Marketing in the United Kingdom - Research Paper Example

ID: International marketing Introduction about the UK The United Kingdom comprises of individuals belonging to different cultural backgrounds, with distinct taste or preferences. This geographical region comprises of four main countries that operates under one government and monarch. These countries can be classified as Northern Ireland, England, Scotland and Wales. It has been noticed that each of these regions have distinct cultural preferences which eventually gets reflected in their way of living, buying habits, etc. U.K. as a whole encompasses individuals who are health conscious and are always inclined towards purchasing innovative products. Northern Ireland desires to split from this region and become a part of Republic of Ireland. In U.K., England has always been considered as the most dominant nation. England accounts for 80% of the total population constituted by U.K. market. Individuals residing in Wales and Scotland exhibit proud national languages and traditions. In the north-west of U.K., it is observed that only a small percentage of citizens fluently speak Scottish Gaelic. On the contrary, large percentage of population is witnessed to speak Welsh. The public signs displayed in Wales, are mostly either in English or Wales. There are various incidents which had led to formation of U.K. The history of U.K. traces back to conquests, royal marriages and old alliances. There have been relationship changes observed in context of countries within U.K. The population size of U.K. is estimated to be 64.5 million. U.K. is considered to be fifth-largest economy in the world and it is a developed nation. This geographical region is also considered to be a high-income economy, and as per Human Development Index, the country ranks at number 14th. The nation is at a great power, encompassing considerable economic position, along with strong political, cultural, scientific and military influence in global context. This region is also denoted as a market economy which is partially regulated. Population In general context, U.K. has undergone a distinct demographic transition. This form of transition can be stated as a shift from pre-industrial population with high mortality rates and birth rate, through a phase of rapid population growth and falling mortality rate, towards a stage of low mortality and birth rate. It is clearly evident that in initial phase there was low population growth rate, which again shifted to faster growth rate and finally witnessed a turmoil, which resulted into low population growth rate. In the last two decades, natural change observed in population growth rate, was accompanied with net international immigration within the country. The overall population of U.K., as per 2011 census, was approximately 63,182,000. In European Union, U.K. is considered to be the third-largest in terms of population size. On the other hand, in context of population density too, the region is regarded as the largest compared to neighboring countries. Its population density can be denoted as, per square kilometer, there are approximately 259 people. The south-east of England accounts for about one-third of total population. Majority of population resides in either suburban or urban areas. There are about 8million people who reside in the capital city of this region, London. The population of U.K. is majorly White British. This nation was located nearby to Continental Europe; hence, the different regions encompassed within U.K. have been subjected to various migrations and invasions. There were varied ethnic stocks from where British people had descended. These ethnic stocks mainly range from pre-Celtic, Anglo-Saxon, Norman, and Celtic to Viking. Though English is regarded as a predominant language, but Celtic language is also spoken partially in different regions such as Northern Ireland, Scotland and Cornwall. On the other hand, in the south-east of this region Welsh is also considered to be a known language. A high literacy rate has been observed in U.K. The percentage of high literate individuals accounts for desirable employment rate in the region. Parents extend their support towards children in terms of educating them from an age group of 5 to 16 years. There are also opportunities provided by the government, where children can continue with pursuing academic qualifications even after the age of 18 years. The concept of free of charge education encourages individuals to strengthen respective educational background. It has been observed that around 60% of overall British students apply for post-secondary education. The trend of population growth in U.K. has been well represented in figure 1. Figure 1: U.K. Population (Source: Trading Economics a) This economic statistics clearly indicate that in context of global population, U.K. population constitutes 0.91 percent (Trading Economics a). It can be arguably stated that in every 111 people, there is one such individual who is a citizen of U.K. According to National Population Projections, more males are born in U.K. compared to females. Hence to a certain extent, this region represents a male-dominated society. The average population age in U.K. is 39.7 years. However, the young generation also constitutes a desirable portion, which shall be beneficial for launching a young adult centric product. Economic statistics In terms of nominal GDP, U.K. can be denoted as the fifth-largest economy. On the other hand, in context of purchasing power parity, the country is regarded as the tenth-largest economy across the globe. In the last three years, U.K. has proved to be the fastest growing economy. According to 2014 economic statistics, U.K. was the fifth largest importer and ninth largest exporter. This clearly indicates that U.K. has been able to establish a strong image in terms of imports and exports. The country also holds second position in terms of inward as well as outward foreign direct investment. U.K. economy consists of certain important economies such as England, Wales, Northern Ireland