Building on the research you have conducted in the interim coursework, you are required to apply the SOSTAC model to the marketing strategy currently being used by the high street fashion retailer you researched in your interim.
You can use the same company as in the interim. You can use the same research used in the background as in the interim
Each element of SOSTAC should be applied separately, but a holistic overview needs to also be used so that each element is integrated within the company’s strategy. The emphasis of your SOSTAC should be,
Macro environment in the situational analysis,
Price, product and place in your tactics.
An evaluation needs to be undertaken of the effectiveness of the retailer’s current SOSTAC strategy.
To what extent do you believe that the current marketing strategy used by the fashion retailer in the UK market could be implemented in an international market of your choice?
SOSTAC model of marketing
Running business in the international market paves the way for firms to have global recognition, which is the key of increasing statistics of profit and thus strengthen their position in the market. In addition, Posner et al. (2015) said that with the assistance of international business, the rate of fluctuation in the market can be reduced as it is utterly a great threat towards maintaining consistency in business process. Present paper will put forth the discussion of international business in the context of TED BAKER. This is the famous luxury clothing organization, which is aiming to launch their business in South Africa. SOSTAC model and macro-environmental analysis in the context of South Africa will be discussed. This paper will also highlight the strategies that TED BAKER should implement in order to launch their business in the new market.
As TED BAKER is aiming to launch their business in South Africa, it is imperative to for them make a comprehensive plan. This is the key of completing a marketing activity in a systematic manner. According to Goworek et al. (2015) proper planning plays a very important role in the way of accelerating the channel tactics and thereby overall marketing activity. There lies the significance of SOSTAC model as it can serve the companies like TED BAKER to handle their marketing activity by making a proper planning. SOSTAC model, in its simplest form can also be regarded as planning, which is utterly significant to build strong marketing strategy (Pedersen et al. 2018). There are five different elements of this model, strong alignment can make it easy for TED BAKER to launch their business in South Africa with utmost efficiency. Detailed discussion regarding SOSTAC model is discussed below:
Figure 1: SOSTAC Model of Marketing planning
(Source: Burns et al. 2016)
- Stage 1 Situation analysis
This is the initial stage of marketing planning, in which in-depth analysis of the current activities being is carried out. Researchers are showing that Ted Baker is being considered as one of the most famous fashion British retailers. Intense appeal is the greatest strength of the firm, which is resulting in highest rate of profitability of the firm. In order to launch business in new market, Ted Baker should also explore their competitors (Todeschini et al. 2017). This can help them to devise their business strategy and thereby stay aside from the competitors. The channel of communication and distribution must also be assessed by the marketing department of Ted Baker.
- Stage 2 Set objectives:
Macro-environmental analysis of TED BAKER
This is the second and most imperative step of launching a marketing activities. This is the key of working in accordance with the planning and thereby attain desired business outcome. Thus, it is the prime responsibility of the higher authority of Ted Baker to set certain business mission and vision before planning to launch business at South Africa. SMART and functional marketing objectives must also be set by them, which can make it easy for Ted Baker to focus on consistent marketing decision making. As discussed by Juhlin and Soini (2018) the marketing department of the firm must also ensure that their business objectives are relevant and achievable.
- Stage 3 Strategy
Formulation of effective strategy is also a major step of initiating any kind of marketing activity. Dividing market in accordance with age, gender, lifestyle along with the choices of customers is the major step, Ted Baker should execute in order to access a potential base of customers. Segmenting market in accordance with the gender and demographics of customers is the initial step of attaining a potential base of customers. As per Gardetti and Torres (2017) South African customers are extremely brand conscious. Ted Baker should take such attitude of the customers as an opportunity in order to promote their business. At the same time, the purchasing power of customers is very high and they are ready to afford any price for a high quality of products (Stone and Farnan 2018). Thus, Ted Baker should also grab this opportunity in terms of accelerating their rate of sales.
- Stage 4 Tactical plan
This is the third most important step of initiating consistent marketing planning. Executing the most effective communication tool is the initial step of making tactical planning. As Ted Baker is aiming to launch their business in a different region, it is imperative for them to implement Social intranet software, which is very much needed in terms of strengthening both their internal and external communication. Li et al. (2014) showed that with the assistance of this software, healthy communication between employees and different departments can be maintained. Assessing all the relevant and effective resources is also a key step of tactical planning. Through this way, marketing activity can be carried out in a timely and cost effective manner.
