Strategic Marketing Report: Harrods Ltd. in Japanese Market

This report analyzes the strategic marketing plan for Harrods Ltd's expansion into the Japanese market, specifically focusing on the hospitality sector. The report begins with an executive summary highlighting the core concepts of strategic marketing, including differentiation and brand building. It then delves into a PESTLE analysis, examining the political, economic, social, technological, legal, and environmental factors impacting Harrods' venture. The report considers the Japanese government's taxation policies, economic indicators, social trends related to tourism, technological advancements, legal regulations, and environmental concerns. Furthermore, the report explores various market entry strategies, proposing franchising as a suitable option. Market segmentation is also discussed, with a focus on targeting higher-income customers. Finally, Porter's generic strategies are critically analyzed to determine how Harrods can gain a competitive advantage in the Japanese market.

STRATEGIC
MARKETING

Executive summary
The term strategic marketing refers to the process of differentiating the offerings made by
an organisation, with respect to its other competitors available in the market. In general
words, strategic marketing activities are adopted in a venture to build a brand name and
value of that firm in the minds of desired customers as well as in the market. A detailed
evaluation of the necessary steps that are needed to be taken into consideration while
determining the strategic marketing plan has been presented as in this present report. Should
consider inculcating what the entirety of what the assignment is about. Harrods Ltd, a UK
based departmental store, is trying to undertake expansion and diversification activities in its
operations. The firm is trying to expand its activities in Japanese economy, by providing
hotel services to the customers. Therefore macro-environmental was carried out to assess the
organisation’s opportunities and threats
It was found that increased in technological advancements like more software or
advertisements into social media would be rising profits of Harrods and impacting company
on positive manner. The demand for hotels in Japan has been ever increasing due to its
tourist attractions, festivals and international game activities that are organized by the
country. The services provided must be in accordance with the demands of tourists from
overseas markets in the country.
The customers should also be provided with online booking facilities, which further ease
the tourism activity of visitors. Like if there is increased in interest of people into more
tourism activities than this would be increasing sales and profits of company would
increasing due to this. Also three mode entry strategies were analysed to assess which might
be appropriate for the chosen organisation, this led to the concept of franchising being
proposed for the organisation. Having done this market segmentation was also done to
select a prioritised segment for the chosen organisation, those of higher income level were
therefore proposed to the organisation. The report finally concluded that organisation should
adopt differentiation strategy in order to gain competitive advantage

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
Recommendation of a product or service with essential PESTLE analysis..........................1
Market entering strategies......................................................................................................3
TASK 3............................................................................................................................................5
Market segmentation to evaluate the target market for .........................................................5
TASK 4............................................................................................................................................7
Porter's generic strategies.......................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
The term strategic marketing refers to the process of differentiating the offerings made by
an organisation, with respect to its other competitors available in the market. In general words,
strategic marketing activities are adopted in a venture to build a brand name and value of that
firm in the minds of desired customers as well as in the market. An effective strategic marketing
to be adopted in the context of entering into a new market or undertaking expansion as well as
diversification activities require a huge investment on the part of that company. The appointed
managers are designated with the responsibility of creating awareness about the providing made
and the differentiations that is possess by those offerings. A detailed evaluation of the necessary
steps that are needed to be taken into consideration while determining the strategic marketing
plan has been presented as in this present report on how the Harrods hotel might operate in the
Japanese market. Therefore macro-environmental analysis would be carried out to assess the
organisation’s opportunities and threats, also three mode entry strategies will be analysed to
assess which might be appropriate for the for chosen organisation. Having done this market
segmentation will also be done to select a prioritised segment for the chosen organisation.
Finally Porter’s generic strategies will be critically analysed to assess which of them when
applied may help the organisation gain competitive advantage.
TASK 1
Recommendation of a product or service with essential PESTLE analysis.
