Marketing Principles Report: Asos.com Case Study Analysis

This report delves into the core principles of marketing, employing Asos.com, an online retail store, as a case study. It meticulously examines the influence of micro and macro environmental factors on marketing decisions, exploring how these elements shape the strategies of the company. The report further analyzes segmentation criteria utilized for various products, the targeting strategies implemented, and the impact of buyer behavior on different marketing approaches. A significant portion is dedicated to the development of a new product line, including the application of the marketing mix. The report also explores the differentiation of marketing strategies across various customer segments, and compares marketing approaches in domestic and international contexts, providing a comprehensive overview of marketing principles in action.

MARKETING PRINCIPLES

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
Task 2...............................................................................................................................................1
2.1 Macro and Micro Environmental Factors.............................................................................1
2.2 Segmentation criteria to be used for products.......................................................................4
2.3 Targeting Strategy.................................................................................................................5
2.4 Effect of buyer behaviour on different marketing strategies................................................6
2.5 New Positioning for a selected Product ...............................................................................6
Task 3...............................................................................................................................................7
3.1 Development of products to sustain competitive advantage.................................................7
3.2 Distribution Strategy.............................................................................................................9
3.3 Price strategy.......................................................................................................................10
3.4 Promotion strategy..............................................................................................................11
3.5 Additional Elements of marketing mix...............................................................................12
Task 4.............................................................................................................................................13
4.1 Marketing Mix for two different segments.........................................................................13
4.2 Difference in marketing products to business ....................................................................14
4.3 Difference in international and domestic marketing...........................................................15
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Marketing is known as the process of transferring goods and services prepared by
producers or sellers to the consumers or buyers, for satisfying their needs. It minimizes the gap
between service provider and service receiver. Marketing is an important part of any business
being a retail sector, airlines sector or any other segment of market. The main elements of
marketing are price, product, place and promotion. It is the way of understanding the customer
mindset and preferences and what amount he is ready to pay for the services offered to him. In
this report study has been made regarding marketing and how it is affected by macro and micro
environmental factors which influence marketing decisions, segmentation criteria that is used for
different products in different market, targeting strategy for the selected product or service, effect
of buyer behaviour on marketing activities in different buying situations etc., in context of
Asos.com, an online retail store of UK. It is introducing a new product line of handbags
targeting different market segments.
Task 2
2.1 Macro and Micro Environmental Factors
There are several micro and macro environmental factors that influence the marketing
decision of this online retail store. It is currently dealing in fashion and beauty products targeting
youngsters and adults. The marketing department has planned to expand the business by entering
into new product line (Bearden, 2006). Since it is an online retailer for both menswear and
women wear, footwear, accessories, jewellery and other beauty products. It has decided to
introduce handbags of different brands for women and wallets for men. Presenting here the brief
description about micro and macro environment factors.
Micro Environment Factors Suppliers : Many suppliers are willing to offer their bags to Asos. As it is known that
suppliers help in controlling the success of the business and organization. Suppliers can
control the success when they have power and they get power by being the most
important suppliers of the goods. In this product line also different suppliers will offer
their products for selling them online (Dalgic, 2006). Resellers : As the company is expanding its business in reselling the handbags made by
different producers, they are known as third party resellers. Third party resellers are
1

those who sells the product manufactured by others. Asos.com is an online retailer, it is a
third party reseller, selling different products of different brands to customers online. It
takes help of other resellers also to make their new products get more famous among
different customers at different places (Jobber and Ellis-Chadwick, 2012). Customers : Customers are of various kinds for example business to business customers,
local customers and international customers. They are the most important part of an
organisation to get success. The products that the company is selling should be as per the
requirements of customers. Marketing helps in approaching target customers for the
target products. Thus, the customers play vital role in success of the company. Competition : The retail online business is not having any monopoly in the market, they
have lot of competitors selling similar products and giving cut throat competition to
them. Asos.com also has competitors like Bahoo.com and N Brown, dealing in similar
products of fashion and beauty products. If an organisation wants to beat its competitor,
it has to choose a marketing strategy different from those taken by their competitors
(Kotler and Armstrong, 2010). Public : Public satisfaction is the prime responsibility of any organisation carrying on
the business. Any marketing strategy prepared by the company should be as per the
preference of public. To take care of their needs is necessary for achieving organisational
goals because any wrong action will lead the company far away from reaching its goals
(Sheth and Sisodia, 2015).
Macro Environment Factors Demographic factors : Demographic factors includes country, region, age, ethnicity,
education level, household lifestyle, income level, cultural factors etc. These influence
the marketing decision making in every aspect. Many people believe in buying from live
markets than online retail stores (Wang, 2007). It also varies with different age groups
like the choices of young and old generation people are different. The income level also
defines a different market strategy. The company is introducing an online shopping for
hand bags and wallets, which will be segregated as per demographic condition of
customers.
2