- Stage 5 Action plan
Making a comprehensive action plan is the fifth step of launching business in international market. SOSTAC Model of Marketing planning, it is vital for the firms to hire the most efficient staffs, who can initiate the fundamental marketing activity. Armstrong et al. (2014) commented that the persons must be hired on the basis of their marketing knowledge and degree of expertise. A relevant time frame must also be set, by which Ted Baker is going to be launched in South Africa. Aligning all the relevant resources in the action plan is also a major matter of consideration in this context. As Ted Baker is aiming to open their business in new market, it is imperative to set a key performance indicator. This can pave the way for them to explore the extent to which their marketing planning is being operated in accordance with predetermined organizational mission and vision (Lees-Marshment 2014).
- Stage 6 Control
This is the last stage o marketing planning, through which the marketing department of Ted Baker can have track record regarding their progress. This is the way of measuring the performance level along with the way, through which the business is running as per the business objectives.
With the assistance of this framework, it can be easy for the companies like Ted Baker to make a consistent business plan, which requires effective team work. This is the key of launching the marketing activity in a timely and cost effective manner.
Prior to launch business in new market, it is imperative to assess its Condition. There lies the significance of macro-environmental analysis, as it can help in having an idea regarding the external market. PEST is a major framework, which Ted Baker can follow in order to assess the condition of the external market of South Africa. Different parameters of this PEST framework are as follows:
Intense uncertainty in the political environment of South Africa can have a strong impact on the business environment. As per reports, a general lack of leadership can be found in South Africa, which is acting as a biggest threat for the firms to run their business in a consistent manner. In addition to that, recent technological recession in the county is also acting as a major threat for the firms to promote speed in their business process (Engineering News. 2018). However, Kotler and Armstrong (2015) argued by saying that the gestational location of South Africa is very much accessible. This is helping both European and Asian market to reach to the South African market appropriately. Still, it has also been observed that rapid downfall of credit rating is also hampering the business environment of entire country.
In-spite of accessing second-biggest economy of Africa, the economy of South Africa is decreasing in a rapid manner. The nation has experiences a considerably slow growth and the rate of GDP is not increasing properly. Moreover, the price of commodity is also decreasing in a rapid manner. This is affecting the market on a large. One of the major factors related to South African economy is the rate of interest, which is increasing drastically. This is affecting the purchasing power of the customers. Burns et al. (2016) showed that the rate of currency as well as exchange is also very low, which can pose a greater challenge for the companies like Ted Baker to launch their business in the nation. According to this discussion, it is quite evident that this week economy can lead the companies like Ted Bake to rethink about their expenditure.
Due to the poor economic condition, the rate of unemployment in South Africa is 25%. Such depleted unemployment rate is posing a great threat towards the purchasing power of the customers, which in turn is hampering the entire business process. High entrepreneurship spirit is the greatest social factor of South Africa. However, Kozlowski et al. (2016) argued by saying that the inclusion of lower rate of unemployment is also affecting these startups. In-spite of all these negative factors, it has been perceived that the South African customers are extremely brand conscious and they are ready to pay any amount in return of high quality of products. Being a leading retailer, Ted Baker can take this attitude of customers as an opportunity in terms of promoting their business in a potential base of customers.
Due to recent technical recession in South Africa, technological advancement in both manufacturing and supply chain is relatively low. However, South Africa is being considered as one of the largest and most valuable information and communications technology (ICT) market and the leader in mobile technology. Due this high quality of ICT, different industries in Australia is attaining prompt growth. Posner et al. (2015) shaded light on the fact that prompt development of mobile technology can help Ted Baker to launch their online shopping portal and thereby get access over a larger base of customers.
3’Ps of marketing mix of TED BAKER is needed to be assessed, as it can help in understanding marketing strategy, followed by the firm. Subsequent discussion will help in understanding the 3’Ps of marketing mix in the context of TED BAKER.
There is a larger variety of products being served by TED BAKER with the intention of catching the attention of wide range of customers. The products of TED BAKER includes wide range of T-shirts, skirts, footwear, bags, accessories, shoes, trousers along with a variety of jeans. Integrating variety is the ultimate product strategy, being followed by TED BAKER. Currently, it is being considered as one stop solution, where people can access both casuals and formals (Opresnik and Hollensen 2017). There are more than 5000 new designs of products, being offered by TED BAKER. A
As the choice of target market plays a very important role in influencing the availability of product line, TED BAKER used to hire local talents in order to strengthen their position in the local market. This strategy of TED BAKER seems to be highly effective as it is helping them to secure a significant position in the market. Seddon (2015) observed that TED BAKER is highly committed towards promoting sustainable development by lowering the rate of waste. The company recycles their security tags and only use bio gradable products in order to run their business in environmental friendly manner.
