Retail Services Marketing Of Uniqlo In Hong Kong Marketing Essay

Retail service Marketing Of Uniqlo In Hong Kong Marketing EssayChapter 1. IntroductionMany disdaines exist and flourish because they ar successful in squ atomic number 18(a) a need in the market. These demand are determined by the consumers who are considered an important component of any business endeavour. The primary reason for a business initiation is to continue identifying consumer needs and then come up with tangible receptions to address these needs. This requirement makes business companies spend a considerable fare of effort and intellect in analysing the behaviour of the consumers in rove to efficiently formulate appropriate trade strategies that would assist the firm in impressive issue and delivery. Smart, D. T., Martin, C. L. (1992) argued that the study of consumers makes companies and organisations recognise and internalise consumer issues that would help strengthen their merchandise strategies. In this paper several issues are discussed pertaining to fa shion and habiliments products and serve offered by UNIQLO in Hong Kong.UNIQLO Co., Ltd. was originated in Japan. The partys business line is about habiliment and fashion. But basically, the company is one of the leading garment and fashion business in Japan that design, pay and retail casual wears. Initially, UNIQLO Co., Ltd. was only a division of Fast Retailing Co., Ltd. unless by November 1, 2005, UNIQLO Co., Ltd. come into the picture by corporate restructuring and occurrently existent as a 100% consolidated subsidiary of Fast Retailing. UNIQLO was now listed at the Tokyo Stock Exchange.In Japan, UNIQLO is the leading clothing retail kitchen stove in terms of both sales and profits. And as of 2010, the company are similarly operating in Hong Kong, China, United Kingdom, South Korea, France, Singapore and United States. UNIQLO create the idea of blending of unique and clothing as an symbol of originality and uniqueness of the cut back industry in Japan. UNIQLO offe rs fashionable and high quality clothing at reasonable prices, and was seized as an opportunity to establish a mug position domestically and internationally, combining all the facets of the business from product design to final sales and the operation of the 790 stores around the globe. Primarily offing for a highly dirt conscious consumer group, UNIQLO envisions itself as a leading humankind(prenominal) casual wear company targeting high sales and profitability growth. For UNIQLO, such aim could materialise base on the established strategies such as low cost management, cheapest manufacture and marketing schedules and prioritising guest requirements.Nowadays, UNIQLO is described as the habiliments giant Gap, Inc.s counterpart base on the 4, 000% share price increase, making UNIQLO as Japans third largest clothing retailer. However, it is non always victory for UNIQLO the subsidiary as well has its own share of downturns especially on its international expansion. For insta nce, expansion programmes in the United Kingdom (UK) saw a tumultuous stumble in profits, forcing Fast Retailing to shut down 16 of the 21 UNIQLO stores opened, because of competition. Most recently, three UNIQLO stores in New Jersey were in addition closed because of scotch slumps. Despite these facts, UNIQLO maintains the spirit and still believed that the brand has only but way forward. How UNIQLO will going to do such is central to this paper, focus on the companys strategic management. External, industry and competitor analysis as rise as the internal environment will be addressed.In fashion and clothing business in Hong Kong, the products and services offered by retailers that start out strong brands are flourishing because they are easier to remember or they are already popular and are know for the quality. Companies like UNIQLO, HM, and Giordano are giving their lift out to build their brand name or brand identities because it helps consumers easily identify the produc t as well as acquire a rich set of symbols and meanings embodied by products. For successfully developed and managed brand names, the connections that patrons make with the brand name creates protect, or brand equity, that weed be a highly valued asset to the firm that develops the brand (Meyers-Levy, Louie, Curren, 1994).Chapter 2. Literature ReviewEnvironmental analytic thinking (PESTEL)Political Analysis In the context of UNOQLO, political factors have direct effect on business organizes and operations. Decisions made by the affects the decision-making of retailers and could come in the form of policy or legislation. In Hong Kong, the one country, two systems is the prevalent governance philosophy which endows the special administrative expanse with a high degree of autonomy and its capitalist economic system. at bottom a capitalistic and free market- point economy, retail companies make the majority of microeconomic decisions but they have to conform to specific agreemen ts. Mainland and HK Closer Partnership Economic arrangement (CEPA) and the US-China Textile Memorandum of Understanding are two examples of this. The former provides UNIQLO