Implementation Of SOSTAC Model For John Lewis And Partners Marketing Strategy

Background of John Lewis and Partners marketing strategy

The paper reflects upon the implementation of SOSTAC strategy in the retail business located in the UK. Most of the organizations use this particular strategy to gain profitability within the market to have systematic management and satisfy the needs of the customers. It discusses the background of the marketing strategy of the organization. It also provides with the implementation of the SOSTAC strategy into the current marketing strategy of the company. It discusses the elements of the SOSTAC strategy such as situational analysis, objectives, strategy, tactics, actions, and control. Therefore, the paper will evaluate the effectiveness of using the strategy in the international market.

John Lewis and Partners is considered to be the chain of high-end department stores that operates its business all across the United Kingdom (UK). It is a retail industry that was founded in 1864. It is a public limited company whose headquarter is located in London, SW United Kingdom (Cathcart, 2014). The chain of a high-end department store is owned by John Lewis partnership, where the first store of John Lewis is opened in 1864 in Oxford Street, London. Throughout Wales, Scotland and England 51 stores include 12 “Flexible format” stores and “At home” stores in Chelmsford, York, and Exeter. The total number of employees in the company is around 38, 100. The company’s mission statement is to provide clarity of direction especially for the employees who are considered as internal stakeholders (Lewis, Byrom and Grimmer, 2015). Its success in business and mission statement could be acknowledged by observing its extraordinary structure of ownership. It aims to satisfy the needs of the customers by enhancing and sustaining its position within the market to maximize their dividend. Its approach to marketing is based on three factors they are partners, customers, and profit. The business strategy of John Lewis has three major objectives such as to increase the partner’s advantage, to realize the market potential and developing efficiently. The following three strategic goals makes the company bold, optimistic and confident of how to enhance their strategic plan.

The primary purpose of John Lewis and Partners is to empower its partners by becoming a member of the company. Becoming a member makes the partners perform well and feel personal satisfaction (Paranque and Willmott, 2014). This helps the organization to enhance performance benefit and that in turn increases competitive advantage. The company sets its goals by deepening and retaining the relationship with its existing customers and retains and attracts new customers. It carefully listens to the requirements of its customers and responding to it immediately. To develop an image of sustainability with its customers, it reduces the issue of carbon footprint and raises the issues of ethical sourcing. To encourage brand loyalty from old customers, the organization has moved from a strategy of transaction marketing to relationship marketing by acquiring new customers. During the last decade, the business has increased substantially and aimed to develop more in the future. It has a marketing management team that improves the performance of the company (Chkanikova and Lehner, 2015). The development of business increases the profitability that maximizes its complexities that puts an impact on the costs of John Lewis. Thus, to overcome with this issue the company executes cost control programs and makes a careful investment to distribute profits among the partners and manage the business effectively. Despite various problems based on reducing real incomes of the customers, increase in competition and an increase in internet shopping the performance of the company remains positive. It is because the organization is committed to providing its customers with an innovative or creative solution and developing awareness regarding the requirements of the customers. John Lewis comprises of reliable Customer Relation Management system that facilitates valuable feedback of the customers.

Implementation of SOSTAC model in the marketing strategy of John Lewis and Partners

SOSTAC stands for situation, objectives, strategy, tactics, action, and control which is determined to be a planning model that helps with planning marketing strategies. It is a general marketing strategy that could be implemented in different commercial situations (Storey, Basterretxea and Salaman, 2014). It highly focuses on the process of implementation stages as well on the marketing communications. It is a simple logic that develops situational analysis based on the decision made along with the tactics and strategy. It helps in making relevant decisions that brings better plans and results.

Based on the SOSTAC framework the marketing plan of John Lewis and Partners has been developed. Particularly, expansion of the global market has been discovered to be an attractive opportunity for business that is not presently utilized by the organization. In the UK involved in the global market, the expansion would be an effective response to the problem of market saturation (Saghiri et al., 2017). However, it has been observed that developing strategic partnership in the international market along with multinational businesses may put a positive impact on the long-term growth of John Lewis.