and Scotland. This economy is regarded as the most globalized economy across the world. U.K. economy is mainly dominated by the service sector, which contributes 78% towards total GDP. The largest financial center is located at London, which forms an integral part of U.K. economy. There are also other industrial sectors which have contributed towards sustained economic conditions of U.K. market (Fingleton, Garretsen, and Martin 120). For instance, pharmaceutical industry plays a vital role, and U.K. accounts for third-highest share in R&D activities, in context of global pharmaceutical industry. The automotive industry is also considered to be a major employer in U.K. market. To a great extent, British economy has been enhanced by gas and oil production of North Sea. In 2011, £120 billion was contributed by this industry sector towards overall national economy. It has also been witnessed that the degree of prosperity varies across geographical regions. The southern Scotland and south-east England is considered to be the most prosperous areas per capita. In Europe, the largest city in terms of GDP rate is London. U.K. is known as the first industrialized country during 18th century, and in 19th century this nation played a vital role in global economic context. However, the economic growth rate of this region witnessed turmoil during2008, due to financial crisis (Sentance, Taylor and Wieladek 110). This recession phase has been successfully managed by U.K. economy, and since 2013 it is an expansion territory with nascent economy recovery. Gross national product is an economic indicator to analyze market value of this economy in relation to services and products. It can be stated that increasing GNP is correlated with stable economic position. For instance, GNP of U.K. in the last year was 455430.00 GBP Million, whereas in current scenario this statistical figure has been increased to 462267.00 GBP Million. This particular parameter signifies that industrial sectors have been highly effective in terms of strengthening economic position. Gross national product or GNP can be denoted as a measure of overall economic activity exhibited by a nation. This economic indicator resembles total value of finished services or goods produced by nationals within a country, in one year time-period (Trading Economics c). Since GNP of U.K. has increased in the last few years, it indicates that this economy has accounted stable business operations. On the other hand, growth rate of U.K. can be well determined by analyzing GDP of this economy. Figure 2 highlights GDP of U.K. Figure 2: GDP of U.K. (Source: Trading Economics b) GDP is a measure used to evaluate national output and income of an economy. The financial crisis had reduced GDP of U.K. to 2309 USD Billion, from 2791.68 USD Billion in 2008 (Trading Economics b). On the basis of statistical figures, it can be stated that U.K. had taken considerable time to overcome economic challenges and reach a stable position (Kirby 50). Since 2013, U.K. economy has witnessed major changes which has enabled the nation to reach a position, where its GDP is 2941.89 USD Billion. There are four important sectors which have contributed immensely towards economic growth of U.K. These sectors can be categorized as agriculture, service industries, and construction and production industries. Distribution of wealth The distribution of wealth is unequal in U.K. In comparison to other developed economies, there is a great deal of income inequalities observed in U.K. economy. The variation is such that certain percentage of population represents high income class whereas other segment is unemployed and belongs to low social class. Individuals who are a part of the bottom section of overall population, possesses an average net income of £8,468. On the contrary, people who constitute upper social class have an average income of almost £79,042. Hence this kind of income variation clearly denotes that either there is upper income group or lower income group. There is lack of middle class segment in this nation unlike other developed economies. The spread of income level in U.K. has been well represented in figure 3. Figure 3: Income distribution in U.K. (Source: The Equality Trust) As per figure 3, 9th highest income group only constitutes 60% of overall population. In context of original income, inequality is significantly more compared to net income. For instance, poorest 10% possesses £3,738 as their original income, whereas this income level is increased 27 times for top 10% higher class individuals (The Equality Trust). The income distribution can be analyzed in accordance to different regions encompassed within U.K. economy. Figure 4 outlines the spread of income across U.K. Figure 4: Spread of income across U.K. (Source: The Equality Trust) As per figure 4, household income in London is higher compared to North East region. This form of wealth distribution reflects a consumer behavior pattern. For instance, due to high household income, individuals residing in London shall have more affordability compared to other regions in U.K. The wealth distribution in U.K. has resulted into an unequal social class. 