In analysing the market it is important to consider how the various segments are changing in relation to Runners World strength and weakness. This can open new opportunities and pose potential threats. Total market share is important as it affects such things as overall visibility therefore advertising presence and influence over distributors can be very important.
2.11 Repositioning
With declining sales Runners World could re-position and rename it-self say Sport Shoes Elite (specialising in running shoes). This requires new store layout, different ranges of shoes and a higher level of customer service to accommodate changes in customer values, tastes and preferences that can indicate that a new repositioning and a new image could prove beneficial. The appropriate strategy should match the environment, values and resources congruently.
This involves concentrating on doing better what is being done. Growth is an objective and there should be an implicit search for ways of doing things more effectively where resources can be directed towards the continued and profitable growth of the market. This is accomplished by attracting new users or consumers, increasing the consumption rate of existing users, and whenever possible stealing consumers and market share from competitors.
This strategy in this respect is low risked since it is based on known skills and capabilities also because Runners World marketing skills will be concentrated on its specialised product and related consumers, and not diversified, these skills can be developed and improved to create competitive advantage. Runners World will have the opportunity to be sensitive to consumer needs by being close to them and can continue to build a reputation for this.
However there is a constant need to monitor competitors and ensure that any innovations do not constitute a major threat.
By doing this, Runners World can focus attention on exactly what potential customers are looking for and the key success factors for the product in relation to different groups of customers, as well as the market as a whole.
3. The Marketing Mix within Runners World
Branding, positioning, differentiation and segmentation can all be used to create and sustain competitive advantage. If competitive advantage is to be gained and sustained, however then consumers must recognise and appreciate the differentiation and the benefits offered by the service and product of Runners World. Additionally they must be willing to pay the price being charged; and the product must be available where they expect to buy it. Competitive advantage though, can be created by utilising the following mixes: Product, Promotion, Price, Place, Process, Physical Evidence and People.
3.1 Product /Service
Runners World services can be described as intangible (e.g. club card by gaining points on each purchase that can be redeemed at a later date or by donating a percentage of each sale to charity say breast cancer research) and tangible (such as the facilities (store lay-out), employees (sales staff) or communications) associated with the product. These tangible products and the other products themselves can be viewed prior to purchase. Therefore, Runners World must pay close attention to associated tangibles and to ensure that they are consistent with the selected image of the service.
The service product is often equated with Runners World, for example the sales staff. Because consumers tend to view services in terms of service personnel and because personnel are inconsistent in their behaviour, it is imperative that Runners World effectively select, train motivate and control its sales force. The strength or weakness of the service provided often affects consumers’ perceptions of service quality.
Price, quality and value are important considerations of consumer choice and buying behaviour and it is not objective quality that matters but the consumer’s subjective perception.
Whether a consumer’s actual experience exceeds, match or fall below these expectations will have a great effect on future relationships between the consumer and Runners World. To improve service quality Runners World must adjust its own behaviour to be consistent with consumers’ expectations or re-educate consumers so that their expectations will parallel the service levels that can be achieved.
3.2 Promotion
Service advertising should emphasise tangible cues that will help consumers understand and evaluate the service offered at Runners World (see part 4).
The cues may be the physical facilities e.g. the new store layout in which the service is performed or some relevant tangible object that symbolises the service itself. For example Runners World Slogan ‘Over a decade of service…a ‘lifetime’ of trust.
To be successful Runners World must not only maximise the difference between the value of the product to the customer and the cost of providing it: they must also design the service offered with the employees in mind. The sales personnel are critical to the perception of quality service. They must be provided with sufficient tools and knowledge to furnish the type of service that the customer desires.
Thus employees within Runners World are an important secondary audience for service advertising. Advertising (see part 4) will have a positive effect on customer contact personnel. It can shape employee’s perception of Runners World, their job and how management expect them to perform. It can be a tool for motivating, educating and communicating with employees. For example ‘Over a decade of service…a ‘lifetime of trust, can be used to develop a sense of pride among employees.
Personal selling is potentially powerful within Runners World because this form of promotion lets consumers and staffs interact. Customer contact personnel can be trained to use this opportunity to reduce customer uncertainty, give re-assurance and promote the reputation of Runners World. In addition sales promotions such as ‘buy one get the second at half price’ can be quite feasible.