Harrods Ltd, a UK based departmental store, is trying to undertake expansion and
diversification activities in its operations in the country of Japan. The firm is trying to expand its
activities in Japanese economy, by providing hospitality services to the customers. Japanese
economy generates a high level of income through its tourism activities, which brings more and
more customers for the hospitality industries and requires them to serve in an effective way, to
large number of people within and outside the country. In order to determine the various macro
environmental factors that affects the workings of an organization, a detailed analysis of
PESTLE model has been presented as under: P- Political environment: The political factors refer to the policies made by the
concerned government in order to control as well as regulate the operational activities of
numerous organizations that functions in an economy. These policies affects the
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business in many ways, as the entrepreneurs are required to manage or frame their
functioning as per the guiding principles provided by the concerned government
(Tomczak and Kuss, 2018). Thus, the mentioned venture is required to undertake its
expansion and diversification activities as per the taxation policies made by the Japanese
government. Japan economy and its government provides a number of taxation holidays
to the ventures that are operating in the hospitality sector, with a sole objective of
enhancing tourism and generating more income. This particular said political factor like
change in any of taxation policy is the tax rate on hotel industry is increased by
government could be causing loss to Harrods in Japan. E- Economic factors: The economic factors affecting a business include the level of
inflation or deflation prevailing in an economy. As per the economic reports, a balanced
economy generates more results for an organization. If there are any kind of inflationary
pressures indicate that, the cited entity has to make a huge amount of investment in the
hospitality industry in order to carry its operational activities in the country. It is not in a
position to provide low pricing or its services that are being provided, as it would result
in initial losses for the firm, which would further lead to generate long term losses
(Chernev, 2018). If the country like that of Japan is having higher GDP rate then this is
profitable fact of Harrods as this is impacting their growth as well. Social factors: The social factors includes the behaviour and preferences of the society,
i.e. customers, which are considered to be an essential macro environmental factor to be
analysed, as customers are the final receivers of all the products and services provided
by any venture operating in an economy. The social factor that need to be considered by
the mentioned organization, with respect to expanding its business activities in
hospitality sector. The demand for hotels in Japan has been ever increasing due to its
tourist attractions, festivals and international game activities that are organized by the
country. The services provided must be in accordance with the demands of tourists from
overseas markets in the country. The customers should also be provided with online
booking facilities, which further ease the tourism activity of visitors. Like if there is
increased in interest of people into more tourism activities than this would be increasing
sales and profits of company would also be increasing due to this. This is in form of
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opportunity for the company if the interest of people is increased in tourism then firm
could be having more profits. Consider citing your sources
T- Technological factors: The mentioned firm should adopt technical advancements
that have been introduced in order to create an enhanced image of its firm in the minds
of its targeted customers. In order to achieve a large group of customers, the managers of
cited firm should undertake promotional activities in a more enhanced way, i.e. through
social networking sites, writing blogs, etc (David and David, 2017). These marketing
resources would enable the present venture to create awareness about its services being
provided to its customers. Increased in technological advancements like more software
or advertisements into social media would be rising profits of Harrods and impacting
company on positive manner. L- Legal factors: The law and administration acts that have been introduced by the
judiciary system of Japan, affects the functional activities of hospitality sector, which is
to be undertaken by Harrods pvt. Ltd. The mentioned organization is required to work as
per the judicial boundaries enacted for the working of hospitality industry. They are
required to provide efficient and qualified services to the visitors. The staff appointed at
the firm is bound to treat the tourist in a well mannered behaviour. A violation of these
enacted principles to be followed would lead to creation of legal charges of this
company (Kumar and Gupta, 2017). If the government or legal system of Japan is laying
any strict law regulation the hospitality industries or employment within this industry
this would be having negative impact on sales and profits of company.
 E- Environmental factors: Providing protection to environment has become an essential
for every business operating in an economy. The present venture is required to undertake
that activity which does not harm the environment of the country in an adverse way.
During the heavy floods or rain in Japan number of tourist into country would be
lowered down thus affecting sales and profit of Harrods in negative way. In Japan the
Basic Environmental plan which is based on basic plan in Article 15 of Environmental
conservation approved in 1994. Under which it would be included the control of
pollution and adding up in revised basic law for environment both for society and global.
This act or law would be affecting tourism and hotels in country as they need to follow
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act and keep the city pollution free and also not disposing any waste into water which
would be affecting the underwater lives. Then in environment and climate change law of
2018 which defines waste as any filthy and unnecessary wastages in its article 2 of
Waste management and cleaning act.
TASK 2
Market entering strategies
A new entering firm in the market requires adopting different marketing strategies, in
order to undertake its operational activities and achieve growth as well as success. The present
venture is trying to enter the hospitality industry in Japan, which requires in the part of appointed
executives and managers of marketing to adopt applicable and suitable strategies to enter the
market. The three different modes of marketing that can be used by the present organisation are
explained as under: Franchising: The mentioned organisation can adapt to franchising its name to other
professional in the market and thus, earn profits. Franchising is a process which includes
the involvement of franchiser and franchisee in the operational activities. Franchiser is
the company that provides its name to the local entrepreneur or individual to run its
business and thus earn profits, whereas, franchisee is a person which operates with the
brand name given by the franchiser and gives a part of its income to him and enjoy the
rest as own profits (Freeman and Scott, 2017). This type of business activity can be
proved as the most beneficial for any organisation, as this reduces the cost of conducting
a high yielding research methodology for the concerned firm. This is possible, as the
franchisor just enjoys the profits by merely providing its brand name to a person. That
person, who is termed as franchisee has to carry out all the venture related activities in
the context of the firm. Franchising would be some advantages and some disadvantages
like that of risk of business getting failed is reduced by this mode of entry with having
your products and services already been well established. The relationship with your
suppliers would already been on good terms and conditions which will not be allowing
company to fall down. On the other hand disadvantages could be like that cost to the firm
is relatively higher than it was accepted and the agreement with that franchisee is also
having many restrictions.
