Retail Marketing Plan UAE

Question: Explain about the Retail Marketing Plan for UAE? Answer: Introduction There is quiet considerable confidence and optimism in the retailers of UAE especially since the beginning of 2015. The retailers are completely ready for making more investments to expand but they also have the awareness of the external environment weaknesses that they face in UAE such as portal based competition, attraction of footfall and conversion of the same into consumers (Badran 2009). In Dubai, the retail sales by the end of 2015 are expected to reach DH billion 160 in comparison to DH billion 152 in the year 2014. The bid of Dubais expo 2020 and announcements on new malls have caused the UAE to be at the focal point of universal revolution in retail (Azzam 2008). The next coming years until the Expo will be an evident proof of regional retailers importance and new technologies investment. The retail organization selected in this paper is TK MAXX in order to explore through appropriate marketing plan, the credibility of success in the region for retailers. Company Overview TK Maxx was initially launched in the year 1994 with an introduction of off-pricing retail in the nations such as Ireland and U.K. T.K Maxx today is the individual retailer that follows traditional brick and mortar as well as off pricing strategy with regards to its products inclusive of fashion of clothes and for home to significant European population. The company first expanded itself to Germany in the year 2007. Further the company expanded to Poland in the year 2009 and then shifted to Austria in the initial months of 2015 (TKMaxx company website, 2015). The company has its operations with regard to commercial website over the web in United Kingdom. The company formed an alliance with Homesense in order to form TJX Europe. Great value is offered by T.K Max when it comes to family clothing and fashion to decorate home inclusive of footwear for women, merchandizes, lingerie, accessories items and also luggage bags. There are some of its stores that feature a Mod Box which is a specific department to gear the young customers and other feature is the gold label used to indicate high end labelled designers (TKMaxx company website, 2015). In the year 2014, the company had 407 stores approximately averaging 31000 size square feet. TJX Europe further believes that there are large number of opportunities with regard to the growth of the store and it is planned by the company to launch the company in Netherlands as well. The company collectively has 975 stores with the present chain in the present markets. (Table 1: Steady Growth in major segments for TK Maxx) (Annual Report TK Maxx, 2014) Addition of new stores has helped the company to add value and this has become the companys significant growth strategy. (Table 2: Growth in several countries for TK Maxx) (Annual Report TK Maxx, 2014) Country Comparison Analysis Three countries have been selected in order to compare them through their economic indicators and also by their retail market risk analysis with the help of risk matrix. (Appendix 1a) The following figure is a matrix comparing on a quadrant measuring risk, growth size and market rate: Figure 1: Positioning Analysis (Anthony, 2005) The following figure depicts a positioning map for TK MAXX in order to assess whether the positioning of the company is in alignment with the country positioning: Figure 2.0: As evident from the above figure, Bangladesh occupies a place in the quadrant where there is low growth and high risk. The market will not be the right choice for TK MAXX. On the contrary, the market size and growth as well as risk in Russian retail market is high but the growth is also high. However this will not be favourable for TK MAXX as it incorporates many competitors with higher risk of failure (Anthony, 2005). Focusing on UAE it is evident that there is nominal risk with higher growth opportunities. Therefore for TK MAXX, UAE has been selected. Situation Analysis There are several ecological variables that impact an organization working in a different country with different environment. Such natural elements can further be categorized as external and internal factors that impact an organization. Inner environment of any organization is inclusive of its SWOT analysis. This section will present external factors analysis that is PESTLE Analysis along with focus on internal factors such as SWOT analysis with regard to UAE. Internal factors and Risks when expanding to UAE Porters Five Force Analysis Suppliers bargain power: There is large market competition but there is higher demand too in the industry and therefore bargain power is not high but medium. Substitute Product: Actual substitutes for clothes are the small brand ranges which customers prefer buying at cheaper rates. Buyers bargain power: Significant number of choices are present within the market because of large amount of competing organizations with different types of clothing brands. Therefore there is a strong bargain power of customers. New Entrants threat: New entrants in the market are less and the small organizations do not interfere will renowned organization. The reason behind this mainly is the retail market maturity stage and therefore making market based brand value is a problem. Rivalry among competitors: