The main motive of an organization is to earn profit by satisfying customer demands and make a better position in the market. In this article, we will critically analyze the Marketing Strategy of PRADA in UK. To grab customers’ attention and make a secure place in the competitive market there is no other option rather than marketing. Marketing helps an organization to identify target customers and their needs and wants and try to supply their required products according to their demand.
Marketing Strategy of PRADA in UK
Marketing does the foremost works of a company that stimulates one’s business and drives sales of its products and services. The marketing department performs all the key responsibilities starting with marketing research and ends with sell products to the customers (Ferrell, 2016). For the requirement of this assignment, the researcher is hired as a marketing officer who has to do a marketing environmental scan for the clothing industry of UK. According to the requirement, the researcher has chosen Prada as a clothing company and start its business in UK. The upcoming part of this assignment will be discussed in the overview of Prada, PESTEL, SWOT analysis, marketing mix and market segmentation of Prada. At the end of this report, a recommendation will be given which will help Prada to be the market leader in the UK clothing industry.
Organizational Overview Prada
Prada is mostly famous because of its luxurious fashion accessories and well known as a prestigious and expensive brand in the world. It was established in 1913 and Mario Prada and his brother Martino were the founders of it. Almost 106 years ago it started its journey as a leather goods shop with the name of Fratelli Prada. All over the world around 618 branches are distributed and more than 12,414 employees are worked on it. It sells premium qualities clothing, fashion accessories, jewelry, perfumes, cosmetics, spirits, cell phones, watches, wines, etc. which are unique as well as expensive. From the very beginning of the journey, Prada followed different marketing strategies to cope up with the competitive market and successfully they have achieved their position in this industry. Louis Vuitton, Chanel, Tommy Hilfiger, Gucci, Armani are the top competitors of Prada.
Macro Environmental Factors that Affect Prada in UK Market
Prada is a luxurious Italian brand that has successfully done its business for the last 106 years. To sustain in this competitive industry they have to use so many marketing strategies and tools. Since they have decided to enter in UK clothing market and for this reason they have hired a researcher as a marketing executive to make a report based on the expansion of their business in UK (Hudders, 2012). In this respect, PESTEL analysis is done in the following to make effective decisions.
PESTEL Analysis of Prada
PESTEL analysis is used to collect valuable information about the external business environment. It helps to identify the challenges what the company may face to operate their business in this new area. As a renowned clothing brand, Prada should be aware of the UK macro-environmental factors.
The political environment highly impacts on a company’s profitability. Before entering UK business market Prada must have a clear idea of the political environment of that country like taxation procedure, government regulation on business, political instability, corruption and so on.
The political environment of UK is almost stable and Prada will feel happy to operate their business here as the corruption level is very low. In recent times for the BREXIT, UK Political market is slightly unstable but this is a very short time and this situation is quite manageable (Jones, 1996).
Besides, the government rules and regulations are friendly to do any business in this large market. The tax is high in UK market but Prada should compromise the higher tax because other things are very favorable to earn high profitability from this market.
Before entering a new market Prada should know about all the economic factors like inflation rate, interest rate, structures of the market, the exchange rate of foreign currency, employment rate, etc. Though UK is an open market and operating any business is easy here, but it is good to have a clear idea about all factors of the economic environment.
To operate any business, employers face a money crisis and then they have to borrow money. And borrowing money is very easy in UK market as the interest rate is very low here. So Prada gets opportunities to borrow money easily and for this money, they have to provide a small amount of money to the bank as interest purposes (Kampanje, 2012).
A good employment rate indicates people able to buy more and it also refers to the higher profitability of a business. As the employment rate I higher here, Prada will get a good market here.
Social environment indicates culture, religion, social status, attitudes of people, values, behaviors and so on. As most of the people of UK are employed and they maintain their class as well as enjoy using a luxury product. So Prada will do better in UK market.
In this technological era, technology brings revolutionary changes in all sectors of life. Prada operates both stores and online services. So Prada needs advance technology to do use new innovative ideas, planning strategy, and online business activities. For this reason, UK market is suitable for Prada as this market is the technological-based market. All types of modern technological facilities are available in this market.
Environmental friendly products are accepted by the people of UK as they are very cautious about their environment. For this reason, Prada should follow all the rules of the environment imposing by UK government. If Prada won’t follow that it would face a huge loss in the market (Palmer and Hartley, 1999).
UK government is very much strict in maintaining rules and regulations of the country. So if Prada wants to do start their business in the UK, it must obey all rules and regulations of the country.
