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Free «Report on Esprit Co.» Essay Sample

This report is about the esprit corporation, it's a well known manufacturing corporation not only in UK but also at world level. The first portion of the report is about the reasons behind the fall in sale of esprit in the year of 2009. And the next portion of report is about the marketing strategic planning of company in china. This report will help us to plan organizational activities in order to minimize the affect of environment, and also help in establishing business at international level in the biggest markets of the world.

Esprit is an international lifestyle brand for youth offering smart & stylish, luxury but affordable and bringing fashion and style to youth life. The Esprit Group is operating more than 800 well managed retail stores chain worldwide directly and distributing its products through more than 14,000 wholesale points internationally, it captured total selling space of more then 1.1 million square meters in more than 40 countries of the world.
Esprit offered license for its logo to third-party licensees that are offering products bearing the same Esprit quality and essence to consumers at international level. Esprit is also operating in cosmetic brand which includes cosmetics, skin care and body care products with the name of Red Earth.
Since 1993 Esprit is listed with Hong Kong Stock Exchange and is a essential stock in the Hang Seng Index, MSCI Hong Kong Index, FTSE All-World Index for Hong Kong and S&P/HKEx Large Cap Index and S&P Asia 50 Index. In short Esprit is a successful organization not only at national level but also at international level, keeping its customer satisfies by providing high quality and stylish product in a very large variety. 

Reasons behind fall in sales in 2009 in UK

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During financial year 2009, UK economy and the economy of many developed countries were badly affected by the financial crises. These financial crisis leads to affect overall business position in those countries. Same was the case with UK economy which in fact came up with many outcomes and one among them was the decline in sales and trade deficit of goods of various companies. Among those companies, Esprit was one whose sales were intensively affected during these crises. It was the crisis era for many economies not was the case with one. Many general reasons were identified and found which were the responsible for this crisis. Among them, some important reasons are as stated below.

Due to bad economic conditions in country, the people of the country were suffering from problems like decrease in per capita income, increase in unemployment, reduction in wage rate, decrease in the purchasing power of the people, increase in the production cost of the manufacturing concerns and policies of the government to balance the budget deficit of the country etc. These issues on one side creating problems for people, low purchasing power affect the sale of the esprit in UK that's why there was a significant fall in the sales volume of the company in 2009, on other side these conditions and policies of the government increases the cost of production of company it directly affect the sales volume of the esprit in UK.

One other reason behind the significant fall in sales volume of the company is due to the strict policies of the financial institutes of the country, in order to control the financial problems in country they introduced strict policies regarding the monetary matters in UK. UK stock markets were not performing well at that time, due to the poor performance of stock market investors was hesitating to invest in companies and borrowing at cheap rats under the threat of S&P sound alarm over British's ballooning deficit in country. Lack of investment was creating problems in economy and it also affect on the sales volume of the esprit.

An other reason behind the significant fall in sales volume of the company is also due to late responsiveness to environment, change in environment was demanding the quick decision making regarding esprit's business strategies, but response of the management was very late that's why esprit faced significant fall in sales volume in 2009.

In response to above issues, many officials responded in the way stated below.

1. Credit rating Company in UK passed the comments that the size of budget deficit of UK resulted in decline in prized AAA rating. This statement by the credit rating company badly affected the credit worthiness of Britain (Seagar Ashley, 2009).

2. In response to the above statement given by the credit rating company about UK's credit worthiness, UK's Shadow Chancellor, George Osborne stated that they must take it seriously the massage given by the internal credit rating agency. If they don't start dealing with these debts, they would face the downgrade (Seagar Ashley, 2009).

3. In response to the shadow chancellor's arguments, the Brown retorted and argue that this is not the case in UK only, but many developed economies of the world are facing the same situation and he was on the believe that the steps and measurements taken in order to get rid of from debt deficits in budget, they would be able to deal with these crises and would be able to reduce them up to 50 percent (Seagar Ashley, 2009).

4. Immediately after the warning by the Fitch, the pound falls drastically but recovered most of its decline after the play had been closed. The sovereign debt rates head of Fitch was confident, as he said, the Britain would soon be able to spell the details out abut the budget deficit. Starling also fall and traded at $ 1.67 at the end of the day (Seagar Ashley, 2009).

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5. The total trade deficit including the trading services surplus was witnessed to £3.5 billions (Seagar Ashley, 2009).

6. The worst situation witnessed was the oil deficit which was witnessed to £ 500 millions (Seagar Ashley, 2009).

7.  Britain suffered the worst deficit and recorded to £ 14.8 billions, which was almost doubled than that was recorded earlier in the year (Seagar Ashley, 2009).

8. Goods trade deficit in September came to £ 7.2 billions which is about £1.1 billions more than that was recorded in August (Seagar Ashley, 2009).