with a tariff-free treatment, stating that products which have no existing CEPA rules of origin will enjoy tariff-free treatment upon applications by local manufacturers. The latter could provide UNIQLO with an opportunity for an annual growth of 8-17% in 21 categories of Chinese textiles and clothing exports to the US. Labor and customary regulations as well as code of conducts are also complied into including China Social Compliance 9000 and US and EU quotas (RSCA 2006 Doshi 2006).Economic Analysis Domestically and sphericly, businesses are also beingness stirred by economic factors whereby a strong economy indicates positive results and weak economy signifies the opposite, affecting both businesses and consumers. Hong Kongs gross domestic product is estimated at US$206.7bn with the service sector that con tributes 90% of the total GDP. The region is also named as the pieces eleventh largest trading entity. Al to the highest degree 50% of the total population is employed full-time and the unemployment rate has a continuous average decline by 4.1%, making disposition of income a possibility, a lower cost of living that is (Monthly Digest 2008). outlay is generally devoted for food, housing, healthcare, transportation, amusement, services and apparel. People nowadays are very particular with investing in quality clothing thereby resume consumption with premium apparel finds (Doshi 2006). Realising this, the price and quality characteristics of UNIQLO has a strategic fit UNIQLO makes raft look fashionable and confident in world-class clothes at a reasonable price through the company-wide integration of the Specialty Store Retailer of Private Label Apparel (SPA) model, a low-cost but effective operation model.Social Analysis Demography or the population characteristics whitethorn det ermine buying patterns and that understanding demographic changes indoors a particular region or place facilitates determining whether products and services would appeal to customers as well as the number of potential customers (Barney and Hesterly 2006, p. 35). Hong Kong has a total of 6, 985, 300 population based on 2008 estimate and is continuously growing due to immigrant influx from Mainland. According to Doshi, people in HK and elsewhere have a growing pastime in private labels. Consumers aspired for having private levels on everyday garments. Casual wear from HK which is known for good design and quality has a positive image on global consumers. Nevertheless, international brands are concentrated in high-end consumers while domestic brands are for low-end consumers (Doshi, 2006). In victorious advantage of the wealth of the demography, UNIQLO makes effort on providing high-quality merchandise and generating set to the society by taxes. Further, UNIQLO is a company that is committed in creating positive reputation as manifested in its vision and mission, styles of management, ways of doing business and requirements to employees.Technological Analysis Technological innovations are a priority for the apparel retailing industry but it will remain as labor intensive as it is today. Boosting the industrys productivity, increase in automation has been the recent trend but it is limited on specific functions, to which mostly require human intervention such as stitch and making patterns. Although there are computerised sewing machines that increase the productivity and reduce training time. Further, the uses of computer system software intended for the industry will be on making rough sketches, printing detailed designs and storing of information for easy retrieval. The customer orientation of UNIQLO was basically construed from its website in which customers can give feedbacks by e-mail and discussion board. Hong Kong Productivity Council made a report di sclosing that the apparel industry could make sense of information technology (IT) if utilise for order processing, costing analysis, order tracking, material management, reporting and connectivity (2004).Legal As with any other business industry of the world, there are rules and regulations that restrict or support the facilitation of the business in the clothing and fashion market in the areas where UNIQLO operates.Environmental There are currently no major environmental issues faced by the UNIQLO in Hong Kong, take out for the ever-present textile and silk production issue which catch environmentalists attention die to the fact that some of its primitive materials and from the skin of rare animals.Industry Analysis (Porters atomic number 23 Forces)Threat of Entry Barney Hesterly (2006, p. 43) point out that new entrants are the firms which have either recently begun operations or those that threaten to begin operations within an industry soon. Notably, the apparel industry is a buyer-driven industry where producers are considering buyers decision-making especially when brand names enter the picture. These buyer-centric industries have low barriers to entry mainly because of longing competition. Utilising brands as a market power source however, this is a challenge for every clothing company. In the clothing business, mass customisation has seen to be