SWOT Analysis of Prada
SWOT analysis is an important tool to identify a company’s position in the competitive market. To know the company’s strengths, weaknesses, threats, and opportunities in a market SWOT analysis is done. For this reason, Prada should do a SWOT analysis to know its current position in the market before entering the United Kingdom market (Benaven, n.d.). Following is the SWOT analysis of PRADA:
- To expand into a new project is quite easy for Prada because it has a strong free cash flow model.
- Have a high brand image for the upper-class people.
- Having a strong workforce and they are highly skilled and properly trained for achieving organizational goals.
- Go to Market Strategies are used for Prada’s product and they get success in this strategy.
- Technologically advance company.
- Maintain reliable relationships with raw material suppliers and create loyal customers by satisfying their customers’ needs.
- Successful in the industry for product innovation.
- The cost is higher than its competitors for the training and development session. They have to bear a high attrition rate in the workforce.
- The planning of financial items is not done effectively.
- A higher liquidity ratio indicates there is a mismanagement of assets.
- The day’s inventory rate is high compared with other competitors. The reason is that they are not good at future forecasting.
- There is a gap in their product range for which competitors can easily enter this market.
- Stable free cash flow gives opportunities to enter into a new market with a new product range.
- Opportunity to adopt new technology and emerge a new market.
- The new trend in customers’ behavior helps to build new revenue streams and add diversified new product categories.
- More liquid asset refers to invest properly in a new market and expand their business.
- Intense competition has increased for the last two years which decreases both profitability and sales.
- The supply of new products is not a regular basis. So the market loses its increasing trend.
- The global market needs a more skilled workforce than they have now, it a warning for the company.
- Target customers are only upper-class people.
Market Segmentation of Prada
All the business need to divide their market into different parts based on their need, demand, opportunity, etc. which is called segmentation. It helps to divide the markets into smaller portion depending on the different customers profile such demographic, psychographic, behavioral and geographic location, etc. (Diaconu and Cerceloiu, 2017)
The market can be divided into the following four segments. They are:
- Geographic Segmentation
- Demographic Segmentation
- Psychographic Segmentation
- Behavioral Segmentation
All the companies depending on their needs and requirements design their segments and unlike others, Prada has also their segmentation strategy given below:
Prada segments their markets based on different kinds of factors such as; age, gender, education, religion, income group, etc. Here some of their segmentation is given below:
- Gender: Prada is a luxury clothing brand so they can segment their total market based on male and female and add different product line variety in the segment.
- Age: Based on different age groups Prada mostly should target the professional people who can afford all kinds of luxury goods for matching their lifestyle. The age group starts from 30-55years. They also target some elite class teenagers and rich people of UK aged around 14-65years.
- Income: Income is a very important factor for buying luxury cloths. So they earning customers of Prada need to earn and habituated to spend a huge amount of money. Otherwise, the group will not be profitable for the business (Diaconu and Cerceloiu, 2017).
Prada should also focus on the gifts items for the higher class and the wedding dresses for the elite class people. They need to produce different luxury goods for the rich class people.
Prada can also focus on the psychographic segmentation of the people. They can focus on their customers’ lifestyle, social class etc.
The UK market for luxury clothing should be divided based on the elite and rich class people. Prada need to create a niche for fixing their segment and they should only focus on the people who really spend a huge amount of money on their attire and cloths. This is only possible if they target based on the social class of the UK market (Iacobucci, 2018).
Prada’s designer clothing are very unique and high quality. They design their products for fashion-conscious, classy and quality with unique taste lover people. Sp Prada designs their products in such a way which will only attract those people who love different things and ready to pay for it. So many celebrities, players, fashion bloggers, icons and business tycoons are interested in Prada’s product.
Geographic segmenting of the market can be divided into different regions, cities, states or countries, etc. Prada has physical stores in USA, Canada and most of the European countries. In these countries, all the elite and high-class people are more in numbers and they buy are lots of luxury products. Prada should also target different regions of elite class people with their online services.
Behavioral segmentation can be decided based on the loyalty towards the brand, usage rate, customer’s response, etc. to determine the pattern of the segmentation. As Prada has already created a brand image and permanent brand value in people’s mind it is easier for them to target similar kinds of people towards their brand (Iacobucci, 2018). Most of their customers feel connected to their brand and products for their excellent service with premium quality assurance.
