Marketing communication of NEXT plc
Retail outlets and emailing influential people on the product's behalf similar developments are likely to continue in the future whereby consumer targets become active participants in the design and implementation of marketing communication efforts.
In order to respond most effectively and efficiently to changing world, marketers must have a clear understanding and accurate picture of the directions those changes are taking. Such a picture cannot emerge without a consideration of the evolving nature of business and consumers. The emergence of both enormous technological advances and excessive supply make the prediction of what will happen in the next few years to business in general and the communications business in particular both very easy and very difficult. Very easy because we know that things will have to adapt to the new opportunities and the fact that the customer is king, Very difficult because the things we have grown used to trusting appear to be changing so fast that we cannot understand them anymore, and the approaches that we thought were acceptable to consumers are not so welcome. Much has changed in the way that traditional communications about brands the development of the internet and the World Wide Web has changed the needs of business, and the speed of business. Internet also speeded up the transmission of information around the world that as new approach to products,
NEXT plc is a retailer operates in UK, offering products in footwear, clothing, home products and accessories. The company distribute through main channels: which consists retail chain of 500 stores in the UK; then Next catalogue, home shopping directory and website more than 2 million active customers and also the company has 180 outlets internationally, the other business that Next includes is Next sourcing, which designs, sources and buys Next branded products through wholesale and retail and website channels, and Ventura which provides customer services management to its clients who are willing to outsource their customer contact administration.
"A FTSE 100 company with group profits of over £470m and more than 45,000 employees, we are now the UK's second largest clothing retailer when it comes to sales. However, it's not just our record of achievement and growth that makes us stand out from the crowd. It's our daring approach in backing new trends, the fashion risks we are willing to take and the fact that we employ some of the brightest people around."(www.next.com)
This report was intended to analyze the marketing communication of NEXT plc. The core topics such as marketing segmentation, marketing communication will be analyzed through ethical background of its process of public advertising. Next plc is one of the leading retail chains in clothing, which provides on store sales and online sales to its customers. The aim is to identify the sensible propositions of its marketing communication.
These are the following objectives of the report
To identify the role of marketing communication of Next plc.
Apply relevant theories to analyze marketing communication' s objectives, and strategies of the company
To analyze the ethical background of Next plc Corporate Social Responsibility(CSR)
To provide relevant recommendations to the company to improve its effectiveness of its marketing communications strategies.
Next External Marketing communication
"Marketing is a vital communication function that is an integral part of our social and economic systems. Increasingly, the focus of marketing is on developing and sustaining relationships with key stakeholders." (Judy Motion, 2010) in early 90's the companies started moving toward integrated marketing communication. According to the American Association of Advertising Agencies developed a definition for marketing communication:
"A concept of marketing communications planning that recognizes the added value of a comprehensive plan that evaluates the strategic roles of variety of communication disciplines for example, general advertising, direct response, sales promotion and public relations and combines these disciplines to provide clarity, consistency, and maximum communication impact" (Judy Motion, 2010). According to the above statement that marketing communications has to be thoroughly evaluated through various communication disciplines to provide better quality of communication to the public. So every marketer should use quality modes to clarify his customers. "One explanation of why this targeting works is due to the shared cultural knowledge displayed in the marketing communication In other words, the success of targeted marketing is driven by a consumer's inference of similarity between some aspect of a company's communication effort and themselves" (Aaker, Brumbaugh, Grier 2000; Brumbaugh 1997).target market has the importance.
The Next Plc has mentioned in its annual report that "In order to communicate the changes we have made to our ranges we have increased both the effort and investment we make in marketing the Next Brand. We have improved the quality of our in-store displays, graphics and windows. In total we spent an additional £16m on marketing in the year, most of this increase went into press, billboard and TV advertising and windows. We do not anticipate a further increase in the marketing budget in the year ahead and aim to maintain marketing activity at broadly the same level as in the year just ended." therefore its clearly observable that Next plc keep on change its way of communication to attract the customers and as you can the company has spend million investing in marketing communication disciplines, to provide a better picture to its customers. At one the company say that their central overhead has been increased in the period of 2009 due to higher expenditure in marketing.
The company branded its logo "NEXT" through high visibility sign boards and also started catalogue shopping, which made convenient to customers and providing better quality and value, gathering or attracting customer loyalty through its brand plus wits its value added service.
Marketing the product- the company used television, and news paper in the beginning but later its shifted it's marketing to internet, billboards, and rigorous television campaigns.
Advertising- Billboards screening Alessandro Ambrosio and Yasmin Le Bon ,Next women's wear goes on the shows the changeover.
The company constantly monitor and evaluate to provide a clear picture of their brand and services also lot of ethical steps need to be done accordance with public relations, after the drop of sales in previous years the company has allocated huge amount of money to advertising and improve its clothing range and attract customers.
