Principles of Marketing Solved Assignment

PRINCIPLES OF
MARKETING

Executive Summary
This report is based on Gymshark which is a gym apparel company based in United
Kingdom. The internal analysis depicts that company is capable of coming up with Smartphone
Commerce, AI and wearable technology. The PESTLE analysis demonstrates that Brexit have
negative influence upon the functioning of entity while strong economies foster increment in
number of gym memberships by increasing the demand for gym apparel sold by entity. The
Marketing mix depicts that enterprise has a unique product portfolio and further possesses the
capabilities to introduce new products within accessories segment. BCG analysis also illustrates
that entity should invest in accessories. Further, the entity is targetting belonging to age group of
18-25 years which are white collared or belong to lower or upper middle class section of society.

Table of Contents
Executive Summary.........................................................................................................................2
INTRODUCTION...........................................................................................................................4
Overview of the organisation.................................................................................................4
Environmental and Competitor Analysis...............................................................................4
SWOT Analysis......................................................................................................................8
SMART Marketing Objectives...............................................................................................9
Marketing Strategy...............................................................................................................10
Utilising the Marketing Mix to Improve Growth and Market Share....................................12
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................14

INTRODUCTION
Principles of marketing refer to the components of marketing that together constitute the
marketing mix. Marketers make use of these principles to devise an effective marketing strategy
which can provide assistance to the organisation in enhancing its sales as well as profitability
(Ahmed and Rahman, 2015). This report is based on Gymshark which is an online gym apparel
organisation based in United Kingdom. This project includes development of a marketing plan
whose purpose is to enhance the overall market share as well as revenues of the organisation.
This information will be of value to Gymshark as this paves the way for future success of the
enterprise. This report consists of environmental and competitor analysis along with SWOT
analysis. Further, it comprises of SMART marketing objectives and marketing strategy based on
STP. Lastly, it constitutes discussion about 4Ps of entity to enhance growth and market share of
entity.
Overview of the organisation
Gymshark is an online fitness clothing brand started by Ben Francis together with a group
of high school friends. This entity offers diverse set of products for men and women such as tank
tops, t-shirts, pants, hoodies, shorts, leggings, stringers etc. This company is regarded as the most
rapidly growing and largest brand within gym apparel of UK. The entity sells its products to 177
countries across the globe (Serrat, 2017). Since the start, this organisation has seen tremendous
growth and an ever expanding loyal customer base. Gymshark has connected with a number of
famous Instagrammers, YouTubers and bloggers by sponsoring them and possess a social media
following of 30 million (ABOUT US, 2019). This enterprise has emphasized on employing
ambassadors and fitness influencers who have big social media fan base.
Environmental and Competitor Analysis
In order to successfully facilitate growth of a company, it is essential that the entity
constantly evaluates the micro environment so as to identify the probable shortcomings or issues
and undertake steps which can provide assistance in dealing with them. In this regard, the
manager of Gymshark has conducted PESTLE analysis which is a framework to assess the
impact of external environment factors upon the operations and functioning of entity.
PESTLE Analysis
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POLITICAL ECONOMIC SOCIAL
 Impact of Brexit
negatively impacts
upon import of
products.
 Interest of government
in promoting sports
apparel brands such as
Gymshark.
 Adherence to
international trade
restrictions and tariffs.
 Impact of economy of
countries on sale of
leisure products.
 Strong economies will
facilitate increased
number of gym
memberships, thereby
increasing the demand
of gym apparel sold by
Gymshark (Armstrong
and et. al., 2014).
 Interest of people
towards products of
Gymshark on social
media.
 High average income
of key demographic
sections for Gymshark
will enhance sales of
company.
 Sponsorship of social
media influencers or
fitness athletes helps to
create awareness about
the gym apparel brand.
TECHNOLOGICAL LEGAL ENVIRONMENTAL
 Artificial intelligence,
Smartphone
Commerce, Wearable
technology and chat
bots present
opportunities for
Gymshark to enhance
its market share and
sales.
 Maintaining awareness
of design patents of
rival firms to avoid
getting involved in
legal issues.
 Written contracts to be
maintained with
sponsored athletes.
 Environmental friendly
packing will help to
gain praise from
government as well as
customers.
 Use of organic
materials to colour or
weave fabrics.
Porter's Five Forces
This is a strategic industry analysis that assists an organisation to analyse and evaluate the
environment of specific business sector in which the entity is operating. In this regard, the
manager of Gymshark has used Porter's Five Force Model to carry out competitive analysis of
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gym and sports apparel industry. The five forces that constitute this model are discussed in
context of Gymshark as follows:-
Threat of New Entrants HIGH
 Easy to setup gym clothing brand owing to cheap
supply and soft regulations.
 Branding and marketing can be easily carried out by
way of social media.
Threat of Substitutes HIGH
 Key market players such as Nike, Under Armour and
Adidas which deal in similar product segment act as
threat for Gymshark (Baker, 2016).