Segmentation, Targeting and Positioning Strategies for Esprit to adopt for China

Segmentation

Segmentation is a process of dividing the market into different subsets of consumers on the bases of common needs or characteristics. Before targeting consumer to home we are going to serve, we need to select consumer profiles in order to know the common needs of the group, on the bases of these needs we design our products. We have so many bases to divide the market into different clusters, like geographic, demographic, psychological, and psychographic, and use related, benefit and hybrid segmentations.

Esprit is offering a large variety of products for a customer, that's why I recommend Hybrid Segmentation for Esprit. Hybrid segmentation is basically a combination of demographic and psychographic profile of consumers; in hybrid segmentation we use different combinations of market segmentations. Now a day marketers are using different combinations of segments in business rather then relying on a single segmentation base. Companies are serving different type of consumers profiles of different characteristics, in order to satisfy the consumers with our market offers, we have to divide the market on the bases of similar needs and characteristics, due to serving different type of consumers companies normally relying on the combinations of segments and hybrid segmentation is a best strategy to serve market place.

Because Esprit is offering products to a large number of consumers in a market, that's why hybrid segmentation strategy is suitable for esprit in China's market. In hybrid segmentation Esprit should use psychographic, lifestyle and demographic profiles of consumers and Geodemographic segmentation.

In Psychographic Segmentation Esprit should use outdoors enthusiasts and status seekers, in demographic segmentation Esprit should use age segment, sex segment, income segment (Fadia Naz, 2007). Because Esprit is offering stylish products for kids of 0 to 14 years old, for mums and household wives for home products, for youth male and females which like fashion and want to become stylish, like newness in there life, they are highly adaptable for fashion, style and new trends in market, most of the youngsters are innovators of the society that's why they like to use new and innovative product in their daily life. On one side it's using life style as a segment with using the age factor also as a segment with gender also, with the concentration on the income to the market place. In geodemographic segmentation Esprit should use so psychographic, lifestyle and demographic profiles of consumers and Geodemographic segmentation is a useful strategy for Esprit in the market of China with focus on regions and seasons of the country.

Targeting the consumers

After selecting the segmentation we target the consumers from those segments. Target market is the group of consumers to whom we are going to serve with our products and services (Leon G. Schiffman & Leslie L. Kanuk, 2007). These target market are from segments which we have selected in above discussion. Now I shall discuss these target markets one by one in brief (Fadia Naz, 2007).

In Income segment Esprit should focus on the middle income group and high income group. If we talk this in the form of classes then middle class and upper class, because these are the people who can afford the products of Esprit, so under income segment these people are our target markets (Leon G. Schiffman & Leslie L. Kanuk, 2007).

In Sex or Gender segment Esprit is producing a large number of products for both gender males and females, so both males and females are the target market of Esprit (Fahad S. Muneer, 2008).

In Age segment Esprit is producing a large number of products for different age groups, I will discuss these one by one, for kids, esprit is producing number of products for babies, mini and EDC youth groups almost all kids from 0 to 14 years old. So these kids are the target market of esprit in directly because the purchase decisions of kids are taking by the parents especially moms so moms are direct target market of esprit, on other side esprit is also serving youth, the teen agers, college and university youth because these are the fashion lovers like different new trends in market and lifestyle these are also the target market of esprit (Leon G. Schiffman, 2007). Esprit is also producing a large number of products for mums and house hold, so in this case mums and house hold wives are also target market for esprit (Leon G. Schiffman & Leslie L. Kanuk, 2007).

In geographic segment, in esprit should focus on the main cities of the China in start so the people of the big cities of China are the target markets, because new trends and fashion always start from big cities of the country (Fahad S. Muneer, 2008).

Positioning of Esprit:

The Esprit is one of the large and well known companies not only of UK but also in world, its producing large number of products for its consumers all over the world. Its offering high quality products to consumers according to new trends, lifestyles and fashion of market place. It also providing support services to its consumer like online shopping facility, product delivery, product returns, product replace, product claims etc. so on the bases of product quality, product variety, product distribution, product differentiation, product support services and analyzing the market of China, I suggest Esprit should be at top means its positioning in China market is a number one company. 

Conclusion:

Esprit is an international lifestyle brand for youth offering smart & stylish, luxury but affordable and bringing fashion and style to youth life. The Esprit Group is operating more than 800 well managed retail stores chain worldwide directly and distributing its products through more than 14,000 wholesale points internationally, it captured total selling space of more then 1.1 million square meters in more than 40 countries of the world.
In 2009 there was a significant fall in the sales volume of the company due the external environment of the country. The political and economic environment was badly affecting the performance of the company in form of fall in sales volume. On the other hand late reaction from management side also was the cause in sale decrease.

In order to establish business in China esprit should design marketing strategies properly, hybrid segmentation is recommended for esprit for China. In Hybrid segmentation a combination of demographic, psychographic and geographic profile of consumers should be used as segmentations. Upper class, middle class, kids, teen agers, youth of college and university including males and females who are style and fashion lovers, mums, house hold wives should be the target market of the esprit in China. Esprit should be placed as top of the companies in its industry in the markets of China, because of its high quality, differentiated featured products with support services.

   

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