Some of the product decisions made by Topshop include:
- Variety –Topshop have recently expanded their product range as the target market wish to ‘accessorize’ – it now includes underwear, swimwear, bags, shoes, jewellery, accessories and the most recent addition ‘pop make-up’.
- Sizes – these range from 6-16 to suit the needs of the target market
- Branding – all products are labeled with the Tophsop brand. This provides consistency and associates certain attributes with the Topshop brand, differentiating it from similar offerings.
Price
‘Price is the one element of the marketing mix that produces revenue – the others produce costs’ (Kotler page 470)
Price therefore requires careful attention from the marketing manager, it needs to be reflected in the communications undertaken by the organization and should be sensitive to the expectations of the target market and the positioning strategy.
Topshops pricing strategy takes into account the disposable income of their target market. Products are not overpriced so as to be unaffordable and are not under-priced as so avoid being perceived as low value or low quality products.
Quite a significant percentage of Topshop’s target market are students, they are offered a 10% student discount. It is often thought that discounts undermine the value perceptions of offerings, but this strategy has worked well for Topshop. It has enabled precision targeting of customers who may be more price-sensitive without harming the remaining customers who are willing to pay full price.
Topshop make use of store cards enabling customers to purchase on credit. To encourage the opening of a store card customers receive a 10% discount on their purchase. The ultimate benefit of such a facility is increased sales – however there are others, which will be discussed later.
Place
Retailers are accustomed to saying that the three keys to success are ‘location, location, location.’
The Arcadia Group has strategically placed their many outlets across the UK
“There is hardly a high street or shopping center across the land that isn’t host to one or more of Arcadias celebrated brands.”
In retailing the product or service on sale cannot be divorced from the actual store itself – what the image is, the nature of the total shopping experience and so on. Topshop have gone to great lengths to create an in-store atmosphere, which will attract the target market.
- Interiors of branches have a modern ‘trendy’ feel – they are bright, spacious and uncluttered.
- The majority of staff are in the same age range as the target market and are dressed in the latest Topshop lines.
- Music played in-store is the latest chart music, televisions placed above till points and in changing rooms are tuned to those music channels that have a youth audience e.g. MTV and Chart Hits.
- In- store events during busy periods such as entry into a draw for tickets to see the latest artists and bands. Some stores even have live performances from up and coming bands – these strategies are usually employed in larger stores as they are time consuming and costly.
Promotion
Covers all the means used to communicate with the target market. Each retailer must use promotional tools that support and reinforce its image positioning - Topshop make use of the following promotional tools:
Targeting Advertising:
As Topshop’s target market purchase trend setting magazines these are used to promote the brand. Magazines such as Just Seventeen, Sugar….. published either weekly or monthly are rarely without a page or two devoted to the latest Topshop lines. Quite often the features will use fashion icons of the youth market such as Victoria Beckham or Kylie Minogue. They capitalize on these trend-setting stars by encouraging readers to ‘Create Posh’s Look’ by purchasing Topshop products.
Internet:
Topshop’s website provides information and promotional material on all their products. The new range of ‘Pop Make-Up’ is again promoted using pop icons. By purchasing certain color ranges customers can – ‘be a pop princes – think Kylie, Sophie Ellis Baxter or Suga-babes’ or ‘be a golden girl – think Britney, Jenifer Lopez and Gizelle’.
Sponsorship:
Topshops sponsor events such as:
- Graduate Fashion Week
- New generation Award
- Designers at Boutique
These events support rising stars of the fashion scene and are known for launching the careers of Stella McCartney and Alexander McQueen. Sponsoring these events enables Topshop to be seen as innovative in the fashion world – helping to build a credible brand name and reputation within its market.
When a company such as Topshop has achieved a certain level of success by focusing on their market and building a strong brand image and market share – they will engage in marketing activities in order to maintain it. Customer Relationship Management (CRM) or Relationship Marketing involves developing stronger bonds with customers by managing detailed information and ‘touchpoints’ with the aim of maximizing customer loyalty.
CRM is becoming the central focus of marketing. Marketing managers are realizing that it pays to invest in quality, customer service and creating satisfied, loyal customers who will:
- Buy more as the company introduce new products
- Talk favorably about the company
- Pay less attention to competing brands
- Be less sensitive to price
Topshop are engaging in CRM, with the use of the following strategies they are attempting to build trust, loyalty and credibility with their customers resulting in long-term profitable relationships:
Store Cards:
Not only have they resulted in increased sales, store cards are providing Topshop with other benefits:
- The card acts as a permanent reminder of the company and its products
- The collection of valuable customer data at the application stage - such as e-mail address, age group, credit analysis etc.
- Enables analysis of demand and customer behavior
Having built a clearer picture of their target market. Topshop can manage more effective promotional activities such as direct mail campaigns both by post and e-mail. They can also mange these so called ‘touchpoints’ by offering cardholder benefits, e.g. VIP invites to the fashions shows mentioned, use of a style advisor service and other discounts for regular use of the store card.
E-Zine/Newsletter:
This is a relatively new service that customers can sign up for when applying for their Topshop store card. Unlike unsolicited e-mails (spam) customers choose or ‘opt-in’ to receive the newsletter, which ensures they ‘stay in step with the trends’. It provides information on fashions and trends, the newest Topshop lines, sale bargains and exclusive offers. The E-zine has opened a constant channel of communication between the Topshop brand and its customers.
Customer Satisfaction:
The key to customer retention is customer satisfaction. Topshop have made it easy for customers to provide comments and feedback, as they have dedicated a web page for the purpose.
Competition in Market
Topshop are operating in an increasingly competitive environment and therefore understanding customers is no longer enough. Topshop must identify its competitors and pay keen attention to them if it is to maintain market share and stay abreast of the competition.
Many companies design and operate systems for gathering continuous intelligence about competitors. However carrying out a SWOT analysis is a simple but structured approach a company could take to ensure awareness of the Strengths, Weakness, Opportunities and Threats in its external environment. It can be useful for pooling ideas and can highlighting major gaps in knowledge.
We can conclude that Topshop have pursued a market – focused approach with their brand. Good use of marketing tools has resulted in a successful brand. However, one element of the marketing mix, which may need revision, is the pricing strategy. When attending a recent university lecture some discussion arose over the Topshop brand and its price. Some felt that products were inexpensive while others felt they were expensive and therefore not in line with its positioning of ‘affordable prices’.
This may indicate that Topshop have defined their target market too widely. Those in the lower end of the target market, (15-30 year olds) with little disposable income may regard prices as expensive or unaffordable, whereas shoppers in the upper end of the target market with a higher disposable income may regard the brand as low quality.
Nevertheless Topshop occupies a leading position within its market. With constant innovation and revision of marketing strategies such as own label branding, targeted advertising, use of fashion icons, sponsorship of fashion events and the use of store cards, with their customer analysis data.
Topshop should find that as Polaroid’s marketing manager Robert O’ Brien expressed:
‘The impact of the strategy will be most evident in the coming years, as the company is just beginning to reap the benefits of its marketing focus.’