Further, consumers tend to value word-of-mouth communications because they are experimental in nature, for this reason Runners World can attempt to stimulate word-of-mouth communication. This can be done by say a testimonial on the local radio by a satisfied consumer to vouch for the benefits of the service.
In addition see part 4 for the different medium of advertising also see part 3.4.
3.3 Price
Price plays both an economic and psychological role in Runners World. However, the psychological role of price in respect to services is magnified.
The products may be bungled together and sold for a single price since the demand for certain product is often inter-dependent. For example Runners World may offer packaged sporting goods e.g. buy a pair of Nike shoe and get a pair of Nike socks free or Nike shoe with shoe deodoriser. Price bundling could help cross-sell to their current customers or acquire new customers. Therefore once market segmentation and specialised services are directed to specific markets specialised prices can be set e.g. become a member of Runners World Sports Club for free when you spend £100.00 or more on any item between now and Christmas. Next comes comparative pricing as the service becomes fairly standardised.
3.4 Place
The appropriate distribution of the service to final consumers is essential if any perceived competitive advantage is to result in sales, revenue and profits. The service should ideally be available for easy consumption by consumers.
Since Runners World distributes its products directly and is in a high contact area it is important that it must not separate itself from its consumers. Two of the most important areas of concern are the application of technology and the use of electronic product delivery channels this includes Runners World data base with all its customers and consumers names and addresses and other details such as income – this information can be used to promote the business by using direct mail as discussed in part 4. In addition there should be the EPOS (electronic point of sale) system to check the stock without going to do a physical check or the acceptance of credits cards and the introduction of club card as previously mentioned.
Further Runners World could offer Internet service for customers wishing to but online from the comfort of their home or office 24/7 without having to visit the store (see part 4). However this may prove costly at the outset and should be developed on a timely basis. Runners World may extend its services by having additional outlets or by doing direct selling i.e. taking the products to the street to sell without allowing prospective buyers to visit the store at the same time they could use this opportunity as a medium for promoting Runners World.
3.5 Process
The direct involvement of consumers in the production of the services offered and the perishability of these services will place great emphasis on the process of the transaction for Runners World. Friendliness of staff and flows of information will affect the customer’s perception of Runners World. Therefore it is imperative to ensure that say goods that are specially ordered are delivered on time and that customers queries are dealt with professionally and that close contacts are kept with customers to sense their needs.
3.6 Physical Evidence
The environment in which the product is offered (e.g. a well kept, spacious well laid out and labelled shelves) and consumed is vital to the consumers understanding of the service or the enjoyment or satisfaction. Therefore the comfort is very much a part of the service offered by Runners World also the appearance and the ambience. The layout, upkeep and general ease of access and use - all will become part of the service e.g. providing drinking water from a water cooler during summer.
3.7 People
The nature of Runners World will require direct interaction between the consumer/customer and the staff and the staff themselves. This level of interaction must be given maximum attention if customers are to maximise their use of the service and ultimately their satisfaction. Employee selection, training and motivation are central considerations e.g. the motivation of staff will enable staff to deliver efficient service resulting in great service from the customer’s point of view. Therefore Runners World is totally dependent on its personnel - Its main assets - People!
All the marketing mixes outlined above are appropriate to Runners World and when implemented can result in a win-win situation.
4. The Marketing Communication Tools within Runners
World
Effective communication is the key to effective marketing. The buyer’s perception of a market offering is influenced by the amount and type of information they receive and their reaction to that information. Therefore there must be a good flow of information between Runners World and its customers to help in the decision-making process which precedes a purchase. Marketing communication is the process of execution of marketing decisions, following analysis of the market and the competitors. It is then that these decisions are implemented in the marketplace, communicating Runners World message – the combination of advertising, personal selling (see 3.2), publicity and public relations sales promotion, sponsorship the Internet, direct mail and direct marketing to consumers who then interpret these stimuli in their own way. An effective marketing communications system also allows feedback form the consumer to the seller and not just the reverse.
