INDIVIDUAL REPORT ON ENVIRONMENTAL ANALYSIS OF A BRAND
Individual Report on Environmental Analysis of a Brand
Introduction
Hamleys has been in existence for over two centuries, and the company prides itself on the fact that it has stood the test of time. The future of Hamleys looks bright only if the company addresses the business analysis aspect. Business analysis is a valuable tool in assessing any given business type. The results obtained at the end of a given analysis are useful in determining a lot of information that are necessary for the business. Some of the emerging topics addressed by business analysis with regards to the outcome therein are: determination of situations that interfere with achieving the laid business strategy, the options that are tactful and which provide possible solutions to the problems, support that is given in order to achieve full implementation of the tactics and finally, modifications to the tactful solutions which keenly address the ever-changing business environment. Both external and internal capabilities of the given business address the strategy analysis which is a fundamental component of the business analysis.
Background of the Organization- Hamleys Brand
Hamley’s is a company founded in 1760 that is legally incorporated and headquartered in London, the UK with forty-six regional branches worldwide. The company prides itself therefore from having a global market base. Hamleys offers a wide range of toy products to its customers. The company started as a family business owned by William Hamley. The business ownership would, later on, transfer hands to an Icelandic investment company dubbed Baugur in 2003. When the Investment Company collapsed, the company was taken over by an Icelandic bank. The Company ownership shifted hands in 2012 when a toy company based in France called Groupe Ludendo, and the company has a presence in Spain, Belgium, and Switzerland after an exchange of £60 million. The current Hamleys ownership rests with a footwear company from China, which started owning the company from 2015.
Importance of Marketing for the Brand
Marketing is a tool, management tool to be precise that is concerned with the identification of customer’s needs, anticipating the said needs and satisfying the needs of the customer in line with the client’s set specifications (Volkmann et al., 2010, p. 185). Marketing is that one aspect of the business function that has the mandate to increase demands and as a result increase sales (Ferrel & Hartline, 2014, p. xvii.). The needs of the customer come first when setting up the marketing strategy and plans for meeting the needs should be set without which, a competitor would fill in the gap, according to the Chartered Institute of Management (2015, p. 3). The institute goes on to add that smart marketing techniques are essential to acquire business success and that the individuals tasked with designing and implementing marketing strategies play a part in the economy by simply fostering wealth for all.
With the above background, we can now have a blueprint for understanding the importance of marketing for Hamleys Brand. Marketing for Hamleys has everything to do with identifying the customer’s needs, meeting the said needs and superseding the client’s needs and not that just, generating an income from the process (Pride & Ferrell, 2015, p. 25). The ever changing market base for Hamleys is a terrible yet fascinating subject which is people oriented. Marketing is, therefore, necessary for establishing a relationship with the customers. Marketing will provide information on the changes in the trends, and this is of importance for Hamleys in the quest for identification of the preliminaries that are of importance to the customer and distinguishing from those trends that are obsolete.
With this in mind, the aspect of developing a market mix comes in. As earlier noted, marketing does not just entail advertisement of goods and services, but it’s about the provision of satisfaction to the customer’s needs. In the marketing world, a fusion of pricing, place of distribution of the product, the given product and the promotion of the product constitute the four primary aspects of the market mix (Kotler, 2012, p. 1). The other three elements making the 7p’s are people, process, and physical evidence. Before coming up with a market-mix plan for Hamleys, adequate research must be done as far as defining the customer’s needs are concerned. Answers to the components of 7p’s give insight on why there is marketing or why marketing should exist (Chartered Institute of Marketing, 2015, p. 4).
The first factor that we look into is the product. The toys that Hamleys offer to the market must be what the consumers want. The products should be aligned to the customer’s specifications. The toys should correspond to the present day need of the consumer, and the consumer should get value for the money invested in the said product. Assessments on whether the customer’s needs are bound to change must be available and when the anticipated change is expected to take effect. Hamleys concentrates on the children’s viewpoint with demonstrations of the toys being available for the children. Pricing is the other factor that is essential in understanding the role of marketing. Pricing is the component of market mix that provides returns on investment according to (www.learnmarketing.net, 2016, p. 1). The pricing should be moderate in that they shouldn’t be too high or significantly low. Pricing of the toys will enable the consumer to analyze the place or position of the business on other competitors. The quality expectation of the toys consumers on the packaging of the toys, environment, and invoices among others must be felt given that the pricing aspect is a measure of relativity. Assessment of the customers’, i.e., new entrants and existing customer’s price needs must be met. Hamleys offers toys in the range of £5 to £1250.
The availability factor of the products is met by looking into the place component. Also under this heading, we have the aspect of the display of the toys to the consumer, the storage facilities, distribution costs, inventory costs and quantity confirmation should be perfect. Delivery style of the toys to the customers should go an extra mile. Conforming to the trending technologies with regards to influencing the purchasing power of the consumers must be addressed. Hamleys has a global presence worldwide with the main company hub being in the UK. The UK branches attract multitudes of people from all over the world to come and experience the Hamleys touch. Promotion techniques should be put into consideration. Promotion refers to the means through which a company conveys information to the third party, on what it deals with. The promotion has everything to do with advertising, rebranding, Public Relations, sales management, corporate identification, use of social media platforms, exhibition forums, and offers. Hamleys must address the above promotional factors to communicate effectively to its consumers and as a result, establish some form of a dialogue between the company representatives and the customer.
