Harrods is one of the world's most well-known shops situated on Brampton Highway in Knightsbridge, in the Royal Borough of Kensington and Chelsea, London, Britain; It was established in 1849 as a small grocery store with only two helpers. Today, it includes its customers with from food to fashion, furniture to sportswear plus 20 in-store restaurants portion every kind of delicacies imaginable from pizza to sushi. Services range between piano tuning to fitted saddles. Must-see places are the Food Halls, the Egyptian Hall and your pet Department. (Visit London)
Harrods after tenure of great success has recently seen a dropping tendency in its sales. Harrods, therefore, has further researched the behaviour of its consumers more closely in order to learn the reasons of the unfortunate decrease in sales. This statement contains an analysis of this study, external influences and how they could be used positively to augment the sales; It mentions the strategies Harrods can use to be able to have the same honourable and esteemed position back industry.
Task 1: Impact of External Influences
An insight into the behaviour of consumers at Harrods
Harrods is a high end departmental store which offers a great selection of products and services. Once opened up as a small grocery shop has matured to become good example for posh and glamorous shopping, complementing itself on its motto "Omnia Omnibus Ubique meaning 'All things, for all people, everywhere'. It is famous about Harrods that you can buy whatever you can name at Harrods, from a hair pin to furniture. (go there guide)
Consumer behavior is a report of when, how and where people buy or do not buy certain products. When buying a product, consumers usually go through several stages which is often named as need recognition, information search, analysis of different purchase options, purchase decision and post purchase behaviour e. g. a need arise when you see your present television set is out dated and rather old fashion or may be its cracked. You decide that you would like a new television and then begin looking for different alternatives transferring yourself to the next stage and you start looking for which tv to buy and from which place; this is the stage when Harrods should come in your brain of the consumer. A consumer evaluates between different available choices which Harrods has good thing about providing consumer all under one roof and then finally he will buy something. (East, 2008)
Harrods is considered a glamorous shopping place. Though practically everything is offered by Harrods but the target market segment that Harrods targets is the top class. This is actually the market portion the management at Harrods keeps in mind while carrying out its marketing activities. People visiting Harrods may participate in any generation but majority of them participate in the social class A and expect something that is up to the mark. They expect that the product offered by Harrods would belong to the best of the characteristics available.
Marketers determine four types of shopping for behaviours and it is based on the kind of products that the consumer intends to buy. All types of shopping for conducts can be observed in the consumers at Harrods as a vast range of products are available at Harrods.
Complex buying behaviour
This where in fact the person purchases a higher value brand and inquires about a great deal of information prior to the purchase is made. This can be whenever a consumer is buying a very expensive outfit of Paul Smith Black colored at Harrods
Habitual buying behaviour
This is when someone purchases a product out of regular e. g. a regular newspaper, sugar or salt. This is relevant for a consumer buying grocery store from the grocery section
Variety seeking buying behaviour
It is when the person likes to shop around and try with different products. Some consumers at Harrods do not have the particular brand in mind beforehand when they shop for any product so they experiment different brands.
Dissonance reducing buying behaviour
This is the sort of behaviour when buyer is incredibly worried about the purchase of the merchandise, because the purchase is expensive or occasional. An example could be buying expensive furniture at Harrods. (Micheal. R. Solomon, 2005)
The management at Harrods needs to keep each one of these consumer behaviour theories like why is consumer buy a product, the type of behaviours can they take up while shopping at Harrods at heart and factors can cause a change in consumer buying patterns at heart while they take their management decisions. They specially have to be aware of the expectations with their consumers and just what they need from Harrods to be able to improve and discover the loop openings which might be resulting in a land in sales.