Clothing industry of UAE has a market that works on oligopoly. There also exists stronger competition within this market segment irrespective of the fact that it is big company or a small one (Banna et al 2007). At the small level, there are various small brands in large numbers and at the large level, organizations such as Al Ain have captured the market share of more than 50 percent. SWOT Analysis Strengths: In UAE, TK MAXX first will have a loyal audience. TK MAXX is already a renowned company with multiple stores of brands across the world. The company also can gain advantage from further alliance like it has done with HomeSense. The company is furthermore recognized for its advertisements and promotional strategies. Weaknesses: The organization is private and may find it difficult to get funds especially with its concurrent battle with organization debts. Leather goods occupy 57 percent of sales for the company and these leather goods are not very popular in UAE. The participation of the company in e-commerce is weak and environment related unfriendly policy implemented for the company are both its major flaws (Annual Report TK Maxx, 2014) Opportunities: The growth in global market especially Asia and China has taken place which may restrict growth in UAE. Production through outsourcing is an opportunity with product alliance possibility with new partners (Banna et al 2007). Franchising, digital marketing and capturing the young customers below 25 years of age are all opportunities in UAE. Threats: Internet based transparency leading towards Burberry effect price consistency. Market based falsification is present. Competitors existing and catwalk copycat fashionables in the market are rising. External Factors and risks when expanding to UAE Political: TK MAXX is a new organization entering in UAE retail clothing industry. Therefore, there will be various company based political pressures in relation to legislations, regulations and laws that need abiding to. UAE is a nation wherein individual proprietorship of all external organizations is hardly accepted. Therefore it is required for the organization to look for another company based in UAE for distributing its market products (Annual report TK Maxx, 2014) Economical: The growth in economy for UAE is considerably high and therefore chances to each money on a large scale are present. Some economic considerations impacting TK MAXX will be higher rates of inflation and current Dubai finance crisis. Social: In the market there appears to be a changing trend in the society. Individuals have got more conscious about their fashion clothes and the way they look. Online marketing and shopping is more preferable and therefore online presence for TK MAXX will be needed. Technological: Enhanced technological usage in UAE has been seen. People prefer technologically advanced clothing stores so they do not have to travel. Marketing Objectives Deals advancement is a vital device in Integrated Marketing Communication. It gives a few particular advantages in the accomplishment of organization destinations. Under this strategy, TK Maxx can offer their items at a lower cost without bringing about a misfortune. Second, deals advancements can impact exchange (Dubai) and client conduct. There are distinctive purposes for doing deals advancements. In this way the company will be able to actualize these systems to build the quantity of clients, support deals, and pull in new clients, to contend viably or reward steadfast clients. Free blessings - Offer free merchandise alongside item being obtained. Case in point a marked make up unit including Arabian kohl which is exceptionally prevalent among Arabian females or perfumeries to clients who have gone for buys surpassing the breaking point of US$ 6000. (Anani, Ahmad, and Whittingham, 1986) From this perspective, the marketing objectives will be as follows: Specific Measurable Achievable Result-Focused Time-Bound Understanding every target market segment appropriately and then adopt more particular strategies for attracting the market based specific customer segments Formulating new product marketing strategy that helps enhance customer satisfaction by 50 percent Marketing product will peculiar and attractive design so that the challenge of large and high competitor number within the market can be tackled Making TK MAXX a leading UAE market brand as it has been in other nations such as US Engaging to make more distribution channel partners so that the market based competition can be reduced Table 1.0: TK MAXX Smart Objectives Strategy (STP Marketing) New market entry strategies For succeeding in the UAE market, TK MAXX will require to develop an essential marketing strategy and it also needs to work over the same (Fekih et al 2002). It has been preferred in this plan that out of the 3 Ansoff matrix strategies, market development strategy will be followed by the company wherein strategies are developed by acknowledging that the market being entered is new with the present product. Such marketing strategies are explained below in accordance with TK MAXX: Strategy to create market dominance: TK MAXX is known amongst those organizations which are leading in market share of most markets like US. Organizations always do not need to stay in a specific market but they always need to be