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Austin Reed Group Plc: Understanding the Environment

Austin Reed Group clothing company has been operating successfully in the past years; this is attributed to the well-set standards by the west. Due to this success, the company wants to venture into more International markets like Asia and Africa to seek more opportunities to market and offer its products and services. The company’s market environment is largely characterized by very competitive competitors whose aim is similar to that of the company which is to win potential clients and maintain the loyalty of the already existing customers. With the competition so stiff, the company is implementing and executing new strategies of marketing their products and services and hence attain the main objective of company growth. The marketing environment of the company has been very essential because it has been influencing and shaping the company’s direction, determining and describing the relationship between the firm and its customers.

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Before making entry to any new markets; the company analyzes the market segments it wishes to venture into, this is usually to enable the company to come up with the best way on how to enter the market and on how to deal with the challenges that come with a new entry, for instance, foreign market barrier and the risks involved.

The company aims at providing designs for its customers of all ages, and even though it relies heavily on information such as the customer’s needs and demands to make designs, there are some other outside aspects that it has to consider for it to compete successfully. These factors are political, economical, socio-cultural, and Technological factors.

The political environment influences the activities of the free market as well as the spending trends of consumers. The company should ensure that the political environment in which they are operating is stable to avoid any conditions that may lead to the occurrence of losses. The subsidiaries should more so be very careful, especially those operating in undeveloped countries, or the countries with a very poor political environment. The company should keep an eye on the tax regimes together with the government regulations to gauge whether the tax laws will be affected. Moreover, it should follow the Government’s rules and regulations for it to be considered as a legal entity legal and be allowed to carry out its activities. It has to abide by the Government’s tax, employment, and environmental laws, as these may influence consumer behavior. The company’s success also has been depended on the stability of the Government, so before making any major investments, the company should analyze the current political situation in the country.

When importing and exporting raw materials and finished goods, it should always make sure that trade barriers and tariff restrictions are complied with.

Economic Factors

The company should not only consider the economic situation of its country, but also that of its export buyers. It should make sure that the country’s economic situation is stable because it will greatly affect its performance. The management should first evaluate and familiarize itself with the country’s interest rates, inflation, and employment rate, its Gross Domestic Produce, and even the exchange rates before making any major investment decisions. Putting these economic factors into consideration should make the decision-making process easier for the management. The country’s economic growth and stability should always be considered for the company to run its activities successfully and achieve its goal of corporate growth. Since the company operates also in external environments, such as those of its export buyers; it should ensure that it complies with the economic factors, laws, and regulations set by the other market. Since the company has subsidiaries in other countries, it should also evaluate the current economic condition of that country to avoid conditions that may lead to making losses, thus ensuring its success.

Social-cultural factors

Such factors include culture, religion, social class, reference group, demographics, and also geography. The company should consider these factors, both within the country and for the export buyer’s environment that it operates in. Respect the culture of the people surrounding it should be among its priorities for maximum customer loyalty. It should also consider designing clothes for people of all social classes and different lifestyles. This is because consumer’s income greatly determines their buying behaviors. Furthermore, if the company’s clothes are preferred and worn by many celebrities, then it is definite that consumers will prefer to wear such clothes, thus improving their market. Demographic factors, such as age should also be considered. The company should design clothes for people of all ages to keep up with the fashion, fads, and preferences of all age groups. Another factor that affects the social-cultural factor is geography, where people from different parts of the world have different buying behaviors. For example, people from Europe will dress very differently from those in Asia or even Africa. This can be attributed to such factors as the different cultural backgrounds and the climate. The company should also consider the population growth rate and thus decide to design more clothes with increasing population.

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Technological Factors

Since the company is facing a lot of competition from other clothing companies, it should ensure that its technology is updated. Technology, in this instance, refers to the laborer’s skills and the machinery used in the organization. To achieve maximum customer satisfaction, the company must incorporate new technology for it to achieve efficiency, effectiveness and make it in a highly competitive environment. The company must consistently acquire knowledge on the rate at which technology in the country is changing and familiarize itself with the current and emerging distribution and communication channels. It is also very important for the company to incorporate and introduce new clothing designs as often as possible, to keep up with the changing consumer’s tastes and preferences, and also to beat the competition in the market. Furthermore, the company must engage itself in intensive training of its employees, to ensure they are highly professional in their work. It must evaluate the barriers of entry that exist before expanding into new markets. Basing on their production level, the company should decide whether to outsource their production, but they have to weigh the advantages and disadvantages of outsourcing before making this decision.

The company is one the leading companies in producing Men’s as well as female’s garments. It also has markets for its products on the international scene with products being sold in such places as Asia and America.

Segmentation Methods

Market segmentation refers to the breaking up of the single heterogeneous market into smaller homogenous subdivisions that have unique characteristics based on consumer trends and buying behavior. Geographical, demographical, or psychographic factors also feature prominently during targeting decisions. To market its products successfully, the company has been using various segmentation methods. The company uses geographical segmentation in selecting a suitable geographical location that it intends to market its products. Geographic segmentation depends on factors such as climatic conditions, demographics as well as population growth pace. This explains why the company has targeted so many geographical locations from all over the world. Variables like age of consumers, ethnicity and cultural orientation, education standards, gender, career, earnings, and family status are also important in targeting. This greatly influences decisions like designing, where different designs are made for different people. Psychographic segmentation is the other method used in market targeting and is dependant on the standard of living, attitude as well as a lifestyle of the consumers. Behavioral segmentation on the other hand depends on such factors as price sensitivity, rate of use, and brand loyalty. Others include distribution segmentation whereby selecting different distribution channels to reach different customers, they sometimes sell through the supermarkets using one brand name, and they can also sell to merchandisers under a different brand name than the one of the supermarket. This is normally to meet all customers’ needs and demands.

References

  1. Kathleen. F. (1998). Apparel Technical Services. The Entrepreneur’s Guide to Sewn Product Manufacturing.
  2. Don, E.S. Dennis G. M. William P. B. (1984.). Strategic Advertising Campaigns. Virginia: Published by Crain Books,
  3. Internet centre for management and business Adminstration, Inc (1999-2007). Quickmba knowledge to power your business.
  4. Michael.S. & Barrie.S.T. (2000).Twentieth Century Industrial Archaeology. Published by Taylor & Francis
  5. Stephen.A. (1999).when London Calls: The Expatriation of Australian Creative Artists to Britain. London. Cambridge University Press

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