External Factors may effect Buying Behaviour
Culture does affect consumer behavior; culture is defined as our attitudes and beliefs. The point that we need to find out here is the way these behaviour and beliefs are developed. As the person matures, a child is inspired by his parents, siblings and other family members who may inform them about rights and wrongs. They learn about their religion and culture, which helps them develop these ideas, attitudes and beliefs. . (Micheal. R. Solomon, 2005)
Harrods must understand the culture of men and women residing in London. Just how they are raised and what their principles are. Do people residing in London prefer to go to glamorous shopping places like Harrods? Are they comfortable shopping at such top quality places? What exactly are their buying movements and do they favor large shopping places over small ones? Can people living there afford to buy expensive or do they often spend anywhere near this much on average? Each one of these questions need to be answered to be able understand the psyche of consumers surviving in London and cater them relating with their needs.
If we return back into history, UK is a school based society and some remains of such behavior are still existent. People who belong to a higher class do prefer to show off and go to high end places but as time is transferring this mindset is changing. This change of head may be one of the factors resulting in fall in demand for Harrods.
Subcultures can be defined as members that own beliefs, beliefs and customs that arranged them aside from other people of the same modern culture. There can be nationality, ethnic, racial, physical or religious sub civilizations.
People belonging to differing of the world and owned by various packages of values and norms are in London, which leads a complex set of people and also require different beliefs and norms mixed up. Understanding and catering to all of them is not so natural but Harrods needs have knowledge regarding major subcultures so that its products are designed relating to it and their do not harm anyone's beliefs and norms. (Leon G Schiffman, 1997)
In order to make certain that the merchandise it offers is good Global culture, Harrods must examine the global developments of buying behavior as well. Generally people around the world have started out preferring large shopping malls over small specific buying areas. This facilitates a consumer in a way that all the products can be found under one roof covering. As people are getting more and busier using their work lives, this will save you time.
Moreover the globe is also moving towards better quality products and services. Custom clothes and fashion attire are getting popular. Brands are getting global. This development of customers goes into favour of Harrods. Multinationals contain the brought the buyer base to one platform which in ways has helped marketers to understand complex behaviours. (my library)
Reference group is an actual or imaginary specific or group concealed of having significant relevance after an individual's assessments, aspirations and behavior.
Marketers have observed that reference categories can strongly effect buying behaviours. Guide groups are particular collection of people a lot of people may look up towards to that have a direct effect on consumer behavior. So they can be only a strap like the Savage Garden or your immediate family. Marketers have grouped guide groupings into classes to grasp what sort of influence more evidently. (Micheal. R. Solomon, 2005)
Types of Research Groups
Some group and individuals are more powerful than others and impact a broader range of consumption decisions. A good example would be family. Your upbringing really has a strong influence on your likes and dislikes, meanings of right and wrong. Family values and practices usually do not change and develop basic requirements of patterns. If a family group is utilized shop from shops alternatively than individuals outlets or it may be specifically Harrods then this practice may be offered to further generations as well which how the pattern goes on. (M. Khan, 2007)
These are the people you compare yourself to and can relate with e. g. friends, friends and neighbors or a membership you are a member of. A few of these may be ones you aspire and want to imitate. A person may begin shopping from Harrods because a good friend of his shops from Harrods and he enjoys it very much and suggested him as well. (M. Khan, 2007)
Reference organizations can further be split into direct and indirect research groups: direct will be the ones you have contact personally with and indirect could be the ones you might not have direct contact with such as celebrities. (Balythe, 2008)
Marketers cannot directly manipulate your direct reference communities or utilize them for their benefits but indirect reference point groups can simply be employed by marketers. Harrods must analyze about its consumers' guide groups and utilize them in its favour. If Harrods functions its existing consumers really well they'll automatically end up being a resourceful reference group for some potential consumers. They are able to also use celebrity endorsements referent powers. (Wagner, 2003)
Opinion leaders are the individuals who have greater understanding of a certain thing than a lay man so you value their views and this may affect consumer behaviour. Most of the times it could really impact the behaviour if finished. to buy is an extremely technological product, may be a hi-tech computer and the opinion leader if so may be considered a computer expert. (CL Tyagi, 2004)
Economic environment has a great effect on buying behavior. People usually spend more during good financial times and during an financial boom and likewise less during recessions.