 A number of substitutes are available at low price.
Competitive Rivalry HIGH
 Large number of similar alternatives.
 Market captured by big companies such as Adidas,
Nike, FP Movement, Style Runner, Athleta, Lorna
Jane which enhances the level of competition within
the industry.
Bargaining Power of Suppliers LOW
 Large numbers of suppliers exist within gym and
sports apparel industry.
 The supplier which offers products at low prices are
preferred by customers.
Bargaining Power of Buyers HIGH
 Switching cost within gym clothing industry is quite
low.
 Customers shift to that brand which offers them high
quality products at low prices (Bowie, Buttle and
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Brookes, 2016).
Competitor Analysis
Within the Gym clothing industry, there are a large number of rival firms which pose
threat to the sustainability of Gymshark within market and also increase the level of industrial
competition. In this regard, the below given competitor map gives the evidence of presence of
huge quantum of companies within Gym apparel sector. This competitor map shows the direct
rivals of entity in the first (green) ring, which collectively impact upon the position and market
presence of Gymshark. In the second (blue) ring are the organisation which are key market
players and pose threat owing to their well established and strong presence in market place
(Resnick and et. al., 2016).
Figure 1: Competitor Map
(Source: Competitor Map, 2019)
Internal Issues
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Additionally, Gymshark should be aware of some of the internal issues that have been
hampering its performance. That is to say that they should be aware of the latest technologies
that are being used in the marketplace by constantly carrying out marketplace research(Resnick
and et. al., 2016). The lack of technological or innovative initiative such as AI, Wearable
technology, Smartphone Commerce, has been one of the prominent issues that is not letting the
company take the forefront within gym apparel industry and becoming the leader (DONNELLY
and Peter, 2012).
SWOT Analysis
This part analyses the internal strengths and shortcomings of entity with a view to gain
knowledge of the aspects where the entity can put efforts to enhance market position and sales.
SWOT is a strategic tool which helps a company in identifying the strengths, weaknesses,
opportunities and threats for carrying out business planning. In this regard, the manager of
Gymshark has also conducted internal analysis with the help of SWOT framework, as follows:-
STRENGTHS WEAKNESSES
 Gymshark does outsourcing within
China and thus, entity possesses high
bargaining power to find an appropriate
supplier at low cost.
 Financial transactions carried out by
way of NEFT are quick.
 Their online advertising is effectively
done with the help of well renowned
social media influencers.
 It has a strong social media presence.
 Gymshark offers gym apparel at
reasonable prices in contrast to its
competitors which assists in gaining the
attention of all economic sections of
society.
 The entity does not have a mobile
phone application.
 Outsourcing within China leads to
additional import cost.
 A large number of substitute brands are
present within marketplace such as
Nike, Adidas, Athleta, Physiq Apparel,
FP Movement, Style Runner etc.
(Jobber and Ellis-Chadwick, 2012).
 Company lacks effective technological
initiatives such as wearable technology,
Artificial Intelligence, chat bots.
OPPORTUNITIES THREATS
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 Artificial Intelligence and chat bots
present lucrative opportunities for
company.
 This company has the capability to
come up with Smartphone Commerce
to significantly attract a larger audience
(Lees-Marshment, 2014).
 New emerging markets present
opportunities for entity to gain access,
thereby, increasing its market presence.
 Gymshark has the potential as well as
capability to open brick-and-mortar
style stores to enhance the customer
base.
 The entity can come up with wearable
technology to gain attention of large
number of people.
 Many companies dealing within the
same product segment as Gymshark
pose threat to the existence and market
share of entity.
 Economic uncertainty within United
Kingdom in terms of Brexit may create
issues in effective functioning of entity
within domestic market.
SMART Marketing Objectives
Based on the analysis of internal environment, it can be said that there are a number of
aspects upon which the entity can work to enhance its sales and profitability. Increment in sales
and profitability would imply enhanced loyal customer base and improved market position,
which will give an overall boost to the company (Lilien, Rangaswamy and De Bruyn, 2013). In
this regard, to improve the position of company in market place, the manager of Gymshark has
set out three marketing objectives, as follows:-
“To enhance the sales of company by 15% by the end of 1 year by introducing wearable
technology”
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“To increase the market share of entity by 5% by the end of 2020 by increasing the
number of sponsorships of social media influencers”
“To raise the profitability of enterprise by 20% by next 1 year by coming up with
innovative products”
Marketing Strategy
In marketing, segmentation, targeting and positioning are key aspects which lay out the
foundation stone to the development of an effective marketing strategy. In this regard, STP is a
framework which provides assistance to an organisation while developing an effective marketing
communication plan or strategy to enable interaction with target customer segments. In this
regard, the manager of Gymshark has made use of STP model with a view to gain knowledge of
its key market segments and to devise an optimum strategy which can aid the entity in improving
its position within marketplace.