The internet promotional of Next plc has been restricted to its own website, since it does catalogue marketing the websites has been precisely developed for customers to surf easily and purchase to their requirements, also it has control over its retail and online promotion. Roger Goodwin, merchandising manager at plumbers' merchant Plumbase says "Next does simple things very well, I was initially attracted by the window displays, which build coordinated fashion statements for the whole family. The standard presentation tends to look good throughout the country; Next displays are clearly communicated to branches, another safe bet is the investment on bay header lights, which add to the atmosphere of careful sophistication. Goodwin says: "Next is not the fashion bastion it once was, but it is conservative fashion, and that works for the audience it is targeting."
Apart from advertising and promotional activities, Next plc also focuses on corporate social responsibility; the company constantly improve its marketing activities to provide a better value to its stakeholders, they also try to continuously improve the social activities and run their day to day business successfully. According the Next plc "For Next, corporate responsibility (CR) means addressing key business-related social, ethical and environmental impacts in a way that aims to bring value to all our stakeholders, including our shareholders. Continuous improvement lies at the heart of our business and we are constantly looking for ways to be more responsible, and run our business in a responsible way." (www.next.com)
Companies regard market segmentation as an essential component of marketing strategy in providing a valuable and tailored service offer. It requires retailers to have an understanding of customer characteristics to effectively communicate the image of their stores. Segmentation is "one of the most fundamental concepts of modern marketing" (Grete Birtwistle, Ian Clarke, & Paul Freathy. 1998). Ultimate target of marketer is to sell his product and send to final products to its customers, therefore to identify their customers wants and need segmentation is carried out on basis on age, gender, income, and ethnic groups are categorized under demographic segmentation. As well as on psychographics segmentation i.e educated, ambitious, and self sufficient is included.
As a result of segmentation the marketer can easily identify the customer need of the particular segment, which also helps the market to identify the strengths, and opportunities in the market.
Next plc positioned itself in the middle category which market to middle market, where the prices are affordable. It is constantly developing its strategies to maintain the loyalty of its customers, and also it's has its own subsidiary "Lime" to compete with the low end market such as Primark, Sainsbury's, and Matalan. Next plc customer base is in between 20-45 years in which they tend to prefer new trends in the fashion market; Next plc knows that women's wear is crucial for fashion stores because women are very cautious in trends. "The group, which launched in 1982 as a womenswear retailer before adding menswear, childrenswear, furniture, soft furnishings, home shopping and even a flower-delivery service, made its name by doing affordable tailoring well."
Based on psychographic segmentation the company targets trend setters, and idols to market their products in order to capture the young generations by screening celebrities and also marketing sex appeal themes to attract its target market.
Next current Marketing communications objectives strategies and activities
Over the period of time the company had been facing a harsh pace due to the recessions, which affected the spending power of the customers the profits of the company tend to decrease in 2009 Next: profits fell to £316.6m in the 12 months to January from £329.1m the year before, so in order to eradicate loss the company CEO Simon Wolfson planned a strategy by imposing or pushing new initiatives to the back the brand. The retailer also has assured to develop its product offer with a prominence on quality and new ranges, Store refurbishment are also one of the initiatives.
On the other hand Next is directory business is growing rapidly with well developed catalogue and website services the company is having superior period in their online marketing. Next directory business has been generating profits all the year compared to its store sales according to the annual report of 2010, the Next directory profit was £183.6 million compared to 2009 which generated only £157.6 millions, the new trend tend to begin after the new initiatives were imposed by the company CEO in 2007, which had drastically helped the company to over its barriers and market itself as a major competitor in the fashion industry.
(Source: Next Annual report 2010)
Next group has focused more on middle market, although they market to middle market, but they also strive to compete in the lower level. But also it can strive to push to high end market. Next is processing towards having a strong brand image to compete in the current volatile environment. Next is focusing more to develop on shop refurbishment and its already holding a strong position in internet market by providing catalogue to its customers. The company's director segment seemed to have a critical stage in the near future due to bad debt and credit requirements. Therefore the stores are gaining significance through the ways of personal selling mainly through sales in the form of selling in retail stores and selling services. Although the company operates in several segment which has pros and cons in this volatile environment, different communication disciplines and promotional activities of each entity, further more the company uses different brands to compete in the market for e.g.
Next - fashion store to provide clothing, footwear, furniture & home appliance
Next clearance- to clear up the piled up stocks of early productions
Lime- to compete with lower level competitor's providing value goods; the competitors for lime are Primark, Asda, & Peacock and co
Next Sourcing- provide services for outsourcing
Ventura- Call centre operations
Lipsy- deals in women wear & accessories
Since the company profit has decreased over a period of time, it has implemented several strategies to prevent falling in the next quarter; as a result the company has invested almost millions in advertising budget to capture the market. It's main strategies were to make clear of their advertisement and provide extensive information regarding the products by providing online shopping, as a part of its advertising the company planned to "alter its logo to a lower-case version this autumn, and new shopping bags - black with a silver logo and red interior-will ape the red leather sole of French designer Christian Louboutin's luxury shoes." Plus it also had a plan of "its above-the-line investment with a brand ad campaign, rumoured to be fronted by Yasmin Le Bon and backed by a £10m spend-a sizeable increase on last year's £1.5m total outlay" these strategic views have made Next to make it strategies to compete its competitors such as Gap, M&S and etc.. and therefore the firm should operate effectively &efficiently over the period of time is has to be flexible in coming future to gain competitive advantage.