Lately aggregate demand around the world felt scheduled to global recession. Individuals were out of careers and businesses were heading towards a downfall which remaining people with less disposable earnings on hand to invest. This may also be one of the factors resulting in Harrods' reduced sales. (Angus Deaton, 1980)
There is store called Selfridges & Co. It is also one of the most significant areas in the world with 540, 000 sq. ft of offering area. It is on the Oxford Street which is a excellent posh location. Like Harrods, it is also famous among consumers for providing a large range of products and services. The difference between Harrods and Selfridges could be that Selfridges is more focused towards entertainment as it includes 15 pubs, cafes and restaurants inside the region. They have two more smaller shops, one in Manchester and the other in (business week)
Marks and Spencer
Another strong competition would be Marks and Spencer (M&S). It really is a United kingdom retail string and they have 330 department stores and over 340 food location all over UK. It generally does not operate in UK only but has over 300 locations in countries including Indonesia, South Korea, India and China. The factor that differentiates M & S from Harrods is the fact it core range involves mid-priced home items, fashion attire and other products whereas Harrods is suitable for the best or may be for everything alternatively a narrowed specific price range.
M & S has been in the forex market for more than a century and has been placed as the no. 1 provider of women wear. Furthermore, the company makes 90% of its sales in its home country which certainly is UK. It can give Harrods a tough competition if Harrods get even a little bit lenient in its services (business week)
Fortnum & Mason
This is 300 calendar year old section store. It is very famous for its food which include jams, teas, and sauces. In addition, it provides Queen with twelve-monthly Christmas puddings. They have five restaurants and though it generates the majority of its sales from food but it addittionally sells gifts, luggage, household products, cosmetics etc.
Though its product range and the region of focus aren't exactly identical to Harrods but it could be counted as a competition and was mentioned by a number of consumers at Harrods. (business week)
Task 2: Recommended Positioning Strategy
A review of human understanding can also help marketers to understand the consumer behaviour. Perception is the process by which people select, coordinate and interpret their feelings; where experience is how are sensory receptors (eyes, ears, nostril, mouth, fingertips) to basic stimuli such as light, color, sound, odour and texture. Such as a computer system individuals mind also functions the information in order to understand things. (Martin E Evans, 2009)
This is age sensory marketing. Marketers make use of impact of sensations on consumer's product activities. They use eye-sight, ability to hear, touch and flavour in order to produce an image of the brand in the brains of the buyer to create a competitive advantage. Marketers try to create brand's unique relationship with the sensation. (Hawyer, 2008)
Harrods may use a certain trade dress which is color combination a business uses so frequently that consumers start associating that brand recover colour combination. Every time they see that shade combo around their head recalls the brand in sub-consciousness. This is how marketers create a graphic that can last very long in the thoughts of the consumers through our feelings; as consumers start associating those brands to different things.
Consumer's perception about the brand contains both its efficient features as well as the symbolic behaviour. Functional attitudes can include its price; its features etc. and symbolic can include its image. Marketers have learned that consumer's analysis of a certain product is more reliant on what this means rather than what it can. This meaning has more to do with product's market position and it may be more to do with our objectives of the merchandise as communicated by its color, product packaging and styling rather than the product itself. (Kathy Niel, 2007)
Therefore, Harrods should use these tools of feeling in order to produce a graphic of Harrods that consumers cannot forget; an image that stays on in the minds. It should make a certain sensation so that consumers can connect the brand with this sensation. This automatically appeals to a consumer towards a brand as it generates a certain impact in the brains of the people that continues for very longer periods of time.
Attitude is truly a learned behaviour. They might be favourable and unfavourable attitude for something or a service. Marketers say that behaviour have the quality of motivation, they can lead consumer towards certain behavior or may also stop him from doing this. Harrods should try to develop a good attitude about itself in the heads of the consumers. (Micheal. R. Solomon, 2005)
Harrods have had certain issues which might lead to a poor attitude. Harrods in order to maintain its glamorous image threw a female out from the store. Eilene Kadden, from California, was ejected from the store because she did not contain the right image; she was too extra fat. Such sorts of situations adversely have an impact on the image of the brand and such incidents can lead to negative behaviour for the brand in the minds of the consumers. Harrods should value its customers irrespective of race, color, ethnicity and physical attributes of a person.