4.1 Advertising
This is a paid form of non-personal communication about Runners World and its products. This can be transmitted to a target audience on a timely basis through a mass medium such as radio, newspaper (including local), magazines (sports), direct mail, public transport (such as bus), outdoor display or the Internet as discussed later.
Because advertising is highly flexible, it offers the option of reaching an extremely large target audience or focusing on a small, precisely defined segment of the population e.g. serious runners.
Advertising can be an extremely cost efficient promotional method because it reaches a vast number of people at a low cost per person.
4.2 Public Relations and Publicity
This is a form of non-personal communication that is published in different forms of media about Runners World and its products at no direct charge. These may include magazine, newspaper, radio and television news stories about new products or changes within Runners World e.g. the repositioning or the relaunching as discussed previously.
Publicity must be planned and implemented e.g. the sponsorship of the local football team so that it is compatible with, and supportive of other element in the marketing mix (see part 3). However, publicity cannot always be controlled as other elements of the marketing mix can be. Therefore public relations manage and control the process of effectively using publicity. In addition public relations can be used as a complementary tool to the rest of the promotional mix.
4.3 Sales Promotion
This is an activity or material that acts as a direct inducement by offering added value to or incentive for the product to salesperson or consumers. These may include coupons, bonuses and contest to enhance the sale of the product e.g. win free club membership for a year at Runners World Sport Club with spending of £100.00 and above on any item (s). This can be distributed through say the local newspaper.
Sales promotion may be produce to enhance short run sales increases e.g. buy one pair of shoes get the other at half price. Further sales promotion can be used to improve the effectiveness of other promotional mix ingredients.
4.4 Sponsorship
Funds are made available to the recipient of the sponsorship in return for prominent public recognition of Runners World generosity and display of Runners World name, products and brand e.g. sponsorship of the local football team and the display of its name on all sports gear worn by them. Runners World can gain the benefits of enhanced company brand or individual reputation and awareness as well as possibly improved morale and employee relations.
4.5 The Internet
This can be used to provide existing and potential customers with Runners World product and brand information quickly. Companies such as Microsoft can provide Runners World with e-commerce capability at affordable prices which can enhance Runners World sales.
The Internet provides a tool which can be up-dated quickly or modified and can produce material aimed at tightly defined target groups or even individual consumers.
The Website must be tailored to match the target consumer buying behaviour and expectations and must be informative but not mesmerising while reflecting the existing branding and product positioning already established.
4.6 Direct Mail
This is used to entice prospective customers to invest in Runners World products or services e.g. the promotion of its Sports Club. Therefore good data base (as mentioned previously) management is important and the material must be carefully targeted to its customers or potential customers to reduce cost.
4.7 Direct Marketing
Direct Marketing encompasses all of the communication tools described above and focuses marketing communications activity on promotional mix ingredients that deal directly with targeted customers. This may include leaflet droppings say for promoting its new store layout a visible form of direct marketing. Direct response advertising – containing a call for action within the advertisement by say coupon (say 10% off with this coupon on all marked items in store).
Direct marketing must strive to reflect targeted customer behaviour, need and perceptions, provide a plausible proposition that is clearly differentiated from competitors’ propositions and match Runners World corporate goals and trading philosophy.
Marketing effectiveness depends significantly on communications effectiveness: the market is activated through information flows. The way a potential customer perceives Runners World market offering is heavily influenced by the amount and kind of information they have about the product offering and the reaction to that information. Marketing therefore relies heavily upon information flows between Runners World and its prospective customers.
No matter how good Runners World product or service offering is the benefit to the consumer needs to be communicated effectively.
5. Evaluating the Marketing Strategy
Whilst internal or external growth strategies might be preferred to fulfil objectives and fill the planning gap, specialisation strategies may be required because of competitor or other environmental pressures. Strategies are only feasible if they can be implemented. An ability to raise money for any reason can act as a constraint on a particular choice.
There are specific methods for assessing and improving the effectiveness of the marketing strategy within.
These may include: Sales analysis, Marketing cost analysis and performance measures.
