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Executive Summary
These studies would chiefly focus on ASDAs clothing Brand Georges Clothing . It happens to be a UK subsidiary of the giant US food major, Wal-Mart. George at ASDA is a subsidiary of Wal-Mart with a market share of 16.94% in the UK business. Currently, ASDA has over 259 stores all around the UK and other countries and 19 depots employing 122,000 staff, which shows the efficiency of the company. The main strategic objective that ASDA is intended on pursuing is to maintain its leadership position in the retail clothing business in the UK. Its business objective is to provide customers and clients with low-cost, high-value products. Since internet business is very popular nowadays, it also seeks to set up a large number of online stores in order to retain its numero uno position in Britain. The retail industry is especially in a fiercely competitive marketplace having the likes of Tesco, Sainsbury, and Marks & Spencer in the race for market supremacy of the UKs prime retail marketing business.
This study is based on a particular outlet and Brand-George clothing. It is one of ASDAs own brands which it has been marketing in that name since 1990 after being acquired from its owner, George Davies.
Introduction
This research study is mainly concerned with Georges clothing. The George clothing range is named after its inventor, George Davies, owner of Next, who was the innovative designer of low-priced, albeit high-value garments. Although he is no longer associated with this brand, his ethos still holds good. Asda has its own range of clothing called George which was created in 1990. (Asda: George Clothing, para. 1).
Research Objective: The main objective of this paper is to seek ways and means to improve ASDAs business operations with special reference to its marketability and market share of George clothing in the competitive market soft in the competitive retail food business in the United Kingdom. It is seen that in the food sector, ASDA, although in the number one spot, needs to tackle stiff competition from rivals like Tesco, J Sainsbury, Morrison, and others. Thus product innovativeness and serviceability are important objectives that need to be underpinned by robust marketing strategies and schemes to attract customers, especially in the current economic scenario.
Research Methodology
The Research methodology considers the topic under discussion under two distinct heads, firstly, in terms of primary data, and secondly, with reference to secondary data.
The collection of primary data is done based on firsthand knowledge (observations), surveys and field studies, personal interviews with the senior management team at Asda, and discussions with selected respondents and members of the consuming public.
Coming to secondary data, they could be said to be data gained through books, journals, and internet searches, and published information gained from previous research studies, recordings, and archives of earlier surveys and research studies. In addition, the definitions and analysis of marketing strategies of Asda shall also form a part of the secondary research programs.
Organizational Background
Industry Background
Asda initially operated as a UK-based company, but it was acquired by the American giant food product company, Wal-Mart in 1999. Since then, Asda had been functioning as a wholly-owned subsidiary of Wal-Mart UK. However, Wal-Mart has since sold ASDA to one of its subsidiaries, Corinth Services Ltd. during 2009. It also emerged that Walmart has sold Asda to Corinth Services Limited, a Walmart group company, for £6.9bn as part of a group reconstruction and for reasons of good financial management. (MacDonald para.3).
Thus the relationship between Wal-Mart and Asda has been one of the parent companies and subsidiaries. Regarding Georges Clothing, it is a brand name that has been acquired by Asda from the owner-designer of such garments, Georges Davies. It could be further said that Asda sells its own garments under the Georges clothing brand and this has become very popular in several global destinations.
It is seen that global food and clothing markets are a burgeoning industry and this century has witnessed dramatic changes in the global food commerce, including the invasion of virtual and online retail stores. In most countries, besides local stores outlets, a major paradigm shifts in growth patterns in retail sectors of countries either big or small. It is estimated that 50% increase from population growth from 6 billion to at least 9 billion. This could be seen in the context of a possible rise in world food and clothing demand that could double by the year 2050, with a 50% increase fuelled by low-income countries (Sustainable Development UK Conference).
The UK cloth and apparel market is characterized by increasing competition between three major giant retail firms Primark, Asda, and Tesco. The changes in the sociological factors in the UK business environment such as decreasing birth rates and declining population have negatively influenced the business growth in the country. Changes in the labor environment increased such as increased womens participation in the labor resulted in an increase in demand for consumer goods. Online shopping is at a lower level in the country. From the research results, it is estimated that 20% of the total customers are of least spending and they are not involved in any consumer society. Of the total customers, 15% are regular buyers. The buyers are always selecting their stores on a convenience basis. In addition, comparison on the basis of price is not functioning among the UK retail marketing. The existing condition in the UK market is characterized by the low purchasing power of customers and some of the customers are adopting the services offered by co-op food stores at low prices and a wide range of products. One of the main factors behind this slowdown is that value is now ubiquitous in the clothing market as middle-market retailers have sharpened their own prices in response to the growing competition (UK Value Clothing Retailers 2007, 1).