 Economic Factors : The economic environment of the country also impacts the
marketing decision making for any product or service (Wang, 2007). It affects the
company's retailing business as well as customer's decision making process. Natural and Physical Forces : Natural factors affect the organisation and its production
process such as forests, agricultural products, marine products etc. Since the company is
dealing in clothing and footwear sector, it needs to take into account the physical
environment factors that includes non renewable resources, for example oil, coal,
minerals etc. Technological Factors : Technology also affects the marketing decision making of an
organisation. Customers are attracted by good, popular and latest technology used
products (Rimal and Creel, 2008). The technology should be modern and updated and
not an outdated one. Technology impacts the production process of products and that
helps in smooth running of business and that is required for keeping the value of product
in the market maintained. Political and Legal Factors : Marketing is affected by political and legal factors also.
Some marketing decisions cannot be taken without political and legal advice and support.
This retail company should follow all the legal and regulatory requirements of the
country of its origin that are necessary to continue its business.
 Social and Cultural Factors : Marketing is the mixture of micro and macro economic
factors. Social factors affects the marketing decision-making in an effective manner. The
products an organisation produces and sells must be in accordance with the requirements
of society but do not hurt the sentiments of public in any manner (Wright, 2014). Any
such factors affecting the society and their culture in negative way, should be eliminated.
Aso0s.com also take into account these factors while entering into new product market
and also in continuing the existing business.
3

Illustration 1: Micro and Macro environment factors
(Source: Micro and Macro Environment Factors,. 2015)
2.2 Segmentation criteria to be used for products
Different customers have their different choices. In order to meet the needs of different
buyers, the producers as well as sellers have to identify the group of customers who will be
interested in buying the products offered by the company and focusing the marketing strategy on
these customers (Hanson and Kalyanam, 2007). In the case of Asos.com being an online retailer,
is planning to introduce a new segment of handbags to give more choices to their customers apart
from clothings and other fashion materials. It will enhance the profitability of the organisation.
The prime focus of this store is on men and women wardrobe, both need handbags and wallets.
They have divided this main product in various segments to attract all type of buyers whether old
or young. The criteria that can be selected for market segmentation is geographic, demographic,
socio-economic, psycho-graphic, behavioural etc.
The market is divided in psycho-graphic segment to attract the consumers as per their
living style. People of different age will like to buy as per their convenience (Judson, Aurand
and Karlovsky, 2007). Kids are also considered while segmenting the market for handbags. Short
and long style handbags are made available with beautiful pictures on them, to attract the
customers. For boys leather wallets in different brands and different colours are made available.
For women different varieties with styles in all price ranges are made available. The theme is
prepared in such a way to attract every segment of market and not a particular piece of market.
4

Since it is a different segment from those in which the company is currently dealing
therefore the criteria of segmentation chosen above should be proven as better satisfying
customer needs, increased profits for business, it will help the company to grow even faster, to
retain more customers and gaining a huge part of market segment. The segmentation on the basis
of age criteria can be from 5-10 years old then 10-15 years old, 15-20 years old and above. It
depends on their income classification as well. Customers with lower income would prefer cheap
as well as durable handbags and customers with high income scale would opt for premium
quality of handbags. So the profitability of the retail shop will be maintained.
2.3 Targeting Strategy
There are four basic marketing strategies on which the store can satisfy their target
market for new product line. They are mass marketing or undifferentiated marketing,
differentiated marketing strategy, concentrated marketing or niche marketing strategy and lastly
direct marketing. In mass marketing strategy the firm targets the entire market rather than a
specific segment of market (Brassington and Pettitt, 2005). The offer is made for all and not for a
particular segment of market. In differentiated marketing strategy different offers are made for
different markets and different customers. It is also known as multi segment marketing. Next is
concentrated marketing or niche marketing which focuses on selection of particular market niche
on which marketing efforts are made and targeted. Direct marketing is made when direct contact
with consumers can be made and target customers are offered the products that are made for
them. The database to contact consumers come via email, mobile no., home no., etc.
In the present scenario of Asos.com, the retail store, for grabbing the attention of target
customers, the marketing strategy that should be adopted is differentiated marketing. The reason
being, it is made for all the segment of customers being children, teenagers, youngsters or old, so
the entire market is needed to be covered. The different segments of market are provided with
the desirable variety of handbags as per their demographic and psycho-graphic classification
(Anderson, Narus and Narayandas, 2009). The store has made facility to easily attract the
customers by sending them emails and contacting them on calls. The store is offering free gift
vouchers with the handbags and wallets. Different and unique benefits are provided to different
customers as per their preferences.
The main principle of target marketing is that brand loyalty is preferred from those who
are targeted for that particular brand. It will help the company to send their message to a target
5

