1. Introduction
This report comprises a marketing audit and a marketing plan for the year ending on May 2012 for Selfridges. Through this report the board of directors will be able to analyse the marketing plan which was created to stimulate and increase in market share of Selfridges’ brand.
Secondary research and personal interviews with Marketing Director and Advertising Coordinator of Selfridges were carried out in order to collect reliable information needed for the marketing audit.
The marketing plan was then based on rigorous analysis of all the information collected throughout February 2011 and it is consistent with the current company’s mission, vision, strategy and objectives, capabilities and opportunities.
1.1 Situation Analysis
With over 100-year history and tradition, Selfridges was recently voted the "Best Department Store in the World" at the Global Department Store Summit in New York. Selfridge’s chain of 4 branches in the UK follows the differentiation marketing strategy which is proving to be successful and assisted the company to reach sales of £809m and 8% growth in profits in the year ending December 2009.
Selfridges’ mission is to provide customers with a “standard for up-to-the-minute style, lasting quality and exceptional customer service” () and its vision is not only to be the most famous UK’s retailer but to be a business of entertainment and the marketing plan for the year has its base on these aspects of the company.
2. Marketing Audit
2.1 Macro Environment
The macro environmental factors that may affect Selfridges’ strategy in the following year were identified and analysed below.
2.1.1 Political Factors
2.1.2 Economical Factors
2.1.3 Social Factors
2.1.4 Technological Factors
2.1.5 Legal Factors
2.1.6 Environmental Factors
Conclusion
All of the factors listed above may affect Selfridge’s performance in the upcoming year. They were taken into consideration during the marketing plan creation once some of them can imply a negative effect on Selfridge’s business (threats) while some others can be seen as opportunities for the company.
2.2 Micro External Environment
Factors such as: customers, suppliers, shareholders, employees and media affect businesses and the attractiveness of industries; therefore they need to be identified so that the company can proactively address each of them during the creation of its marketing ...
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Conclusion
All of the factors listed above may affect Selfridge’s performance in the upcoming year. They were taken into consideration during the marketing plan creation once some of them can imply a negative effect on Selfridge’s business (threats) while some others can be seen as opportunities for the company.
2.2 Micro External Environment
Factors such as: customers, suppliers, shareholders, employees and media affect businesses and the attractiveness of industries; therefore they need to be identified so that the company can proactively address each of them during the creation of its marketing planning and process of choosing a sound marketing strategy.
Michael Porter’s 5 Forces Model (1996) was the tool used to facilitate the visualization and understanding of the environment that Selfridges is in and the attractiveness of the departmental retail industry.
2.2.1 Threats of New Entrants
Conclusion: The threat of new entrants in the departmental retail industry is relatively low.
2.2.2 Threats of Substitute Products
Conclusion: The threat of substitute products is medium and that is when the marketing strategies take place in order to maintain loyal customers who are willing to pay more for a better quality product, a better shop experience and a better value for money.
2.2.3 Bargaining Power of Supplier
Conclusion: The bargaining power of suppliers is medium; however, it can be balanced with the value adding by the Selfridge’s brand name when selling to customers.
2.2.4 Bargaining Power of Customer
Conclusion: The bargaining power of buyers is medium to high and is mostly due to the competition within the industry.
2.2.5 Rivalry
Conclusion: The competitive rivalry is high with Harrods and Liberty as the major and direct competitors of Selfridges.
Porter’s 5 forces model applied to the factors above demonstrates that the departmental industry is very attractive to Selfridges. It also highlights the high level of rivalry amongst competitors and therefore, customer’s high bargaining power. Hence, marketing strategies are vital to assist Selfridges to differentiate itself within the market.
2.3 Micro Internal Analysis
2.3.1 Customer Segmentation and Targeting
Selfridges has a strategic policy of ongoing market research which assists the company to provide the best products and services to its target markets according to their wants and needs.
Selfridges provides a differentiated service for its customers and therefore adopts and extremely segmented market, rigorously addressing 5 female target audiences and 5 male target audiences.
The wide range of variables that distinguish Selfridge’s target markets amongst each other are: sex, age, socio-economic grade, marital status, type of job, type of home, regionality and use of internet. All 10 targets have a specific name and are allocated in appendix 9.
These target markets and well-educated, willing to pay premium prices for a better value product and service and are social-environmentally conscious.
Knowing the importance of these target markets to the business, Selfridges treats each of them differently according to their profile, addressing their expectations and desires, providing special services which can be seen on appendix 10.
2.3.2 Competitors
Within the same market industry, Selfridges directly competes with other departmental stores such as: House of Fraser, Harrods, Liberty, Debenhams, John Lewis, Harvey Nichols and Littlewoods. Harrods and Liberty are the major direct competitors as they also follow a differentiated and premium marketing strategy.
