Marketing Audit Framework And SWOT Analysis For The Seller – MBA Assignment

Current Market Environment and Marketing Audit Framework

Questions:

1 Critically review the current market environment by using a marketing audit framework.

2. Summarise the audit through a focused actionable SWOT analysis

3. Select ONE marketing opportunity and then explain with justification how this can be commercialised over the next three year period with specific attention to proposals for the following:

3.1 Market Attractiveness

3.2 Market Segmentation and Market Targeting

3.3 Impactful Brand Value Propositions to secure a competitive position

3.4 Specific, relevant, marketing mix plans for the next 3 years to build customer loyalty

3.5 Marketing Resource requirements

4. Justify this innovation in terms of potential financial contributions through revenue grow, cash flow and profit contribution

5. You are required to submit this proposal as a MBA module assignment with appropriate critique, use of models, references and citations which conform within a 4000 word limit to Harvard Referencing protocols.

Presentation of the domestic market for an organisation appears to be the most convenient factor that helps in organisational growth. This particular research study is going to present the necessities of domestic market leadership strategies of The Seller, a new retailing company going to launch in UK in the coming days. Being a marketing advisor, the current researcher is going to present the organisational framework. The researcher is also going to present the marketing audit framework that leads in presenting the strategies needed to be presented and chalked out. The researcher presents the different issues related to this approach and presents the competitive analysis of the market place. At the same time, revenue growth, cash flow and profit contribution are also presented by the researcher. This particular study is going to present the necessary approaches taken for development of this research practice.

In order to analyze the current market environment for The Seller availing different tools is, therefore, essential. In this approach, proper evaluation of both the internal and external factors is literally essential that helps in determining the effective organisational issues. A proper analysis of the different marketing factors is literally essential in this order. As mentioned by Hsu (2012), marketing audit is of two different types: internal audit and external audit. In order to identify the external market issues, PEST analysis appears to be the most congenial factor.

Political Issues: In the past few years the retailing business has been received an immense support from the political side in UK. This has rendered different retailing companies to try their hand in UK. As of having a financial and economical stability for last three years after the certain fall has resulted in intense encouragement for retailing sectors. As retailing sectors are in need of importing different branded products, clear custom service is needed. UK Government is encouraging in this service as well. As more employment opportunities are getting created by these retailing sectors, the influence of government is also essentially ethical as well.

Economic Issues: Although it is stated that UK has recovered from its economic depression in the past years, however, it will take the time to stabilize the economy. Changes in the organisational taxation policies in the recent days have added more problems. Therefore, the authority of The Seller is needed to be aware of its approaches. Analyzing the necessities of the customers and possible approaches to take up for fulfilling the demand is literally essential. Having been influenced by diversification approach, economic diversification approach is needed to be exercised by the organisation. However, with the radical decline in disposable income level and GDP of UK, a serious economic deprivation issue can raise up.

SWOT Analysis

Social Issues: With the social changes from physical purchase to online marketing, it appears to be a severe problem for all of the retailing sectors operating in UK. Therefore, most of the retailing organisations are opening the online retailing services as well. The Seller is also needed to apply both the physical and online marketing approaches. At the same time, Britons, nowadays, are becoming typically health conscious, resulting in letting every retail store avail fresh and herbal products. The Seller is also needed to be quite efficient in its approaches to applying these approaches.

Technological Issues: With the technical advancement in this recent era, retailing industry has seriously gone to use the technologies essentially. Implementation of the online shopping and retailing appear to be the most significant approach that may let The Seller achieve immense success. At the same time, with the installation of technologies in order to reduce the carbon footprint and less energy consumption approach lead this sector to developing a lot (Tomczak, 2010). The Seller is also needed to center its focus onto these factors as well. To provide the customers ease of access, application of automated technologies may prove to be helpful.

