Marketing of Uniqlo - Essay Example

Introduction Successful marketing of any product requires a comprehensive understanding of different factors that basically contribute towards the success and failure of any product. Right from the conceiving of the idea to the actual selling and after sales services, it is important that marketers must utilize the set of available tools and techniques that can help organization to offer a perfect product or service. The so called 7 P’s of marketing therefore contribute significantly to the overall development of marketing concepts that are employed by the marketers to successful market the product or service. Most importantly, it is important to understand that these 7P’s also reflect upon the overall performance of the firm and must be aligned with the overall strategy of the firm. As such it is important that different aspects of marketing shall be designed in such a manner that they allow firms to develop their strengths in the market. Uniqlo is one of retail stores in UK offering women’s and Men’s clothing over internet as well as through its stores. It is important to note that Uniqlo is a Japan based firm offering the products to many countries of the world including UK. The unique business model of the firm allows it to involve itself in every process of manufacturing and marketing of the product and its subsequent sales. This report will therefore attempt to provide a comprehensive analysis of the 7P’s of the marketing process undertaken at the firm besides comprehensively covering PESTLE analysis and assessing its impact on the firm. Overview of the Business UNIQLO is an international brand offering men’s and women’s clothing since 1984. Traditionally, it is a Japanese casual wear store with international presence in many countries including UK, US, Korea, Japan etc. Uniqlo originally is a part of Fast Retailing Co, it is now a fully owned subsidiary of the firm with listings on the Tokyo Stock Exchange. The early history of the company suggest that it focused on selling men’s wear only and it entered into the second segment of the market at later stage. Since late 1990’s firm has developed a unique business model based the model adapted by “The Gap”- an American casual wear giant.(Wilson & Barbaro, 2006). Accordingly, the firm was able to sell its own branded cloths outsourced through other manufacturers. This SPA or Specialty retailer of Private Label Apparel- provided UNIQLO a very different strategy to follow and it has implemented this strategy across the board in almost every country where it is operating. The UK operations of the firm are run through a chain of 14 stores and a web store through which consumers can also purchase the products. UK operations were started in 2003 with registered office at the Oxford Street London. Most of the stores are in London wherein company mostly serves those customers who are willing to buy casual branded cloths. It is also important to note that the UK operations are mostly focused on the young customers who are willing to adapt more casual life style at an affordable cost. Market Segmentation UNIQLO is a casual wear retailer therefore its focus is on those who prefer to remain in casual life style. On segmentation side, store offers clothing for both the men and women therefore children are almost excluded from the target market of the firm. Further, the men and women clothing is then subsequently segmented into young girls and boys between the approximate age group of 18-25 years. The segmentation strategy of the store can be effectively divided into two different set of segments i.e. segmentation based on demographic as well as psychographic segmentation. Demographic segmentation strategy is based on the fact that store targets a certain age group i.e. youth as well as families of a certain income level. Such segmentation strategy is also based on the assumption that the middle level income families with young children tend to spend more on the casual wearing of their children as compared to low income level families. Further, since its start, store focused on selling single sex i.e. men’s only clothing however, it is now also in women’s clothing therefore its basic segmentation strategy is gender based. ( Brassington & Pettitt,2006) It is also important to understand that psychographics is essentially the key strategy that is being followed by the store. This is due to the fact that store attempt to target a particular set of beliefs and activities of a certain group of individuals falling in certain catogery. Thus the major segmentation strategy adapted by the store is based on psychographics wherein the product development and marketing is purely based on the certain attitudes and activities of the target market customers. Psychographic segmentation therefore allow store to target young individuals with relatively care free attitude and less responsibilities to tackle with. Most of the customer base of the store comprise of the individuals who are willing to spend small amount of their incomes on purchasing the casual wearing cloths Marketing Mix Marketing mix is essentially a tool which can allow marketers to implement the marketing strategy of the firm. It is combinations of different variables that must be woven together in order to effectively execute the overall marketing strategy of the firm. It is important to note that most of the marketing decisions are largely concentrated into the 7 important marketing variables. It is also important to note that the generally marketing mix comprises of four important variables of product, price, placement and promotion however, it can also be extended up to 7 Ps with the introduction of people, process and physical evidence. The model with 7 Ps is called extended version of marketing mix because of the extra variables that it undertake and discuss. The basic premise of the marketing mix is to understand and explore the seven important variables which contribute towards the overall success and failure of the marketing effort of the firm. The basic elements of the marketing mix therefore needs to be developed in such a manner that they must corroborate each other. Marketing Mix of UNIQLO Marketing mix of the store is discussed below: Product Essentially the product of the firm is only limited to casual wearing cloths which is relatively a generic product with lot of substitutes. However, due to unique business model of the firm and its brand image, product of the store is readily acceptable. Most important features of the product include strong brand name, designer clothes, higher quality and styling. Pricing Since the brand is a premium brand therefore the pricing strategy adapted by the store is that of price skimming. Price skimming strategy allows the firm to place its designer products in more unique manner and charge higher prices as compared to others. Further, pricing is also based on the seasonal discounts and promotional activities also. Pricing strategies generally change during particular seasonal activities such as Easter and Xmas. Placement The business model of the firm is so unique that it allows it to utilize the strengths of many other producers. The placement or distribution channel of the firm is based on its own stores where it sells directly to the customers whereas the production side of the product is mostly concluded