Objectives

• To broadcast and optimize marketing strategy
• To build customer perception and brand awareness
• It aims to improve efficiency and meet quality standards
• It aims to create campaigns that support their products
• To realize the market potential

Strategy

To promote their brand, John Lewis would create a campaign that supports their services and products that provides a high quality of services to the customers. The company would create a competitive motivational advantage for the partners that will help the company to be effective and motivated. The partners gain their satisfaction by becoming a member of the company where they get the opportunity of employment to make a realistic sense of community. It attracts a massive number of customers by developing a strong relationship with the existing customers (Mason and Doherty, 2016). To execute this process, they better understand and responds quickly to the needed change. The change may be something related to product sourcing, flexible shopping and competitive pricing. To develop and support its position within the market it enhances sustainability program. Moreover, business growth maximizes complexity that affects the costs of John Lewis products. John Lewis focuses on increasing efficiency that is more significant to achieve profitable and balanced growth for the company. It facilitates to their partners that require to prioritize investments that present the discipline of cost control.

Tactics

To execute an effective business, the company makes use of some of the significant strategies that will prove to be beneficial for gaining profit. The strategies such as Ansoff matrix, market penetration, market development, product development, diversification, relational and transactional marketing. Implementation of all these strategies helps the company to achieve the organizational target and fulfill the needs of the customers (Stark, 2015). The company is using these strategies to grow within the market efficiently. It uses the strategy of market penetration that pushes old products into their current market strategies. Another strategy is the use of market development that helps to develop new markets for the old products. It also uses product development that develops new products for old products and at last diversification that develops new products for new markets. The company also uses a relational marketing strategy that focuses on long-term valued customers for marketing purpose (Challagalla, Murtha and Jaworski, 2014).

The company makes use of the Ansoff matrix which is determined to be a strategic marketing planning tool that demonstrates the significant relationship between an organization’s marketing strategy and four alternative growth strategies. The four alternative growth strategies such as market penetration where the company focuses upon selling of the products and services to gain higher market share (Chen et al., 2015). The company makes the use of this strategy to sell their products to more number of current and new customers within the market. For example, the company aims to sell its products to the women between the age group of 28 to 60. It also implements this strategy in their home and garden accessories and furniture by creating their old products to make them convenient for their customers. To use market development, it focuses upon the four areas such as competitor’s customers, non-buying in current segments, new segments and existing customers. It also uses product development in commercializing and generating new products within the management of the product life cycle to gain profit in their market share. It uses the four stages of the product life cycle to have better execution of the strategic process (Green et al., 2016). The diagram below presents the four stages of the product lifecycle that continues to grow, rise and fall. The four stages present its existence in the working life of most of the products.

John Lewis developed a marketing campaign that increases the range of their products. For example, it sells new products of children’s night wears as shown in the advertisement to introduce a new range of products that will increase their sales rates. It gives prime importance to branding, themes or styles as well as attractive images that will influence the customers to buy their products (Felix, Rauschnabel and Hinsch, 2017). The company makes use of relationship marketing by focusing upon their marketing to increase long-term valued customers. It identifies its valuable customers by maintaining and initiating a relationship with the customers. To increase relationship marketing with the customers, it generates a sustainable profit. Currently, the company makes use of relationship marketing to facilitate value to customer service. The company had made 24 hours customer service lines available to the customers that will fulfill the needs of the customers by serving them better services.

Control

With the help of performance measurement John Lewis evaluates whether the set of goals are achieved or not. It decides the frequency of measurement to revise the strategies, tactics, and actions as well as adjust its operations (Steele, 2016). It makes use of the strategies mentioned in the Ansoff matrix such as market development, product development, market penetration, and diversification. John Lewis makes less use of diversification as it comprises of existing products within the existing market.