Tri-Component Attitude Model
According to this model attitude involves three components which are cognitive, affective and conative components. (Micheal. R. Solomon, 2005)
The cognitive aspect involves person's cognitions i. e. his knowledge and belief about the brand. This can be formed by a combination direct vulnerability and from other sources. Harrods should create a positive impression in the heads of the consumers through its image, service and behaviour.
The affective element is more about the sensation of the consumer. How related and emotionally attached he's to the brand. A family group might be shopping from Harrods from last three generations and may develop an emotional attachment to the store. These emotions can further have an impact on the activities of the consumers. They van be negative as well.
The Conative component deals with the actual behaviour of the buyer, additionally it is called the consumer's purpose to buy.
This model can help Harrods to develop a good attitude among its current and targeted consumers. Harrods should make an effort to factually as well psychologically develop a positive sense about the brand.
Self-concept is the values that customer retains about himself. It could be positive as well as negative. At times you feel that a part of you is more positive. People buy products which they can relate with themselves. What is the reason that social school A is the major consumer at Harrods? It is that all the merchandise were created keeping the cultural school as a target market segment and they also can relate with it.
This is the way a brandname portrays itself and places itself in the imagination of the consumers. Placing a brandname is an extremely crucial task. This is exactly what can either make a brandname or break a brand. When a professional targets a certain market sections, it intends to different itself from the other brands through its competitive advantage.
How to Position
When a brand is to position itself, the 1st step whenever a business makes a decision to enter the marketplace to describe the marketplace where the brand is to get into and to have difficulties. The market where Harrods is to be competitive is London. It is posh area where people spend cash to avail finest quality products and services. The next step would be to gather information from the relevant consumers in what belief do they have about the competing brands in the market. Harrods must understand what features regarding the shopping stores are most favourable in the intellects of the consumers. It requires a complete understanding of the wants, dislikes, tastes and mindset of the relevant consumers it intends to focus on. It needs to look for the share of mind of all the competing brands which are mentioned above including Selfridges, Marks and Spencer, Fortnum and Masom. It needs to rank the rivals and the capabilities which would be hard to contend. By the end it needs to put itself using the blend of the more suitable attributes and features of the brand itself to capture a place in the imagination of the buyer.
Era of Marketing
This is age Marketing. Marketing a brand is becoming more important than the product itself. The Marketers study the market at length, segment the marketplace into different segments predicated on demographics and psychographics and then choose the most profitable segment as the targeted section. All the products and services are then designed keeping that one segment at heart. All the decisions are also taken in accordance compared to that targeted segment. (Gerit Antonides, 1998)
Harrods rather than taking decsions keeping the products and services at heart, needs to take decisions keeping the preferences of targeted consumers at heart. If the certain brand in preffered and renowned in US but people in UK like other brands over it which may even be of somewhat lower quality, opting for that brand of better quality would not be wise decision. Harrods has used some bad decesions in the past to save lots of its glamorous image; they have kept a range of brands that are not even liked by most of the folks in London which really is a failing for Harrods to comprehend the psyche of its consumers.
Suitable Positiong Strategy for Harrods
The three major setting concepts known on the list of marketers and they are practical, symbolic and experiential position. Efficient position is when the organization shows itself as the perfect solution is to problems. It stimulates the huge benefits that can offer and gain a favourable position.
Symbolic postioning is whenever a corporation uses its image, belongingness and egoistic image which provides the comsumers with cultural meaningfulness. This is the type of positioning suited to a business like Harrods which is what it's been doing before as well but a certain change is required to get this to symbolic position better. These changings would be described further in the survey.