group of customers for whom the strategy is made by the sales team. Especially in online
targeting a particular customer segment, will help the advertisers in to directly selling their
product to them for whom it is made.
2.4 Effect of buyer behaviour on different marketing strategies
Buyer behaviour plays an important role in different marketing strategies. It is a decision
process in which customer's willingness to buy and use the products. In this case of Asos.com
knowing buyer behaviour is very important, which will help in deciding the marketing strategies
to build customer confidence. There are six stages to the consumer buying behaviour. Like the
need of the product which the store is introducing, information about the products, alternatives
available, decision to buy or not to buy, buying the product and the post purchase evaluation
about the satisfaction of the product.
The product introduced by Asos.com is preferable to all type of consumers therefore the
buyer behaviour to buy the handbags can be affected by their opinion, psychological behaviour
and social activities. Buying behaviour of customers is the mental and emotional process because
it involves the way of thinking of customers at the time of buying the products, their tendency to
buy, their willingness to pay for a particular product etc. The marketing department should
consider these factors at the time of marketing the products. Other factors which influence
consumer buying behaviour is the groups with which they interact like family, friends, reference
groups and society etc. Target market for handbags include young people who have great
demand for these products as a fashion statement. Buyer behaviour is the mixture of internal and
external factors that affects the marketing strategy that the marketing team is adopting to
promote its products, and when this behaviour is assessed and analysed, it can guide towards
better marketing strategies and methods. Supply and demand of products also influences
marketing activities in several ways. For these type of products like handbags, wallets etc.
customers have their responses as routine buying behaviour.
2.5 New Positioning for a selected Product
The product selected by Asos for gaining a huge market share is handbags. To make
these handbags and wallets famous among the people, advertisement campaign should be
organised for example advertisement on electronic as well as print media can be given regarding
the variety of handbags available at the store for ladies with different ranges and wallets for
males of all ranges and styles, can be given. To promote the advertisement campaign for wallets,
6

Brett Lee is appointed as a brand ambassador of the company and for ladies handbags, Angelina
Jolly has been appointed as a brand ambassador. They will promote online as well as offline, so
that people will get attracted towards the brand. This way the product will get established in the
market. The marketing campaign also include distributing free samples to the market leaders, so
that they can give feedback about the new brand of goods. Online promotion is also very
important. At the time of introducing new products, the main thing that is required to be taken in
mind differentiation and positioning strategies and tactics. The advertisement should be such that
focuses on giving a valued and different product to a particular market and in a way so that
customers accept that product.
Asos is a multi national online retail store, its customer following is worldwide. Its
marketing budget is also very large. Asos is conducting marketing research about the desire and
willingness of customer to buy handbags and wallets. Prominent customers are given samples of
handbags and wallets, to obtain their positive and negative feedback about this specific brand
and will get to know how much they are willing to pay. Pricing strategy is an important part of
positioning a new product in the market (Henley, Raffin and Caemmerer, 2011.). As the
marketing department gets the feedback from customers, it tries to reposition the product, means
changes and improves the product identity and brand value. Presenting here the list of
positioning strategy for handbags and wallets.
 Asos has conducted a market segmentation as per the demographic classification of their
customers.
 Handbags are made by keeping in mind every type of customers, so the target market for
this product is premium as well as middle class buyers.
 Identification of the attributes of handbags and wallets to show to customers and attract
them to buy.
Task 3
3.1 Development of products to sustain competitive advantage
Though Asos is world famous for its quality product services, it has many rivals in the
market. It has make its products in such a way that differentiates from the products of its
competitors. Since it is introducing a new range of product brand, it has designed the handbags in
such a different look, so that customers get attracted automatically. It has launched variety of
7