Porter’s generic strategies

Porter’s generic strategies explains how an organization gains competitive advantage based on its selected market scope. Generic strategies are classified into three or four aspects they are either cost, lower or focus. John Lewis will adopt porter’s generic strategies based on two types of competitive advantage either through differentiating itself or via low costs along with the dimensions valued by the clients to offer a higher price. John Lewis also selects scopes from the types such as either from industry wide or from focus offering its goods all over various segments within the market. It reflects upon the choices that were made based on both the types of scope and competitive advantage. By using porter’s generic strategy it would become easier for the company to communicate between market focus strategies, differentiation strategies and cost minimization strategies. John Lewis comprise of multiple segments that is targeted by an organization. It helps the organization to combine lower and differentiation cost with the scope of activities which John Lewis wants to achieve. This will help the organization to improve their performance within the market to achieve their target. As the organization possess sufficient capabilities and resources hence it helps in satisfying the needs of the customers. This particular strategy also facilitates differentiation strategy where it provides profitability to John Lewis as compared to their competitors. Therefore, it can be said that differentiation strategy will be suitable for John Lewis if applied efficiently within the organization. 

Changes in the macro-environmental factors could put an impact on the marketing strategies of John Lewis and Partners. It could put an impact on the organization’s overall profitability and competitive advantage. It provides with the information based on the operating challenges of the organization (Tardan, Shihab and Yudhoatmojo, 2017). The macro-environmental analysis consists of some factors such as economic, social, political, technological, legal and environmental factors.

Economic Factors

The macro-environmental factors such as aggregate investment, aggregate demand, and foreign exchange rate, interest rate, savings rate, and inflation rate put an impact on the marketing strategy of John Lewis. John Lewis uses the economic factors of the UK such as the industry’s economic indicators, and the inflation and growth rate. Based on the interest rates the entire economy of UK is dealing with sensitive changes and recession. Every retail sector is facing tough competition within the market by giving a lot of incentives to the customers (Wijaya and Hermawan, 2018). These factors will affect John Lewis as most of the time it has to lower its prices. John Lewis economic factors are based on interest’s rate, inflation rate, unemployment rate, discretionary income, and economic growth income.  

Socio-cultural factors

Within an environment, the culture of a society is affected by the culture of an organization. Shared attitudes and beliefs play a vital role in the marketing of John Lewis products. Based on the SOSTAC strategy the company would understand the needs of the customers and design a marketing message for Household and Personal Goods. The social factors faced by John Lewis are environmental consciousness and health, demographics, social conventions, gender roles, power structure, hierarchy, class structure, and education level. To get a considerable number of opportunities, John Lewis introduces the latest fashion and more branded products to attract the customers.

Technological factors

Most of the organizations are rapidly disrupting due to technology. The major trend for the retailing industry based on sales approach is internet shopping. John Lewis makes use of administration, management and paperless operation of the organization. The operations are carried out through IT systems that protect servers and provides flexibility in the business operations.

Legal factors

Most of the countries, the legal institutions and framework are not efficient to prevent the intellectual property rights of the organizations. Before entering into the international markets, John Lewis cautiously evaluates the possible risks that could result in theft of the organization’s confidential data (Jaworski, 2018). While entering into the international market John Lewis focuses upon some of the legal factors such as data protection, health and safety law, employment law, e-commerce and consumer protection, intellectual property law, patents, copyright, discrimination law, and anti-trust law.

Environmental factors

The different market comprises of different environmental standards or norms that put a direct impact on an organization’s profitability. Environmental factors of John Lewis are also affected by the laws and the liability laws. Various environmental factors such as endangered species, recycling, climatic change, waste management in Consumer goods sector, water and air pollution in regulating household and personal goods industry, laws regulating environment pollution and weather.

Political factors

Political factors play a vital role in considering the factors that affect the long-lasting profitability of John Lewis in the UK. In more than a dozen countries John Lewis operates in Household and Personal goods with different types of political system risks and political environment. Before investing or entering into the market, John Lewis follows some of the political factors. The political factors such as taxation, mandatory benefits of employees, product labeling, industrial safety regulation, wage legislation, favored trading partners, level of corruption, and risk of military invasion.  

A business organization makes use of four significant elements of marketing that combines to meet the target market of the firm. The elements such as product, price, place, and promotion of the product. The marketing strategy of John Lewis based on the ingredients of the individual marketing mix is described in the following sections.

