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Global Marketing-Strategy and Practice: Topshop Report

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Updated: May 25th, 2020

Topshop Background

Topshop was launched in 1964 and has continued growing and extending its operations to become very successful in the fashion industry. Topshop is renowned for its superb performance which has indeed enabled it to win the Fashion Retailer of the year two times consecutively, which is a rare occurrence in Europe.

Topshop success is attributed to its ability to consistently predict upcoming fashion trends and being the first company to bring them into the market and especially in European high streets.

The company is known to lead in introducing the latest catwalk styles for young people at affordable prices, as well as in a well fashioned manner. It offers products such as fashion jewelry, alloy jewelry, handbags, wallets, shoes, leather handbags, designer shoes, ladies wallets among others. Topshop started as a small fashion shop in the basement of Peter Robinson department store as early as in 1964.

Since then, the company’s performance has been very impressive and within its first decade of instigation, it had managed to transform its humble beginning to become a stand-alone retailer. In 1994, the corporation adopted the brand Topshop and it extended its operations to take over the entire 90,000 sq feat space located at London Oxford Circus.

In addition, its great performance within the European high streets has enabled the company to extend its business beyond the high streets which has enabled it to intensively augment its revenues.

Topshop is considered as a part of Arcadia Group that owns a number of other retail shops that include Dorothy and Perkins, Topman and Miss Selfridge. The Arcadia Group has greatly boosted the sales of Topshop and Topman to enable it reach a high of 2.78 billion (Williamson 2000).

In order to augment its revenue through international ventures Topshop Corporation aspires to extend its operation in either France, China as well as in Egypt in accordance to its growth strategy (Paliwoda; Ryan 2008).

Topshop management anticipates that by expanding its operation in either one of these destination, it will increase its market share considerably, as well as help it to generate more revenue and especially at this moment, it is recovering from the aftermath of the recent economical recession. This move is expected to increase the corporation performance as well as to maximize the shareholders’ investments considerably.

How France was selected as the Best Destination

Topshop management opted to extend its operations to France instead of China or Egypt. The management decided not to consider expanding their operations to Egypt because of the stiff competition that Topshop is likely to face from textile products from Egyptian companies.

Although Egypt was one of the strategic locations that Topshop management had selected to extend its operations to, they opted not to expand their operations there. Egypt was a strategic choice since it had a high population of approximately 70 million people according to 2000 census statistics. The country mainly comprises of young people with over 35% of its population below 14 years and less than 4% above 65 years.

This population can offer a good market for Topshop products since the company produces products that are designed mainly for the young people. This was one of the reasons why Egypt was identified as a viable destination for Topshop expansion. Nevertheless, the high proliferation of Egyptian garments in the region is anticipated to be a major obstacle to the success of Topshop in the region.

Textile industry is among the leading industries in Egypt and thus expanding Topshop operations in the region will expose the company to unhealthy competition which will greatly hinder its growth. Thus, Topshop should look for a better region to expand its operations to. This may include Regions where the company is not likely to experience very stiff competitions which can greatly hinder its survival.

Topshop management had considered expanding its operations to China. The reasons they had opted to expand their operations to the republic of China was its high population. China is ranked as the highly populated nation in the World with a population of over 1.3 billion.

This high population makes China a suitable destination for many companies because of availability of cheap labor and ready market for manufactured products. Nevertheless, Topshop management could not extend its operations to China.

The reason behind its failure to expand its operations to China is because Topshop produces products that are mainly meant for the young people while China’s population is mainly composed of older people due to the States restrictions for one child.

Therefore, extending Topshop Operations to China was not a strategic location. After a careful analysis of the three identified options, Topshop management decided to extend its operations to France. This region was considered an appropriate expansion region because of its closeness to the United Kingdom where Topshop originated. France being a member of the European Union is likely to embrace the Topshop products greatly.

Market research and other background information on the chosen market

A market research is a very important process for a company that is aspiring to venture into a given market. A market research helps the businesses entrepreneurs to know what products and service will be profitable to offer in the market. In addition, an effective market research is able to indicate whether a firm has been successful in meeting the expectation of its customers in terms of quality, delivery as well as supply.

A market research includes a plan that indicates how relevant data is to be collected and analyzed in order to give results that will be very important in making marketing decisions. The marketing research entails two kinds of research; the primary research and the secondary research. Secondary research involves a review of available literature concerning the subject matter.

Secondary research helps an organization to establish its competitors, determine the segment it should target regarding to issues such as life style, population, demographics as well as behavior patterns (Marder 1997). On the other hand, secondary research involves collecting first hand data for the given market research. Primary research helps companies to determine customer satisfaction, needs as well as market completion.

Topshop will conduct a market research about its venture into United Arab Emirates. The results from the market research will be very essential in determining the strategy the corporation is going to use to venture into this new market which will either be joint venture, franchisee or direct financial investment (Farnham 2010).

In addition, the result from the market research will help to determine the extent of competition the corporation is likely to face. The market research will help to identify the main fashion firms that are present in France.

In addition, the research will help to identify which services and products the anticipated competitors are offering in order for Topshop to study their sales trend in order to determine on the kind of products it will use to penetrate its new market. Different regions have diverse demographics needs, preferences and tastes (Jeannet & Hennessey 2004).

Therefore the market research conducted will help Topshop to learn about its demography in order to tailor its products as well as its services accordingly. France is a region that is mainly comprised of the rich. Most of the fashion customers in French are mostly actors, politicians, executives as well as tourists that have visited the region mainly for businesses as well as recreation reasons.