44% of total wealth is acquired by richest 10%. On the contrary, 9.5% of total wealth is hold by 50% of the poorest in U.K. This statistical figure denotes that wealth distribution is comparatively more unequal than income distribution. The bottom 10% in U.K. holds less than £12,500 in terms of overall wealth. It has been observed than top 9% accounts for £1,000,000 in context of total wealth. The measurement of wealth distribution can be well evaluated in relation to different regions in U.K. Figure 5: Distribution of wealth across U.K. (Source: The Equality Trust) London has the highest income group, as per figure 4, however, in figure 5, South East U.K. accounts for maximum wealth in comparison to other regions. An average household located in South East region, possesses 182.63% of total wealth, which is twice of wealth witnessed in Scotland. Labor force The political uncertainties and global competitive scenario has not strongly influenced employment trends in U.K. It can be stated that in the last few years, U.K. has encountered growth of successful businesses which has provided employment to wide array of individuals. This positive aspect has reduced rate of unemployment and contributed towards strengthening economic conditions. U.K. is regarded as a nation that strongly attracts foreign direct investment. The employment trends have certainly witnessed a change since financial recession that occurred during 2008. There are certain industries that have positively contributed towards growing employment trends in U.K. such as manufacturing, construction, financial services and hospitality. In some regions within U.K., tourism has played a vital role in enhancing employment conditions. The labor force scenario can be properly analyzed by reflecting upon the rate of unemployment in U.K. Figure 6 highlights the unemployment rate in this region. Figure 6: U.K. unemployment rate (Source: Trading Economics d) As per figure 6, it can be stated that the rate of unemployment in U.K. has drastically reduced in the current financial year. There are more job opportunities available in the country which has provided the required scope for growth and development. The percentage of jobless individuals decreased in the last few years (Trading Economics d). This indicates that U.K. is not only a known country for outward foreign direct investment, but its inward foreign direct investment has also initiated suitable employment opportunities for many candidates. The low unemployment rate of U.K. also denotes that this nation shall be at a stable economic position in the future years. Description about the market U.K. market comprises of various regions which constitute individuals from different cultural backgrounds. Hence a product needs to be launched that is suitable for majority percentage of population. It is observed that U.K. customers are health conscious and they prefer to utilize products that keep them healthy. In U.K. market those customers are mainly observed who is less price-conscious and are inclined towards product quality. This region accounts for maximum well-known international brands. The success of such brands is simply because of desirable disposable income of individuals. U.K. market constitutes high unemployment rate, which signifies that customers prefer purchasing high value items as long as they are provided with value for money. Each of the geographical regions encompasses key elements that strongly influences purchase decision. Consumer market segment differs from one region to another, based on their financial stability, taste, preferences, etc. In U.K. taste or preferences of consumer market segment is highly distinct from that of individuals residing in U.S. These differences in consumer market segment play a vital role in success or failure of products or services being launched in respective markets. For instance, demographic segmentation is an essential factor when it comes to selling a product in a specific geographical region. U.K. market comprises of individuals who mostly belongs to younger generation or middle age group. The product to be launched would be for customers falling in the age group between 20 years to 35 years. However, this product shall not have any age restrictions since it is centered towards providing a healthy lifestyle to individuals. On the basis of demographic segmentation, it can be stated that age and income level shall be two critical parameters. The target market would be those individuals who prefer staying fit, go for regular work-outs, and believes in maintaining a good physique. To a great extent, consumer buying habits helps in determining whether a product or service shall remain successful in the marketplace. U.K. consumers usually conduct a proper market research before investing in a particular product or service. This consumer market segment represents individuals who are less price-conscious and prefer purchasing quality products. The product to be launched in U.K. market would be “electromagnetic dumbbells”. This product shall be mainly for those customers who prefer staying fit but does not have enough time to visit a gym. On the other hand, this product shall also reduce dependency of an individual on a trainer. The consumer buying habits in U.K. market is more inclined towards evaluating value-added features encompassed within a product or service which cannot be imitated by other players. Hence it is important that extensive promotions are conducted before product launch, in order to educate customers on need of such product, before it is made available in the marketplace. Consumer buying behavior in this region is such that individuals are more concerned about USP of the launched product rather than focusing on whether it is within their affordability range. It can be stated that major USP of this electromagnetic dumbbell is weights can be automatically set from 3kg to 24kg by simply adjusting electric power. Advertising and promotion forms the key driver behind a product’s success. U.K. customers are more accustomed to advertising through digital media compared to traditional media. It has been observed that advertisements given in social media tends to attract consumer attention more in U.K. Social media has emerged as a platform which is convenient for companies in terms of being cost-effective, whereas it even facilitates accessing wider consumer market segment (Papadopoulos and Heslop 76). However, an effective advertisement campaign with promising brand message influences consumers more in U.K. market. This product launch needs to ensure that message being communicated not only addresses current market needs but also is effective in long-run. Marketing plan Market penetration strategy shall be used for this product launch in U.K. market. This strategy would be inclined towards providing a cost-effective mechanism to all those customers who prefer regular work-outs. In U.K. market there is presence of wide range of