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 Joint venture: The cited marketing solutions firm can resort to open a hotel in a joint
venture with another already existing firm in the hospitality industry. Signing with an
already existed firm, may lead the present business to earn profits, without consideration
of any market development or marketing strategies on a large scale. This reduces the
investment to be made in the context of adopting expansion and diversification activities
in the venture. Having better resources in terms of specialized staff and technology and
new insights of market and expertise is one of the biggest advantages of Joint venture.
Both the parties would be sharing risk and cost on equal or agreed bases so there are no
chance that burden is on only one party. All type of flexibility could be restricted within
this type of joint venture and opportunities which like that which are resting into the
outside sources would be limited as well. Company would be having more access to
market into Japan if they are operating in there with any other Japanese hospitality
company.
 Greenfield: The leaders or executives may also resort to a wholly self owned subsidiary,
i.e. business to expand its activities in the field of hotel industries. Undertaking the
introduction or launch of a new firm, is required to be followed up by a huge investment
to be made in order to create awareness about the offerings of differentiated services
offered at the newly opened hotel (Kipnis and Broderick, 2017). This type of market
entry mode is also having certain pros and cons of its own like that of the parent
company is having operational and strategic control on the subsidiary company. The risk
of losing intellectual property rights would also be lower than both the companies are
having common access to data. On the other hand the cons would be that it could be an
expensive task for the companies and the parent company would be paying more amount
for buying the subsidiary company. Harrods would be having all the profits sharing with
them only and it would not be allowing any other company to take the profit. On the
other hand if there is loss into company then Harrods could be suffering huge loss that to
alone from market.
The various marketing strategies that can be undertaken in respect of these three modes
of market entry are explained in detail as below:
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The present organisation can resort to franchising its brand name to other personnel who
are interested to undertake the name of the firm. This would enable the venture to create a good
image of its business in the minds of customers, thus, building brand image which further
enhances recognition, leading to profits. They would be having more access to customers, capital
and employee of Japan if they are adopting Franchising as their option of mode of entry into
market of that country.
So Harrods as they are planning to enter into the market of Japanese hospitality industry
should be entering into this market with the help of Franchising which is regarded to as best
mode of entry for the company. This would be having low risk and higher chance of
profitability.
TASK 3
Market segmentation to evaluate the target market for
Market segmentation is related with segmenting, i.e. dividing the market on the basis of
gender, age as well as class and thus, offering the services in accordance with their requirement.
This segmentation of market is essential to determine the target market to be achieved by the
mentioned organisation through its offerings. The target audience are considered in accordance
with the tastes as well as preferences of different groups segmented as per the market analysis
(Brown and Treen, 2018). In the context of hospitality management the major five basis that can
be considered for market segmentation are:
 Geographic location of the firm, which involves dividing the market in terms of nations,
states, regions, cities and other such aspects and targeting desired audience.
 Demographic segmentation of the people in the country, which includes segmenting the
market as per the demographic variations with respect to age, gender, income, marital
status, etc. these are the grounds on the basis of which the demand patterns of customers
or people in the country differs from each other.
 Behavioural as well as psychological variables or dimensions of the society, this enables
the marketers to analyse the wants and desires generated on the part of an individual
relating to a particular good or service, as per the psychological approach, whereas, as
per the behavioural approach, the knowledge as well as attitude of the customers are
considered and accordingly groups are formed with a view of targeting those audiences.
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This basis can be considered while segmenting the markets. A target market to be
achieved can be defined in accordance with the segments created for the mentioned firm
the market segmentation on the part of Japan economy would enable the entrepreneur to
analyse the pattern of demand made by tourists visiting the country and their tastes as
well as preferences and accordingly, their demands can be fulfilled by the mentioned
organisation by providing preferable offerings. In the field of hospitality management,
the major target for the venture and its operational activities of providing hospitality
services is the tourists or visitors that visit the country (Koo and Jin, 2017). The tourism
sector in Japanese economy has been increased considerably, overtimes, which has led to
an enhanced or increased opportunities for the hotel industry, as more number of tourists
would result in increased demand for their accommodation as well as food and beverages
facilities, provision of which is undertaken by numerous ventures operating in the
context of hospitality sector.
