Ted Baker Essay
The focus of this paper will be on British clothing company, Ted Baker. Ted Baker is one of the leading British clothing designers with a presence in the UK, the USA, Continental Europe, the Middle East and Asia (Ted Baker 2008).
Managing director of Ted Baker, Ray Kelvin, opened his first men’s shirts store in 1988 in Glasgow, and shops in Manchester and Nottingham quickly followed. In 1990, the flagship store at Covent Garden was opened. At present, the business has expanded to include several product lines, such as Ted Baker Menswear, Global, Ted Baker Swimwear, Ted Baker Woman, Jean, Ted Baker Endurance, Ted Baker Kids, Ted Baker Underwear, Ted Baker Homeware, Ted Baker Fragrance, Ted Baker Sunglasses, and Ted Baker Watches (Ted Baker 2008).
The company has presence in the UK, Ireland, Switzerland, France, Sweden, the United Arab Emirates, Saudi Arabi, Bahrin, Qatar, Oman, Kuwait, Lebanon, Malaysia, Taiwan, Singapore, Indonesia, Thailand, Hong Kong, Macau, China, and Australia. It is also present in the U.S., Canada, Mexico, the Caribbean and South America through its wholesale licencee the ‘Hartmarx Corporation’ (Ted Baker 2008).
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The company reported sales and profit increase in first half on 2008 as ‘[s]trength of the Ted Baker brand and a successful multi-channel distribution strategy continued to drive growth’ (FashionUnited, 2008, para. 1).
Situation Analysis
Marketing Mix is one of the most effective tools to analyze the current position of Ted Baker. Marketing Mix is sometimes referred to as the ‘4 Ps’, which stands for product, place, price, and promotion. Sometimes this list is extended to ‘7 Ps’ to include people, process, and physical evidence; however, this plan will focus on the application of the traditional model.
Product
At this point, the offerings of the company are analyzed, for instance, using the Product Life Cycle (suggesting that a product passes through the stages of Introduction, Growth, Maturity, and Decline). Ted Baker has different product lines, and all of them are in different stages of product development. For example, Ted Baker Menswear, the original product line dating back to 1988, is in the Maturity stage, while Eyewear collection, launched in 2001, is still in the Growth stage.
Place
This element of the Marketing Mix concerns the distribution of a product. Together with stores owned by the company, Ted Baker has concessions in leading department stores (82 in the UK only) and has license agreement with regional wholesale representatives. Furthermore, Ted Baker has an online store.
Price
Again, pricing strategy depends on the product line. For instance, Ted Baker Global uses Premium Pricing, while Ted Baker Jeans line relies on Economy Pricing.
Promotion
Promotional Mix includes such elements as Personal Selling, Sales Promotion, Public Relations, Direct Mail, Trade Fairs and Exhibitions, Advertising, and Sponsorship. Ted Baker does not advertise its products; the company’s philosophy is grounded in relying on the word of mouth through developing ‘a subculture of fashion conscious people’ (Ted Baker, 2008). The company also employs Sales Promotion in the form of offering some of its products for free.
Market Segmentation
The target customer of Ted Baker is a person belonging to higher middle class or above, working in executive or managerial position, brand conscious, and aged between 25 and 45. The variables used in the market segmentation are:
Demographics variables:
Age: The primary age group that buys this food and retail groceries are between the age of 25 and 45. Gender: The genders that predominantly purchase are male, since two of the product lines (Ted Baker Menswear and Global) are aimed at male population. Education: The major share of the customers has higher education. Income and Occupation: The customer base is higher middle class or above. Most of them occupy executive or managerial positions.
Psychographic variables: Lifestyle: The potential customers are brand conscious and may be particular about the certain set of requirements that they expect from the product. Value: Customers have a detailed regard for high value. The clientele does not mind paying extra as long as they get the high level of quality that they are specifically looking for.
Behavioral Variables: A certain section of the customers have a tendency to analyze the products and the benefits of the products purchased from a particular store. They normally would be doing the price comparison before purchasing the product and review the differences they will be entitled to get from any other store. The differences may be in terms of quality or even in terms of monetary savings. There are certain customers who are brand loyal. This means that they would have been using the brand for some time (e.g. purchasing it online or in the U.K.) and they are satisfied with the performance and hence they would want to continue using the same products and services. The improvement in segmentation helps the business to target a distinct section of people and put them into groups and provide them with the best level of quality customer service possible.
SWOT Matrix
Strengths
Weaknesses
Ted Baker relies on the word of mouth for creating brand awareness. Thus, Ted Baker makes excellent customer service its top priority, since favorable public image of the company depends solely on customer satisfaction. It offers high quality product for a carefully selected niche market.
While the level of customer satisfaction is high, brand awareness among general population is limited. The company might have achieved better sales if more laypersons knew about its existence.
Opportunities
Threats
Trade liberalization and European integration will make it easier for the company to access foreign markets. Internet technologies will enhance online sales and facilitate information dissemination though the company’s website and decrease costs of promotion and publicity initiatives.
Global financial crisis poses a significant threat to the company’s profitability. Apart from market volatility that affects all businesses at the moment, Ted Baker’s customers are likely to suffer most from the crisis by virtue to belonging to the class of well-to-do middle aged managers.
Customer Satisfaction
Enhancing customer satisfaction happens though engaging in customer after-care following expensive purchases with a view to reducing customers’ post-purchase cognitive dissonance. While clothing stores rarely engage in customer after-care, Ted Baker has gained a competitive edge over its competitors by doing so. Money back guarantee is one of the most effective ways of providing quality customer after-care (Berman & Evans, 2007).
Customer satisfaction survey serve the dual purpose of expressing concern for the shopper and gathering valuable marketing information with a view to further improving Ted Baker’s services.
Future Plans
There are four main strategies that a company can pursue, namely strengthening the positions of existing products at existing markets (Market Penetration Strategy), offering new products to existing markets (Product Development Strategy), or offering existing products to new markets (Market Development Strategy), or offering new products to new markets (Diversification Strategy) (Ansoff, 1957).
Ted Baker focuses on pursuing multiple strategies. Market Penetration Strategy implies that Ted Baker is attracting new customers from within its target range through its unique marketing communication strategy. Product Development Strategy involves developing new product lines and innovating within existing lines. Market Development Strategy is very important for the company aspiring to be global leader in its industry. Ted Baker aims to strengthen its global presence, particularly in European markets.
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If you need a custom essay, dissertation, thesis, term paper or research paper on your topic, EffectivePapers.com will write your papers from scratch. We work with experienced PhD and Master's freelance writers to help you with writing any academic papers in any subject! We guarantee each customer great quality and no plagiarism!
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