health clubs or gyms, providing different packages to target group. These packages are usually costly, and also tends to make customers are highly dependent on a trainer. The time constraint is a major problem for all those individuals who are working and need to travel frequently. This product concept of developing electromagnetic dumbbells is not gender-based approach; rather it can be used by both males and females. The product strategy can be correlated with market penetration mechanism since electromagnetic dumbbells would be a cost-effective item in comparison to investing lump sum amount in gyms. On the other hand, this product shall be convenient enough to carry in any corner of the world. The market penetration strategy would be implemented in context of high product quality and low cost. This product is basically launched for high-end customers, hence; in relation to this segment’s income level these electromagnetic dumbbells would be cost-effective (Sheth 170). The main goal behind this product launch is to completely acquire that segment of customers who are highly health conscious. It can be stated that market coverage is aligned with frequency rate of advertising campaigns, promotions, etc. The product shall be firstly launched in some prime cities of U.K. such as London. To a great extent, market coverage is strongly influenced by marketing campaigns. It can be stated that influential marketing campaigns motivate customers to opt for a product, and at a later time-period word of mouth promotion generates high revenue margins. Figure 7 denotes a marketing campaign which shall be used for this innovative product launch. Figure 7: Marketing campaign This marketing campaign denotes that there shall be dual value-added features provided with this product. Zumba electromagnetic dumbbells would not only be a cost-effective and convenient to carry fitness equipment but it would also be beneficial for all those individuals who find lifting heavy weights problematic. These dumbbells would enable customers to be physically fit irrespective of where they travel. This is an innovative fitness solution for all those individuals who consider working-out at gyms, a troublesome issue, due to time constraints. The marketing campaign would be based on communicating the core brand message to customers. It can be stated that a marketing campaign which causes a high impact on consumer’s mind is able to influence final purchase decision. Apart from promotions and advertisement, marketing plan also encompasses a vital factor known as place (Meissner 95). A product launch can be successful only when it reaches right people in right time. The distribution channel for such electromagnetic dumbbells is a critical factor since the product will be launched in a highly competitive marketplace. This product will be distributed across retail stores, specialty stores which deal with fitness equipments, etc. In modern world, maximum market coverage depends on incorporating wide array of distribution channels. For instance, this product can be distributed not only through retail outlets but also via online platform. The statistical figures related to wealth distribution in U.K. indicate that there are certain geographical regions which accounts for maximum wealth and high income level. Market coverage for this product shall encompass those regions that are economically stable. At the initial phase, main regions to be covered are South East U.K. and London. The residential locations, places near corporate houses, malls, etc., shall be targeted in order to spread more brand awareness. After a year or two of product launch, other areas in U.K. would be covered such as England, Wales, South West U.K. and Scotland. Conclusion As per this study, effectiveness of marketing strategy is closely knitted with understanding consumer behavior. Every geographical region encompasses certain key characteristics which differentiates it from other regions. For instance, U.K. market comprises of different regions, and each of this area has residents with varying cultural backgrounds. The unique taste or preference of a customer is strongly influenced by cultural component. Culture plays a vital role in shaping consumer attitude towards a particular product or service. In this study, economic conditions of U.K. have been closely analyzed in order to determine which product shall be most suitable for this region. An innovative product, electromagnetic dumbbells, would be launched in the U.K. market. This product shall be an alternative for all those individuals who prefer to stay fit but do not get enough time to work-out in gym either because of tight work schedule or frequent travelling. Works Cited Fingleton, Bernard, Harry Garretsen, and Ron Martin. "Recessionary Shocks and Regional Employment: Evidence On The Resilience Of Uk Regions." Journal of Regional Science 52.1 (2012): 109-133. Print. Kirby, Simon. "Prospects for the UK Economy." National Institute Economic Review 225.1 (2013): F45-F68. Print. Meissner, Hans. Strategic international marketing. London: Springer Science & Business Media, 2012. Print. Papadopoulos, Nicolas, and Louise Heslop. Product-country images: Impact and role in international marketing. New York: Routledge. 2014. Print. Sentance, Andrew, Mark Taylor, and Tomasz Wieladek. "How the UK economy weathered the financial storm." Journal of International Money and Finance 31.1 (2012): 102-123. Print. Sheth, Jagdish. "Impact of emerging markets on marketing: Rethinking existing perspectives and practices." Journal of Marketing 75.4 (2011): 166-182. Print. The Equality Trust. The Scale of Economic Inequality in the UK. 2015. Web. 3 December 2015. < https://www.equalitytrust.org.uk/scale-economic-inequality-uk >. Trading Economics a. United Kingdom Population. 2015. Web. 3 December 2015. . Trading Economics b. United Kingdom GDP. 2015. Web. 3 December 2015. . Trading Economics c. Gross National Product. 2015. Web. 3 December 2015. . Trading Economics d. United Kingdom Unemployment Rate. 2015. Web. 3 December 2015. . Read More