Case Study Simulation Cotton On Limited Marketing Essay

Case Study Simulation Cotton On moderate Marketing EssayThe purpose of the report is to establish three strategies which allow for address get bys within Cotton-On Ltd causing their current financial troubles. The three chosen strategies be research consumer purchase habits, introduce online gross gross gross gross revenue and expand gross sales into the European Union countries. These strategies leave be explored and discussed to relieve how they help alter the situation at Cotton-On Ltd.The first strategy research consumer buying habits shows how we enumerate through with(predicate) the range of methods utilise for researching consumer buying habits in rule to irritate a good word which is most suit subject link up to Cotton-On Ltd. Ga in that respectd info dirty dog be used to identify decisions regarding various concerns with Cotton-On Ltd, such as harvest-tide range, pricing or available sales gets. The methods used for researching consumer buying hab its helps support other strategies because it allows Cotton-On Ltd to understand capableness customers in current securities industry settings.The second strategy introduce online sales refers to Cotton-On Ltd using the meshing as a tool to strengthen the political party because it is increasingly skilful for them. by means of extensive research Cotton-On Ltd should introduce online sales because of their mail within the grocery place otherwise they entrust be disadvantaged comp bed to competitors. Also the probable of the online sales channel is an opportunity for them to expand online and take advantage of the internet as a grocery storeing tool. in quantify there is a range of assorted ways Cotton-On Ltd plunder choose to approach change their products online and this will be shape up discussed within the report.The third strategy expand sales into European Union countries explores this topic in context of online sales. The UK is a ensueing European country i n relation to online sales however there be bigger markets to be explored, since well-nigh of these markets are expect to grow in the next hardly a(prenominal) divisions. The topics which will be discussed is the European market related to Cotton-On Ltd, the aspect of the vocabulary barrier, the pricing / specie and any other points will be taken into canvassation.All three strategies are explained to show the advantages for Cotton-On Ltd and set off the important make loves. We show how the strategies are linked together and where viable, suggest methods for writ of execution and oercoming issues. Those strategies are a starting point for the society to overcome their problems. interrogation Consumer Buying HabitsMethodologyConsumer buying habit is a complex weigh and there are many factors that influence buying decision of the customer. When it comes to researching consumer deportment for a ancestry it is the greatest mystery of any championship to act (Matt Alde rton, no date). on that point are many ways we could commence put out(p) more or less consumer buying habits, but before doing anything else we necessitate to investigate Cotton-On Ltd, its frame or any previous study on the matter. One of the future(a) techniques would be chosen to suit Cotton-On Ltd namely, interview, questionnaire, survey and consumer panel, but the best would be to organize customer revolve about group to help Cotton-On Ltd identify and beat consumer specific claim. Customer focus group will produce unspoilt customer data in their own words, which would help create to a greater extent effective marketing campaign and will expose problems within Cotton-On Ltd (Matt Alderton, no date). To get the best out of customer focus group it is of import to stay focused on Cotton-On Ltd objectives that would gain to be why the business is losing sale and how to save m integrityy?Predetermined questions and Moderator who be able to articulate comfortably, e asygoing to approach.Recruit up to twelve participants the selection will be according to our question and will avoid random customer.Record the focus group either with a tape recorder or a video camera, but will find to ask participants permission.Evaluate feedback by reviewing the session to im exhibit the quality (Matt Alderton, no date).As well as organising focus group Cotton-On Ltd should involve a Consumer Panel to test our product as Consumer Panels are useful for fast short survey (DJS investigate Ltd, no date).DiscussionThere are a few problems with Cotton-On Ltd transcription necessitate updating, improving and hitherto would be scrapped once the in the buff recommendation and system is implemented, but global issues realize to be taken into accountancy too, collect to economic climate of UK, which is either flat or blackball growth for the last six months family budgets are tight unless using up where it matters most.The first issue has been noticed in Cotto n-On Ltd case is that until last year it represented 20 per cent of UK customers, which is equivalent of 30 per cent of the UK sales revenue. That means Cotton-On Ltd prices are naughtyer and something needs to be done in order to increment the sales revenue, whilst retaining the said(prenominal) sales revenue at least for now. In the light of the focus group Cotton-On Ltd will go to move accordingly whether to keep the same price for the moment, but crack something in addition to what customer buys or anything, otherwise desired.As Cotton-On Ltd lease 20 stores across the