handbags for ladies like waterproof leather bags, big belt bags, clutches, slings etc. available in
all the colours starting from the range of 200 pounds up to 4000 pounds. The wallets are also
having various different features like leather wallets, wallets having many pockets which will be
easy for keeping different cards, photos, money in it. They are made as per the preferences of
male customers. Wallets are too big to keep mobile phone in it. They are very comfortable to
carry. Products has three levels that will help in extracting all the benefits from it. The three
levels are Core product, actual product and augmented product. Presenting here a brief
introduction of levels of products in relation to handbags and wallets.
 Core Product : This is the basic level of product marketing at which the buyer set his
mindset of buying a particular product and the seller or producer tries to give benefits to
their prospective buyers by launching a usable product for them. The main feature of
handbags and wallets are to keep things inside them and other features like mirror and
paper napkins can be provided with them, so that the customers feel comfortable with the
bags at the time of travelling. Other extra facilities are also provided to them. So before
designing any product the designers should take in mind the core benefits that are
required to be provided.
 Actual Product : It is the process of converting the core benefits into a brand of products
that people are willing to buy. The main aim of this product level is to offer those benefits
so that people will surely buy the products (Bowie and Buttle, 2011). In case of
handbags the special benefits that can be provided are long detachable belts in different
colours and small mirror inside the bag, for ladies and many pockets in wallets with good
quality of material used for stitching them. Different sizes are made available for
different category of buyers. Other salient features are quality level, product and service
features, styling, branding and packaging etc. should be considered and kept in mind
before marketing of the product.
 Augmented Product : This level includes the additional non tangible benefits that can be
offered by the store along with handbags. This includes after sale services, help lines,
warranties, free cheap delivery etc. These after sale services and warranties builds the
relationship of customers and the company that offers customers peace of mind that will
help the company to create more customers (Abdullah and Ismail Ahmad, 2010).
8

3.2 Distribution Strategy
Distribution strategy is the method to get the products and services pass through various
distribution channels to ultimately reach the end purchaser. It is an important activity to approach
the target customers and market. Since Asos is an online retail store for fashion and clothings it
reaches its customers through internet. It has worldwide online retailing shops from where the
customers buy their products. They have opened many franchises to distribute these products so
that customers get the delivery in a couple of hours. As soon as customer makes an order the
shipping and delivery process get starts to deliver the product at its earliest. Customers get
information about the current location of the product via email or text messages. Asos has
provided facility of cash on delivery to its clients. For premium buyers more delivering facilities
are provided by the said store. Logistics are made to execute the plan and control the physical
flow of products to the end consumer. The distribution department needs to take in mind
following points.
1. The pan and schedule of production.
2. The posting of information about the new handbags at the online retail store to grab the
attention of customers.
3. Cancelling those handbags which are out of stock or sold or currently not available, so
that customers do not get confused.
4. Ordering the new stock to the suppliers to fill the stock and fulfil customer demands.
5. The stock control, invoicing and transportation administration systems should be
considered in the distribution strategy.
9

Business-to-business and business-to-customer companies can sell their products by way
of single distribution channel or through multiple channels that include wholesaler and
distributor, directly via internet, directly via catalogue, sales team, value added reseller,
consultants, dealers, retailers asd sales agents. If the buyers need personalised services then
services of local dealer network can be taken. If users want to buy online, Asos.com website is
available and by selecting direct, online shopping can be done.
3.3 Price strategy
The price is an important element in marketing mix. To attract customers, prices should
be fixed in such manner that every class of buyer can afford it. The price classification is done
for handbags as per age groups and income segment. For age group of below 10 years price of
handbags and wallets is £15 so that more kids products can be sold by attracting the customers
with low prices. For age group above 10 years prince range varies with different varieties and
brands. Prices of designer and elegant handbags and wallets for premium customers are set high
i.e. from £500 to £1800. The prices are fixed by keep in mind the prices set by competitors for
the similar products.
10