the most effective strategy. Putting strategises into action remains to be in resilience today (Culpan 2002). Therefore, the focus must be on minimising the costs without sacrificing quality and to do this, managerial know how is a must in order to understand interactions with suppliers and consumers, to facilitate creativity and innovation and to maintain mobility in adapting to new market demands (Kincade, Regan and Gibson 2007).Building brand sentiency and consumer loyalty is a costly endeavor since it involves advertising needed non only to promote the brand but also on sustaining awareness and loy alty. Strengthening brand names also requires that there are quick response programs to increase revenues and manage risks. One of UNIQLOs major resources is its brand name, which is now synonymic with comfortable, high quality and cheap clothing merchandises. Although brand awareness outside the home country is a challenge, it is of intangible value to UNIQLO as a business asset. Brands are valuable and rare and reputable brands are acquired through the impressions one has of the company, and its products or services. Since a brand name is built overtime it becomes costly to assume thereby providing a sustainable competitive advantage in the apparel industry (Groucutt, Lydley and Forsyth 2004, p. 285).Threat of Rivalry Either in home or army countries, apparels, accessories and merchandise will always have a competitor which usually fluctuates in size. The modern market trends for the apparel industry are globalisation and increase competition, increasing price and lower profi t margin pressures, small quantity with high complexity orders, shorter lead times, multiple location operation, changing customer requirements and liberalisation on textile and clothing quota that creates new market dynamics. Being responsive to these market trends shifts the focus of the apparel industry for to a greater extent extensive product information and improvements at the least possible cost. Such condition forces companies to divert on product differentiation because of high switching cost. In an industry where products are deemed to be equal, the key sources of differentiation are brand image, reputation and prior existence (Byoungho 2004b). For UNIQLO, the products themselves are an important source of competitive edge. UNIQLO strives at developing products of high quality, in sundry(a) collections to enable the company to reach the highest possible number of customers. As such, the rivals would be endangered when it comes to introducing innovative products. UNIQLO is positioned in the fashion capitals of the world for the purpose of taking advantage of the new information about fashion trends. UNIQLOs ability to quickly adapt to trends and new markets has helped them develop product differentiation, something that is key to the companys success in the apparel industry. According to Tokle (1990), product differentiation is what separates the top competitors from the rest, but it something that is not costly to imitate. This is why their product differentiation is only a temporary competitive advantage. free-enterprise(a) advantage could be achieved once the organisation learns to manage its capabilities that the end consumers could appreciate and competitors would find difficulties imitating (Porter 1985 Roney 2004).Threat of Substitutes Casual wear is very particular with loose-fit, comfortable and relaxed fit. gymnastic or active wear was perceived to be the closest substitute to casual wear as manifested by the booming athletic wear indu stry. typically worn as casual fashion clothing, active attires could provide deterrence in the industry. Moreover, the blurring demarcation on the casual clothing family could be also seen as an opportunity for substitutes. Specialised stores offer semi-casual, smart casual and business casual lines. Semi-casual clothes are less presentational than informal but are not as loose as casual dresses. Smart casual purports conservative looks but with harmony on colors, fabrics, shoes and accessories. Business casual, on the other hand, varies in definition but the common element is the collar. Realising this, the bottomline now is the price. Moreover, based on the SPA business model, all the necessary functions at UNIQLO falls under a single umbrella especially the inbound logistics and the production. UNIQLO is an example of a cut-make-trim company in which in which the company purchase the fabric and retain ownership of the raw materials and work-in-process, and so making it hard for rivals to imitate or produce substitutes for UNQILO brands.Threat of Suppliers The prices and availability of commonly used fabrics such as cotton, blends, synthetics and wools might fluctuate importantly due to its dependence on demand, crop yields, weather, supply conditions, transportation costs, government regulations and economic condition among others (Byoungho 2004a). Quota is the major factor that affects the demand and supply of textile and fabrics. even though the sale of raw materials is standardised, independent contractors, raw material suppliers, importers and apparel