TED BAKER operates numerous stores in different countries. In addition to that, TED BAKER also used to sell their products through online. Thus, a strong place and distribution strategy is being followed by this business organization in order to rich to a wide range of customers (Marshall 2014). A strong and comprehensive supply chain along with unique business model is being followed by them in order to bring products to the market in a timely manner. The commercial team of TED BAKER is highly committed towards maintaining cordial relationship with the in-house designers with the intension of exploring new trend and thus develop new design accordingly. Most of the stores of TED BAKER are exclusively owned by the company itself which helps them to keep their shopping experience intact.
TED BAKER offers highly fashionable products in comparatively lower price. The company offers latest fashion brand in a very lower price in compared to other international brands. This lower pricing strategy is being followed by them with the intention of catching the attention of wide range of customers. However Challagalla et al. (2014) counter argued that one of the greatest aspects of TED BAKER is that, they use country specific pricing strategy based on the spending power of customers of individual countries.
In order to enter in a new market, it is imperative to implement a strong business strategy. This can serve TED BAKER with the ability to secure a strong position in the in the international market. With the increased accessibility, South Africa is being considered as the hub of wide range of exporters. Thus, it is imperative to implement market standardization strategy (Sheth and Sisodia 2015). This is the way, through which fashionable product experience among the customers can be improved. With the assistance of market standardization strategy, consistency in marketing effort can be acquired.
Initially, gaining thorough understanding regarding the market is very much needed. This is the way, through which factors such as operating business environment, competitors, and requirements of the customers can be assessed. Designing products as per the requirements of the customers of South Africa is another major strategy, TED BAKER should implement in order to launch their business in the nation. This is the key of serving appropriate products among the customers (Slack and Brandon-Jones 2018). As South Africa lacks high quality of transportation infrastructure, TED BAKER should take care towards executing their own logistic framework which is the key of having a strong network of distribution.
Appropriate branding and advertising is also a key factor for running business appropriately in South Africa. The firm can use the campaigning such as “Keeping up with the Bakers” in terms of sharing their instagram success stories with wide range of customers. This is the mode of encouraging the customers and thereby keeping them updated regarding the products, offered by TED BAKER. Partnering with the local companies is another major way of launching business in new market (Child 2015).
As TED BAKER is extremely intended towards introducing their business in new market, they should explore a strong strategic direction. This can pave the way for TED BAKER to promote sustainable growth of their business. Ansoff Matrix is a greatest strategic planning tool, which TED BAKER can used in terms of launching their business properly in South Africa. Detailed discussion about Ansoff Matrix is as follows:
Figure 2: Ansoff Matrix Framework
(Source: Posner eta al. 2015)
- Market penetration
This is one of the greatest strategies, TED BAKER should carry out with the intention of getting a larger base of customers. TED BAKER should encourage the customers to buy more products. The organization must be committed towards checking the latest fashion, followed in South Africa and act accordingly. In addition, they must also introduce new design in every week to make the products more lucrative among the customers (Burns et al. 2016).
- Market development
Promoting sustainable development of Market is also a greatest strategy, TED BAKER should follow. Initially, it is vital to explore the most potential base of customers. Feedback from the customers must also be taken to assess the durability of their products (Li t al. 2014). Standardization and introducing unique variety of products are the greatest factors for promoting market development.
- Product development
Offering new range of products is another major way of catching the attention of wide range of customers. It is imperative to introduce innovative products among the customers. Consistent effort towards research and development is very much needed in this context for the sake of assessing the requirements of customers.
Introducing diverse range of products is another significant factor for attaining multiple base of customers (Kotler and Armstrong 2015). TED BAKER should focus on multiple fashion related items such as clothes, shoes, jewelries, accessories along with bags for the sake of attracting wide range of customers.
Based on the discussion, it can be concluded by saying that devising strong and comprehensive business strategy is high imperative factor in terms of accessing new market and thus keep the customers attracted. With the rapid development of globalization, the need of running business in the international market is also increasing drastically. This is the way of gathering a large range of customers by offering them with variety of products or services.
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