Fragrance Direct is a toiletries retailer who sells branded, discounted perfumes, aftershaves, cosmetics,hair care, skincare, cosmetics and beauty products. This report investigates and discusses the Fragrance Direct’s current marketing situation in an intensively competitive marketplace and to prepare an appropriate two-year marketing plan which could lead the company to increase its market share. The report was prepared after critically considering all marketing theories and tactics in context of Fragrance Direct like e-business strategies, product development, marketing decision making and organizational strategy, marketing segmentation and positioning, SOSTAC planning model etc. A projected budget was prepared and justified for the projected marketing plan.
Regardless of types of business, any business needs a concrete marketing plan if they were to succeed. Brassington & Pettit (2006) define, “Marketing plan is a detailed, written statement specifying target markets, marketing programmes, responsibilities, timescales and resources to be used, within defined budgets.” A two-year marketing plan is made for Fragrance Direct which could aim to help them to achieve a growth in market share.
Many approaches can be used to make a marketing plan. SOSTAC planning model is the one which includes all essential marketing plan and it is the most useful one. Here I used Smith’s (1997, pp 32) SOSTAC planning model to make a two-year strategic marketing plan for Fragrance Direct:
At present, direct selling businesses are booming due to increased home broadband services. The case suggests that Fragrance Direct is one of a number of specialist internet-based retailers at the moment. Their strength is they can sell products cheaper than any other competitors who trade through physical stores. According to their website, they are able to offer highly competitive prices and this is done by keeping overheads low. There is no shop, no middlemen as they supply their products directly to the customer ( Fragrance Direct, 2009). So the company is in a good shape and has the ability to grow even further.
Though the company has been growing rapidly but according to the case scenerio in order to achieve their medium-term growth targets they need a major push to broaden their customer base and increase market share. There is opportunity for the company to do that. So the key objectives Fragrance Direct’s management should adopt right now are to target new segment while maintaining existing products portfolio and develop new products for the targeted segments. This way they can manage to retain the present market share as well as there is possibility to increase their customer base with the help of launched products.
Selecting the correct segment and correct proposition is the key to success. Kotler & Armstrong (2006) point out that the market consists of many types of customers, products and need. The marketer has to determine which segments offer the best opportunity for achieving company objectives. Traditionally Fragrance Direct have not focused in male grooming audience yet although the case report suggests men’s fragrace market is worth over 500 million US dollars and the demand is steadily increasing. So as an existing market player this the segment where Fragrance Direct should exploit if they want to increase their market share. Most of the existing toiletries market players targeted young man while the report indicates this segment is declining. On the other hand older segment is increasing so Fragrance Direct should target this segment with widen products base. Market segmentation is important for any company like Fragment Direct as it helps to target its marketing mix more closely and precisely.
Tactics tend to be short term and flexible, whereas strategy is longer term and more enduring. When strategy is agreed the next job for marketers to develop tactics.
Smith & Chaffey, (2005) hinted that E-marketing tactics focuses on deciding the optimum marketing mix (pp 338).
The marketing mix concept is one of the core concepts for marketing. 7Ps framework for marketing has achieved high degree of acceptance. Armstrong & Kotler (2007) define “A marketing mix is the set of controllable, tactical marketing tools that the firm blends to produce the response it wants in the target market.” Here, the 7Ps marketing mix tactic has been discussed in context of Fragrance direct:
1. Product: Products should be developed in accordance with customer demand and developed products should meet the need of targeted segment of the market. At present the male grooming product market is confined with aftershave fragrances and a limited range of hair care products. So there is scope to broaden the sell of different others new products like men’s bath and body, men’s skin care, men’s sun care, men’s accessory etc. as the demand is consistently increasing.
2. Price: When determining the price it is important to remember that whether customers are willing to pay the price or not; they have the ability or not. Wrong pricing could lead the market failure. According the company’s website their one of the aims is “To keep prices as low as possible to make high street shopping a thing of the past.” However they are under intense compitition from traditional sellers lke chains of chemists (pharmacists, drugstore) and supermarket chains who have started selling health and beauty products thorough their physical stores as well as through internet and they are capable to offer cheaper price. So new products should be priced as cheap as as possible as a “penetrating price” while continue to offer existing cheap price for others products.
3. Place: The place is where customers buy the product. For Fragrance Direct place is “internet” from where customers by their products. Products must be delivered in right time, and in the right quantity in order to maintain the highest level of customer satisfaction. Fragrance Direct aims to make shopping online quick, easy and convenient and to provide an excellent level of customer service. They also aim to make their site fun, interesting with bargains and a range of products (Fragrance Direct, 2009). To mainten these services storage, inventories and distribution should be maintained appropriately.
4. Promotion: Through promotion activities a company delivers messages to its cusomers about the products, brands using variety of media and communication tools. Smith & Chaffey (2005) suggests that the ten promotional mix (advertising, selling, sales promotion, PR, sponsorship, direct mail, exhibitions, merchandising, packing and word of mouth) -can be used to communicate or promote in the online or offline world (pp 54). Fragrance Direct should use all of these means to fulfill their mission-“To be the first name you think of when buying fragrance and cosmetics on the internet. The case article suggests that male style magazines such as GQ, FHM and Loaded have huge impact on male in the UK so they should specially promote the site with those magazines.