manufacturing firms could not isolate themselves from such scenario because of the prospective unsteadiness in the supply drawstring (Chetty 1999). As well, because of forward vertical integration, coupled with the low barrier to entry, suppliers could easily become rivals. In becoming threat of entry, suppliers could be also become a competitor to already established apparel manufacturers. In addition, contractors is also one of the threats when the demand of the labor increases, it will cause labor costs price inflation. Laszlo (2008) melodic line that there are five main parts of the apparel value chain including raw material supply, provision of components production networks export channels and marketing networks at the retail level. Through the process, UNIQLO has an ownership on production and thereby a complete control on the supplies procurement. UNIQLO insources its production and handles the majority of the operational details. Sourcing is a go-to in the apparel industry but it is not rare although it can add value to UNIQLO.Threat of Buyers Reaching more and diverse consuming group, the apparel industry is both a stable and unstable industry. Stable because quality price and quality products are the main element and unstable because there are many factors that affect both price and quality. In the point of consumption, for instance, there are middle men such as the r etail stores that offer an host of brands. In purchasing manufactured apparel, retail stores could have influence on making significant requirements and demands on their purchase, affecting prices. Though quality is inherent, prices would not be reasonable at all, and alternative clothing is readily available. This explains why apparel manufacturing companies are setting up their own stand along stores which will leave to their own produce. Important is that apparel stores must not fall dependent on s specific class of customer. Buyers are increasingly appearing to favor above standard apparel with a much lower cost, making apparel less differentiated. When selling directly to consumers, buyers would incur a significant spate of their dispensable cash. Same goes with retail store, they purchase apparel at the least possible final cost, but adds up to prices of apparel. UNIQLO is involve in selling to the customers through specialty store marketing, with a minimalist strategy of pile em high, sell em cheap concept that is. In addition, the unbranded fashion or the no-logo concept was perceived to be the main reasons for peoples warm attention (Williamson 2007 Parrish, Cassill and Oxenham 2006).Competitors AnalysisLocal Competitor GiordanoAccording to companys website, Giordano was established in 1981 as one of the most well-known and established apparel retailers in the Asia Pacific region. The company employs 11,000 staff with over 1,700 shops operating in 30 territories worldwide. The companys vision aimed to be the best and the biggest world brand in apparel retailing with a remarkable mission i.e. To make people feel good look great.From the companys website, they are stating that Giordano is committed to being a successful and responsible corporate citizen. Meaning, they are committed not only to delivering quality products and service to their customers and strong and sustained financial performance to their shareholders, but that are also committed in creating a positive move in the communities where they do business. The current CEO since 1996 is Peter Lau, a Canadian Chinese. Basically, Giordano is based in Bermuda and trades on the Hong Kong Stock Exchange as 709.HK.Giordano concentrates in creating and delivering economic quality clothes such as Long Sleeve Shirts, T-Shirts, and denim jeans. On the other hand, Giordano Ladies, a sub-brand was only established in 1996. It has been instrumental to upgrading the unisex brand from a budget image to a more fashion oriented apparel retailer similar to The Gap.International Competitor HMIt is now a widely held view that the world economy has entered a much more complex phase where individual national economies have become inextricably linked. In this new world economy, resources and markets have ceased to have the indelible national individualism of the past (Jones, 2002). Restricted resources and markets that were once legally isolated have become much more accessible to enter prises that have acquired a global strategic vision. To the more visionary global enterprises, the world is but a borderless environment with homogeneous consumers who have developed an unforgiving taste for the most sophisticated and high-quality products. In response to the needs of these global consumers, the enterprises have developed global products. How such homogenised consumers are served, however, is a question of the strategic orientation of the enterprises and their ability to exploit the ever-evolving global economic environment (Jones, 2002). With this regard, HM, a company in Sweden engaged in clothing and a leader in fashion business shows significant impact to their consumers in accordance to their brand and branding strategies.HM is considered as one of the worlds