and technological advancement. Marks and Spencer is one of the leading organizations within the industry interns of high profitability and growing market share. The organization has implemented unique online service marketing strategy so that the customers can place and get the order in quick period of time comparing to other competitors. Implementation of ICT, PDA service and advanced navigation system has helped the organization to develop a potential client base by ensuring effective customer service (Onevoiceict, 2011, p.2). Employees are termed as ‘people’ in 3Ps of service marketing and they are the most important assets for an organization. Skills and effectiveness of the employees help the organizations to gain effective competitive advantages. Several organizations used to provide different types of trainings to their employees in order to ensure effective customer service (Pride and Ferrell, 2004, p.77). In addition to this, several organizations adopt different types of engagement programmes in order to meet the developed corporate values and business objectives. However, Marks and Spencer focuses on effective customer service training for the employees. On the other hand, several competitors of Marks and Spencer always try to focus on pricing and quality of the products. It is true that organizations like Arcadia Group faced huge legal issues in workplace performance management problem due to several workplace conflicts. It affected the service marketing strategy development process. However, it is true that organizations like H&M, Marks and Spencer and Next Plc strongly focus on online marketing activities in terms of strategy development process. On the other hand, organizations like Primark Stores, Arcadia Group, Cruise Fashion focus on CRM processes and strategies during the service marketing strategy development processes. Key strategic service marketing issues for the next 5 years Service marketing is becoming one of the important and effective sections in the marketing field. It has been discussed earlier that several leading organizations within the UK fashion retail chain industry are trying to focus on the unique service marketing strategies. Global business environment is becoming highly competitive as well as saturated due to impact of several external environmental factors on the business performance of the organizations. Consumer buying behaviour can become one of the major service marketing issues for the fashion retail organizations in next five years. It is true that several leading organizations are trying to adopt and implement business operation strategies based on the market trend, degree of market competition, impact of external environmental factors and market demand. However, the economic environment in UK has seriously got affected as the economic slowdown affected the purchasing power and disposable income of people in UK (Gronroos, 2007, p.61). Limited purchasing power and low disposable income are the major consequences of global economic recession and UK financial crisis. On the other demand for online shopping is significantly increasing among the people in UK due to busy daily life schedule. Therefore, it can be stated that the traditional definition of shopping activities can be changed in next five years. Therefore, it can be stated that several leading organization can only focus on the development of effective online service marketing strategies in next five years. Marks and Spencer and its core major competitor Next Plc already have implemented online marketing and business operation strategies in the business operation process. The organization always tries to ensure online promotional activities. In addition to this, online order placing, order delivery, follow-up and customer feedback process enhanced the organizations’ customer service management practices. Several organizations are trying to improve service marketing activities based on the feedbacks that gave been received from the customers through online network. The organizations within the industry should try to understand the demand for effective customer service. People generally expect effective customer service from the organizations against their paid money (Shankar, 2002, p.71). Inadequate relationship management of the organization with the potential target customers can be considered as one of the major service marketing issues. People have the option to switch over the brand in terms of poor customer service management process adopted and implemented by an organization. Therefore, it is highly important for an organization to consider this issue. Implementation of change management process during the service marketing strategy development process can hamper the overall workplace environment. On the other hand, inadequate implementation of change management process can create several issues in customer service management process. First of all, it can create several confusions among the customers as well as employees (Bhattacharya, 2009, p.71). It can hamper entire communication process between the customers and organization. Ability to solve company’s problems based on relevant services marketing literature It is clear from the above mentioned possibilities that several external and internal factors can create different types of service marketing issues for the organizations within the UK fashion retail chain industry. Therefore, it is important for the organization to avail the ability to solve the service marketing issues. CCDVTP service marketing theory can be