Organizations Description
ASDA has one subsidiary, George Clothing that mainly sells groceries and clothes and now George Clothing is the only subsidiary Asda has. The others have since been sold off. Georges brand of apparel for all is sold through more than 250 ASDA stores in Britain and other independent stores. ASDAs US parent company retail giant Wal-Mart Stores plans to make George a worldwide fashion force through distribution in Wal-Mart stores. (George Clothing, Overview, para.1).
Products/Services and Market
George Clothing
During the end of the 20th Century, ASDA was struggling to keep itself competitive. Its desperate marketing moves included the appointment of a new Chief Executive, Archie Norman, who needed to be responsible for the creation of a product mix for attracting new customers to the stores. As a part of this restructuring policy, George Davies, a famous retail designer expert, and founder of Next to was assigned the onerous task of creating ASDAs private brand collection called George.
The George label has grown to £500Million since it was launched and it has not looked back, with George Clothing supplying to more than 182 ASDA stores in the UK (Sommerville).
It is seen that ASDA has now been acquired by Wal-Mart US, and the benefits of this sale could e seen in the marketability and competitiveness of the ASDA business.
Wal-Mart is now fully positioned to market George clothings in the UK, including internet selling. Asda is going digital and will start selling its George clothing range over the internet for the first time next year in one of the biggest online pushes in Wal-Marts recent history. An initial range of 1,000 menswear, womenswear, and childrenswear lines will be sold online to UK shoppers from February 2008. The range will be expanded significantly following the launch. (Asda News and Facts History, George Clothing to be Sold Online, para.1).
Tabular representation of goods and services of Asda.
Vision/Mission
Asdas mission is to be the best value retailer exceeding customers needs always delivered to be the best value retailer exceeding customers needs always delivered by our purpose to make goods and services more affordable for everyone and our values are Respect for; Strive for Excellence and Service to our customers. (ASDA Stores). These target customers are ordinary working people and their families whose weekly shopping needs Asda is trying to meet. The re-establishment of Asdas reputation on price is at the heart of its strategy.
The vision of ASDA is to become Britains largest retailer by selling quality products at a lower cost than the competitors.
Department and My Role
I have been working as a sales manager for a year in the George Asda store located in the UK. My role and duties are to support the management team in daily operations and maintain friendly business dealings and communication with customers. The products handled by me include mens clothing, including tuxedos, suiting, shirting, and mens dress materials. Besides, the stores also stock large varieties of mens jeans, t-shirts, jackets, and pants all at economical and affordable prices. Besides, it stocks all kinds of occasion wear and branded formal and formal wear, shirts, vests and swimwear, and other dresses for men. (Mens Clothing).
Strategy and Marketing
Strategic decisions relating to the external environment are essential to any organization. The strategy helps to identify the customers, competitors, market trends and to cope up with the required changes according to the business environment. Marketing refers to the interaction of an organization with its market. Therefore, marketing is required for the strategic planning of an organization. The strategy could be defined as making major decisions affecting the long term direction of the business. (Drummond and Ensor, 2) Strategic objectives are defined as goals of the company aimed to meet the strategic intent and tactics. Strategic planning and strategic thinking are interrelated representing a core of modern management. Vision is an important strategy of an organization.
Definition of Marketing Strategy
In marketing, strategy is the glue that aims to build and deliver a consistent and distinctive value proposition to the target market (Kotler, 171). Customers, competitors, and corporations are the three Cs, which are essential for marketing strategy. External consistency, internal consistency, and dynamic consistency are the three tests required to meet by the enterprise to make a good marketing strategy. A company will have a strong and sustainable strategy if its marketing strategy is unique and cannot be imitated. A Marketing Strategy is an integrated set of choices about how we will create and capture value, over long periods of time. (15.834 Marketing Strategy, 5).
Current Marketing Strategy
The marketing strategy of the store needs to be a total customer experience and not just selling products. Thus, the mantra to be adopted would be in terms of providing service right from the display of items on the display counters to the service with a smile attitude of the sales personnel. Quality, quantity, widest range, an assortment of all kinds of goods, etc all for a part of the strategy. Again, this could also envisage special promotional aids like discounts, year-end bargains, festival offers, etc., anything to keep customers happy and the sales staff busy.