Possible benefits to be accrued from a given product must be communicated through the appropriate media to relay the relevant information. The promotion’s aim is to make a good first and lasting impression. Use of social media would add oomph to the promotion venture as opposed to the general print media. Forging the alignment between employee orientation and customer orientation would augur well with the promotional venture. The people factor also gives meaning to the marketing strategy. Marketing is people oriented as earlier mentioned. Interactions between the consumer and the marketer create impressions, and this places an emphasis on the alignment of employee orientation to the customer orientation. The employees of Hamleys must be well motivated and suited for their positions to facilitate marketing and sales of the company toys. Review facilities from the customers’ point of view to determine their degree of satisfaction should be set in place. Provision of after sales services must also be available in Hamleys for a further boost of customer satisfaction with the products and services. Use of social media in on the side of the employees as a means of reaching a wider customer scope is appropriate.
The processes of the company are key in marketing the company. The processes that are of interest to the client relate to the systems that are in place in the enterprise. Hamleys will have to look into the manner in which it responds to its customers. It is imperative to consider the process in which service delivery is made and paying attention to the staff who are delivering the said services. The systems that are in Hamleys should strictly be of benefit to both the consumer and the company and not on the convenience of the business. The final variable is the physical evidence aspect where in this case, Hamleys must address certainty of the toys the consumers would wish to buy if they indeed fit the purpose for which they were intended for. Testimonials together with reviews facilitate this variable by enhancing its authenticity and so the potential consumer would be likely to buy a given toy. Websites or mainly the online media or word of mouth is of assistance in this sense adding to the banners that are in a place to gauge the customers’ feedback. Making a cohesive consideration of the variables mentioned above in a given company enables the market mix to be felt and is what Hamleys should be considering to apply.
PESTLE Analysis
PESTLE analysis is of importance in assessing the business environment. Political factors affecting Hamleys are in line with changes in ownership, the inception of branches which are outside the UK. We also note the collaborations of Hamleys with the UK government in the quest to have a change of heart regarding STEM toys. Economic factors shown address the economic situation in the UK which in turn affected Hamleys. Economic factors may be felt in a given home country like it is evident in the UK. The decrease in toy market noted in 2013 followed by a decline in sales of 45% of the consumers going for toys priced under £5. Recovery of the toy industry was recorded as of 2015. Socio-cultural factors address the present and would be customers. Changes in demographical factors, lifestyle, and behavioral factors affect the marketability of Hamleys toys in the UK market base. For example, the use of toys by individuals under sixteen years has been banned.
Interests of British Toy and Hobby Association members are protected by ensuring that manufacturing processes are sustainable by the employment of best practices in manufacturing. The technological variable is also of the essence in the sense that IT or the particular technology applicable in the manufacture of the Hamleys toys. Identification of technological factors is important and especially if it is done on time lest a competitor sets in and makes use of the technological loophole. Legal matters come into play as an important variable of Business Analysis. Changes in laws and policies have been the in thing in this century and the past few decades. The rush to ensure compliance with standards and regulations is prevalent and business analysis ought to be done in a manner that slots in legal compliance and this should be no exception for Hamleys UK. Examples of this are that the toys must bear the CE mark, must be marked for traceability purposes, be safe and that usage instruction must be provided. Environmental factors such as the going green campaigns are changes that have brought to book matters about packaging and pollution by Hamleys given that the company is a member of the BTHA. The production of the toys must be sustainable.
The Porter’s Five Forces Analysis
The Porter’s five forces analysis, although quite different from the PESTLE analysis, is also a tool for analyzing the business environment that a company operates in, in this case, Hamleys U.K. The forces addressed are: Competitors, new market entrants, substitutes, buyers, and suppliers. Understanding the competition levels, the competing powers and the number of the competitors also considering the level of the business as it is. The other pressure source is the new entrants to the toy industry and the chances of survival of the entrants plus the subsidies accorded to them. As at 2012, entry into the market was impaired owing to the economies of scale. However, imports from oversea companies were noted to be increasing. Cooperation relating to licensing was observed from other leading brands.
Substitute range is also of importance in the sense that assessment of other products that can be used in the place of toys. The position of Hamleys concerning alternatives is of importance. Children were noted to have a growing preference for other entertainment features e.g. video games. Other toy companies were noted to have other competing toys which were recording massive sales e.g., Lego Mini also Disney and Argos had a considerable market share percentage. Assessing the buyer aspect and the chances of the customers opting for other suppliers is important. The buyer power is also worth evaluating. Cheaper options from other brands swayed customers to the other side and also noting that the number of children who use toys had reduced thus affecting the possible buying power of the consumers. Hamleys sources toy supplies from Hong Kong, who are licensed, producers. Other cheaper options translating to lower production costs are obtained from China who makes 80% of the toys worldwide.