favourite and preferred designer of apparels and clothing for man and women. In addition, HM is also known not only for their fashion cosmetic but because of the quality of the clothes designed durability and the funkiness of its clothes. Through the online stores, HM provides the US, UK and European Market undivided clothing designs. The main goal of this company is to provide innovative designs of apparels and clothes for different types of people in different countries all over the world. The company has been known because of its strategy of providing clothing designs exclusively for each countrys preferences and needs.HM is considered as one of the worlds favourite and preferred designer of apparels and clothing for man and women. In addition, HM is also known not only for their fashion but because of the quality of the clothes designed durability and the funkiness of its clothes (HM, 2009). The HM mission, Fashion and Quality at its best price. In addition, their handbags, shoes and accessories are also creating big sales and positive reactions from consumers. Through the online stores, HM provides the US, UK European Market and Asian Market exclusive clothing and even handbag designs. HM also offers perfumes and watches. The main aim of this company is to provide fast fashion goods (haute couture, ready-to-wear, handbags, perfumery, and cosmetics among others) in different countries all over the world (HM, 2009). The company has been known because of its strategy of providing fashion designs exclusively for each countrys preferences and needs which was positively accepted and loved by consumers.CPM MatrixTable 1. CPM MatrixUNIQLOGiordanoHMCritical Success FactorsWeightRatingWeighted ScoreRatingWeighted ScoreRatingWeighted ScoreAdvertising0.2040.8051.0040.80Product Quality0.1540.6040.6040.60Price Competitiveness0.1040.4030.3040.40Management0.1040.4030.3040.40Financial Position0.1540.6030.4530.45Customer Loyalty0.1040.4030.3030.30Global Expansion0.1530.4540.6040.60Market Share0.0530.1530.1530.15Total1.003.803.703.70With regards to the discussion of the local and international competitors of UNIQLO, the CPM matrix describes the edge of UNIQLO over Giordano and HM. As seen in the circumstantial success factor, UNIQLO dominates the Product Quality, Price Competitiveness, Management, Financial Position and Customer Loyalty. Despite of this, it seems that UNIQLO was lacking in advertising which was dominated by Giordano. In addition, UNIQLO also needs to consider their efforts in global expansion and market share in order to become successful in Hong Kong.Extended Marketing Mix 8Ps of Services MarketingFurthermore, since the UNIQLO as a brand concept be similar to or is associated with service stipulation, the 8Ps method adopted for service marketing may be competently espoused for its advertising. The 8Ps areProduct This refers to the stuff or services to be offered by the company. In the case of UNIQLO, their products and services are mostly related to clothing and fashion, thus the need for constant review should be bear in mind in order to meet the changing customer expectations.Place In UNIQLO, the place in which this product was manufactured and distributed was somewhat accessible to both suppliers and customers. Actually, UNIQLO are considering the issue regarding product availabily at the most convenient places for the target market, i.e., current and prospective clients.Price In terms of price, UNIQLO produce were priced competitively.Promotion UNIQLOs most effective ways to communicate to the various target groups to stimulate greater awareness, interest and patronage are somewhat good but not exceptional. UNIQLO are now using TV advertisement, Internet marketing, and billboard advertising.Physical Evidence In terms of presentation, UNIQLOs products are exceptional. In addition to these, the services offered by the company were also outstanding. As seen in their shops UNIQLO are known with their well-dressed staff/consultants, logos on office doors/ business cetres, letter heads, brochures, complimentary cards, consultancy reports, etc.Process With regrds to the process, the business of UNIQLO are well management in which makes their business system flawless and customer complaints are easily handled.People When it comes to people, UNIQLO chooses the best suitable person needed by the company. This means that UNIQLO expertly indentify the capabilities of a person that will reflect the value of UNIQLO products and services.Promise UNIQLO with their consultants are delivering their promises. In terms of quality of products and services, UNIQLO are giving it to their customers at utmost quality.Public Relations UNIQLO stakeholders carefully identify the various publics that can impact on UNIQLO to which PR communications can be directed. Such publics include individual consultants, clients, big practices, small practices, other related professional associations, germane(predicate) agencies of the United Nations, financial institutions, etc.Developing the Concept of Servicescape and BlueprintingServicescape- Servicescape is a concept that was developed by Booms and Bitner to