Thus, it becomes necessary to adopt short-term and also long-term strategies that could serve the companys interests and well that of the patrons and customers. In the store, the strategy could be in terms of an attractive, well-lit, and spacious area, scientifically designed and structured to provide maximum ease and comfort to customers and induce them to make purchases. In the context of Georges clothing, it is also necessary to have trial rooms and fitting areas where customers could try out their clothes before buying them. Again, it is also necessary that if possible, Georges could also set up tailoring units annexed to their garment stores that could take up the tailoring needs of customers too. This would save time and obviate the need to seek outside tailoring help. The customers interests need to be well sustained and minor niggles may be settled promptly so that he need not seek to venture outside of Georges for the purchase of garments.
Asda now is on firmer grounds, is now owned by Corinth Services Ltd, a subsidiary of Wal-Mart USA. From the marketing angle, it could now gain the financial and administrative support of its parent company, this being all the more important since most of its stand-alone units have now been closed down. The corridors of trading, especially in Georges Clothing have opened up and it would be well within Asdas marketing strategy to move into market consolidation and also enter new markets, either on its own or through joint ventures or alliances.
It could also set up stores with the active collaboration of Wal-Mart and its subsidiaries in cities or regions where it is now unrepresented. This perhaps needs to be the core marketing plan of Asda in terms of market growth and consolidation in unrepresented areas in the UK and other developing economies in other countries of the world.
Current marketing tactics
The current marketing mix of ASDA is well integrated and consistent and can be detailed by examining the 4Ps of the marketing mix.
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Product: ASDAs clothing brand George has a wide range of selections for customers looking for the value of money, quality, and style. They dont make products just for a special class of people, but to cater to everyones needs. The products are of high quality, in fashion, and easy to care for.
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Price: The clothing brand offers some of the best products at competitive prices. Most products are at much lower costs than the rest of the retailers in the market. People can have trendy, quality clothing at affordable prices.
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Place: ASDAs stores are located all over the UK. Over 240 stores are located all over the UK offering the services of the retail chain to almost the whole of the UK.
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Promotion: ASDAs sales promotion involves a complete mix of marketing techniques including cause-related promotion, fundraising, charity, sale of charity pins and badges, etc. It also does internet promotion and marketing to meet the present technological trends.
Internal Analysis
SWOT analysis: helps to identify strengths and weaknesses of George at Asda, which is mainly internal, and its opportunities and threats in the external environment thus leading to competition in the market.
SWOT Analysis of George Clothing, UK. The main strengths of Georges clothing are that supplies could be purchased from ASDA supermarkets, stand alone stores and non-food retail outlets. (Accessaries Retailing 2006).
There are a large collection of mens wear and ladies wear and clients could window shop from neatly and exclusively displayed items in shelves and showcases. These could lead to better buys and bargains. There is also large stock availability of different varieties of garments to suit different age, men or females and different budgets.
However in the case of George clothing, it could be seen that the number of George stand alone and small stores are less as compared to other stores.
The main aspects at the store level with regard to Georges is that the prices are much cheaper, while at the same time, the quality is comparably with the best available in the local markets. The opportunities for Georges are that in its food sector it has a high brand value, this needs to be sustained over time.
The main threats and challenges for the business is that new entrants and competitors may make inroads into the market share of Georges.
Market Analysis
Competitor Analysis
The UK retail-clothing sector is composed of the retail giants like Primark, Tesco, Asda, and Marks & Spencer by supplying a wide range of products and aiming at same type of customers. The main competitor of George at Asda is Primark with a market share of 17.7% as Asda has a market share of 16.94%. Other competitors are Marks & Spencer and Tesco. Comparing the price of different players, we can see that, Asda offers the low price as compared to others. Simple evidence is the uniform prices as follows:
George at Asda £ 4.75, Tesco £ 15.25 and Marks & Spencer £21.50. (George Fires First Shot in Back-to-School War).
It is seen that from point of view of pricing, perhaps ASDA pricing is the lowest in its genre and it has maintained the price line remarkably, despite the onslaught of recession when most trading firms had to slash back on prices to remain afloat.
It also has a wide range of product to suit customer affordability and a wide range to choose from. The George own brand collection is very popular and reasonably priced and has made successful inroads into many locations in UK and elsewhere. The places would obviously be where these are marketed and there is no doubt that it is well marketed at good locations.
The competitors most proximately close to ASDA are Primark and Marks and Spencers. Although ASDA was in the third position, it has now been relegated down the order due to the marketing success of Primark.