The marketing strategy that is to be adopted by the mentioned venture should be in
accordance with target audience that has been generated from the market segmenting activities
undertaken. As discussed earlier, the major target that has been generated by the mentioned firm
is the tourists visiting the country from the overseas market, the other major targets for the firm
relating to its offerings for foods and beverages must be considered as the young population of
the country (Benyoussef Zghidi and Zaiem, 2017). The youth of the economy highly influences
the demand from the products or services provided by different companies operating in that
economy. Thus, a marketing strategy must be prepared in order to attract the young population
and they must be served in accordance with their tastes as well as preferences regarding food
stuffs.
Thus, market segmentation allows the managers to determine the needs as well as
requirements of different customers belonging to different group. A collective decision regarding
the offerings to be generated can be made according to the market that is to be targeted by the
products offered by concerned venture. Having assessed the demographic pattern in Japan the
organisation might decide to concentrate on the middle class as it prioritised segment.
TASK 4
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Porter's generic strategies
With an aim and objective of achieving success, followed by growth and development,
there is a need to gain an advantage over the competitors. These advantages bring more efficient
as well as beneficial results for an organisation, as customers prefer the products or services
provided by concerned venture, over the other options or substitutes available in the market. In
order to gain these competitive advantage, the mentioned company, i.e. Harrods Ltd., can
undertake porter's generic strategies, a detailed evaluation of which is presented as follows: Cost leadership: As per this strategy, the concerned organisation is recommended to
adopt a low pricing strategy at the initial stages. Customers are attracted towards
discounts as well as low rates of prices, which would enable the cited firm to attract more
customers by charging low prices. This would generate an advantage for the company
over its prevailing competitors in the market. But this strategy is applicable only if the
firm can find an alternative which generates low cost for producing its offerings and thus,
leading to cost advantage which would further enable them to adopt a considerably and
reasonably low pricing strategy (Papadopoulos and Giannoukou, 2017) However, this
strategy is applicable only in the initial stages, as at this time the cost of production is
comparatively low, as not much is spent on other venture related activities. In the later on
period, the firm has to make other investments to increase the sales and profits of the
venture, thus, it has to charge more, in order to recover incurred cost and thus, earn more
profits or earnings. Differentiation: The unique factor of any product or service attracts the eyes of many
individuals or customers in the economy. Thus, with a view of gaining an advantage over
competitors, the mentioned entity should provide differentiations to the customers in its
providing relating to hospitality services. If a firm succeeds in providing differentiated
offerings to the customers, which leads to satisfaction on their part, it is possible or that
business to charge premium for its products and services, as customers are ready to pay
extra in order to consume a qualified or differentiated product or service (Sutiksno and
Souisa, 2017). This type of strategies which company would be choosing in order to
enter and work into the Japanese market is also having making pros and cons of it like
that of products are very much unique in terms of quality that too as compared to the
others in the same market or industry. While the cons would be like that of it is required
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to have larger financial investment from the company. If company is focusing on their
USP which is providing higher quality of service to customers then they could be able to
gain higher share from market as compared to that of others in same industry or market
area of Japan.
 Focus: As per this approach of porter's marketing strategies, the managers are required
to focus or concentration on a particular segment of the market that has been generated
and accordingly, the services are being provided to them the focus strategy is further
divided into two sub categories, which are explained in detail as below:
 Cost focus: This strategy of gaining competitive advantage, deals with focusing on
attaining cost advantage from the targeted market that been formed with reference to
market segmentation activities.
 Differentiation focus: According to this approach, the managers appointed at the
mentioned firm are required to pay attention on generation of differentiated,
innovative and highly customer acceptable offerings of services to the visitors of the
hotel. This allows the firm to attract more customers by creating a brand value in the
market and thus, gaining competitive advantage by stealing the customers of other
hotel operating in the context of hospitality sector (Richard, 2017).
Both these strategies are an example of focus to be made in order to adopt an effective strategic
marketing plan. The managers appointed at the mentioned hotel can either focus on cost
advantage or differentiation advantage, as both are beneficial in their own ways.
Thus, the above mentioned are the three marketing strategies that can be adopted by a
venture in order to create a brand value or image of its offerings made in the market as well as in
the minds of targeted audience. The strategies adopted enable the managers to determine the cost
and decide a reasonable as well as affordable prices for its offerings provided ton customers.
Company must be focusing on their cost as this is able to provide then higher profits and sales
margin is also good for them if they are choosing Cost.
So Harrods hotels should be choosing the differentiation strategy so that they could
acquire reputation and better quality of products and service for the customer ensuring their
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