As competition increases in the retail consumer markets, it becomes increasingly necessary for businesses to examine the marketing environment.
The following explores B & Q brand, which is a home improvement retailer in the UK. The company functions as a subsidiary of the larger Kingfisher Plc. The report covers the history of B & Q as a company. A macroenvironment analysis and a microenvironment analysis follow this. The analysis models are critiqued based on their application to the market needs, with recommendations for improvement.
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B & Q Company
Back in 1960s, home improvement was a pastime for the minority. Professional building supplies were mostly located at builder’s merchants and service provided by large stores was intimidating to the average DIY’er. The first B&Q was opened by Richard Block and David Quayle (whose surname initials later provided the company name) in Portswood Road, Southampton, in Hampshire in 1969. Its mission was to bring value, longer opening hours and a broader product range to everyone (B & Q PLC 2007). By 1979, B&Q had a total of 26 stores (B & Q PLC 2007).
Through the early 1980s, B&Q grew rapidly and became part of the Kingfisher Group (B&Q’s parenting company), and by the end of the decade B&Q had expanded to 280 stores and offered customers larger stores and even greater product range (B & Q PLC 2007). In 1995, the first larger format B&Q warehouse store opened and B&Q began opening for business on Sundays (B & Q PLC 2007).
The first store outside the UK was opened January 1996, in Taiwan. In 1998, B&Q merged with France’s leading home improvement retailer, Castorama, to become the largest home improvement retailer in Europe (B & Q PLC 2007).
B&Q adapted a click-and-mortar approach to stay up to date with technological changes. B&Q’s Web site, www.diy.com, has been transactional since early 2001, providing access 24 hours a day, 7 days a week, offering products, expert advice, inspirational room ideas and ‘how to’ guides, as well as general information on stores (B & Q PLC 2007).
The average visiting number on the site has increased tenfold since that date. Their research shows 60,000 to 600,000 visitors a week, 90% of whom visit a store, and 12% of store visitors have already used the site for research prior to their visit (B & Q PLC 2007). This demonstrates a good cross over between the virtual and physical stores (B & Q PLC 2007).
B&Q is continuing to evolve its product offer, providing the broader range of products needed to complete home improvement projects and the associated finishing touches, along with existing core DIY products. A wider range of products are available through special order, where goods can be ordered in-store, from a catalogue or online and delivered directly to the consumers home.
The marketing macro-environment (Kotler and Keller p 77 2003) is understood as the major forces that exist outside the business domain. These are the forces that the company must function within, but may have little control over. Kotler and Keller (2003) identify the macro-economic forces as the PEST analysis, which is compromised of political, economical, social and technological forces that place pressure on the business.
Organizations today are subject to an increasing number of regulations that entail compliance. Government regulations are sometimes threatening mechanisms for value representation and virtually no support to communication processes that create win/win situations where multiple stakeholder and shareholders can successfully pursue their mutual interests (Deetz, 1995).
In addition to various national and international regulations, there are many more rules that stem either from regional or local governments or industry oversight committees. A recent major local political-legal struggle for B & Q is the “government planning policy that allowed bulky goods retailers to plant themselves in out-of-town parks is being abused by the clothing brands, whose consumers have plenty of space on the high street to swing carrier bags” (Cockram p 58 2003).
This resulted in an increase of “more than £1m in rent to the cost of a large store” (Cockram p 58 2003). This exemplifies Deetz (1995) contention that government regulations can behave as a threatening mechanism for business.
The DIY Industry has maintained high, positive international growth over several decades. In 2006, however, the UK DIY market suffered a profit decline (Horne 2006). This resulted in disappointing financial performance of B&Q and the decline in parent company Kingfisher's profits to £208 million (Horne p 3 2006).
The force of economics has impacted the trends in the do-it-yourself market and increased the cost of building materials industry in the country (Horne 2006). This profit decrease is a direct result of 2005 cost increases, where competition rivalries were competing for a smaller home owners market (Wilkinson p 9 2005). The impact of the housing market is significant because the DIY market caters to homeowners, thus higher cost of living expenses combined with increases in interest rates have a constricting impact on the market, which in turn creates a customer shortage for the UK DIY market (Wilkinson 2005).
See Appendices A, B and C for an overview of Housing Market and Kingfisher Stock Value
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