Therefore, Topshop should consider appropriate preferences for all these categories of potential customers in order to lure them to buy their products. Topshop should design handbags that are costumed for the tourists’ ladies that visit the region for recreations. Similarly, they should design ladies as well as men shoes that will suite the tourists visiting France.

As aforementioned there before, identifying the market behavior is paramount for the success of any business venture. Thus, Topshop marketing and sales people should realize cultural barriers that are likely to slow down the sale of their products.

They should advise the production department to identify the most appropriate colors to use in these regions. The use of colors is important as different regions have different interpretations for colors and wrong use of colors can greatly hinder the sale of Topshop products (Doole & Lowe 2008).

The market research will in addition help Topshop management to determine the most effective promotions as well as marketing methods to use to enhance the awareness of its brand within France as well across the border (Bradley 2010)

France is known for its superior fashion brands. It has many popular fashions brands such as Louis Vuitton which was started in 1854. Most of its products are meant for international actors such as Hollywood stars. It is mainly known for its French leather products such as handbags. Other products that are mainly produced in French include watches, sunglasses, briefcases, wallet as well as Jewelry.

Hermes is another very famous fashion brand in France. It was established in 1837 (Kotler &Gary 2007). Initially, it produced carves and handbags only. Its most notable product was the Kelly Bag as well as Square Scarf which were produced in the late 20s. During its early days customers had to wait for up to 7 years before accessing Hermes products.

Today, Hermes has augmented its performance and it currently offers assorted varieties of scarves, bags leather goods, watches and perfumes as well as women and men clothes. These companies will give Topshop a stiff competition in its new venture.

The management at Topshop will require studying the market trend of these top French fashion companies in order to identify the strategies they employ to remain competitive in the mission. This will be imperative in order to learn the approach to use in order to successfully penetrate its new market (Cateora & Graham, 2008).

A detailed competitive analysis of the international market

Since there are many multinational fashion brands in France, Topshop will face stiff competition in its new market. In order to establish a competitive edge over its rival brands, Topshop will have to differentiate its products accordingly.

One strategy that it will employ to enhance its products is to extend its production line to include considerable designs for the middle and older generations that forms a considerable size of the French population.

In addition, Topshop Company should increase its speed in its production processes such that it is in a position to reduce the product life cycle and releases new fashions more often than its competing brands (Johansson 2004).

Apart from competition on price and quality, fashion brands are nowadays competing mainly on the time of releasing new brands. Those companies that are able to release new products faster, they are able to compete better than their rival brands (Hollensen 2011).

International business requires effective and efficient communication mechanisms (Mohan, 2005). The cotemporary advancement in technology necessitates businesses nowadays to relate and trade more effectively.

The advancement in Information Technology has boosted international commerce and made the world behave like a global market with the introduction of internet which supports online marketing as well as e-commerce. Thus, Topshop should embrace facebook and twitter and use it to market its menu to its potential customers within the France as well as across borders.

The use of facebook and twitter in the promotion of its products will help it to reach a large number of potential customers which will help it to realize high profits. To enhance the sale of its products, Topshop should design its website to allow electronic payments. Use of electronic payments will facilitate many customers to buy Topshop products from the comfort of their homes (Bradley 2004).

An Evaluation of available international Models

Topshop can opt to use franchisee, joint venture as well as Direct Financial investment to extend its businesses operations to the new market. Because of economical factors as well as conveniences purposes, Topshop will opt to extend its operations to France as a franchisee or a joint venture.

By conducting an appropriate market research, Topshop will be able to identify the strategy it will use to penetrate the fashion industry in France. It will use appropriate competing strategy to establish a competitive edge over its rival brands which will help it fair well in its new market.

Lastly, Topshop should embrace internet technology to help it succeed in its international business by facilitating it adopt online marketing and e-commerce (Parner 2012).

List of References

Bradley, F., 2004, International Marketing Strategy, Prentice Hall, New York.

Bradley, N., 2010, Marketing Research Tools and Techniques, Oxford University Press, Oxford.

Cateora, PR & Graham, JL 2008, International Marketing, McGraw Hill, New York.

Doole, I & Lowe, R 2008, International Marketing Strategies, Prentice Hall, New York.

Farnham, P 2010, Economics for Managers and Franchisee, (2nd ed.), Upper Saddl River, NJ: Pearson Education Inc. Published as Prentice Hall, New York.

Hollensen, S 2011, Global Marketing – A Decision-oriented Approach, Prentice Hall, New York.

Jeannet, JP & Hennessey, HD 2004, Global Marketing Strategies, Oxford University Press, Oxford.

Johansson, JK 2004, Global Marketing, McGraw-Hill, New York.

Kotler, P & Gary, A 2007, Principles of Marketing, Prentice Hall, New Jersey.

Lee, K & Carter, S 2010, Global Marketing Management, Oxford University Press, Oxford.

Marder, E 1997, The Laws of Choice—Predicting Customer Behavior, Prentice Hall, New York.

, J 2005, International Marketing, Oxford University Press, New York.

Paliwoda, J & Ryan, J 2008, ‘International business vs. international marketing’. Journal of International Marketing, 461, pp. 2- 4.

Parner, L 2012, International Marketing, University of South California. Web.

Williamson, P 2000, The success Story of Topshop, Cambridge University Press, Cambridge.

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