Develop a Marketing Plan for a NEXT Group PLC for the next year/3 years - Marketing Essay Example
An organization has a purpose or mission, but over time it’s mission may become unclear as the organization floats new products - Develop a Marketing Plan for a NEXT Group PLC for the next year/3 years introduction. When management senses that the organization is drifting, it must renew its search for purpose. Successful companies continuously raise questions and answer them carefully. Many organizations develop formal missions statement that answer question. A mission statement is a statement of the organization’s objective, which accomplish in the larger environment.
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The NEXT PLC has a task to build, with the main focus of giving all of our customers what they deserve – The Best. Individuality, long experience, courage in development, and open-mindedness are our tools. The idiom “The Customer Is The King!!!” is, in our company, not simply a kind of marketing strategy – it is Tradition. In the following years The NEXT PLC will continue development of the NEXT Brand in the United Kingdom and Ireland. · Increase selling space in NEXT Retail outlets and Extend Directory market share. It also continues to be one of the UK’s most effective providers of call center services. This guarantees a financial basis of profitable growth, increasing value for our shareholders, and creating career opportunities and financial rewards for our employees 1.
Pulling together with a great team of people at all levels NEXT is determined to provide outstanding value for money to its customers. The mission statement of NEXT Group PLC is to improve customer service introducing new initiatives such as next day delivery as standard for NEXT Directory orders offered before 5pm. Customers may collect items at any of 460 stores nationwide. It has set up a new in-house delivery service to deliver large Home items with the ability at weekends. For ordering on-line, customers are able to check their accounts and make payments this way 2.
Financial Summery For Next Group PLC:
NEXT Group PLC is basically engaged in retailing, home shopping and customer services management. The Company’s administering segments include NEXT Retail, NEXT Directory, NEXT Brand, NEXT Sourcing (NSL), NSL has launching it’s trade in mainland Hong Kong, China, , Sri Lanka, Turkey, the Unite Kingdom and other locations, which are involved in the design, sourcing, buying, merchandising and quality control of NEXT products 3.
Next Group plc expects that annual profit before tax (PBT) for fiscal year ended January 2007 would be slightly ahead of market consensus, within the range of £463 – £473 million. Operating profits (EBIT) for fiscal year ended January 2007 are expected to enhance with in the range of 5.1% – 7.2%. On this basis earnings per share (EPS), It has been increased through share buyback policy and would increase in the range of 11.0% – 13.4% for fiscal year ended January 2007. Analysts’ estimates on an average were expecting the Company to report PBT of £460 million; EBIT of £490 million for fiscal year ended January 2007.
NEXT Group plc Announces Share Repurchase Program:
Next Group PLC declared that it has purchased for cancellation 484,668 ordinary shares of 10p each, at an average price of 1671.4486 pence per share 4. NEXT Group plc. is declaring an interim dividend of 15.5p, an increase of 10.7% over last year. This will be paid on January 2, 2007, to shareholders on the register at November 24, 2006. NEXT Group plc declared that Barclays PLC held 13,569,151 ordinary shares of 10p each of Next Group plc which represents 5.95% of the issued share capital 5. NEXT Group plc declared that Barclays PLC, as at June 12, 2006, held 17,474,481 ordinary shares of 10p each of Next plc which represents 7.45% of the issued share capital 6.
The company has obtained an adequate understanding of the customer base and its own competitive position in the industry, marketing managers are able to make key strategic decisions and develop a marketing strategy designed to maximize the revenues and profits of the firm. The strategy may aim for any of a variety of specific objectives, including optimizing short-term unit margins, revenue growth and market share 7.
The marketers identify one or more target customer segments, which they intend to pursue. Customer segments are often selected as targets because they score highly on two dimensions:
1) The segment is attractive to serve because it is large, growing, makes frequent purchases, and is not price sensitive
2) The company has the resources and capabilities to compete for the segment’s business that can meet their needs better than the competition, and can do so profitably.
The following points should emphasized with the objective of market overview
It will formulate strategy to establish and foster strategic alliances and partnerships.
Launch the channel strategies and programs that ensure customers have access to products.
Marketing Communications: It should improve a global communications strategy for Next Group products and solutions to improve customer 8.
Launch research strategy and engages business leaders to evaluate insights that help drive critical business decisions.
Chalk out a road map that takes Next Group PLC products from conception to launch, then monitors their impact throughout the product life cycle.