Issues	Description	Status
Threat of New Entrance	As retailing business seems to be profitable, a lot of industrialists in the past few years have tried their hands. But as the investment in the initial stage is literally high, it leads most of the people set their feet back.  Therefore, it can be stated that new entrance is not the biggest issue for The Seller.	Medium
Threats from the Substitute	In these recent days, online marketing seems to have become literally famous among the Britons. As the availability of the products can be cherished within the doorstep, people barely prefer going to the physical retailing shops. Even the retailing companies also seem to offer this service for acquiring the marketplace and attain the competitive advantages. Therefore, for The Seller it may seem to be a literal threat in order to market their products directly. Reaching to the customers of the market may also seem to be a problem.	High
Bargaining Power of Buyers	To most of the Britons, quality is barely compromised. For the high quality products or services, the Britons seem never to bargain. Therefore, if The Seller can market quality oriented products, the buyers can accept the products easily (Taufique and Shahriar, 2011).	Low
Bargaining Power of Suppliers	Suppliers play the most intrinsic role in this approach. As for the raw materials the retail companies in most of the cases need to depend on the common suppliers, satisfying them necessarily is literally an essential issue. For The Seller, a convenient relation to the organisation and suppliers is essential. It can help in attaining better cohesion in the marketplace.  Suppliers are also needed to be quite intrinsic in this approach that needs to be coherent in this approach.	Medium
Competitive Rivalry	The competition among the several retailing organisations in UK is literally high. This leads to engaging in a distinctive problem. Competitors in the market like Tesco, Saintsberry, Spenser and others are also intrinsically engaging in this market place. With marketing of the products, competitive approaches are also intrinsic factors that lead to attaining The Seller gain market advantages.	High

Table 1: Competitive Analysis of UK market for The Seller

Strengths Increasing demand for the convenient stores in the past years in UK is expected in benefiting in the market demand. As The Seller is going to provide services online, it is expected that the organisation will attain competitive advantages in the marketplace. Stability in UK market is also one of the strategical approaches that lead to attaining marketing benefits. Brand value of the organisation is also supposed to be detrimental in capitalizing the market place.

Weaknesses Being completely new in the market, it may seem to be quite difficult for The Seller to understand the demand of the market place. Competition is the most significant problem for The Seller may seem to face seriously. Along with the native supermarkets, there are several other international supermarkets as well, ready to provide competitive fight to the organisation (Schögel, 2010). Socially convenient stores and supermarkets although is a serious need, however, the small stores are also in a challenge for The Seller. Being completely new to the market, it may not get always accepted by the common people. Being completely new to the market it may not get clear access directly. Therefore, it needs to stand back in the queue of retailing development.

Opportunities Expansion in a larger market place to cope up with the demand may seem to be a congenial effect that The Seller may get advantages of. Online retailing is another significant issue that The Seller may get to access directly. With mobilizing business, The Seller can leads in attaining better cohesion. More flexibility in this approach can also be gained essentially. As the demand of the essential commodities availed from the market is literally in demand, it is expected that in the coming days the demand will increase in a large number. Peattie and Belz (2010) is of this view that most of the convenient stores run on the branding approach. If The Seller is quite bold in its approaches and understands the market demand significantly, it is expected that the organisation will perform sophistically.

Threats Price war may seem to be the most drastic threat that The Seller may seem to face. Structural change in the price approach after London Olympics seems to have cast its effect on the organisational development. Along with the international retailing companies, native small companies may also create problems in the organisational development. Integrated retailing strategies taken up by Walmart, ASDA, Tesco and other super-marketers pose to be a significant challenge for The Seller. Most of the international brands rely on the operating international retailing chains. However, there approach in this context or The Seller may not seem to be intrinsic. This would be enough to create disparity between customers’ demand and supply.

