Question;

A critical assessment of the marketing issues facing NEXT(CLOTHING)
Student brief:
You are a specialist marketing consultant and have been retained by an organisation of your choice to carry out an analysis of their business and to make marketing recommendations to address the challenges you have identified.

Task One: (No marks awarded)
Choose an organisation upon which to base your report (an organisation, or part of an organisation, large enough to enable you to carry out the strategic audit, but not so large you are not able to provide the level of depth and detail expected in a level 7 assessment. This should demonstrate you are able to make an informed choice about the suitability of a particular organisation which will meet the requirements of the brief.

Task Two (10 marks)
Carry out a strategic audit on the organisation using models, concepts and frameworks(a pestle analysis, swot analysis, porters 5 forces some sales figures of chosen company and 7 p’s if you need it) that have been identified on the course and should be limited to 4 pages (this is to be attached as an appendix to your report). This should demonstrate that you can assess the position of the organisation with regard to the marketplace and to compare the actual direction of a business in comparison to the direction required to succeed in a changing marketing environment. You need to critically analyse complex, incomplete or contradictory areas of knowledge of a strategic nature and communicate the outcomes effectively

When you do the PESTLE analysis can you please do it in a table and on the same table put some implications next to it. By saying implications what I meant is whether it is a threat or opportunity for the organization.
Also I will attach some examples of it.
For instance: something like this but this one got strength and weaknesses what I need is threats and opportunities in this bit then obviously later on there will be a SWOT analysis In the appendices.

1.1. PESTEL Analysis:
Issues Factors Implication
Political 1. Though Royal Mail has become privatised still they have does not need to charge VAT for its customer. (Seely, 2013)
2. Being regulated by Ofcom Royal Mail cannot take decision on Pricing (Seely, 2013)
3. To protect Royal Mail’s universal service, an external body always investigates risk involved with its universality (Groom, 2014) 1. Strength
2. Weakness
3. Strength
Economical 1. Complain and compensation rates both are going higher. For example: £6.6m compensation in 2013 was £1.5m higher than previous year. (Jones, 2013)
2. Severe decline in letter volume caused revenue fell. (5% dropped in personal letter caused 3% revenue fell in 2013(The Telegraph, 2014)).
3. Significant amount of free cash flow (£334m in 2012-2013, (Lyall,2013)) 1. Threat
2. Threat
3. Opportunity
Socio-cultural 1. Negative trend in writing letter. From 2006 to 2012, there was significant 25% (33% last decades) Drop in personal letter volume. (Fino, 2014)
2. Emerging use of social networking (8% overall communication acquired by social media in last 5 years, Groom 2013).
3. Passion and loyalty involved with about 500 years old brand. (Royal Mail, 2014a) 1. Threat
2. Threat
3. Strength
Technological 1. In 2006, Royal Mail Introduced online posting system that does not required traditional stamp. (Blake, 2010).
2. Enhanced technology is being used by competitor. For example Amazon UK planning to use drone to deliver post in remote areas(Armistead, 2014) 1. Opportunity
2. Weakness
Environmental Royal Mail uses 135,000,000L of diesel, what emits huge carbon dioxide equivalent to 0.15% total UK emission. In addition it creates over 2,200 landfill wastage in a year. (Crace, 2009) Weakness.
Legal 1. Royal Mail is only universal service provider in the UK (Royal Mail, 2014b).
2. Being under Universal Service Obligation(USO) Royal Mail legally has to deliver post anywhere in the UK. 1. Strength
2. Weakness

Task Three (20 marks)
Critically assess the significance of the key issues you have identified in your strategic audit. You should be able to produce reliable, valid and incisive insights into the key issues following completion of the strategic audit and assess the implications to the organisation.
This are the key issues after doing the strategic audit that you find out that the company is facing now. Basically these are challenges/key issues they are having. should be 5-6 key issues and you need to critically assess those key issues.

Task Four (40 marks) (between 900-1000) words
Critically evaluate the different approaches to achieving a marketing orientation, exploring linkages with customer value and the key issued identified in Task three, and assess the extent to which the organisation provides value to its customers. You need to be able to identify relevant theoretical principles commensurate with postgraduate level and critically apply and evaluate these within a senior management context using originality of thought
Note for task four:
First of all what it means by marketing orientation by compare and contrasting about 4-5 interpretations. Make a link with customer value and to assess the extent to which the organization provide value to its customers. Try to link up with the chosen organization. As you

Task Five (20 marks)
Make clear recommendations for improving the organisation’s current value proposition and marketing orientation. You should be able to support your recommendations using concepts drawn from the course, along with business criteria and argument
Note for task 5: in this part how to improve the marketing orientatation of the company which could be based for example branding, pricing or seeking a different source of competitive advantage.