UK and the tho other mean of sale we keep is through mail order, the assurance for National Statistics retail sales accede for January 2012 out today 17-February 2012, non-store retailing which is mainly internet sales, grew by 13.3% in January (Chloe Rigby, 2012). So the shift continues from high street sales to online and mail order Cotton-On Ltd needs to recognize this and move accordingly. As a retai l merchant the give away for Cotton-On Ltd is to combine the flexibility that online and mail order delivers, with the customer value of the material shopping. By bringing those together Cotton-On Ltd services and pop the questions become more compel to it is customers and this will lead to addd revenue, and will improve Cotton-On Ltd brand regard as (Chloe Rigby, 2012).As it shows in meeting of Cotton-On Ltd directors that the business does not know sales of their products by colour, size and Cotton-On Ltd should know which product is interchange well and which one is not. So once we produce the final report on consumer buying habit we would be able to know these answers to some extent. Cotton-On Ltd would be able to decide accordingly to whether it is best to have online system that can drool separately each online sold product to our database then it will be easier for Cotton-On Ltd to see the products selling more, less, or none. In this way, we would be able to compare the data easily without losing them and produce in our factories according to these good and recondite customers data.For decision out more about customer buying habits Cotton-On Ltd should have a good information system that allows collating data from online sales and withal customers should be able to track their order. In this way we can expose our customers buying habits that how often they buy, their desired colour, for example it is very likely bad the system we have in Cotton-On Ltd that there are lots of received products colour and sizes that never or very little been sold, so we need to cut producing those product in order to reduce waste and will result saving money.Introduce Online SalesJustificationCotton-On Ltd provides their customers with a few traditional ways of buying their products, they as well have presence on the Internet via their website and advertising but they do not use it as distribution channel. Research shows that in the current market, where man y traditional retailers have already introduced Internet sales, this step becomes a strategic necessity (Bernstein et al., 2008). whence Cotton-On Ltd is currently left in a disadvantaged position.In addition, even in this time of economic difficulties, when the traditional retail area is shrinking, the moment of online buyers and online sales are increasing (Datamonitor, 2011a). According to Datamonitor (2011a) in 2010 the online retail sector in the joined land reached revenue of over 24.1 billion ($38 billion) and sales in apparel (including accessories and footwear) reached 3.5 billion ($5.5 billion). The entire market is expected to grow to over 41.9 billion ($66 billion) by the end of 2015, 11.6% growth. This shows the potential of the online sales channel.It is relatively easy to enter into Internet retail, especially for an realised caller-up with set up distance sales, as the equal are low and there are little additional regulations (Datamonitor, 2011a Great Britain. Office of Fair Trading, 2006).Implementation and IssuesCotton-On Ltd may not have staff with equal skills to build and maintain an online store integrated with their website however this is not the notwithstanding way of implementing this strategy. Using an existing online service, which allows retailers to sell through their website, may prove more feasible as the first step in providing online sales. stock-still though this is not an ideal solution (Bernstein et al., 2008) it as well as addresses other issuers mentioned afterward in this section. The current website can be updated to direct raise customers to the service where they can make a purchase, while the staff will only be faced with learning whatever interface the service is providing.There are a few other concerns related to online sales and gaining tonic customers through this channel. Research suggests that the reason for the strong standing of the online market is the stratagem of lower prices and price com parison tools (Datamonitor, 2011a Bernstein et al., 2008). Therefore price competition may be stronger than in the traditional market. At the same time, use of online sales helps to reduce relations costs and some of those savings can be passed to customers (Bernstein et al., 2008) at least partially addressing the pricing issues. It is likely that this strategy will reduce sales through other channels, but this redirection is desirable repayable to the aforementioned trim costs (Bernstein et al., 2008). The effects should be monitored and further decisions should be made accordingly. For example, telephone sales may no longer invite as many staff members, but they may be trained for support in online sales and customer service via email.Trust is the main issue when rending new buyers in the online setting. Customers are concerned about the certificate of online transactions, which means they are more likely to select known and swear retailers (Datamonitor, 2011a Premazzi et a l., 2010). A study conducted by Premazzi, Castaldo, Grosso and Hofacker (2010) find that customers are more impulsive to provide their information only for certain compensation (prizes, vouchers etc.). And therefore, if this method is used, the suit of compensation should suit the hindquartersed audiences. It as well as concludes that well designed, user friendly and geological fault free websites may annex customer trust.Another way of targeting new customers may be by using an already known and trusted service, for example Amazon. They are one of the biggest online retailers (Datamonitor, 2011a) and they offer ways for retailers to sell products on their website with relatively low cost (Amazon, no date). Products made available through Amazon website will be exposed to millions of shoppers that use their services, and Cotton-On Ltd could use Amazons position in the market as a declaration of the gumshoe of the transaction to the customers (Amazon, no date). Additionally, successful transactions will summation Cotton-On Ltd brands exposure and make up trust for it.Legal considerationsSelling over the Internet is considered the same as selling over the phone in light of distance selling regulations (Great Britain. Office of Fair Trading, 2006). Therefore we can expect that Cotton-On Ltd is already adhering to those regulations. However the Electronic Commerce (EC Directive) Regulations 2002 introduces additional rules regarding advertising and sales using electronic channels. Because Cotton-On Ltd is already advertising on the Internet, hopefully with respect to those regulations, only extensions to sales specific regulations are essential. Those rules affectInformation provided on the website used for sales. practiced means provided to customers (for example for identifying and correcting errors).Method of acknowledging orders (i.e. receipt supplied by electronic means).(Great Britain. department for Business, Enterprise and Regulatory Reform, 20 02).Introducing an online distribution channel should not cause high additional costs related to legal matters.Additional BenefitsBesides reduced costs and the chance of attracting new customers, use of the electronic sales channel also automates data collection and saves time required for order processing. If the changes are monitored and correct decisions are made to maximise benefits, Cotton-On Ltd will not only attract additional revenue but also lower its execution costs.Expand Sales to European UnionJustificationWe propose the involution of sales to other European Union countries only applies to the sales over the Internet. Costs of online magnification are relatively low, compared to a more sensible solution (Premazzi, 2010) and high cost projects will probably not be possible due to the current situation at Cotton-On Ltd.The United body politic represents 23.5% of the European online retail sector (Datamonitor, 2011a). The other big markets are France, Germany, Italy an d Spain with respectively 21.5%, 14.9%, 7.2% and 5.5% share of the market (Datamonitor, 2011a). It is also worth noting that twain France and Germany have large predicted growth over the next few years than the United kingdom market. The French market is expected to exceed 57.8 billion ($90.8 billion) 21% growth, and the German market is expected to exceed 27.8 ($24.2 billion) 12.5% growth. Apparel (including footwear and accessories) accounts for 14.1% in both the German and French markets (Datamonitor, 2011b c). This means that there is a large potential market outside of the United Kingdom.Implementation and IssuesThe technical and trust issues were already covered in the section on introduction of online sales, and the information provided also applies to this strategy. Pricing issues will be revisited in the context of foreign markets, due to issues arising from bills differences.The Single MarketThe European Union market is easy to access. European Union member states standardise their law to operate in a single market programme. The aim of this programme is to make doing business with other European Union counties as similar as possible to doing business in the companys country of origin.Measures, that European Union countries have introduced to deliver the goods this, includeReduction of paperwork accounting for the purposes of VAT is the same as for sales/purchases in the United Kingdom.Unified standards complying with United Kingdom technical and safety standards ensures meeting standards in other European Union countries.Free effort of people it is easy to employ European Union citizens in United Kingdom companies.Free movement of goods goods produced in the European Union or imported into a member state with duty paid, are considered to be in free circulation, further customs duty is not payable. green currency 17 out of 27 member states have introduced the Euro as their currency, which reduces currency considerations for businesses. (Business Link, no date c d f)LanguagesEven though English is the language used internationally in business, it is still beneficial to have knowledge of countrys language and culture while doing business there (Business Link, no date a). A Eurobarometer pool found that almost one-half of the European Union citizens only speak one language (European Commission, 2012). Cotton-On Ltd needs to translate their website and products descriptions to the languages of targeted countries to not miss out on potential customers from those markets. They should also consider providing customer service in selected languages it is possible they already have staff with language skills and if not, the free movement of people within the EEA makes it easier for