In an indirect manner Selfridges competes with: Marks and Spencer, Next, Peter Jones, Boots, H&M, GAP, Superdrug, Mango, Benetton, River Island, Office, Amazon, EBay amongst others.
The perceptual map and a BCG Matrix *(8) help to identify the industry rivalry and where Selfridges stands out within the market by making use of entertainment actions within its differentiated and premium marketing strategies.
2.3.3 Brand
From constant windows styling to refurbishment of shops, Selfridges focuses on its brand identity. It is through its brand image on the customer’s mind that Selfridges stands out from its major rivals in the market.
It has recently been voted the "Best Department Store in the World" at the Global Department Store Summit in New York, giving special attention to the customer’s shopping experience, either online or ate the stores.
The company has always been focusing on social-environmental activities and its environmental mission is “Selfridges aims to be an environmentally responsible company, working with our customers, people, partners, suppliers and communities on combating climate change, managing waste, safeguarding natural resources and trading ethically.”
Selfridges seeks to pass to its customers the message of being extraordinary, captivating, inspiring, diverse, innovative, up-to-the-minute style, lasting quality and entertaining, which seems to prove being successful.
The perceptual maps below show how each target market is seen by the company from a customer’s brand image and value to the business aspects.
2.3.4 Distribution
Selfridges sells straight to end users that either go to the shop or purchase goods online, therefore it uses a simple channel type with 0 level of length.
The distribution channel is effective, either through e-commerce or purchases at the stores and it is also used by the major competitors.
2.3.5 Product
Selfridges provides a very wide range of products which are better visualized below.
2.4 Internal Analysis
2.4.1 Physical Resources
Selfridges has 4 branches in the UK and are listed below.
2.4.2 HR and Skills
Selfridges employees over 3500 people amongst its 4 branches in the UK and practises diversity within a friendly and social work environment. It claims that its employees from beauty counters to Food Hall are as diverse as the products they sell.
Staff from shop floor sellers to directors of the Head Office Departments (Buying & Merchandising, Finance, HR, Information Systems, Marketing, Communications & PR, Online store team, Visual Merchandising and Property) is motivated to constant learning and development through weekly training and ad hoc courses which keeps the workforce up-to-date and able to provide the highest standards and ensure customer satisfaction.
The company searches for committed, keen and ambitious people and constantly encourages its employees to acquire new skills and capabilities to better serve customers through three-month induction training, continuous on-the-job training, career developments advice and feedback.
2.4.3 Financial Resources
Source: Selfridges and Co. Plc Annual Report 2009.
2.4.4 Intangible Resources
Selfridges&Co name alongside with its brand are the most valuable intangible resources the company posses.
The special limited edition of the Blackberry Bold coloured in Selfridges’ trademark pantone 109 yellow was created to celebrate the company’s 100-anniversary in 2009.
2.4.5 Competences
According to Sally Scott, the company’s Marketing Director, Selfridges’ core competences are the ability to conduct market research and understand customer’s expectations, maintaining a perception of luxury brand; and ability to effective manage its Human Resources.
Selfridges’ distinctive competence is the ability to entertain and innovate. Continuous public and private events, the opening of galleries (ie. The Shoe Gallery), personalized goods, personal shopping and seasonal campaigns have attracted customer’s attention and differentiated the company from its major competitors.
2.4.6 Capabilities
2.5 SWOT Analysis
Selfridges’ strengths best match the first three market opportunities with a high level of implication for the customers and those can be an effective way of differentiating the company from the threats of a competitive industry and rivals with similar marketing strategies.
3. Marketing Plan
3.1 Objectives
The market audit for detailed explained above was the base for creation of marketing objectives that align the company’s strengths and opportunities within the market.
- To increase market share from 12% to 14% by May 2012.
- To increase online customers purchases by 30% by May 2012.
- To sell over £12m of the new Selfridge’s products line addressed to the over 50’s target audience by May 2012.
3.2 Gap Analysis
The main objective of the marketing plan for Selfridges is to increase its market share in 2% by May 2012. In case no marketing activities that address the gain of market share take place Selfridges would lose 2% of market share to its competitors. Hence, the gap of market share between April 2011 and May 2012 is of 4%.
3.3 Strategy
3.3.1 Growth Strategy
According to Ansoff Matrix for businesses there are 4 different strategies that organizations can adopt when attempting to grow. (Ansoff I., 2007).
- Diversification is a risky strategy taken by an organization that decides to provide new products/services to a total new market.
- Market Development is the strategy adopted by companies that seek to sell its existing products/services into new markets.