Presentation and formatting (10 marks). Recommended structure
Assignment Cover Sheet
Report Title page
Executive summary (max 500 words and not included within word count)
Contents page
1. Critical Assessment of the key issues
2. Critically Evaluation of different approaches to achieving a marketing orientation
3. Recommendations for improving the organisation’s current value proposition
Conclusion
Appendices:
• The strategic audit
• Bibliography
• Appendices

Word counting
Main body 2500 words
500 for executive summary
And strategic audit not in the appendices not more than 4 pages please.

Answer;

Executive Summary

The paper examines marking challenges affecting Next PLC. The first section provides an overview of the company. The section provides a brief history of its operational activities and the objective of the study. The successive part includes a research on critical marketing issues affecting the marking goals of the company. One of the issues is the fact that the company operates in clothing industry where the level of competition is high. The company is a multinational business implying it has an urgent obligation of wining customer loyalty I its international stores. The pricing issues are another barrier that derails the company initiative of attaining competitive edge. The fact that the competition is high indicates that the company would consider adopting low price strategy. The issues can be regarded as the most compelling one since it determines the willingness and ability of customers to purchase clothes produced by the company. However, intensive study indicates that the company would fail to attain its profit margin that is an essential objective to a company. Further study indicates that the company has demonstrated the need for adopting online advertising to overcome the completion. However, the company needs to invest heavily on other promotional strategies to achieve it marking strategies in such a highly competitive industry.   Despite the fact that the company faces imminent threat from rivals, the company deserves credit for adopting responsive approach. The initiative is effective in the sense that it has guided the company to realize impressive turnover and thus show the potential of achieving its marketing objectives. Moreover, the strategy has helped the company establish good relationship between the executive and the employees.

The next section focuses on examining various marketing orientation such as marketing concepts, selling concept, product concept, and production concept that would help address the identified issues. The marketing, production, and product concept are ideal in addressing tax, pricing, and marketing strategies.  The paper provides that the concepts will enable the company to develop strategies of improving quality of cloths and thus boost the level of sales in the end. The concept further would help the company retain customers and maintain loyalty to the entire stakeholders. The successive section examines various recommendations that the company would consider to overcome the marketing challenges it is facing. The paper identifies strategies such as product attributes and adoption of the marketing, product, and production concept as the most ideal initiatives for the company to consider. The concluding section indicates that the company has so far demonstrated efforts in attaining marking objectives but needs to elevate the effort for future success. 

Overview of Next PLC

Next if multinational clothing, home products footwear incorporated in Britain. It is the largest clothing retailer based in the United Kingdom operating in nations such as USA, Greece, Hungry, China, Lithuania, Iceland, Japan, and UAE among other international markets. Despite the fact that the company has a number of potential, the company has marketing executive has urgent responsibility of streamlining marketing issues (Next Plc. 2014).

Critical Assessment of Emerging Marketing Issues

This section will focuses on assessing emerging issues based on the strategic audit from SWOT analysis, PESTEL analysis, Porter 5 analysis and Sales report of Next PLC.

Marketing Strategies

The fact that the company operates in a very competitive market is proof enough that the executive should consider adopting efficient and effective marketing strategies. Next PLC has highly considered achieving the needed strengths by making significant adjustments in home shopping networks and delivery services. The company deserves credit for identifying the need to use online purchasing as an effective marketing strategy. The strategy is one of the strategies that would help contemporary retailers to attract attention of many customers especially for a multinational business.

Additionally, the company-marketing executive must have considered maintaining customer loyalty by considering establishing customer quality service. The marketing initiative ensures that customers experience conveniences as far as placing orders is concerned. In other words, customers are assured of acquiring their orders on a timely basis. The idea is essential in the sense that it would help the company a conducive atmosphere with its prospect customers.

Responsive Approach

The company has considered investing from creativity as one of the marketing ambitions. Consequently, the company has recorded impressive turnover better part of the past nine years as indicted in the financial statements. The idea initiative deserves the needed credit since achieving economically is highly essential for a company willing to achieve competitive edge. Additionally, the company must have foreseen the urgent need for displaying corporate responsibility. The approach is essential in the sense that it would attract the desired external opportunities such as ethical, environmental, and social performance. The fact that the company established the need for emphasizing on prioritizing energy reduction by a margin of 4 percent is clear indication that the company is willing to establish ethical performance (Next PLC 2013)

In essence, ethical management is a principal strategy that could effectively guide a multinational corporation in achieving corporate culture, employee reputation as well as the general reputation of the company. According to Wolinski and Coates (2005), a company demonstrates the desired attitude of respecting and supporting welfare of workers. To elaborate, the company considered to motivate it workers by creating an environment where the marketing executives would enhance their performances.

Stiff Competition

Despite the fact that Next plc put considerable measures to achieve competitive edge, the company still need to consider that competitive edge is great threat to in a highly competitive market (Key Note Limited, 2000). As mentioned by Porter (2008), many customers view fancy clothes as luxurious products that they should not consider allocating decisive amount of financial resources. In other word, risks related to substitute products is a key threat to a corporate business aiming at attaining competitive edge. Next offer luxury products that many prospect customers would likely substitute other brands. Therefore, the product description needs to be standardized in order for the company to avoid becoming inferior against the likes of River Island and Topman.