As The Seller is all set in tending its upheaval in the market place, it needs to focus on the opportunities of the UK market place available essentially. It appears to be one of the congenial aspects for the convenient development as a whole. Here, the analyzer is going to predict the opportunities available for the next 3 years. A report of Jeong and Kwon (2012), mentions that with the increasing demand of online retailing business in the past few years has conquered the UK market place. As most of the retailing organizations nowadays prefer to go online and delivering the products and services to the doorstep of the customers, it is playing one of the cohesive approaches on the strategical development of The Seller in the coming years.

Away from the urban areas of UK, demand of products and services marketed by the different retail and convenient stores is literally high. Dependence on the local shops in these days seems to have reduced a lot as well. It seems to be quite sophisticated in the approaches that in the coming days demand of the products will also increase essentially. As most of the convenient stores dole out international branded products in most of the cases, attractiveness of this market has also increased essentially. As the demand is essentially high in nature, the supply is also needed to be convenient as well. It results in performing well in the coming days for The Seller. On the other hand, a report of Kasavana (2001) highlights 69.24% Britons prefers online retaining service. To these people approach of market penetration for The Seller in the coming days is going to be essentially convenient in nature. It also appears to be quite sophisticated matter for the essential development of the market place as well. Online service for The Seller is also going to be convenient as well which enables in determining better cohesion in the market ethics as well. With proper promotion both online and offline mode may lead the organisation reach to a large number of customers in the market place. It seems to be quite significant approach for enhancing the attractiveness of the market credentials. It also appears to be intrinsically convenient in this approach that leads in engaging more ethics.

Marketing Opportunity and Commercialization Plan

Proper market segmentation and analysis seem to be one of the coherent factors that an organisation is needed to be managed. The market place is needed to be essentially segmented according to the products and services that are being provided by the organisation. Being a supermarket, The Seller needs to store a lot of various kinds of products. It needs to be quite affluent in this approach that leads to develop the organisational ethos. More to be added, for various kinds of products proper market segmentation is necessary. Targeted market approach is also quite intrinsic approach that helps in strategizing the market approaches. Proper segmentation of the market place is therefore seriously necessary. As The Seller targets at implementing online retailing service in the coming days, it is quite natural that the organisation is needed to be quite intrinsic in this aspect. For the different products different age groups are needed to be chosen which leads to determine the organisational benefits. Targeted market approach is having an intrinsic approach for the organisational development. The market ethics is needed to be maintained significantly that helps in ascertaining the market target. Approach of the marketing ethics is also significant ethics in order to make the customers essentially attracted by the products that the organisation markets actually.

Brand value proposition for attaining the competitive advantages of the market place also seem to play a quite affluent role. Perception of the customers and the perception of the organisation is needed to be balanced so that the disparities in the market ethicalities can be removed. Brand value of the organisation is needed to be developed significantly so that it helps in attaining better cohesion in the market ethics. Brand value proposition seems to be the most coherent approach that leads in generating better ethicality for the development of the market ethics. It also helps in attaining the competitive advantages of the market place. Within next three years it is expected that the organisation will gain a significant hold over the market. Its approach is aloe going to be significant.

As The Seller has set its target of acquiring the 25% of the UK retailing market in coming 3 years, it is expected that application of the proper strategies of price, product, promotion and place is needed stated chalked out by the organisation. Presenting the marketing approaches succinctly, approaches taken by The Seller are to be identical as well.  Managing product approaches is literally significant for acquisition of the market place. In the following section an approach of market mix approach is stated for The Seller.

Product: Quality is the most essential issue that most of the Britons actually care for always. Product is needed to be quite unique and at the same time its branding is also quite significant issue that the organisation is needed to be aware of. The product is to be quite intrinsic in this approach. Marketing of the proficient products is also literally significant that The Seller is needed to be presented. Products are needed to be garnished and presented succinctly. Within the first year of business, The Seller aims to provide 24.32% better product and service to the customers in comparison to the other retailing service providers. Within 3 years complete packed and manifested products are to be dole out. It is expected that it will let the organisation attaining a better product approaches. Within the 3 years of time span it is expected the organisation will attain its coherence in the market place.

