Explain the value and limitations of secondary information to organisations. Use secondary sources to describe and analyse the market of sports footwear in the United Kingdom or an alternative geographic market of your choice.
You have been tasked to deliver a business report, justified by market research, to cover the following:
- Provide a summary of the advantages and disadvantages for organisations in using secondary information
- 4P analysis (product, price, place and promotion) of three major brands of sports footwear in the UK or analternative geographic market of your choice.
- Using a PEST analysis (political, economic, social-cultural, and technological factors) supported byappropriate background research, explain the current trends relevant to the UK sports footwear marke.
Advantages of Secondary Research Data
Secondary research uses outside information that collects the information from government agencies, industry and trade associations. It is the data that is used and collected from other sources. Such type of data is cheaper and can be easily achieved if the comparison is made with primary data. The advantage or benefits for the organization in using the secondary data are:
- It is considered as one of the effective sources of collecting the data in an economical manner. It saves efforts and expenses of the organization. The data can be attained easily without making extra efforts and also the expenditure pattern is less as compared to other sources to collect information.
- It also saves the time of the organization to collect the information in a proper manner. In the past, it is evaluated that the secondary data is obtained by tracking the libraries. But now a day technology has given a drastic change and also made the process simple. Complete information can be obtained by the search engine. So, it has given a great benefit to the organization to avail the information easily.
- It also assists to make the primary data collection more specific. With the help of secondary data, the company can easily evaluate the gaps and deficiencies and the important information can be collected (Hollensen, 2015).
With the use of secondary data, the company can easily understand and improve the problem. The secondary information creates a basis for comparing the data that is collected by the researcher. The comparative study can be easy for the organization.
- Inappropriate data: Data collected by the organization is not accurate. The secondary data gives vast knowledge but it is not correct and accurate every time. The information can be inappropriate because it was collected many years ago and also it gives the information of entire country when the aim is to investigate a specific region. The information does not have any validity associated with it and also the alternative technique of collection of data can be found out through surveys and by interviews (Patil and Bach, 2017).
- Time lag issues: The information that is taken from books and surveys can be risky for the company. The information that is in the books is usually not sync and also changes drastically. It is also evaluated that the information is also outdated in many cases.
- Proprietary issues: There are many secondary sources that have the copyright on the information and also by using them it can create a serious legal complication for the issue to survive in the market (Helm and Gritsch, 2014).
- Not specific: The extensive information gives benefit as well as creates a drawback for the organization. The organization will not be able to give answers related to a specific issue through the information. So the information that is collected from the secondary source is not specific to the organization and can create a hurdle to survive in the competitive environment.
It is considered as the largest brand in the sports industry. The 4 P's that are price, place, promotion, and product are:
- Product: Adidas is one of the largest sports brands in the market. The company offers various products and equipment's to the athletes. The innovation strategy is adopted by the company in which it consists of the first shoes that are designed for ice and first multi-studded shoes. The product strategy adopted by the company covers the whole product line of the sports sector. The product range of Adidas includes running and lifestyle shoes, soccer shoes and also consists of apparels (Londhe, 2014).
- Price: The Company gives focus on a particular set of consumers and offers best products to them. Due to the strategy of innovation and improvement in the product line the company has attained success in the market. The price of the products is decided by the company by considering the quality and also the competition level in the market. The prices of the product that are offered by the company are already high, as the high quality is used in the product. The company never compromises with the quality and also the price is also justified.
- Place: The Company available the products around the globe by various distributions channel like franchises, specialty stores and also online retailers (Huang and Sarigöllü, 2014).
- Promotion: The company considers 360 branding strategy that covers all the aspects of media and communication. Adidas promotes the product through print, online and also by commercial campaigns. The tagline that is used by the company is "Impossible is Nothing".
- Product: Puma is known as one of the largest sportswear and sports equipment companies in the world. It offers products that are related to sports, fitness, and lifestyle. In sports, the products that are covered are apparels, shoes, and accessories like football, golf. It also gives various products that are related to the specific sport of the country. In the fitness sector, the company has grown the product line for running and training exercises.
- Price: The Company has the direct competition from the established brands like Nike, Adidas. To compete in the market the price of the products are kept low as compared to the competitors. Puma offers the variety of products that attract new customers towards the company. The loyalty benefits and also seasonal discounts are offered, so that the customers can be retained and the Company has adopted based pricing strategy that helps to convince the majority of consumers (Hanssens, Pauwels, Srinivasan, Vanhuele and Yildirim, 2014).
- Place: The Company takes into consideration three types of distribution channels, wholesale, puma owned store and also e-commerce stores. The company is present in 120 countries and also maintains a proper relationship with the retail partners (Choudhury, 2017).