Another concerning issues is the fact that the company the company would have to convince it customer on the uniqueness of its clothing products at low price. Occasionally, customers have a tendency of creating a doubt over quality of a product offered at a low price. Porter (2008) observed that the success of a strategy rests with unique activities. Therefore, the company-marketing executives have primary obligations of achieving the best form price competition, otherwise, the brand and customer loyalty would certainly diminish in the near future.

In addition, Next would likely face problems with controlling its profit margin (Chandra, 2008) since the company would fail to gain control over demand of their products. Furthermore, the company operates in uncertain industry because people have a habit of polling their financial resources seasonally on clothing products. Therefore, the company certainly struggles to deal with seasonal cyclical implications mainly contributed by fluctuating weather. Generally, the company face imminent threat posed by economic recession despite putting frantic effort in achieving future success. The market structure is also highly turbulent making the company to pool more financial resources to achieve the needed product demand.

According to the Next Annual Report (2013), the company has a responsibility of formulating strategies that would enable the company to survive during economic hard times. UK government policy on cutting budgets and spending level is dangerous to its future growth. The policy affected the company because consumers were also force to adjust their spending habits on clothing products just like many other products in the United Kingdom. Despite the fact that the government policy on cutting the budget was necessary to invoke, it adversely affect sales projects of the company.

Pricing Issues

An increase in the prices of cotton imposed financial strains to the company (EMAP Publishing Limited, 2013). An increase in inflation of food and fuel made the situation worse towards the company’s initiative of attaining the target profit. The compelling situation is the fact consumers would reduce the budget for clothing products to cater for priorities that are more urgent. The company has obligations of adjusting its production level to avoid becoming victims of seasonal economic crisis. The company should have taken responsibility of adjusting the unemployment crisis in the United Kingdom. Low consumer wages is also a concerning issues affecting the operations of the company.

However, the company has put considerable measures as far as technological development is concerned. The company used phone, technology, and social networks in achieve the target demographic customers (Next, 2013). The technology is crucial for the future growth of the company especially when sourcing young customers. Technically, it is becoming an excellent idea to gain good strategy that would help the company boost its sales.

In contrast, the company would gain an opportunity during severe weather conditions as it was reported on the 2011 annual report. An adverse weather condition is condition can highly affect the smooth process of sales (Next, 2012). In essence, the company appears to have failed to envision that the severe weather experienced in December would have contributed sales hamper. On the other hand, the environmental conditions such as the government campaign to minimise carbon emissions would require the company to incur additional cost. The company marketing executives would consider inventing environmental friendly packages as one of the compliance strategies.

Tax Issues

On a similar note, the company is obliged to adjust to the adjustment of the VAT invoked by the UK government (Crown, 2014).The issue is highly crucial in the sense that the company would be forced to increase prices of its clothing products to meet the high cost of operations. The move will be unpopular to customers but on the other hand, the company would have to adjust to the new prices in order to operate profitably. The fact remains that the company would have to meeting the additional cost of raw material implying that it would have to pass the additional cost to the products adjusting to the capped VAT poses additional expenses for meeting employees’ wages. General increase in VAT implies that other products increase in price thus requiring the company to consider increasing the level of salary to enhance the needed employer-employee reputation.

Evaluation of Distinct Approaches to Achieve Marketing Orientation

A critical review of the identified issues pertaining Next PLC implies that the company has obligations of identifying distinct marketing orientation. Market orientation is generally defined as marketing strategies that guides a company to coordinate marketing campaign between customer and the company (Singh, 2004; Motzek, 2011; Singh, 2004).  In essence, the strategy aims at adjusting attributes of products to meet the desires of customers. Market oriented organizations embark of producing goods that would meet the desires of prospective customers (Bjerke, 2006). Therefore, an essential strategy can be used by organizations to enhance marketing condition with consumers.

Marketing Concept

The marketing concept entails strategies that firms adopt to match customers wants and capabilities of the company to meet the wants (Drummond & Ensor, 2005; Rajagopal, 2000; Schmitt, B. (2011). When companies adopt marketing concepts, the executives are obliged to adjust their operations strategy to focus on satisfying the needs of potential customers.

The orientation would be ideal for Next PLC to consider addressing the stiff competition. The company would have to consider prioritizing potential strategies that would guide the company overcome the fierce threat of rival clothing producers. The concept would help the executive of the company to identify specific demands of clothing designs that the company would consider redesigning. The idea is to designing clothing products that potential customers to the company would be able and willing to purchase. Furthermore, the marketing concept would help the company focus on establishing forces of social and culture that defines the desire of the potential customers to the company. To elaborate, the fact that the company serves customers around the globe implies that it would need to conduct an intensive research on cultural forces of international customers especially in the European market. The objective would be to obtain the cultural values regarding clothes that match cultural values of the target customers. The company would then consider redesigning clothes that would match the cultural values of the different target society.

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