Importance of social responsibilities in Next plc's external marketing communications
The definition of CSR
"CSR is concerned with treating the stakeholders of the firm ethically or in a responsible manner. 'Ethically or responsible' means treating stake holders in a manner deemed acceptable in."(Michael Hopkins, Corporate social responsibility and international development, 2010)
The company is continuously operating and challenging business environment with the current economic situation of the world, handling a complex set of issues to address to its business, customers, suppliers also it trades with environmental communities in the sector that company operates. The company also believes that there business is more important to provide customer relations and socially responsible and also it doesn't seems to have any conflicts between social responsibility and the company's business practices.
Customers- the company will work positively towards its customer and ensure to meet or exceed its customers' expectations providing or through better delivery of excellent product and services. The company have identified an opportunity to provide its customers to "develop a new animal welfare policy to improve, promote and protect animal welfare in relation to the products we sell including the development of plans to eliminate the use of wool from sheep that have undergone the 'mulesing' process. And the policy is also underway and to be launched in 2010" (www.next.com)
Suppliers- the company is focusing positively to handle its suppliers not only positively but also it is looking into the aspects such as social, ethical, and environmental impotents of its supply chain. In 2007 the company organized a awareness raising program to win the hearts of its suppliers. "In 2006-7, Next plc's ethical trade team developed a series of awareness-raising conferences for suppliers across its key sourcing countries. In total, it delivered six conferences to a total of 278 key suppliers in the UK, as well as India, China and Thailand. In addition, over 500 Next buyers and 300 technical and quality staff received similar training."
People- Next is working and provides the environment with lots of gratitude where the employees are supported and respected and treated fairly in workplace and taken care of them apart from this it is also to listen to them and motivate them to attain their full potential.
Environment- the company is working actively to provide a safety environment and trying to reduce the impact of its business on the natural environment. To safeguard the environment the firm trying to purchase renewable energy for its stores in Ireland according to Next plc it is trying to implement renewable sources the company is also analysing the remained waste materials contained general waste and trying to segregate and divert waste away by recycling and achieving long term aim of no operational waste. Through their strategic approach and updates to reduce waste it is visible on its advertising as well
Community- the company also focuses on more into community where it's working to deliver better value though community contribution and charity and other organizations. Next has continued it support the charity soul of Africa which has initiate a project to train the unemployed women. The company has been donating huge amount of money for the community well being also the registering into charities year by year increase in Next plc.
Sponsorship- Next is also towards sponsoring sport clubs and sports events as a part of it the company is one of the sponsor of Olympics 2012, also it sponsor some growing football clubs to improve their skills in the sport.
Effectiveness of Organisation's Activities of Next
There advertising and other activities are well developed to support the company their main concern is on promotional activities, in which the Next directory should concern more in promotional activities through internet as well as using other website to create and awareness.
It can also use other modes to create promotional activities to support its store using other disciplines. Whereas the online Next directory has been increasing in profits each year, the stores , mostly in terms of retail outlets were consistently having a decrease or loss in their financial performance. Although the success of the online marketing pathways is outside problem, the success of the retail store remains in doubt. "Next's retail environment, once seen as a selling point, now looks dated and its merchandise has erred toward the bland in its attempts to be all things to all people. At one time, Next was perceived as aspirational, but few consumers would view it as that today. The openings of its sales are incredibly popular, but the ensuing bunfights do nothing for its brand image." (Gemma Charles. 2007, April), the above statement clearly shows the that next merchandizing is not well enough for the present market environment, and due its ineffectiveness on retail store merchandizing the company is performing badly in the store business, since Next is mass company it should place its brand in a strong position if not the effectiveness of the brand will diminish in a period of time also like other fashion stores the company should use other effective ways of retaining its market share, selling designer clothes will be an advantage for the present fashion trend, if not constant visual advertisement is necessary for a company like Next. Apart from that the company should also look into other way of promoting its products such as improving its CSR and concentrating more on segmentation.
The company can hire a designer to design its clothing like Topshop does, because fashion seekers nowadays are more into designer wears therefore designer clothes may create good impression to its customers.
Also when using media sources to advertisements the company can uses its designer as a concept therefore it's would affect the customers, and attract them,
More bill boards should be planted with celebrities featuring a model for Next.
Organize their the store facilities and colour matches precisely, because customers should be convenient when roaming around the store as well as proper, concepts should be implemented based on the seasons
Proper themes should be created to attract the customers since its more towards CSR its can use animals as part of its theme for a period of time.
Since the company handling its own advertising sector, which is cost effective but on the other hand there may be loop holes therefore it can outsource to and advertising agency for a period of time.
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