Targeting customers is done in three different ways and they are:
- Undifferentiated Approach
- Concentrated Approach and
- Multi-Segment Approach.
The customers of Prada focused on both males and females. They set their target customers based on their attractiveness among the people of the elite and rich class. They sell their variety of the luxury of the products from different outlets and try to capture almost all age groups of people for clothing. But in the case of UK market, it has seen that young professionals and youngsters like and admire their luxury clothing line (Kotler and Armstrong, 2012). So they have fixed their target market from the age around 15- 45. In these ages, people spend their money more on unique and expensive clothing lines as well as in their lifestyle. They try to maintain different clothes and outfits for different purpose so it drags them more to the luxury clothing stores and they prefer Prada to get the best items with the best quality in a premium range of price.
Positioning is a way to place a specific brand in customers’ minds in such a way so that whenever they want to think something related to the product they can only think about that specific brand in their mind. Prada has already an established brand image in its loyal customers’ mind and the customers visit them for specific luxury clothing lines. They are prestigiously known for their finest quality with justified price, premium design, and fabric with a very amiable and shopping friendly environment (Kotler and Armstrong, 2012).
Prada provides its best service by their sales assistant with premium quality products. They are very unique, masterpiece and extraordinary to capture their customers’ minds easily. Though the price is higher still all the rich and elite class people consider Prada as their one of the finest choice for shopping in UK.
Marketing Mix of Prada
Prada has to design their own customized marketing mix to retail their products so that people can differentiate their brand from other luxury clothing stores and find the best quality product from at their convenience. Here the marketing mix of Prada has given below:
Prada is offering its customers the premium quality of the products. For that the top management to bottom workers of the brand works really hard and with proper dedication, they try to provide their best service and effort throughout their clothing design and manufacturing. The brand is popular for its luxury designer clothes and accessories, shoes, bags and pieces of jewelry (Kotler and Armstrong, 2012). All the products are very unique in terms of design, quality, and price. Prada tries to make their product more attractive and sophisticated with the help of advanced design creation and technology. All the products are not only best in quality but also excellent in case of providing comfort.
Prada design their products to charge a premium price for their customers for their uniqueness, delicacy, and quality. The brand image of Prada is very high in the market place and loyal customers of Prada never think twice about paying these high prices. The brand is extremely lovable among the elite class people of the UK. Moreover, Prada is very sensitive and careful about their quality and design and never compromise product quality or customer service for pricing lower in any way (Rosenbloom, 1976). Rather they provide sales to the people who want to buy from Prada at a little cheap price than their actual prices.
Prada outlets are mostly found in big cities and high profile shopping areas. The outlets are very well decorated, posh, and classy with excellent interior decoration. All the outlets are very exclusively designed and well maintained by the amicable sales assistants. Prada also sells its products online and their sales are increasing all around the world among the elite class people and getting excellent from their clients (Rosenbloom, 1976).
In the case of promotion Prada tries to attract more elite customers with their unique advertisements and large billboards in busy places. They also advertise their products in different fashion magazines with some leading fashion icons, actors, actresses and some inspirational personalities from different fields of interest (Zhang and Cude, 2018). Their online website is also well designed and portrayed with their
Prada is a very prestigious, well known and renowned brand so their target group of customers is also selected from a niche group of people. They maintain a high brand image and excellent quality for their high income and elite class rich people. The brand is trying to maximize its profit to become the leader in the luxury clothing industry by expanding its business in UK (Zhang and Cude, 2018). Here some of the recommendations are given to make Prada popular and better established in people’s minds and stand out in a better position from their competitors.
- Prada should increase their geographical location and outlets to reach more customers. Middle East, UAE, Saudi Arabia, Indonesia, etc. can be some excellent choices for them to start their outlets and get huge profits from those places.
- They need to increase their digital presence and focus on online marketing more to grab all elite class people around the world. Prada needs to interact more with their virtual customers to increase their profit base and serve more people.
- They also should create alliances with some strong brands of the world such as; nine west Cosmopolitan, Vogue, etc. and sponsors some world-famous events such as; world cup cricket, football, concerts, business summits, high-class conferences, etc.
- The brand can also introduce sale offers, occasional discounts and other special offers for the people to get attracted to the brand.
Overall, it can be said that Prada is a very high-class brand in the luxury clothing market. Now they should focus more on promotional strategies and online marketing for getting more customers (Zhang and Cude, 2018). They can also introduce new product lines to make them affordable to the higher middle class and middle-class people as well to increase their customer base and profit as well.
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