emphasize the impact of the physical environment in which a service process takes place. If you were to try to describe the differences a customer encountered when entering a branch of say like McDonalds compared with a small family restaurant, the concept of servicescapes may prove useful. Booms and Bitner defined a servicescape as the environment in which the service is assembled and in which the seller and customer interact, combined with tangible commodities that facilitate performance or communication of the service (Booms and Bitner, 1981, p. 36).Servicescape may be likened to landscape. It includes facilities exterior (landscape, exterior design, signage, parking, surrounding environment) and facilities interior (interior design decor, equipment, signage, layout, air quality, temperature and ambiance). Servicescape along with other tangibles like business cards, stationary, complaint statements, reports, employee dress, uniforms, brochures, web pages and virtual servicescap e forms the Physical Evidence in marketing of services.Servicescape is not defined as above. The definition above is the definition for physical conclusion. Physical evidence consist of servicescape combined with the tangible elements, so servicescape is a part of physical evidence.Blueprinting Service blueprinting was initially introduced as a process control technique for services that offered several advantages it was more precise than verbal definitions it could help solve problems preemptively and it was able to identify failure points in a service operation.24Just as firms have evolved to become more customer-focused, so has service blueprinting. One early adaptation was the clarification of service blueprinting as a process for plotting the customer process against organisational structure.25Service blueprinting was further developed to distinguish between onstage and backstage activities. These key components still form the basis of the technique and its most important fea ture, that of illumine the customers role in the service process.26In addition, it provides an overview so that employees and internal units can relate what they do to the entire, integrated service system. Blueprints also help to honor a customer-orientation among employees as well as clarify interfaces across departmental lines.Chapter 3. Research MethodologyThe aim of the study is to once again, seek the various sides of economic impact in capital of the United Kingdom after winning the title to be the host of the 2012 summer Olympics. It is a big challenge for the hosting country to facilitate a mega event and the industry that is in the center of the issue is the tourism. The continuous development of an industry is possible if there are factors that can affect its growth. In the existence of the Olympic event in London, there should be an appropriate investigation that might lead in determining the economic impact of Summer Olympics. along with the complexities defined in th e countries of UK, London remains the center of attention because of the opportunity in hosting the prestigious Olympic Games. After the years of 1908 and 1948 in hosting the previous Olympics, London finally acquired the honor in hosting the mega event. Obviously, years can be evidence the world is changing and with that, London must be prepared on the various effects resulting to the Olympic Games. With the help of the appropriate method, the study can gain the chance in meeting the objectives and goals.Research Methods to be UsedSince the study is annoying regarding the empirical ground and current situations of Londons preparedness in the upcoming Olympics, the proposed primary method is through the use of checks and question. There are many types of primary inquiry available based on the purpose of the researcher/s. The design of the method can create the accurate result and overview on the concern of the study. It is expected that survey methods are more efficient in terms of gathering the primary data therefore it is utilized in the study. Through the form of questioning the people or groups, the study can gain the limited amount of information which is also useful in understanding the subjects point-of-views. On the other hand, the use of interview helps the research in providing the ideas of a small group similar to gathering their opinions. After the essential data had been collected, the information was analyzed and organized according to a comprehensive fashion.SubjectsThe survey data was taken in the participation of 200 district residents who are deemed to be affected by the Olympic event. The responses of the participants are gathered and then, analyzed based on the five-point Likert scale. On the second phase of the method, an interview was conducted in among the five respondents in order to achieve the qualitative dimension on base the gathered statistic data. The respondents of the interview includes the officials in London as well as th e businessmen that took participation in the pre-Olympics, during Olympics, and post-Olympics.Sampling DesignIt is impractical for the study to conduct a survey in the entire population within the community