- Promotion: The Company considers effective marketing strategies that help to promote the product globally. The company has brand ambassadors like Pele, Usain bolt. The company also sponsors many clubs, teams, and association that have the global connection. For promoting the women product line the company also conducted ramp walk. Puma has also given focus on launching many campaigns that engage the customers. The company is also present on a digital platform and on social media sites (Camilleri, 2018).
- Products: Nike sports shoes are the most popular product. The company enhanced the product line for this category. The company offers running shoes, tennis shoes and also the variety of casual shoes. Nike has also adopted intensive growth strategy for product development.
- Place: The sports shoes are available through a large number of company outlets. The product of the company is available on the Nike official online store, Retailers and also with the Nike town retail outlets. Retailers are considered as the most important place that sold the Nike products. The consumers also purchase the product from online stores. The company has control over the distribution channel and on the sales of the product (Barrett and Weinstein, 2015).
- Promotion: Nike Consider effective promotion techniques that enhance a strong brand image in the mind of the consumers. For promotion, Nike considers the technique of advertising, personal selling, direct marketing, sales promotion and also public relations (Armstrong, Kotler, Harker and Brennan, 2015).
- Price: Company uses the value-based pricing strategy that helps to grow sales and profits of the company, the prices are fixed by the company by considering the profit and the competition level. The value-based pricing considers the consumer perception about the value of the product. The value of the product is fixed by determining the willingness of consumers to pay for the product (Babin and Zikmund, 2015).
The pest analysis is based on the current trends that are relevant to the UK sports footwear market.
- Political factors: The UK is considered constitutional monarchy that conducts the operations under the parliamentary system. It is one of the fairs and a stable country that has a plenty of opportunities for the business. In the last decade, the footwear industry has seen a political shift and also the political environment is not in the favor for the US brands. Due to high tax rates the companies are not able to earn profits also it can create a problem for the business when the political interference is seen in the business. The companies also consider the rules for selling the product in the market. The companies outsource the development of the product to the third countries so that the manufacturing cost can be reduced. The companies have to face the rules related to the international trade agreements, product safety laws, labor laws and also consumer safety product regulations. The trade restrictions and tariffs are also considered as one of the essential political factors. The reason behind the company outsourcing is to offer labor cost and also to save taxes related to the products (Bao and Chang, 2014).
- Economic factors: The UK is considered to have a strong economic position relative to the other countries. The GDP rate is high and also it has a diverse economy. The population allows the small markets to enhance its profitability and also it is considered as one of the free markets. It has a diverse economy with large public and private sectors. The sports footwear has always been an important rage in summers. At the time of recession, the companies suffer from a loss. The sports products are competing against the gaming and music industry. The economy of UK fluctuates and also the manufacturers shift to accommodate in an effective manner. The footwear companies should research in a proper manner so that the products can be sold and distributed. There are many companies that manufacture the products outside the country so that labor cost can be reduced. The companies should play smart with the price of materials (Ashley and Tuten, 2015).
- Social factors: There are various social laws that give direct impact on the development process. It is due to the direct impact on the demand of the product regarding one product or service. The competition level of footwear industry is high and it can be an advantage for many companies because it will cater large consumers towards the branded product. The consumers are giving focus on health and the love for the sports footwear industry is enhancing day by day. People are giving emphasis on the products that are being athletic but are stylish and comfortable. The Olympics season is considered as a very essential and profitable for the popular brands in the market. The culture also gives direct impact on the profitability of the companies. Also, the attitude to the foreign products and services was considered as an international threat to the sportswear companies and it considers the range of investment (Khan, 2014).
- Technological factors: Social media is considered as a good example to show that how technology gives direct impact on the businesses. It is not only marketing of products, production, and distribution that are affected by the technology. The inventory management and sourcing also give direct impact on the technology used by different footwear brands of UK. It also takes into consideration the access, licensing and patents. Technology has changed the high cost of manufacturing into low cost of manufacturing (Karjaluoto, Mustonen and Ulkuniemi, 2015). The companies' also introduced innovative products and services that attract the consumers towards the company. Upgraded technology gives the advantage of low cost of production and also related with huge consumption market. The factor has given a new system for the companies to inform and also to communicate with the large audience. The large brands like Adidas and Puma are giving focus on catering the athletes.
They are giving focus on enhancing the performance for coaches and professionals in the sports industry. The companies also used online websites for selling the products through online. Global communication is also considered as an important aspect that has enhanced the operations of the businesses in the UK. There are various technological factors that give direct impact on the footwear industry of UK. The factors are quality innovation skills, internal competition to enhance growth and also laws with regard to intellectual property (Tuten and Solomon, 2014).
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