sustainable in the market as well with higher marketing share in order to be leading the industry (Badran 2009). Therefore this strategy will be focused upon. For increasing the share in the market, the organization should enhance its ratio of concentration. TK Maxx will need to manufacture more clothes in its second stage of entry and will focus on capturing the markets of rural and urban UAE. TK Maxx further will promote itself through attractive strategies of advertising and also a considerable amount will be invested to promote the brand value of the company and therefore its share in the market. Generic strategies of Porter: These are the strategies that help in penetrating the market which is the individual marketing strategy scope and strength of strategy that further helps in producing market based strategic strength (Anani et al 2006). These strategies with specific focus to TK MAXX selected here are cost leadership and product differentiation. Cost leadership: TK MAXX will have to keep its price equivalent and lower than the industry average range. Companys main aim will remain in capturing the share in the market initially and when company gains success it will enhance the price when needed (Alkim et al 2009). There already is tough competition within the market and the consumer needs the best price available. Therefore product price can play a highly significant rate. It is obviously a problem for choosing a strategy especially in the situations where development of market is the focus such as in UAE where market players in large numbers are already present. Positioning TK MAXX will be positioned in the market of UAE by following series of steps as follows: Define the specific country related buyer segment: It is the countrys national population from both rural and urban areas with specific focus on age groups (15 to 30 years) Define the space of the produce: The product of clothing range will be depicted as luxury brand clothes in the market Organizing primary research in the market through perception of people being acknowledged on the current fashion clothing product Trying to depict the general strategies of the competitors towards the consumers Organization will further also try figuring the whole market at target Product final launch will also be done Objectives for positioning the brand The main purpose of TK MAXX lies in brand maintenance at all times and also to be superior to other brands in the market. The branding objectives for this positioning will lie in: To gain recognition through quality standard awards recognition Constant increase in the capture of market Positioning the company as a leading organization within the next decade with maximum market share percentage. Market Entry For succeeding in the UAE market, TK MAXX will require to develop an essential marketing strategy and it also needs to work over the same (Bahgat 2009). It has been preferred in this plan that out of the 3 Ansoff matrix strategies, market development strategy will be followed by the company wherein strategies are developed by acknowledging that the market being entered is new with the present product. Such marketing strategies are explained below in accordance with TK MAXX: Strategy to create market dominance: Organizations always do not need to stay in a specific market but they always need to be sustainable in the market as well with higher marketing share in order to be leading the industry. Therefore this strategy will be focused upon. For increasing the share in the market, the organization should enhance its ratio of concentration (Banna et al 2007). Organization will need to manufacture more clothes in its second stage of entry and will focus on capturing the markets of rural and urban UAE. Organization further will promote itself through attractive strategies of advertising and also a considerable amount will be invested to promote the brand value of the company and therefore its share in the market. Marketing Mix Program Figure 3: Marketing Mix for TK MAXX (Banna et al 2007) Product: For TK MAXX, the direct product is cost effective clothes. Organizations do not engage in changing the features and current product attributes. The designs will exclusively be exported from China and India as the services there are cheap. In UAE, TK MAXX will be responsible for separating its products into variety through consideration of UAE culture, its weather and the trend of fashion. Most of the stores in UAE believe in selling the culture of UAE through their products fixed at reasonable price without encouraging bargain. In UAE most young adults, adults and older individuals believe in buying clothes that have value, clothes that do not show their skin and polite dresses. The products provided by TK MAXX are also in complete accordance to these requirements. The climate of UAE generally remains at its heat peaks and for this people require their bodies to be covered. Fashion trend will further be considered as UAE has a Muslim kind of fashion style with borders and plain colours. Burkha will also be sold by TK MAXX in the country in order to meet the high requirement of this product. Price: Average price in the industry is high for luxury based clothes and so goods will be brought in from cheaper sources. The price range of TK Maxx products is affordable and mainly