SWOT Analysis
SWOT analysis looks into the strengths, weaknesses, opportunities and threats that face a company and in this case, we analyze the SWOT analysis for Hamleys UK. SWOT is a decision-making tool for both internal and external factors that affect the business (Peng & Gao, 2011, p. 790). Through this analysis, Hamleys UK can establish ways of accentuating the company’s good attributes and working on the negative pointers and this analysis can be the background of a working and successful strategy management. Hamleys UK strengths include established a brand name, high resource levels, global presence, the need to meet clients’ needs and to exceed the client’s expectations. The weaknesses address the targeting of the upscale market and having one major store in London. The threats include new entrants to the toy and the entertainment industry, competition and novel technological factors including video games, constant ownership change which disrupts employees and may have a lack of motivation effects on the staff. Opportunities for Hamleys U.K are the establishment of more local and global branches which address the needs of the middle class, finding ways of efficiency enhancement during operations and addition of multiple lines of products. With the above analysis, Hamleys U.K can be able to develop a strategy that addresses the above four factors.
The STP model analyses the segmentation, targeting and positioning of the product in such a manner that emphasizes on the most valuable target market (Lamb, Hair & McDaniel, 2012, p. 66). In the segmentation phase, demographical, geographical, psychographic and behavioral aspects are looked at with regards to the product offered by Hamleys U.K. Assessing the gender, lifestyle, location, age and neighborhood of the possible target market aids in determining the appropriate market of the toys that Hamleys offer. The company can analyze the target market in a way to establish the most profitable market segment, and growth of the various segments should be noted (Dibb & Simkin, 2012, p. 1). From targeting, then positioning of the business ensues. In this case, the market mix becomes of assistance in establishing a distinct selling and value proposition of the toys for instance in the case of Hamleys U.K.
Consumer behavior analysis is of fundamental importance especially in developing certain issues that are of importance to the business. The method of analysis of consumer behavior is the Kotler’s model. This approach analyzes cultural, social, personal and psychological factors. The children are the primary toy users in the UK with their number as dependents contributing to the toy market. The married couples and their children are the possible markets. The upper middle class which is Hamleys niche market focus majorly on the quality and ethical background of the product. The U.K culture views luxurious toys as an aspect of status. The British culture incorporated in their toys is Hamleys selling advantage. Conduction of market research would help Hamleys in the following ways: identification of new products and or services, identify changes in the market, competitive edge, determine customer satisfaction, tell on idea viability, and be up-to-date with the technology.
Recommendations & Conclusion
Recommendations that are manifest after the environmental analysis are the provision of energizing power to the business by bringing in cash reinforcement to grow the business and to also be open to new ideas. Maximization on the company’s strengths is of a critical value and will, in turn, give a competitive edge. Partnering with smaller companies is highly recommended. Business Analysis is an important topic that addresses the environmental factors that affect a given business entity (O'Farrell, 2016, para. 3). Hamleys UK is one of the biggest toy brands in the world. The crisis similar to the one experienced in 2013 could affect the buying power of Hamleys consumers given that they are mainly of the middle-upper class. Hamleys market has changed over the years, and so the company has evolved by enhancing modifications in its environment.
References
Chartered Institute of Management. (2015). Marketing and the 7Ps – © CIM 2015 Marketing and the 7Ps: A brief summary of marketing and how it work. [online] Available at https://www.cim.co.uk/files/7ps.pdf [Accessed 5 Jun. 2016].
Dibbs, S., & Simkin, L. (2013). Market Segmentation Success: Making it Happen! New York, Haworth Press.
O'Farrell, R. (2016). Environmental Business Analysis. [online] Smallbusiness.chron.com. Available at: http://smallbusiness.chron.com/environmental-business-analysis-43238.html [Accessed 5 Jun. 2016].
Ferrell, O. C., & Hartline, M. D. (2014). Marketing Strategy: Text and Cases. Mason, OH, South-Western/Cengage Learning.
Gao, C.Y. and Peng, D.H., 2011. Consolidating SWOT Analysis with Nonhomogeneous Uncertain Preference Information. Knowledge-Based Systems, 24(6), pp.796-808.
Kotler, P. (2014). Kotler on Marketing: How to Create, Win, and Dominate Markets. New York, Free Press.
Lamb, C. W., Hair, J. F., & McDaniel, C. D. (2012). Essentials of Marketing. Mason, Ohio, South-Western Cengage Learnings
Pride, W. M., & Ferrell, O. C. (2015). Foundation of Marketing. Stamford, CT, Cengage Learning.
Volkmann, C. K., Tokarski, K. O., & Grunhagen, M. (2010). Entrepreneurship in a European Perspective Concepts for the Creation and Growth of new Ventures. Wiesbaden, Gabler. http://site.ebrary.com/id/10427777.s
www.learnmarketing.net. (2016). Marketing Mix (4P's) Price and Pricing Strategies. [online] Available at http://www.learnmarketing.net/price.htm [Accessed 5 Jun. 2016].