Market Attractiveness

Price: The price of the product is needed to be kept within such level so that it can be easily permitted by the common people. Lindley, Friedman and Struble (2011) mention with the quality of the product increases, price needs to be increased. It is also needed to be stated that if the price of product is not so much convenient according to the quality, the customers may not seem to feel attracted to purchase it. But charging high may not attract more customers as well. Therefore, the price is to be kept within balance. The price of the product for these years is determined to be kept low by The Seller only to put a hold on the market. Even it is decided that the level of profit is expected to be kept low. The price is to be quite significant at the same time. The organisation needs to maintain proper supply chain management as well so that the price is stable. It is needed to be stated that in order to manage the online technologies the organisation needs to expend significantly. But the average price of the product must not go up in any way.

Promotion: Along with promoting the different products and services for The Seller use of digital and social media is quite significant. It is needed to be stated that promotion helps in penetrating the marketing approaches significantly. Promotion of the product advertised by different celebrities let the organization perform significantly. In the first year for the promotion approach the organization is expected to expand 32% which will gradually be reduced by the years. At the end of third year the cost will be fixed to 4% only. Once the organization takes a hold for the market, it is expected to attain the market value. Promotional approaches are also intrinsic factors that needed to be managed properly.

Place: For the first two years the place selected for this project is going to be limited within London, Westminster, Manchester, Liverpool suburbs only. But within three years along with the development in the online retailing sector, physical stores will also be spread in other areas of UK. For the place of advertisement, essentially the crowded places are going to be chosen by the organization. It seems to be one of the intrinsic factor for the further development of the organization. The physical stores of the company will be on basis of taking lease of the places to lower down the cost of setting up of retail stores.

The resource of the marketing will be sourcing products as well as channel of business model. In this model of business, The Sellers will source its products to the retail consumers from its retail and online stores. In addition to this, retailing of consumable products needs to be sourced from the suppliers at low price (Hamer, 2011). It will provide the company opportunity of selling goods at low price to enrich its customers in the convenient stores.

The promotion of the convenient stores and online stores will be done using the social media and websites. Company will find the solution of finding the strategy of promoting its business through banner ads and pop-ups in the websites where internet traffic is high. Therefore, the resources for marketing will be selective and bounded to online promotion. The process of promoting the business will not be through traditional channel of advertisements in newspapers and television to reduce the cost of promotion. Further, to reduce more cost, company will avoid making any exhibition in the areas where it will set up the business.

Market Segmentation and Targeting

Revenue growth of a company is key information in deducing the application of innovation by a startup company in the market. The growth of the revenue is normally a prediction of value of innovation in business model. The chosen model of business is selling of retail consumable products physically through its convenient stores targeting the small area as well as specific customers’ needs. Further, company has also target of selling highly branded products from its stores to the customers to reduce the bargaining power of the customers. The expected capital budget of the company is £45000 for the first year whereas the promoters of the company will provide only £40000 at the initiation of the project. The target of the company is to set up 12 convenient stores in the country at the first year that will cost up to 85000 for the capital expenses. Therefore, it is clear that company cannot bear that much of cost in the first year, so it will consider taking rent of the 6 stores for the first three years while rest of the stores will be bought as assets incurring £45000. Company will borrow £5000 for the capital expenditure from banks. The working capital of the stores will be run by taking credits from the suppliers as well as borrowing from the banks as a short-term loan. The revenue projection of the company is as follows –

Particulars	Year 1	Year 2	Year 3
Revenue	50000	65000	89000
Cost of goods sales	36000	47000	62000
Gross profit	14000	18000	27000
Cost of advertising	3000	5000	4500
Administrative cost	12000	14700	16000
Salary of employees	6000	6000	7000
Net profit	-7000	-7700	-500
Finance cost	400	992	1687.36
Tax	Nil	Nil	Nil
Net profit	-7400	-8692	-2187.36