targets customers preferring the price range of low to middle. Additionally, the strategy followed will be demand based pricing as it will ensure that in the new market the company creates its excellent brand awareness, market share enhancement and customer preference for the brand being enhanced. The budget for customers kept for buying clothes depends upon demand and the preference and therefore this strategy will be suitable. Market penetration as a strategy will further be used that will ensure TK Maxx keeps a lower price for it products and attracts the customers based on the same. People: In order to satisfy the people of UAE, TK Maxx will have to focus on service and for TK Maxx globally service satisfaction is the only reason why the company produces its products. The employees will be trained by the company so as to make sure that the consumer is made comfortable and can interact easily with them to let know what they need. Process: TK Maxx has complete confidence in its self with regard to its distribution channels effectiveness, reliability and on time delivery. There are mainly three channels in the distribution system of the company inclusive of retail based stores, website of the company and the company catalogue. Additionally, the company will focus on improving customer service every day. In order to have on-time delivery the company will ensure that its distribution warehouse is near from the retail shops. Physical Evidence: The Company will use its retail stores as a medium to attract the consumer. The design of company stores as per the below figure depicts modernization and value. These will attract the customers. Moreover in UAE there is demand for large clothes as well and therefore the company will focus on the same. The company will further make use of showcasing clothes and using large posters. (Banna et al 2007) Place: Alliance will be formed with UAE based local manufacturers and suppliers in order to attain cost effective distribution channel. Promotion: Online promotion for the product will be focused upon. Furthermore, the company will make use of Fashion Magazines, fashion shows, newspapers, Television advertisements, Fashion blogs and Social networking. The cost of advertising for the company will be high in the initial promotional year. The total budget for 1st year will be 5,000,000. The total budget for second year will be 3,000,000 and that for third year will be 2,500,000. In the second and third year fashion shows will not be focused over. Product Life Cycle The company, TK Maxx will be new to the market of UAE and so the company will start from the first stage which is introductory stage. Advertisement tools will be used by the company in this stage for building awareness of their brand and to gain attention of the consumer. In this stage, focus will also be given by the organization on strategies such as Marketing mix, communicating through promotional aids along with promotion mix so as to move to the growth stage. A positive sign will be illustrated in this stage for the company with regard to brand awareness, still advertisements and marketing will be done aggressively. The third stage is the maturity stage which is an indication that an organizations products have reach their maximum ability and will start to deteriorate in the coming days. This is when TK Maxx will decide on releasing its new fashion collection by launching new advertisement strategies for gaining awareness of brand and hence mad customers attracted and become loy al consumers to TK Maxx. (Banna et al 2007) Gap Analysis (Gap Analysis for TK MAXX) (Fekih et al 2002) As per this figure above it is evident that Content aggregation and management from the VC segment depicts dual gap and dual strength with a medium priority and for which the company will require a partnership in UAE. The second segment is transportation and access for which the priority is higher and this will also be abled through partnership. The last segment is service provisioning in which the strength is triple with medium priority and the only solution for its improvement is partnership. Monitor and control In order to monitor and control the marketing plan proposal, it will be expected to focus on the important performance indicators for performance measurement or performance evaluation inclusive of customer satisfaction level and loyalty of brand (Fekih et al 2002). Marketing plan will be controlled by checking the result consistency in alignment with mission, marketing mix, trends in industry and objectives in the company. Monitor and control will further be the responsibility of marketing executives, sales managers, media managers, market research departments and product managers. Marketing and advertisement budget The marketing budget will be allocated as per the following pie chart: Table 2.0: Marketing and advertising budget, 2015-2017 The above picture depicts that the company will spent overall in the marketing and advertisement presentation with a budget kept at 52,380 US dollars only. More will be spent by the company on blogs and sessions that help the company to attract more customers. Conclusion and Recommendation TK MAXX will prove itself to be a successful organization entering into the retail industry as a new company. 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