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Analysing the Environment and Buyer Behaviour week 4 Prof Chris Birch Business and Enterprise Education [email protected] 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 SW Template - example Strengths Weaknesses •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? •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? OT Template - example Opportunities Threats •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? •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? PE Template - example Political Economic •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 •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 ST Template - example Social Technological •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 •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 EL Template - example Environmental Legal •Global policy •Global pressure •Scarcity •Sustainability •Health and wellbeing •Costs of ecological destruction •Risks of ecological destruction •Societal attitudes •Brand impact •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 Porter’s 5 force analysis a 6th force? – the threat of doing nothing? Porter’s 5 forces references • http://www.coursework4you.co.uk/essays-and-dissertations/porter-5forces.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 Hi involvement Lo involvement Hi value Lo value Information Impulse Increase engagement Improve differentials An involvement model