Experiential position is when an oraganization makes use of the consumers sensory and cognitive arousal and the concepts of perception to make a graphic in the brains of the people that consumers can relate with.
Harrods Current Positioning
Harrods has placed itself as a high-end, gorgeous, luxurious and top quality division store. It hasn't situated itself as a office store but as an memorable experience. Harrods has a reputation for quality and a motto "Everything for Everybody Everywhere". Consumers know it as a place where you can buy everything. From sugars and potatoes to luxurious automobiles, everything is offered by the Harrods. The major element or competitive benefits that Harrods has used is its grand image and variety.
Some of the Harrods plans to maintain its top quality image has subsequently adversely affecting its reputation. The occurrences of forcing people out due to their appearance and rigid dress code guidelines make customers inconvenient and lead to a negative impression. Harrods need to add an element of humbleness in its positioning statement. The feeling that you gets when he hears about Harrods is of arrogance and attitude. A tinge of humbleness needs to be put into the image in order to create a positive impression.
Harrods should try to create an image of an environment friendly organization. People once protested against Harrods' advertising animal fur. Such kind of occurrences would not happen if you have you have a total understanding of you're the culture and principles of targeted consumers and people around.
Harrods should encourage the brands working inside the store to promote green environment and produce as many environment friendly products as they can and do something for protecting the environment out of every kind of pollution. This will lead to a responsible image about in Harrods in the minds of the consumers that will definitely in turn enhance the sales.
Online and Offline Positioning Messages
As brought up under the proceeding of repositioning Harrods, Harrods must promote a tinge of humbleness using its glamorous image. The current motto employed by Harrods is "Everything for Everybody All over the place" and "Everything, for all people, just about everywhere" which portrays that literally everything is available at Harrods.
Messages like "Everything that you'll require because we worry!" would promote an image of care and attention and responsibility on part of the organization. This would portray that the business is not selfish about its benefits only. The attitude of the employees in the store will automatically depict the positioning and arranged a symbol in the imagination of the consumers.
Moreover for offline setting, Harrods can start campaigns for environment protection. It could sponsor such activities in order to create a direct effect and show which it actually cares and adding towards the modern culture.
Harrods is a very famous and well known brand. They have successfully achieved its targets and continuously upgraded and expanded over time. Its management worked well efficiently to gratify the needs of its consumers. It had been clear and focused on the portion it was focusing on and therefore tailored its products accordingly.
Due for some external factors plus some of the bad decisions that Harrods had taken declined its sales. The image that Harrods was enjoying is just a bit damaged but its not late to lead to the mistakes before.
Moreover, every company must innovate and re-position itself relating to changing environment. Harrods to be able to earn its position again needs to make small changes in its positioning. It should have more humble towards its customers and promote environmentally friendly products.
Task 3: Individual Critical Reflection on Learning Outcomes
Critical Reflection on Learning Outcomes
Before the start of the component, I had not been sure of whether it will further improve my learning or not. The ideas I had been to likely to apply in the module were those I had formed already studied many times so I was not looking forward to any further new learning and experience.
As I started focusing on the component and began gathering information about Harrods, I came to the realization that my belief about the module was entirely incorrect. Though I didn. t learn anything new in the module but it provided me an possibility to apply what I have learned in a genuine life situation. All of the principles and course material that I examined in the course was basically applied to solve the given problem of reduced sales.
Moreover, while I was learning for the course I had developed the feeling that the majority of the concepts talked about in the course catalogs are only for theoretical purposes and are not used or beneficial to the organizations in real life situations. My view was proven incorrect while I focusing on the module when i saw that companies do use these principles and they do help them in understanding the behaviour of consumers which is crucial because of their success.
This component was a great experience. Though collecting information and analysis was a little troublesome and tiresome but it was worth it. The info collection on the external factors influencing the buyer behavior really was difficult; classifying it and coming up with useful results and conclusions was even more problematic. This component specifically enhanced my analytical skills and better my self-confidence of practically applying theoretical knowledge.
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