The promotional aspects of ASDA are also well structured. It has made every effort to see that good visibility is present and its publicity is at par, if not more than its rivals and competitors. However, a lot more needs to be done in these areas, especially in the lines done by JS- launching of discount vouchers, off the till rebates and surprise gifts and shopping galore, etc that could attract a new genre of customers who are concerned about the quality and pricing of the products they put into their trolleys.
The promotion strategy of the competitor is also the same which could be identifies by Primarks slogan Look good pay less with competitive prices. It is seen that Primark mainly focus in cost leadership strategy and the differentiation strategy which could be referred as the key factors to success. The market segmentation of Primark, which mainly focus on the customers under the age of 35 also led to its position. By comparing the marketing strategies of Asda and that of Primark, it is seen that Asda mainly create a private label brand at out of town stores, i.e. branding whereas Primark focus on logistics and supply chain management.
Macro Environment analysis
PESTLE analysis
Coming to the first aspect, political, it is observed that revenues in ASDA Georges could be affected by laws, governments negative attitudes towards the stores, political instability and turmoil and lack of a strong and effective government to administer affairs of the state. Next, economic factors like recessionary trends in the economy, inflation and lowered spending capacity by consumers could affect Georges business. In the social context, it is observed that the influx of citizens from other EU countries into UK could cause problems, as ethnic and cultural divides of UK citizens and an aging UK population. Besides, much technological advancement have taken place like internet selling, use of mobiles and other communication devices which may place more demands on the kind of garment products that Georges indulges in. Coming to legal, the threats posed by lawsuits and other legal procedures also need to be taken into consideration. Georges responsibility as a corporate citizen also needs to take cognizance of keeping the environment litter free, clear of environmental hazards and pollution, waste management and a host of ecological issues that may confront it from time to time.
Market Segmentation
In order to satisfy all customers, a company should identify the market segments, which can be served effectively. Market segmentation can be done in seven steps proposed by Roger Best as follows:
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Needs-based segmentation in which the customers are grouped based on similar needs.
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Segment identification: the demographics, lifestyles, usage behaviours are determined for the need based segment.
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Segment attractiveness: Based on market growth, competitive intensity etc, the attractiveness of each segment should be identified i.e. if the existing players obtain a large market share, the cost of production is low, etc then it attract more players if the barriers of entry is less.
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Segment profitability: the profitability is a major factor of entering into a particular segment which can be identified through the profit analysis of the current players.
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Segment positioning: based on the customer needs and preferences, their taste, etc the product should be positioned in the minds of customers to have a value.
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Segment Acid Test: create segment storyboards to test the attractiveness of each segments positioning strategy.
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Marketing mix strategy: expand segment positioning strategy to include all aspects of the marketing mix (Kotler, 286).
Market segmentation is done based on geographic, demographic, psychographic and behavioural variables. Geographic variables include segmentation based on region, city, density of population, climate etc. Demographic variables include age childhood, adult etc, family size small, medium, large, family cycle, gender male and female, income higher level, middle income and lower income, occupation, social class etc. Lifestyle, personality of the customers is some of the psychographic variables.
Market segmentation of George at Asda
For the loyal George customers
Asda offers the best in range for its loyal customers. Online shops and internet marketing fulfils the requirements of its customers. Customers are offered a choice of easy payment mode also. Asda researches the customer needs through feedback systems to cater to the needs of their everyday customers. When customers said they frequently found jeans the wrong size, ASDA introduced a range of mid-sized womens jeans in sizes 11, 13, and 15 (Asda Wins Customers by Making Good Quality Food and Clothing Affordable to Everyone, Customer Insight, para.2). The quoted words show the proof for the market segmentation profile. Gift vouchers and discount coupons are targeted for this segment.
For people who buy on an impulse
Extensive marketing and advertising are targeted on the customers who will want to check out the ASDA stores. Providing clothing to all age groups is also a market segmentation technique for people who want to buy on an impulse. Half price sales and end of season sales promote more sales in this segment.
George at ASDA provides high quality clothes at competitive prices which attracts customers who need expensive products.
Analyse and evaluate Asdas market segments
ASDA attributed its success in the retail chain at second position due to the three key elements outstanding value because of the subsidiary of Wal-Mart, improving quality with low selling price, and the use of customer insight to introduce new innovative products and offers, thus satisfying a majority of customers. In order to be successful and gain customers, there should be a clear identification of the product and potential target audience. Product differentiation strategy creates a unique market proposition by creating entries of barrier to other companies. Ongoing cost efficiency initiatives the company has engaged its 165,000 colleagues in a Save £1 A Day challenge. The passion of ASDAs colleagues to save customers money is the central theme of the supermarkets current advertising campaign (Asda Wins Cus
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