These first two strategies explained above are not valid to Selfridge’s overall strategy, once its main objective is to increase its market share.
- Product Development is the growth strategy by which firms try to introduce new products into existing markets.
- Market Penetration is a strategy by which companies seek to sell more quantities of their existing products into existing markets.
The growth strategy chosen for the over 50’s Selfridge’s audience is the Product Development, where this existing market will be offered a new line of products.
And to achieve the objective of increasing the online purchases the growth strategy chosen was Market Penetration by which Selfridge’s will focus on selling more of its existing products to its existing markets through the company’s online purchase system.
Ansoff Matrix for Selfridges&Co
Both strategies will add up to the main objective of increasing the organization’s market share in 2% by May 2012.
3.3.2 Competitor Strategy
3.3.2.1 Defence strategy
There are basically 4 competitive defence strategies and the most suitable for Selfridges within the next year of the marketing plan is the Mobile Defence. Mobile defence strategy consists on shifting company’s resources and constantly developing new strategies and tactics. Selfridges will therefore modify existing online purchase system and reposition it into customer’s mind and also introduce a new line of products to the over 50’s segment, positioning the brand as differentiated within the market and increasing its market share.
3.3.2.2 Attack Strategy
There are 4 competitive attack strategies and the most suitable for Selfridges is the Envelopment Strategy which consists of encircling the competitors. By introducing new products to a specific target audience within the market Selfridges will weaken competitor’s products and brand identity and therefore increase its market share.
3.3.3 Positioning Strategy
Selfridge’s online purchase system will be repositioned into customers’ minds as a convenient, fast, secure, versatile, pleasant and trendy way by which they can choose their goods, receive them and feel Selfridge’s shopping experience from their home/job.
The new line of products for the over 50’s audience will be positioned in both men and women categories and can be better understood through the positioning maps below.
Over 50’s female and male target audiences will be named Simply Elegant. Selfridges will position the new product line into the market as being practical, simple, convenient, elegant and stylish.
Positioning Map - Women
Positioning Map - Men
4. Implementation Plan
5. Budget and Control
Based on the necessary activities to complete the marketing plan the total and contingency budget are as follow.
Total Budget: £15,000,000.
Contingency Budget: £1,500,000.
The total budget was broken down according to each marketing mix complexity which can be visualised on the budget breakdown chart below and also divided monthly on the Gantt Chart which can be seen on appendix 11.
The control tool that will be used during the marketing project is the Milestones’ stage gating.
This tool helps to keep track of the project, proactively make changes where necessary and also assists on performance evaluation. Each gate symbolizes the date when each activity should end in order to start a consecutive task and complete the project on time. The gates can be visualised on the Gantt Chart in appendix 11 where all the project activities have a start and a finishing date.
6. Appendix
1) Business Week. [Accessible on: ]
2) BBC News. [Accessible on: ]
3) Which Way to Pay. [Accessible on: ]
4) International Business Times. [Accessible on: ]
5) Department for Workers and Pensioners. [Accessible on: ]
6 and 7) IS Preview. [Accessible on: ]
Source: ispreview.co.uk
8) BCG Matrix:
9) Customer segmentation and targeting.
10) Customer profile and services provided.
11) Gantt Chart
7. References
Chaffey D., 2003. E-business and E-commerce. Essex: Prentice Hall.
City A.M., 2010. Selfridges profit boosted. [online] Available at: [Accessed on 25 Feb 2011].
Dibb S. Et al, 2011. Marketing: Concepts and Strategies. Oxford: Houghton Mifflin.
Fifield P., 1998. Marketing Strategy. 2nd ed. Oxford: Butterworth Heinemann.
Hollensen S., 2010. Marketing Management, a relationship approach. Essex: prentice Hall.
McDonald M., 2002. Marketing Plans: How to prepare them, how to use them. 5th Ed. Oxford: Butterworth-Heinemann.
Johnson G., Scholes K. & Whittington R., 2008. Exploring Corporate Strategy. 7th ed. Essex: Prentice Hall.
Personal Interviews with staff on 23rd of February 2011 at Selfridges Head Office, London.
Selfridges and Co., 2011. The Business. [online] Available at: = [Accessed on 12 Feb 2011].
Selfridges and co., 2011. Our heritage. [online] Available at: = [Accessed on 15 Feb 2011].
Selfridges and Co., 2011. Environment. [online] Available at: = [Accessed on 15 Feb 2011].
Selfridges and Co., 2011. Head Office. [online] Available at: [Accessed on 20 Feb 2011].
The Telegraph, 2010. Selfridges named world's best department store. [online] Available at: [Accessed on 20 Feb 2011].
