Developing a Marketing Strategy for Next's Expansion into New Markets

The report recommends that Next, a British multinational clothing and home goods retailer, can generate higher revenue by expanding its market share in two markets: China and Singapore. The report also assesses global factors impacting the organization's marketing strategy and provides recommendations for entering new markets.

International
marketing
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TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
An analysis of macro and micro factors impacting on the retail market and the market
recommendations.........................................................................................................................3
An evaluation of market potential (shortlist of markets with potential)......................................5
Recommend two markets which can be selected and provide justification as well....................5
Recommendation of two markets which can be selected for diversification along with its
justification..................................................................................................................................6
Marketing mix for proposed markets...........................................................................................7
References......................................................................................................................................10
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INTRODUCTION
In the contemporary scenario, international marketing is gaining significant aspect
as it focuses on introducing wide range of products and services into the new marketplace.
The present report is being focuses on the Next one of the renowned British multinational
brand that serve wide range of products that include clothing, footwear as well as home
products. The company mainly operates their business activities through their online stores
and physical stores in the UK region (Amabile and et.al., 2006). Presently, the report focuses
on analysing the micro as well as macro factors that mainly affect the retail market. However, the
report will also focus on studying different market under which Next can diversify their business
activities.
An analysis of macro and micro factors impacting on the retail market and the market
recommendations
There are wide range of factors included in external and internal environment that affect
the clothing industry and some of the factors are discussed in the below mentioned section. The
factors that are included in the macro environment are as follows:
Political factors: Rules, regulations and government framework can posses negative as
well as positive impact on retail industry and this further also leads the business entities to adopt
several new provisions for business management. In order to adopt the new systems, Next plc
has to emphasize on cost facets as that could also prevent the business from the legal issues
(Zweifel, 2003). Retail industry needs to consider legal factors as well where in chief focus
should be given to legal policies and strategies because retail industry mainly focuses on
diversification and expansion aspects. On the other hand, trade regulations needs to be
considered for the same.
Economic factors: Retail industry needs to consider economic aspects as with the help of
that only, business can survive at competitive market place. The flow of resources is stable in the
economy; therefore this assists the consumers to spend more on retail products and services.
Hence, economic factors are beneficial for the business entity because people are spending more
in retail products and services. However, on the other hand, if changes would appear in economic
facets, then it might hamper the purchasing parity of consumers. Thus, retail industry needs to
lower down the prices so that demand can be increased (Gyves, 2008).
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Technological factors: Retail industry has been emphasizing on technological grounds so
that new services can be added to the service line of the business entity. Retail industry has been
focusing on technological aspects which also assists in customer satisfaction and that also drives
them to remain with the company. Several sorts of billing systems have been added in the service
provision where in retailers are able to deliver timely and adequate services to the clients. All the
business activities are also managed in feasible manner and this also encourages technical reach
of the entity. Moreover, the entities working in retail industry lays emphasis on competitive
aspects and as a result, differentiation exists at market place (Ivy, 2008).
Social factors: Retail industry has to consider social factors as well because needs of
clients changes frequently. Demand for eco friendly have been increasing because customers are
getting more conscious about their health. This leads the business entities to adopt social norms
on higher extent because customer satisfaction will only augment brand aspects and success
facets of the business integrated in retail industry.
Apart from macro factors, there are several micro factors as well that affects retail
industry and a few are discussed in the below mentioned section: Employees: Retail industry manages all the work processes with efficient staff members;
thus employees plays major role in the same area of concern (Virvilaite, Seinauskiene
and Sestokiene, 2011). Thus, people working at retail industry have to make sure that
they are capable enough to deal with technological aspects. Further, they need to be
efficient enough so that they can properly use all the systems. Distribution and suppliers: Retail industry is entirely dependent on suppliers and
distributors because they supply raw materials to the industry and afterwards, they
produce finished goods for the consumers (Leonidou and et. al., 2010). Thus, there
should be proper relationship with the suppliers so that demand can be managed
accordingly.
 Competitors: There are several players working in the retail industry; thus all the entities
working in the same scenario needs to consider competition policies and regulations. The
level of substitute products increases and this augments competition at market place.
Hence, for the same aspect, it is essential for the industries to consider competition acts
and norms in feasible manner.
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An evaluation of market potential (shortlist of markets with potential)
Next plc has been planning to enter into Singapore and Chinese market place because
both the markets are developing and entering into such market can encourage the ratio of
revenue and success aspects. Chinese market would be beneficial for the retail entity because
people prefer to have luxury items ranging from clothing and footwear products. Retail industry
is the largest contributor in economic development; therefore Next plc would acquire greater
benefits after entering into Chinese market. This might also augment the degree of Foreign
Direct Investment (Wilkinson, McAlister and Widmier, 2007).