Marketing on database is based on the principle that through collecting and organizing information about your business, it can reduce the cost of your business’s marketing efforts and increase profit. a integrated database approach incorporates information about your products, suppliers, competitors, and other business areas.
Companies neglect to evaluate what database marketing resources It is already available before making expensive decisions. The following are steps should implement when creating a strategy for integrating database marketing into Next Group PLC:
1. Determine clear objectives for database marketing.
2. Evaluate external data sources, software and systems alternatives.
3. Conduct an internal audit:
4. Using the results of the audit, the evaluation and your budget constraints – choose your weapons.
Main Aspects of SWOT Analysis
An appraisal of an organization’s strengths and weaknesses in relation to environmental opportunities and threats is generally referred to as a SWOT analysis. The following analysis will look closely into the SWOT’s concept and criteria for successful and effective SWOT analysis. SWOT has a long importance as a tool of strategic and marketing analysis
The NEXT Brand is targeted at the top end of the mass market. Its well-established strengths are individual STYLE, good QUALITY and VALUE for money 9. The key for this success is that NEXT designs its own products and sells them under its own label. As one of the largest retailers, they use their extensive market overview to recognise changes in customer wishes and behaviours. Creating products under its own label allows NEXT to adept quickly to changing market conditions. This procures NE
XT PLC an invaluable advantage – saving time. The fashion industry is one of the fastest-moving markets. Adaptability, and therefore timesaving, is essential in a market where time decides between success and defeat.
Unfortunately, regular customers are sometimes obliged to buy in the stores of NEXT PLC’s competitors. The root of this weak point can be found in the incomplete product range. For example, NEXT PLC doesn’t realise the danger of not selling sports wear. In fact, if regular customers of NEXT PLC are interested in sports wear, they have to go to the competitors. This gives the competition a chance to convince NEXT customers of their advantages.
Secondly, customer footfall is a good way to increase sales because browsers looking for a specific article will often buy more than just that item. For example, a man who is only interested in sports wear may buy a gift as well 10.
On the other hand, if the man knows NEXT does not carry sports wear, he will automatically take his business elsewhere. This is why it is necessary to get him in the store. The device should be: “Come In and find Out!”
Times of social rethinking should be observed with attentiveness by NEXT PLC in order to make a profit. Nowadays, more and more people are becoming conscious about the significance of nature. Manufacturing with natural fibres and environmentally friendly raw materials is a good opportunity to promote the socially conscious reputation of NEXT, thereby increasing long-term success.
Individuality is a key word for profit. Latest studies show that the average body has changed. People are getting taller and heavier. The biggest ever study of the female figure showed that over the last 50 years the average British woman’s bust has grown by four inches, her hips by six inches, and her waist by eight 11. To adapt to these changes leads customers to recognise that NEXT PLC pays attention to them.
The biggest threats that NEXT PLC faces is companies that use a “Guerrilla Attack.” This means that discounters, especially big supermarkets that are not based on the same market as NEXT PLC, sell similar products. They offer these products for only a short period of time. For example, they sell for only one week at an incredibly cheap price and then they move on. The Tesco supermarket is selling the aforementioned Levi’s top-selling 501 jeans at £ 30, some £20 less than the High Street price 12. Consumers consciously decide to buy these lower priced items in lieu of higher quality, high-ticket products. This hit and run strategy leads to a big part of the demand being satisfied.
Marketing Objective and Strategy:
Marketing is a social & managerial process by which individuals & groups obtain what they need & wants through creating &exchanging products &value with others. Marketing Objectives and strategies of Next Group PLC: The marketing that the company would like to attain during the plan’s term & discusses key issue 13. There are a lot of objectives of marketing for Next Group PLC. Some points are given below:
Dividing a market into district group of buyers on the basis of needs and behavior.
The Next Group PLC process of evaluating each market segments attractiveness and selecting one or more segments to enter.
The Next Group PLC arranging for a product to occupy clear distinctive and desirable place relative to competing products in the mind of target consumer.
The Next Group Plc set of controllable tactical marketing tools-product, price, place, and promotion.
Managing marketing effort;
The Next Group PLC wants to design and put into action in the marketing mix that will best achieve its objectives its target markets.
It is the Next Group PLC marketing by which the business unit hopes to achieve its marketing objectives.
The Next Group PLC managing the marketing begins with a complete analysis of the company’s situation. The company must analyze its market and marketing environment find attractive opportunities and avoid environment threats. Its must analyze company strengths weakness.
