Market Analysis - Boots

BOOTS

•Give a clear definition of the marketing function - what does it aim to do?
-Marketing is a management process so it requires people to take responsibility for decision-making. It involves identifying the needs and wants of customers. It involved anticipating or predicting what customers might want in the future. It seeks to satisfy the consumer and for the business, marketing is all about making a profit.
-The seven functions of marketing are: Distribution, Financing, Marketing Information Management, Pricing, Product/Service Management, Promotion and Selling.
-Its main aim is to satisfy their customer’s needs and wants while generating a profit for the firm.


•In the light of the definition above, how does market analysis help to meet the aims of the marketing function?
-A Market analysis is an investigation of a Market that is used to inform a firm's planning activities around the decision of: inventory, purchase, work force expansion/contraction, facility expansion, purchases of capital equipment, promotional activities, and many other aspects of a company.
-The following are the dimensions of a market analysis:
* Market size (current and future)
* Market growth rate
* Market profitability
* Industry cost structure
* Distribution channels
* Market trends
* Key success factors
-Market Analysis helps in deciding how to get their target market, achieve and gain a place in the market.


•What would you classify the company's market position to be? Justify your answer.
-Market Challenger. In the market for prescription medicines, Boots’s main competition comes from UniChem (who own Moss Pharmacies) and SuperDrug, which are pharmacies around the UK. A market challenger is a firm that seeks to adopt strategies to challenge market leader’s position.


•What are the key marketing objectives of the company?
-Boots' stated goal is to modernise, become more efficient and be more customer focused. They say that in the past, the business has been a steady performer, but has not 'punched its weight' given the strength of its brand.
-Boots's customer loyalty card, named 'Advantage', is strongly associated with their marketing campaigns. The Advantage card is held by nearly 15 million consumers. It is linked with half of all sales in Boots the Chemists.
-Therefore, the company used the marketing mix technique, where marketing mix is the balance of marketing techniques required for selling the product.
-Furthermore, their other objectives are revenue maximisation, consumer and product focus and to overcome competitors.


•In your view, does the marketing strategy adopted by the company appear to help them to meet these objectives?
-In response to the tougher trading conditions, Boots embarked on a programme of price discounting in the third and fourth quarters of 2003-04. A large 'three-for-two' gift promotion over Christmas 2003, helped to boost like-for-like sales by just over 4% during this period.
-In 2004, the company intends to continue its price discounting. The company aims to continue to invest in this area, planning to spend £5 million on price cuts in the fourth quarter of 2003-04.
-Few issues have risen over the company and the community of loyal customers for Boots are growing every year. Yes, as of now, Boots has 17% of the market share in Britain, behind UniChem with a 40% market share.


•What are the main market segments the company appears to be aiming at?
-Boots is a diversified company, which aims to sell their services and good among a wide range of consumers and customers, despite the age, religion, social class, ethnic grouping and lifestyle of the society. Boots is also a single segment – often selling a specialised product, exclusive goods, medicines, home care products and other necessities.


•What type of market structure does the company operate within - how do you think that might affect their marketing strategies?
-Boots operate in Britain within an oligopoly group. As of now, Boots’s main competition comes from UniChem (who own Moss Pharmacies) and SuperDrug, which are pharmacies around the UK. Boots did price skimming with their products as one of their marketing strategies to gain more customers. They also did market penetration where Booths choose to focus on selling existing products in existing markets, where an example is an introduction of the loyalty card Boots has implemented in their company.


•Try to find out what market share the company has in its market. What are the marketing implications of this information for the company?
-As of now, in Britain, Boots has 17% of the market share, behind UniChem with a 40% market share and SuperDrug. Which shows that Boots are behind the leading top firms, Boots is also the largest pharmaceutical wholesaler in the UK. This information will help Boots try to strive harder to be 2nd or along-side UniChem with their marketing strategies.