Currently, Next has been managing business in UK and the business could expand the
operations in American market because people in America prefer to have retail products on
higher quantity. At present, Next plc has around 700 stores out of which 500 are in Ireland and
UK and remaining are spread in different continents of Europe. Next is the largest clothing
retailer by sales in UK and this is the reason, it is listed in London Stock Exchange. In terms of
expansion, Next can establish the business in America because USA has well- established
distribution channels for all types of retail companies (The Retail Services Industry in the United
States, 2015). The retail service industry would provide an openly competitive environment that
fosters the value of business operations and it also spurs innovation that further increases
efficacy and reliability of the products. From many research studies, it has been explored that
total sales in retail market (USA) is more than $2.5 trillion; thus retailers are considered as the
largest contributor in generating employment opportunities (Rugman, 2002). Numerous
opportunities for growth exist in the US market because of direct and indirect sellers
Recommend two markets which can be selected and provide justification as well
In order to expand its operations and increase its current market share, Next is required
to select appropriate markets. Based on the above discussion, the market of China can be
selected as it is one of the growing economy of the world. Further Next will find enormous
opportunities for growth and development in China. The reason why china has been selected is
that the government of country is very supportive and provides a lot of helps to new businesses.
Along with this, foreign investments are always welcomed by the country (Aziz and Fady,
2013). The company wont have any kind of difficulty in terms of selecting channels of
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distribution and customers. By selection of appropriate channels of distribution, the company
will be able to provide the products and services easily to the people of china.
On the other hand, the market of Singapore will be also taken into consideration. After
carrying out the entire screening and assessment of the market it has been found that the income
level and standard of living is increasing with a great speed (Wolfe, 2013). Further there are
many clothing retailers which are already performing well in the market. The high income of
people and using standard of living is a clear sign that there are adequate opportunities for
growth and development for Next. Along with this, it can be also state that the trend among
people in Singapore is increasing day by day and people have started to use branded clothes and
accessories. The company can easily gain market share and attract customers with the help of by
carrying our effective marketing and promotions. Further the company also have an opportunity
to offer some new and innovative products to the people of Singapore (Longenecker, Moore and
Petty, 2003). One of the most important thing which will be required to consider is that the
clothes and outlets should match and reflect the culture of Singapore. This will result in crating a
positive image in the minds of customers and will enhance its brand image.
Recommendation of two markets which can be selected for diversification along with its
justification
Management of Next is planning for the diversification in the business by entering into
new markets. For this aspect, management of organization is required to select suitable market
for the expansion in order to get maximum advantage. By considering above discussion, Next plc
can expand their business operations in China. It is because; retail sector in the selected country
is innovative and profitable. In these countries, retail market is at its growth stage as organization
are expanding their business for better global presence (Nagel, 2012). This aspect is creating
more opportunities in the country as it had emerged from economic challenges in the long run. In
addition to this, the retail supply chain in China provides combination of creative supply chain
retail and financiers who operates directly in the retail chain.
Another market that can be selected for the purpose of expansion is Singapore market in
accordance with screening and above discussion. It is because, this market has great
opportunities for the retail industry. By operating in this market, management of Next Plc can
maximize their profits. In addition to this, Singapore market human and financial resources at
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cheap rate by which overall cost of business will be reduced. In this market, company can
introduce innovative products by considering taste and preference of the customers (Rugman,
2002). This approach has positive impact on the customers which will help in creating better
brand image. In addition to this, there is a huge distribution channel in this market through which
company will be able to sell its products by using numerous channels and through web portal.
Marketing mix for proposed markets
In Chinese Market
Next PLC has to follow marketing mix in accordance with culture and trend of the country
and while expanding the business in China, Next has good opportunity to attract large number of
customers. Company has to emphasis on its marketing mix in very efficient manner. Product: Next has achieved very good brand name in clothing sector in UK and for this
product company take advantage while expanding business in China. Company can offer
designer clothes for the Chinese people, these will help them to fulfill the current needs
and trends of the customers(Tallman, 2010). Price: Pricing of the products of Next Plc can be followed through reasonable pricing
strategy. Initially the company is new in market and to attract the large number of
customers of China, reasonable pricing for the branded clothes will lure high number of
customers. Place: At the time of starting period, Next can sell their clothing products in Beijing as it
is the capital of the company and also has highest population. This will help to cover
large market area of China at initial period. Further, Next can sell their products in other
cities of China. In addition to this company can also start to sell their products through
online website. This will also cover large market area of China (Vrontis and Thrassou,
2007).