From the above table, it can be seen that company will not post a single money profit after paying the interest and other liabilities within the first three years. Therefore, it becomes difficult to assess the innovation of the company in point of view of efficiency of the management. However, the growth of revenue is estimated as 30% and 36% in the second and third year respectively. Therefore, the style of conducting the business with convenient stores in the country might be said as successful after watching the revenue prediction from the first three years’ business. Further, it is also observed that company will borrow more £7400 after completing the first year to meet the all obligations. Thereby, cost of finance will grow for the next year by £592. The same will also happen in the next year – £7700 loan will be taken in the second year. The finance cost in the third year of the business will be £1687.36 due to increase in overall borrowings. The third year finance cost of the company will be £1687.36 while the net loss will reduce to £2187.36 at the third year of business. Due to borrowing in the consecutive three years of business, the repayment for loan will be higher which will be considered as cash outflow for the company. The cash flow of the first three years for The Sellers is as follows –

Particulars	Year 1	Year 2	Year 3
Net income [adding depreciation]	1100	-1192	6312.7
Change in inventory	5000	6000	4500
Cash flow from financing activities	400	992	1687.36
Cash flow from investing activities	0	0	0
Net cash flow	5700	3816	9124

From the above cash flow table, it can be seen that cash flow from the activities will be positive for the first three years as estimated. Therefore, business can be taken in hand due to positive cash flow from the activities. In addition to this, the revenue of the business will have good growth as seen from the estimation in the revenue estimation. The growth is seen 30 and 26 percent respectively. Further, it is also seen that except second year, the other years have seen a good growth in cash flow from business and there was little scope for the business to make any profit from investing activities due to new business set up.

The worrying part of the estimation is no profit making in the first three years due to low revenue margin and low contribution margin in selling the products. The business needs to promote its business through attract the customers with its low priced products. This can be considered as the dumping policy for attracting the customers whereas it will have least opportunity to compete the supermarkets due to low advantage from the suppliers’ side. The amenities in the store will be least due to running the operation at low cost. It will ensure that high-end customers will not go through these stores normally.

The breakeven of the business will be higher than the estimated cost of the period. The business will not meet the breakeven in terms of revenue and cost of business for the first three years. However, it can be seen that company can make better sales and it cannot reach the break even in terms of units selling whereas the profit is not possible from business. It means revenue of the business is low in this case to reach the target of business. Therefore, it can be said that breakeven model of the business will be failed as per the estimation and company will not reach the target of no profit and no loss point.

References

Hamer, L. (2011). Reducing Online Buyers’ Perceptions of Risk: A Study of Online Auctions. Services Marketing Quarterly, 32(2), pp.83-95.

Hsu, Y. (2012). Facebook as international eMarketing strategy of Taiwan hotels. International Journal of Hospitality Management, 31(3), pp.972-980.

Jeong, H. and Kwon, K. (2012). The Effectiveness of Two Online Persuasion Claims: Limited Product Availability and Product Popularity. Journal of Promotion Management, 18(1), pp.83-99.

Kasavana, M. (2001). eMarketing. Journal of Hospitality & Leisure Marketing, 9(3-4), pp.161-178.

Lindley, L., Friedman, D. and Struble, C. (2011). Becoming Visible: Assessing the Availability of Online Sexual Health Information for Lesbians. Health Promotion Practice, 13(4), pp.472-480.

Peattie, K. and Belz, F. (2010). Sustainability marketing — An innovative conception of marketing.Thexis, 27(5), pp.8-15.

Schögel, M. (2010). Customer Touchpoint Management. Thexis, 27(2), pp.1-1.

Taufique, K. and Shahriar, F. (2011). Online Social Media as a Driver of Buzz Marketing. International Journal of Online Marketing, 1(2), pp.57-67.

Tomczak, T. (2010). Innovatives und nachhaltiges Marketing. Thexis, 27(5), pp.1-1.