considered and applied by several organizations within the UK fashion retail industry in order to adopt the ability to overcome the service marketing issues (Figure 2). CCDVTP model recognized as “create value, communicate value, deliver value and generate profit by providing value added goods and services to the potential target customers”. It has been mentioned earlier that each and every leading organization within the UK fashion retail industry is trying to develop and implement marketing strategies based on the market demand and satisfaction level of the target customers. Intense market competition, market saturation, high market demand for effective customer services and economic downturn are forcing the organizations to develop and implement service marketing strategies. Service marketing has become an important aspect in the field of customer management and marketing. First of all it is important for the organizations in the UK fashion retail industry to develop effective value for the customers. In this modern era of globalization and technological advancement, people are looking for effective customer service rather that quality of goods and services as the organizations in this industry always try to ensure the quality of the products. The values for the customers can be developed by improving the business operation processes. The organization should have the ability to consider and implement effective and advanced technological processes and tools so that people can become more loyal to the brands or the organizations (Gilmore, 2003, p.41). After creating effective value, it is important for the organizations to communicate with the customers so that the organization can enhance effective customer service awareness. For example, Marks and Spencer provided in their company website and in several social media networks that they always try to take care of the satisfaction level of the target customers. In addition to this, high automation in the CRM management process increased the brand image of the organization. The business performance of several organizations in this present era of technological advancement used to differ from an organization to another considering effective customer service management processes and activities. In the communication process the organizations within the UK fashion retail industry should have the ability to develop and practice aggressive and unique promotional activities (Vargo, 2004, p.43). These promotional activities will help the organizations to communicate with the target customers. However, several organizations adopted online business operation strategies. Online promotional activities will; help the management of several UK fashion retail organizations to communicate with the target customers regarding the created value. Customer relationship management has become one of the important management and integrated marketing tools in the service providing and product manufacturing organizations that helps to the organization to determine the market demand and needs of target customers. The retail organizations should have the ability to integrate unique manual process or advanced technological tools in the customer relationship management in order to develop a potential client based inside or outside the country. Again the example of Primark Stores can be considered in this aspect. The organization has installed big data software in the customer relationship management process as a communication tool to provide effective solutions and responses to the asked quarries or complaints (Gronroos, 1984, p.15). It is important for other organizations in this industry to consider the significance of the strong CRM tools and processes as it helps to develop potential competitive advantages. Several fashion retail organizations have implemented online business operation processes in order to meet the corporate value i.e. offering goods in quick period of time with great efficiency to the target customers by the implementation of advanced technological processes. Majority of the organizations within the UK fashion retail industry has applied the use of advanced navigation process in the logistics and operation management to deliver the goods within given deadline. On the other hand, implementation of advanced PDA software can help the organizations to reduce the supply chain lead time and high inventory turnover (Strouse, 2004, p.32). Application of these tools and processes will help the organization to deliver the developed corporate values to the end users, such as customers and several valuable business clients. Last but not the least, making profit by ensuring effective customer service is the major objective of any developed service marketing strategy. Sustainability in the business operation process can be considered as one of the major business growth drivers as it helps to attract several key external and internal stakeholders to take interest in the business operation process. Therefore, it is important for the organizations within the UK fashion retail industry to develop effective customer centric service marketing strategies so that the organizations can earn huge profit against the offering of effective customer service management process. Conclusion and recommendations It is clear from above discussion that UK fashion retail industry has become highly competitive as several leading domestic and multinational organizations are operating with each other in this industry. Therefore, the organizations are trying to develop and implement