 Promotion: As per the current scenario, Next can used the advanced promotional
strategies for its clothing products. Use of social media networking sites, E-mail, online
advertising etc. This will help the company to attract large number of customers. In
addition to this, Next can also start its marketing campaign in Beijing, mainly in shopping
malls and other market places.
In Singapore market
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Singapore as a country has different culture as different type of people lies who varies from
each other in the form of culture, religion etc. Further, for meeting with the requirement of
different type of individuals it is required for Next plc to develop effective marketing mix sothat
survival can become easy in the market of Singapore (Christopher, 2012). The proposed
marketing mix of enterprise is as follows: Product: Next can introduce different type of clothes in the Singapore market through
which overall sales volume of the company can be enhanced easily. Further, different
styles of clothes can be offered to target market such as organic one through which
overall environment can be protected easily. Moreover, it will have positive impact on
brand image of business and can act as development tool. Price: High level of competition exist in the market of Singapore due to which business
has considered the strategy of penetration pricing where prices will be kept low in order
to attract large number of customers (Morschett and et.al.,2006). Further, this will
support in enhancing the sales volume along with profitability of enterprise in short
period of time Place: Distribution channel plays most important role in marketing and company will
offer entire range of its products with the help of e-commerce sites where large number
of customers can be influenced easily to purchase the commodities. This can enhance
overall performance of company and can allow customers to gain appropriate information
regarding products (Zou and Fu, 2011)
 Promotion: For promoting products in the market both below and above line method will
be used by company where in Singapore market sales promotion technique will be
employed and through this sales volume can be increased. Further, advertising will be
given on television and social media so that customers can gain information regarding
product range.
CONCLUSION
From the above report is has been concluded that international marketing is considered an
effective concept that assist Next in emerging or expanding their business activities in the new
markets so that they may generate higher revenue. The report has also recommended two
markets under which Next could expand their market share that is China and Singapore.
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Moreover, it has also assessed different global factors that have impacted the organization's
marketing strategy. Lastly, the report has also recommended different market strategy so that
Next can easily enter in the new marketplace.
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REFERENCES
Books and journals
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Enterprise Information Management. 26(5). pp.577-595.
Christopher, M. E., 2012. International Management: Explorations Across Cultures. Kogan Page
Publishers.
Gyves, S. ,2008. Corporate social responsibility: an avenue for sustainable benefit for society
and the firm? Society and Business Review.(3)3.pp.1-16.
Ivy, J., 2008. A new higher education marketing mix: the 7Ps for MBA marketing. International
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Leonidou, C. L. and et. al., 2010. Assessing the contribution of leading mainstream marketing
journals to the international marketing discipline. International Marketing.27(5). pp.491 -
518.
Longenecker, J. M., Moore, C. W. and Petty, J. W., 2003. Small Business Management.
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Morschett, D. and et.al.,2006. Strategic International Management: Text and Cases. Springer
Science & Business Media.
Nagel, C., 2012. Global Market Entry. Xlibris Corporation.
Rugman, M. A., 2002. International Business: Critical Perspectives on Business and
Management. Taylor & Francis.
Tallman, S., 2010. Global Strategy. John Wiley & Sons.
Vrontis, D. and Thrassou, A. 2007. Adaptation vs. Standardization in International Marketing:
The Country-of-Origin Effect. Innovative Marketing, 3(4).
Wilkinson, J. T, McAlister, A and Widmier, S., 2007. Reaching the international consumer: An
assessment of the international direct marketing environment. Direct Marketing: An
International Journal. 1(1). pp.17 - 37.
Zou, S. and Fu, H., 2011. International Marketing: Emerging Markets. Emerald Group
Publishing
Zweifel, D. T., 2003. Culture Clash: Managing the Global High-performance Team. Swiss
Consulting Group.
Online
Virvilaite, R., Seinauskiene, B. and Sestokiene, G., 2011. The Link between
Standardization/Adaptation of International Marketing Strategy and Company
Performance. [pdf]. Available through:
<http://www.socscidiss.bham.ac.uk/methodologies.html > [Accessed on 10th December
2015].
Wolfe, M., 2013. Standardization of International Marketing Strategy. [Online]. Available
through: <http://smallbusiness.chron.com/standardization-international-marketing-
strategy-15206.html>. [Accessed on 10th December 2015].
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