The Next Group PLC strategic planning, the company decided what it wants to do with each business units, marketing planning involves deciding on marketing strategies that will help the company attain its overall strategic objectives.
The Next Group PLC process of measuring and evaluating the results of marketing strategies and plans, taking corrective action to ensure that marketing objectives are achieve.
A comprehensive, systematic independent, and periodic examination is required for Next Group PLC’s environment objectives, strategies, and activities to determine problem area and opportunities to recommend a plan of action to improve the company 14.
The Next Group PLC managing the marketing function would be hard enough if the marketer had to deal only with the controllable marketing mix variables. But the company operates in complex marketing environment, consisting uncontrollable forces to which the company must adapt.
Responding to the marketing environment:
The NEXT Group PLC view the marketing environment as an `uncontrollable” elements to which they must adapt. They analyze the environmental forces and design strategies that will help company avoid the threat and take advantage of the opportunities 15.
3-Year Forecast And Budgets:
Financial forecasting is an integral part of financial planning. It uses past data to estimate the future financial requirement. A financial planning model establishes the relationship between financial variables and targets and facilitates the financial forecasting & planning process. A model makes it easy for the financial managers to prepare financial forecasting.
Here is the model –
Profit & Loss Statement Equation Output
1. Sales S = S0 ( 1+ g) S
2. Variable Cost S* vc VC
3. Fixed Cost (1 + ¦c)* F0 FC
4. Depreciation dep* FA SEP
5. Earning Before Interest & Tax S – VC- FC- DEP EBIT
6. Interest i* D INT
7. Profit before tax EBIT- INT PBT
8. Tax T* (EBIT- INT) TAX
9. Profit after tax PBT – TAX PAT
10. Dividend p* PAT DIV
11. Retained earnings PAT- DIV RE
Source & Use of Fund
12. Profit after Tax Source profit & loss PAT
13. Depreciation Source profit & loss DEP
14. Operating Cash Flow PAT + DEP OCF
15. Less: Dividend p* PAT DIV
16. Internal Funds OCF- DIV IF
17. External Funds TSF – IF EF
a) Borrowing EF – FI AD
b) Equity issues E – E0 – RE EI
18. Total Source of Funds (TFS) TSF = TUF TSF
19. Change in Net Working Capital NWC – NWC0 ANWC
20. Fixed Assets Investment FA – FA0 DFA
21. Total uses of fund (TUF) DNWC + DFA
22. Net working capital w* S= NWC0 + DNWC NWC
23. Fixed Assets fa* S = FA0 + DFA FA
24. Total Assets
Liabilities & Equity NWC + FA TA
25. Debt d* TA = D0 + DD D
26. Equity (1-d)* TA = E0 +E1 + RE E
27. Total liabilities & Equity 16 D + E = TA P
Among three year, we will present the financial forecast of 2006 form the Annual Report of Next Group Plc and calculate the Budgetary Forecast for 2007 & 2008 using 2006.
Growth in sales is an important objective of Next Group PLC. An increase in a it’s market share will lead to higher growth. The Next Group PLC would need assets to sustain the higher growth in sales. It may have to invest in additional plant and machinery to increase its production capacity. Also, it would need additional current assets to produce and sell more goods services. The Next Group PLC would have to acquire raw materials and convert them into finished good after incurring manufacturing expenses. It may have to sell goods on credit because of the industry norms or to push up sales 17.
1) Hitt M. A. Ireland R.D. & Hoskisson R. E. (2004), “Strategic Management Competitiveness and Globalization”, Edition 4th, South-West Thomson Learning. Page 238 242
2) Stoner J. A. F, Freeman R. E. & Gilbert D. R (2006) “Management” Ed. 6th, Prentice Hall, Page 405-411
3) http://www.next.co.uk 18
1 NEXT Annual Report, 2000
2 NEXT Annual Report, 2005
3 Next plc Issues FY 2006 Guidance; PBT Guidance Above Analysts’ Estimates 2007 Jan 4 7:00 AM
4 2006 Jul 21 3:36 PM
5 2006 Aug 30 1:35 PM
6 2006 Jun 15 10:39 AM
7 long-term profitability & other goals also
8 awareness and impact sales
9 NEXT Annual Report, 2000
10 Gift Concept
11 Arlidge, June 2000
12 Key Note, 2000
13 affect their attainment
14 marketing performance
15 environment provides
16 Financial management P-566
17 Analyzing a fund’s investment options