effective business operation strategies in order to increase market share. Service marketing can be considered as an important area in the field of business management and marketing as the people in UK expect effective customer service along with high quality products against paid money. However, leading fashion retail organizations like Marks and Spencer, H&M and Next Plc already have implemented effective business operation strategies in order to enhance effective customer service management process. Adoption and implementation of ICT, PDA service, advanced navigation system and big data software in the customer relationship management process helped to increase the core competency of Marks and Spencer (Technologytaskforce, 2013, p.1). In addition to this, the company always try to maintain effective service marketing mix strategies by ensuring effective physical evidence, process and people strategy. However, recent financial crisis and economic slowdown affected the consumer purchasing power and disposable income of people. Therefore, it is important for the organization to develop and implement effective change management strategies in the service marketing strategy development strategy to avoid the possible service marketing issues in next five years (Zeithaml, 2002, p.6). Moreover, the organizations should have the ability to meet the market demand by developing customer centric service marketing strategies. Following recommendation plans will help the organizations to overcome several external and internal threats that can hamper the business operation processes. First of all, it is highly important for the organizations to develop and implement effective differentiation business level strategies in the business operation processes as the demand for differentiated customer service is significantly increasing among the target customers. The organizations should try to focus on niche market segment by the development differentiated business level strategies. Demand for differentiated goods and services has significantly increased among the target customers due to technological advancements as several organizations are adopting advanced automotive processes in the business operation in order to gain potential competitive advantages. People expect customer service starting from the consumption point to the after sales following up point. Therefore, it is highly important for the organizations to improve the efficiency in the customer relationship management process in order to reduce the degree of intense industry competition. Selection of appropriate promotional media is highly important for the organizations in the UK fashion retail industry. Growth and acceptance of online promotional activities are significantly increasing among the clients and customers as the number of internet and social media user is increasing rapidly day-by-day. Therefore, the leading fashion leading organizations in UK should try to invest highly in the promotional activities about the customer service management processes and activities as it will help the end customers to take interest in the products and services that are offered by the organizations. Last but not the least; it is highly important for the organizations to consider stakeholder engagement aspect in the business operation process as it will help the organization to enhance effective decision making process (Burrow, 2008, p.19). On the other hand, it can help the organizations to avoid several social and legal issues that can affect the brand image and business performance of the organizations within the UK fashion retail industry. References Bhattacharya, C., 2009. Service marketing. London: Routledge. Burrow, J., 2008. Marketing. Stamford: Ceangage Learning. Burts, S. & Sparks, L. 2003. COMPETITIVE ANALYSIS OF THE RETAIL SECTOR IN THE UK. [PDF]. Available at http://www.dti.gov.uk/files/file11029.pdf. [Accessed on 22 January 2014]. Douglas J. G. & Cohen, M. 2004. Consumer Culture: A reference handbook. London: Routledge. Gilmore, A., 2003. Services Marketing and management. London: Sage. Gronroos, C., 1984. A Service Quality model and its marketing implications. European Journal of Marketing, Vol. 23(2), p.15. Gronroos, C., 2007. Service management and Marketing. New Jersey: John Wiley & Sons. Hisrich, R., 2000. Marketing. London: Sage. Onevoiceict., 2011. Accessible information and Communication Technologies. [Pdf]. Available at: . [Accessed on 22 January 2014]. Pride, W., and Ferrell, O., 2004. Marketing. Stamford: Cengage Learning. Richardson, J. 2010.  Vertical Integration and Rapid Response in Fashion Apparel. Journal of Organization Science. Vol. 7(4), p.400-412. Shankar, R., 2002. Services marketing. New Delhi: Excel Books India. Strouse, K., 2004. Customer-centered Telecommunications Services marketing. London: Routledge. Technologytaskforce., 2013. Why accessible technology. [Online]. Available at: http://technologytaskforce.org/why-accessible-technology/. [Accessed on 22 January 2014]. UK Trade and Investment. 2012. UK Retail Industry – International Action Plan. [Online]. Available at http://news.bis.gov.uk/imagelibrary/downloadmedia.ashx?MediaDetailsID=6389. [Accessed on 22 January 2014]. Vargo, S., 2004. The Four Service marketing myths remnants of a good-based manufacturing model. Journal of service research, Vol. 27(1), p.43. Zeithaml, V., 2002. Services Marketing Management. International journal of marketing management, Vol. 13(1), p.6. Appendices Figure 1: 3Ps of Service Marketing Figure 2: CCDVTP Model Read More