STP
Segmentation: An entity is usually not capable of targeting the overall market and thus,
it segments the market on certain parameters and then picks out one criterion on the basis of
which it sets out a marketing strategy. In this regard, market can be segmented on the basis of 4
criteria which are briefly explained below:-
Demographics: Here, the market is segmented on the basis of characteristics or attributes of
population such as age, income, ethnicity, education, marital status, gender, occupation, income
level etc.
Psychographics: Here, market segmentation is done on the basis of attitude, personality traits,
lifestyle and hobbies of individuals.
Behaviour: This seeks to segment the market on the basis of behavioural characteristics of
customers such as purchase behaviour, brand loyalty, benefits sought and reaction to marketing
or distribution channels.
Geographic: Here, the market is segmented on the basis of state, country, city etc.
On the basis of above evaluation, the marketing strategy devised for Gymshark is
demographic segmentation. In this regard, Gymshark will target customers belonging to age
group of 18-25 years as their lives revolve around music, fitness, fashion and health care
(Newman, Peck and Wilhide, 2017).
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Targeting: Here, the company targets the market segment selected on the basis of
previous stage of STP. Here, the characteristics of consumers are taken into account so as to
devise an effective and suitable marketing strategy for entity. In this regard, differentiated
marketing strategy is being selected by Gymshark to target the customers, as follows:-
Consumer Aspect Description
Age 18 to 25 years
Gender Male & Female
Occupation White Collar, Senior/Junior Executive, Junior Managerial
position
Income Level Annual Income of SGD $25,000-50,000
Consumer Values  Fun loving
 Health conscious
 Fitness and music loving
Positioning: Here, an organisation positions the products within its selected target
customer segment. In this regard, Gymshark apparel is designed and developed for comfortable
workout and seek to deliver excellent performance (Nowak, Gellin And MacDonald, 2015).
With wide range of men and women clothing, company will be able to gain the attention of large
number of consumers.
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Figure 2: Positioning Map of Gymshark
(Source: Positioning Map of Gymshark, 2019)
Utilising the Marketing Mix to Improve Growth and Market Share
The seven elements of marketing mix are formulated and developed by marketing experts
who are around the world for creation and execution of successful marketing strategies.
Marketing mix is defined as set of tactics, actions which are used by organisation for promoting
their products and brands within market. Gymshark makes use of this strategy to build services
and products to render services to their customers. The major motive of this is to make
appropriate product at right price within appropriate place with suitable promotion strategy.
Gymshark is an accessories and fitness apparel, online retailer and manufacturer which renders
their services around United Kingdom. They aim at rendering services for fitness freaks.
Product Core: They provide gym apparel for fitness enthusiastic people.
Actual: The unique and functionality of product makes Gymshark
different from their competitors.
Augmented: Return support and delivery, branding and design of
product are unique which are rendered by them (Pike, 2015).
Price It renders cost which is accepted by majority and they have applied
market penetration.
Place They serve in limited places means selective distribution occurs.
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Also, the entity only offers its products only via online channels.
Promotion Pop-up stores in Paris. They provide Black Friday watchlist for
women and men.
BCG Matrix is a tool used for evaluating the strategic position of brand portfolio of
business together with its potential. This framework classifies business portfolio on the basis of
industry attractiveness and competitive position. This analysis assists the company to gain
knowledge of the brands in which it should invest and the ones that should be divested. On the
basis of BCG analysis of Gymshark, it can be said that organisation should invest in accessories
segment and divest none of the current segments of product portfolio of entity.
CONCLUSION
From the above discussion, it can be concluded that an effective marketing strategy as
well as planning is the key to success of an organisation. Also, it is observed that marketing is a
key activity which should be taken into account by organisation as it helps in gaining the
attention of a large number of people. Further, it has been analysed that the external factors,
namely, PESTLE offers both opportunities as well as threats which should be considered by
entity while devising an effective marketing strategy. Besides this, it has been acknowledged
with the help of internal (SWOT) analysis that entity faces immense competition from close
substitutes present within gym apparel industry. Also, it reflects that entity has the potential to
tap the advantage of opportunities such as Artificial Intelligence, chat bots, wearable technology,
Smartphone Commerce etc. It is also found that industrial rivalry within gym apparel industry is
high and the threat of new entrants is also quite high owing to soft regulations. Further,
marketing mix of company demonstrates that entity offers unique clothes for men and women.
STP model illustrates that enterprise is carrying out segmentation on the basis of demographics
and targetting customers belonging to age group of 18 to 25 years belonging to medium and
upper class sections having annual income of SGD $25,000-50,000. The major competitors
within gym apparel industry are Nike, Adidas, Athleta, Physiq Apparel, FP Movement, Style
Runner which pose threat to the sustainability of this company. Thus, it is concluded that top
management of entity should come up with unique and innovative products while making use of
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effective technologies to gain the attention of large number of people as this will help them to
enhance their sales as well as profitability.
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