5. People: We could assume the online business as service marketing. In service marketing people or staff is a very important part of marketing mix. The challenge for Fragrant Direct is to continue recruiting right people, train them and reward them appropriately.
6. Process: Process in a web-based company includes internal and external process as well as transactions, internal communications etc which are necessary to run a business. All processes have to be executed excellently to make the business a success. Fragrance Direct must keep an efficient process by keeping site updated to indicate if any number in stock changed, product specification, price change, dealing with customers’ e-mail enquiries, product dispatch etc.
7. Physical evidence: In an online business, the quality of the site is the physical evidence (Smith & Chaffey; 2005, pp. 66). Normally customers buy intangible services from Fragrance Direct through their site so there is an amount of uncertainty in the process. So Fragrance Direct must ensure customers buying the services must meets acceptable standards of speed and ease of use.
Smith & Chaffey (2005) states that action stage reveals the details of tactics. Actions implement the tactics. Any kind of project action plan can be used like critical patch or Grant chart. Following is the Grant chart which reflects a two-year action plan for Fragrance Direct:
Table 1. Grant chart for Fragrance Direct
Activity
April 2009
June
2009
July
2009
Dec
2009
Jan
2010
March
2010
April 2010
September 2010
Oct.
2010
Dec. 2010
Jan
2010
March
2011
Get approval for new product development
Product development
Build information/brochure
Run banner campaign on website
Offline press launch of
new products
Website update
In any marketing planning, details should be added about how the plan would be monitored, measured and controlled. If any components of the plan are not working it should be reviewed, modified if necessary even should be stopped. The following diagram shows a two-year Control system for Fragrance Direct:
Table 2. Model of Control systems for Fragrance Direct (two-years)
Quantified
objectives
Means of measuring
Frequency of measurement
(quarterly)
Accountability
Cost
Action
(Who needs to be alerted?)
Building information/brochure
June 2009
Marketing executive
£2000
Marketing executive
Sept. 2009
Dec. 2009
March 2010
June 2010
Sept. 2010
Dec. 2009
March 2011
In any marketing plan all company resources required to be included. Smith & Taylor (1997) state that the three resources, 3Ms, cover:
1. Men/Women (the human resources)
Skilled professionals (men/women) need to brought in to make the organization run as well as existing human resources need to be retained with training, rewarding. However it was discussed before in the marketing mix “people” section.
2. Money (budget)
3. Minutes (time)
These two points are discussed in the later section.
Any e-marketing plan must contain timescales, schedules and deadlines. It must take time for Fragrance Direct to analyze their recent market situation, targeting, segmentation, new product development, promotion campaign etc. So everything should be done according to timeframe as time seems often the most tight of the resources. Without a proper timeframe the marketing plan may get uncontrollable. There is a time frame for fragrance Direct:
Table 3. Timeframe
Activity
Timing
Market research
6 month
Product development
3 month
An adequate budget is required in order to achieve the plan. Like any other retailer Fragrance Direct now have to face the tough competition from competitors. Retailers are cutting prices in a desperate bid to sell their goods. A research by Ramasesham (2000) found that even prices are cut to a level where extra sales are made at a tiny gross margin. At the same time retailers are facing cost rises which are in many cases higher than the rise in selling prices. The following projected budget is made according to Ramasesham (2000) research where he investigated from marketing budget how much money should be spent in different marketing activities e.g. 33% of total marketing budget should be spent for advertising and so on.
Table 4. Projected marketing budget
Item of Percentage of total marketing expenditure accounted for by item
Advertising 33
Promotion 15
Personal selling 28
Storage 2
Order filling 4
Delivery 2
Clerical sales, accounting 5
General and administrative 5
Research 1
Credit 1
Others 4
Total 100
Fragrance direct is a successful company who posseses the ability to offer products at great prices, whilst still concentrating on a high level of service. So it is possible for them to out perform their rival and increase market share if they have been able to follow a perfect strategic marketing plan. It is strongly recommended that they strictly follow the suggested two-year strategic marketing paln in accordane with tight controlling measures.
It is also recommened that this is the time to concentratte on suggested marketing segment, penetrate the market with new developed products and apprppriate marketing mix.
Armstrong, G. & Kotler, P. (2007) Marketing: An introduction. New Jersey, USA: Pearson Prentice Hall
Brassington, F. & Pettitt, S. (2006) Principles of Marketing. 4th edition. England: Pearson Education Limited
Fragrance Direct (2009) “About Us” [online] http://www.fragrancedirect.co.uk/Customer-Services/About-Us/page/aboutus [accessed 9 April, 2009]
Kotler, P. & Armstrong, G. (2006) Principles of Marketing. 11th edition. New Jersey, USA: Pearson Prentice Hall
Ramasesham, B. (2000) “Research Note: Marketing Budgeting Practices of Retailers” Retailers’ Marketing Budgeting.
Smith, P. R. & Chaffey, D. (2005) e Marketing eXcellence. 2nd edition. Oxford, England: Elsevier Butterworth-Heinemann
Smith, P. R. & Taylor, J. (1997) Marketing Communications. 4th edition. London: Kogan Page
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