Analysing the Environmentand Buyer Behaviour

week 4

Prof Chris BirchBusiness and Enterprise Education

birch.westminster@gmail.com

Agenda for week 4• H&M – a model answer / structure / approach• Presentations – Pizza places• Group discussion on the presentations

– Task set: for next week – Prepare a SWOT and a PEEST (in your groups) on one of Pizza Express / Pizza Hut / Bella Pasta / Carluccio’s - groups will be told which one they are to do in class

• Environmental Analysis tools• Buyer Behaviour• For next week – read Case Study 7 – Cappuccino wars – prepare

a 300 word preparatory summary of this -

• H&M – a short summary of the case study:

Founded in 1976 – now has 1800 stores in 35 countries – still growing and a specific international strategy is in-place for the USA, where there are more small stores and less department stores.

Operates in the retail fashion and accessory sector, selling chic and stylish clothes - It’s main market is 15-30 year old women, but it also has a menswear department, though this is relatively small.

H&M’s main competitors are GAP and Zara – Gap is bigger, but not as commercially successful. They are often trading in the same shopping precincts which means the quest is to achieve bigger market share that competitors. To achieve this, they need a clear, consistent and visionary marketing plan in order that they are well positioned and differentiated, with ready made USPs.

Their competitive advantage comes from a number of factors – Their products are low cost, high value. They are well designed and readily available – They use big name designers to develop special interest lines to attract attention and get people into stores. Designs are modern, distinctive and well researched. They fully understand their market segments and have built up a relationship of mutual trust.

The low price, high value proposition is achieved through excellent cost control and supply chain management. They are able to get new products to market much quicker than their competitors, making them agile and responsive. They have positioned their fashions as perishable goods, meaning that they are not intended to last for long. They are priced to encourage impulse buys when people go into stores, and their brand has become one that represents chic and peer acceptability by those who wear them. It is important that their supply chains are ethically acceptable as their customers are interested and aware, and would not support exploitation.

In summary, H&M know their customers – they have a marketing mix that fits their chosen market segment. They continuously innovate through design and materials to keep products edgy, and price to meet the expectations and spending power of their customers. They always aim to delight, and they are totally market-oriented.

A good presentation

• Understanding / knowledge of subject matter • Well prepared (P6!) • Assess and judge the audience• Clarity and coherence of argument / points• Simplicity and consistency – uniqueness?• Visually stimulating, interesting, engaging

– A (good) picture is worth a 1000 words?– When to use multi-media

• Verbal and non-verbal communications– The pause – The look – The question

• Supplementary materials• Questions and answer sessions• THOUGHT / DESIGN / PREPARATION / PRACTICE

Useful weblinks

• http://desktoppub.about.com/od/microsoft/bb/powerpointrules.htm• http://presentationzen.blogs.com/presentationzen/2005/09/whats_good_powe.html• http://www.microsoft.com/atwork/skills/presentations.aspx• http://www.youtube.com/watch?v=gNG0etmnwuk• http://www.youtube.com/view_play_list?p=2CAD127F190E76D7• http://www.youtube.com/watch?v=yH9yLZFRS-Q&p=2CAD127F190E76D7• http://www.makeuseof.com/tag/10-tips-for-preparing-a-professional-presentation/

• Search on ‘good presentations’ ‘presentation tips and tricks’ etc – loads of good stuff

Tools ...• What is a SWOT analysis

– Strengths– Weaknesses– Opportunities– Threats

• What is a PEEST analysis– Political– Economic– Environmental / Ecological– Social– Technological

• Do a SWOT and a PEEST for the University of Westminster

Strengths

•Advantages of proposition?•Capabilities?•Competitive advantages?•USP's (unique selling points)?•Resources, Assets, People?•Experience, knowledge, data?•Financial reserves, likely returns?•Marketing - reach, distribution, awareness?•Innovative aspects?•Location and geographical?•Price, value, quality?•Accreditations, qualifications, certifications?•Processes, systems, IT, communications?•Cultural, attitudinal, behavioural?•Management cover, succession?

Weaknesses

•Disadvantages of proposition?•Gaps in capabilities?•Lack of competitive strength?•Reputation, presence and reach?•Financials?•Own known vulnerabilities?•Timescales, deadlines and pressures?•Cashflow, start-up cash-drain?•Continuity, supply chain robustness?•Effects on core activities, distraction?•Reliability of data, plan predictability?•Morale, commitment, leadership?•Accreditations, etc?•Processes and systems, etc?•Management cover, succession?

SW Template - example

Opportunities

•Market developments?•Competitors' vulnerabilities?•Industry or lifestyle trends?•Technology development and innovation?•Global influences?•New markets, vertical, horizontal?•Niche target markets?•Geographical, export, import?•New USP's?•Tactics - surprise, major contracts, etc?•Business and product development?•Information and research?•Partnerships, agencies, distribution?•Volumes, production, economies?•Seasonal, weather, fashion influences?

Threats

•Political effects?•Legislative effects?•Environmental effects?•IT developments?•Competitor intentions - various?•Market demand?•New technologies, services, ideas?•Vital contracts and partners?•Sustaining internal capabilities?•Obstacles faced?•Insurmountable weaknesses?•Loss of key staff?•Sustainable financial backing?•Economy - home, abroad?•Seasonality, weather effects?

OT Template - example

Political

•ecological/environmental issues•current legislation home market•future legislation•international legislation•regulatory bodies and processes•government policies•government term and change•trading policies•funding, grants and initiatives•home market lobbying/pressure groups•international pressure groups•wars and conflicts

Economic

•home economy situation•home economy trends•overseas economies and trends•general taxation issues•taxation specific to product/services•seasonality/weather issues•market and trade cycles•specific industry factors•market routes and distribution trends•customer/end-user drivers•interest and exchange rates•international trade/monetary issues

PE Template - example

Social

•lifestyle trends•demographics•consumer attitudes and opinions•media views•law changes affecting social factors•brand, company, technology image•consumer buying patterns•fashion and role models•major events and influences•buying access and trends•ethnic/religious factors•advertising and publicity•ethical issues

Technological

•competing technology development•research funding•associated/dependent technologies•replacement technology/solutions•maturity of technology•manufacturing maturity and capacity•information and communications•consumer buying mechanisms/technology•technology legislation•innovation potential•technology access, licencing, patents•intellectual property issues•global communications

ST Template - example

EL Template - example

Environmental

•Global policy•Global pressure•Scarcity•Sustainability•Health and wellbeing•Costs of ecological destruction•Risks of ecological destruction•Societal attitudes•Brand impact

Legal

•Regulation and Compliance•National legal drivers•Global legal drivers•Influence of Pressure groups•Risk of neglect•Brand damage from adverse legal case•Personal legal liability for Board

a 6th force? – the threat of doing nothing?

Porter’s 5 force analysis

Porter’s 5 forces references

• http://www.coursework4you.co.uk/essays-and-dissertations/porter-5-forces.php

• http://www.quickmba.com/strategy/porter.shtml• http://www.businessballs.com/portersfiveforcesofcompetition.htm

Understanding Buyer Behaviour

Factors to consider in Buyer Behaviour

The decision process

Post purchase behaviour

Purchase decision

Evaluate options

Information search

Need recognition

Understanding Buyer Behaviour

An involvement model

Hi involvement Lo involvement

Information Impulse

Hi value Lo value

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