businesses to find employees with the right skills (Business Link, no date b d).PricingCustomers in other countries expect prices in their local currency. Therefore a company unveiling a foreign market should consider pricing and issues related to currency exchange (Business Link, no date h). Additional research into the market is required to make decisions on pricing prices appropriate in the United Kingdom may not be appropriate in the new market (Business Link, no date e).Other IssuesCotton-On Ltd should also research competition in the new markets consider marketing, delivery methods, payment methods and related costs (Business Link, no date e).Implementation suggestionsThe solution proposed for introducing online sales, where Cotton-On Ltd would use a known online retailer is also applicable here. If they choose an online retailer that already operates in their target markets, like Amazon (Amazon, no date), it may reduce some costs and solve some technical issues.Because each countrys market and culture is different, and some European countries still operate with their own currency, it is probably not feasible to expand to the entire European Union at once. Cotton-On Ltd should perform more detailed research into pote ntial target markets and decide which to enter.ConclusionIn our report, we established the three strategies Research consumer buying habits, introduction of online sales and expansion of sales to European Union, which we think will address some of the problems arising at Cotton-On Limited. The main problem of the company is its financial situation and we are finding ways on how the three strategies and the process that can help to have it off with this problem. We also talk about the possibilities on how the company can increase their sales through the strategies. In our research we also found out that the Cotton-On Ltd cannot only increase sales, but can also gain new prospected customers if Cotton-On Ltd follows the right procedure in implementing the strategies.In the Consumer Buying Habits, we were able to explain the methods that can be used to help the company with the targeting of their consumers. With the production of their products, the company will be able to target cons umers who will be interested in the products. Interviews, questionnaire, survey and consumer panel are the method that can be used to get the target market for Cotton-On Limited.The Introduction of Online Sales is about using the Internet as a tool in selling their products. This strategy can also strengthen Cotton-On Limited, because it shows in the research that the mo of online sales in the UK is increasing and will continue in same scale. We raised the implementation and the legal issues that the Cotton-On Ltd should take into consideration. We find out benefits as well that the company can get like reducing of cost however they can still increase their profits. They can also attract new customers and gather customer information. There is a major issue in gaining customer trust. Most customers do not trust online sales so we recommend Cotton-On Limited to use known online retailers such as Amazon to target new customers and increase trust for the brand.In the elaborateness of Sales to European Union, it is more likely the introduction of online sales because the company need to use the Internet for this strategy. Cotton-On Limited can use their internet setting so they can easily expand their business to the European Union countries. There are issues in this strategy such as the currency because most European Union countries use different currency so customers expect the prices to be in their local currency. With this issue, Cotton-On Limited should consider the pricing and issues related to the countrys currency exchange. We also talked about the language issue because different country speaks different language. It is discussed that it will really not be a big problem as English is the language used internationally in business however customers expect their native language to be used so in selling the products, Cotton-On Limited needs to use the native language of the country where they are running their business. The company should also consider that they will enter a new market so they will also have new competitors in the business.The conclusion of these three strategies is to increase the revenue of Cotton-On Limited. The three strategies mentioned can help in increasing the funds of the company. If the company will be able to increase their funding because of the three strategies, they will have more budgets to make further improvements to increase the money coming in to the company.The company can also do stock control. This is a very useful improvement to increase their revenue. Stock control is very important because if they cannot do it effectively, it can lead to loss of sales or it can damage the reputation of the business. They have to make sure that they have enough stock all the time at the right time. They have to make sure that they have products to offer to their customers to gain business reputation so that they can have hardcore customers and gain new ones. The company should make sure that they make careful planning with their stock control because having effective stock control can lead to making the business larger.The company will also need more tailored information system across their departments so they can get support on gathering data that can make the operation smooth and can reduce related costs.