5.1 Sales Analysis
Sales figures can be used to evaluate Runners World current performance. The sales date partially reflects the target market’s reactions to the marketing mix and are generally readily available. These sales data can monitor the impact of current marketing efforts. To provide useful analyses current sales data must be compared with forecast sales, specific sales or the cost incurred to achieve the sales volume.
Further, market share analysis can let Runners World compare its marketing strategy with competitor’s strategies. The primary reason for using market share analysis is to estimate whether sales changes have resulted from Runners World marketing strategy or from uncontrollable environmental forces. If Runners World sales volumes declines but its share of the market stays the same, then it can be assumed that industry sales has declined – because of some uncontrollable factors – and that the decline was reflected in Runners World sales. However if Runners World experiences a decline in both sales and market share, then the possibility is that it’s marketing strategy is not effective.
5.2 Market Cost Analysis
A marketing strategy that successfully generates sales may also be extremely costly. To obtain a complete picture, Runners World must know the marketing cost associated with using a given strategy to achieve a certain sales level. Marketing cost analysis breaks down and classifies costs to determine which are associated with specific marketing activities. By comparing cost of previous marketing activities with results generated, Runners World can better allocate its marketing resources in the future.
Marketing cost analysis lets Runners World evaluate the effectiveness of its marketing strategy by comparing sales achieved and cost incurred and by pinpointing exactly where Runners World is experiencing high costs.
In addition the number of square metres of floor space used can also be used to assess its marketing cost for e.g. floor rental space.
5.3 Performance Measures
This can be done by assessing the effectiveness of marketing programmes to implement recommended marketing strategies, fulfil corporate financial expectations and achieve the required level of customer satisfaction – is a necessary mechanism in the marketing process e.g. profitability, sales volume and market share can be used to assess the overall market. Other financial measures include: Return on capital employed, sales per square meter of selling space and customer satisfaction level. Therefore market share is a vital criterion for judging performance.
While it is important for Runners World to be financially viable – making adequate profits to be able to fund future investments in staffing, and new target markets are imperative.
Marketing aims to satisfy customers so it is sensible to monitor customer satisfaction overtime. This should reveal an increase in customer satisfaction levels otherwise customer needs and expectations are not being met. A mix of financial and qualitative measures should be used to judge the effectiveness of the marketing programme to customers. In addition this measure can be bench marked against key competitors.
The ability to succeed with market development will be dependent on Runners World relative strength and power in relation to competition. There may be competitive barriers to successful implementation.
Issues of competitive advantage and implementation become paramount. Chances of success will increase if there is an opportunity to create and sustain competitive advantage.
The influence and preference of Runners World will be a major determinant of the strategy selected. Runners World will also build its structure and ideally the strategy and structure will mould together to generate synergy from the various activities. This in turn will depend upon Runners World culture. If there is a change of leadership there may well be a change of strategy and in turn of structure and culture, when strategies fail to meet up to expectations, there may be a change of leadership.
6. Conclusion
The management of change is both difficult and time-consuming, more so, since Runners World strategies have been successful in the past. However, at Runners World if time and resources are invested in developing a clear ‘vision’ – that is in defining Runners World ambition in terms of the role it will play, the geographic and market sectors in which it will compete, and the sustainable competitive advantage it can or has achieve, as well as the distinctive skills that will make it successful and resilient – then this creates a major integrating force which can help Runners World overcome barriers to change, channels the energy of Runners World to strive towards its highest aspirations, and positions Runners World to exploit strategic opportunities.
Runners World ability to initiate and manage change will be critical in determining the success of the business. Runners World must monitor the competitive environment constantly and be prepared to react quickly to changes in market conditions. More importantly, though, Runners World must also be seeking to take the initiative by building up and using the competitive advantage through innovation, not just through new products but also through pursuing an innovative approach to marketing and every other aspect of the business. Efficient management is essential, but it is innovative management that is the real key to success.
7. References
1. Class Notes - Marketing
2. Strategic Management, 5th Edition, Fred R. David 1995, Pages 560 - 580
3. Strategic Marketing Management (Chartered Institute of Marketing), Richard M S Wilson, Collin Gilligan with David Pearson, 1995, Page 450 - 499
4. Marketing 2nd Edition, David Mercer, 1996, Pages 210 - 230