through outsourcing the required products. Firm basically outsource its main product i.e. clothing however, it is involved in the whole process of designing, research etc. There are 14 stores of UNIQLO in UK with most of them concentrated in London and serve as the important contact point with the customers. Store also has a website through which it also sells its products.1 Promotion The promotional initiatives of the firm include seasonal discount sales, in-house discount sales as well as other offers. Firm’s publicity efforts include designing of different events through online promotional activities. The project Uniqlock is considered as the most successful promotional activity of the firm wherein it basically placed a small online widget on its website which worked as a music dance clock. Apart from this, Uniqlo, in association with YouTube, also arranged the competition for its new 20 Color Polo Shirt for girls. Physical Evidence Physical evidence basically provides information about the physical layout of the service points of the firms. The stores of UNIQLO are mostly large with enough space to allow customers to wander around for shopping purposes. Further, they are properly lit with ambient lights and duly supported by the occasional light music to further provide comfort to the customers with which they can actually shop. People Since the business is a combination of services and products, it is therefore important that people providing the services must be good enough to support the overall purpose of the organization. The service personnel involved at the store are mostly pleasant however, it is also important to note that the stores has been designed in such a manner that they encourage self service shopping therefore the interaction of the people and customers is less whereas more time is given to the customers to choose and decide about the particular products to purchase. Process Processes are basically methods of providing services to the customers and require organizations create the processes in such a manner that it can generate customer loyalty. Since services are always perishable in nature therefore it is customary that the people offering the services must have comprehensive understanding and knowledge about the organization besides demonstrating professional maturity. Firm offers its services through two important channels of online as well as physical stores sales. As discussed above that the stores are designed in such a manner that it encourage self service shopping therefore the overall processes generated are also designed in such a manner that it allow customers to predominately decide how they want to shop. Further, the check out process is really seamless and error free and people offering the services at different stores seem to possess the requisite knowledge about almost everything related with the store. This include knowledge about pricing, sizes, colors as well as other additional information considered as necessary for successful delivery of the service. PESTLE Analysis Understanding the environment within which an organization works is really critical for the long term success and failure of the organization. Successful organizations always undertake a systematic understanding of how the external environment can affect their business and resultantly they devise their strategies in a manner that allow them to successfully withstand the pressures from external environment. It is critical to note that the external environment is always out of the control of the organization and organization cannot control its outcomes therefore It is critical that the organization must develop its own internal strengths to successfully meet the external challenges. PESTLE analysis is mostly focused on understanding and exploring external environment and it is always important that firm must have a very comprehensive understanding of the different forces such as political, economic, social, technological, legal as well as environmental factors. For example, if political situation is not feasible for certain type of businesses than it would be really unwise to invest into a country which do not support external businesses to take roots into their countries. Similarly, legal restrictions may force any firm not to engage into any kind of typical activity etc etc thus it is necessary that a thorough and comprehensive understanding of the external environment outlined through PESTLE Analysis shall be developed in order to successfully meet the strategic challenges faced by the firm. Change in Elements of PESTLE Having discussed the importance of scanning external environment, the next logical step will therefore require that an understanding must be developed to assess as to how the changes in various variables can affect the organization under study. Following section will discuss the same: Political Forces An unfavorable change in the political environment of the firm may force the firm to quit the market. In many socialist or so called communist countries, doing private business is often prohibited therefore any firm will be irrational to work into such country. Similarly, if UK Government goes into war against Japan, it may prohibit all the businesses owned by Japanese to work in UK therefore an unfavorable change in political forces may result into closure of the business also. Economic Forces An unfavorable change in economic conditions may result into significant losses to the store owing to the lack of demand from consumers. The current financial crisis in UK has resulted into closure of many smaller firms which could not withstand the worse economic conditions in the history of UK. Similarly, better economic conditions will allow business to flourish and expand into new markets also. Social Forces A change in social forces can also affect the business adversely because changes in social variables such as age, income levels, gender, population etc can change the overall demand patterns for the firm. Technological Forces Changes in technology may not affect the business directly because of the nature of the business. Though better technology can allow the production of more unique and innovative fashion designs however, technology itself may not direct affect the store. Legal Forces Changes in legal infrastructure of the firm can adversely affect the business too because existing or new legislative actions may restrict the firm from undertaking any particular activity. Environmental Factors Environmental factors may also not directly affect the business because manufacturing activities are now performed in environment friendly manner with little wastage that can create pollution. Conclusion UNIQLO is a Japanese casual wear retail store with business operations in countries like Japan, US, UK etc. UNIQLO adapt a unique business model wherein it controls every process in manufacturing of its products but does not necessarily engage into manufacturing activity itself. Its marketing mix is well balanced with strong segmentation and online presence. Firm targets young customers who prefer to live casually and offer them designer clothing. References 1. Brassington, F, & Pettitt, S (2006). Principles of marketing. 4th. ed. New York: Prentice Hall. 2. WILSON, E (2006). Basic Chic from Japan. But Will It Sell? [Online]. [Accessed 17 May 2010]. Available from: . Read More