Product

The range of products of John Lewis department stores within the international market substantially differs as per the product range that is presently offered in the UK stores. Moreover, the focus is on the positioning of the product. Product positioning is referred to as the perception of the customers related to the product as compared with the investment and competition that is to be made to position the products of John Lewis. The products that are related to the social class, prestige, achievement, and notions of success.

Price

Price is defined as the real amount that is paid by the customers specifically for a service or product. Hence, the services and products of John Lewis would be priced at a premium level, higher than average market level (Olson et al., 2014). It is because it is based on the services and products customers will be sold the perception of social class, prestige, achievement, and success related to the brand of John Lewis.

Place

The place is considered to be something where the products of John Lewis would be provided to the customers. This particular component of the marketing mix is significant for the retailer business in comparison with the other businesses within the marketplace. Therefore, the company will make substantial financial investments to set up the departmental stores of John Lewis in modern and busy shopping centers. It will set up its stores in other places where the company visits to target customer segment.  

With the utilization of customer service followed by SOSTAC strategy, it becomes easy for the company to keep the customers brand loyal. With the help of this strategy, the company keeps the customers satisfied. The company keeps their customers happy by helping them over the phone or in the store if they face any issue. It has been observed that over 88 years the company has been regarded as a trusted brand to its customers with the motto of “Never Knowingly Undersold.” The company is committed to offering the lowest price to the customers as compared to its competitors. Therefore, by implementing the SOSTAC strategy, the company would fulfill the requirements of more number of customers by providing them with outstanding and high-quality services. Due to high-quality services the customers are willing to pay more to buy the product from the departmental stores.

They would help the customers as per their abilities that would provide the customers with all the significant information based on the products. Another factor is that the customers are provided with affordable and high-quality products within the stores that make the customers utilize the products again and again (Menon et al., 2015). John Lewis beats its rivals by 10% within the marketplace that makes the customers keen to spend their money to buy the products of the company. Based on SOSTAC strategy John Lewis got success through effective management by comprehending the significance of environmental factors such as the emergence of shopping online and making appropriate decisions. Moreover, its service quality from rodents to services has developed a strongly recognized brand to the consumers. Hence, the company became a leading retailer within the retail market of UK. As the environmental factors are determined to be cautious hence, it must be prepared for any contingency plan to prevent its reputation in the future.

It has been recommended to John Lewis to depend on its traditional marketing strategy while entering the Chinese market to ensure its success in the UK marketplace. This particular strategy includes targeting high earners and providing them with a high standard of services and products for premium prices. To enter the Chinese market, John Lewis would make use of different available marketing strategies. The well-known new market entry strategies involve franchising, licensing, forming joint ventures, turkey contracts and exporting wholly owned subsidiaries. Based on these foreign market entry methods such as forming wholly owned subsidiaries that are referred to as the appropriate for the company to enter China (Kiseleva, 2017). The method of wholly owned subsidiaries of international market entry provides John Lewis a substantial range of advantages that involves an ability to identify the location, ability to engage in global strategic coordination, protection of technology and selection of strategy. At the time of adopting the method of wholly owned subsidiaries in entering the Chinese market, the company must explore the possibilities of creating strategic partnerships with the major organizations in China (Lambert, 2016). Moreover, the company must ensure that the choice of the method of wholly owned subsidiaries of international market entry is related to a range of disadvantages and risks that involves risks and high costs. However, alternative methods of new market entry such as franchising, licensing and format joint ventures for suitable options.

However, the segmentation of target customers for John Lewis within the Chinese market could be specified as females and males between the age group of 25-45. The Chinese market will target the customers who have significantly increased their income since the past years by using an excess amount of opportunities within the business. The branding of John Lewis in the Chinese market will be established in such a way that the brand will be based on social status, achievement, and prestige. In the Chinese market, the choice of this approach has greater chances to get success followed by cultural features of the Chinese customers. It also has chances to increase the level of household income, preservation of face and value of social status in China because of rapid economic development of the country. In China, John Lewis is going to adopt marketing mix elements of communication that includes different methods of publicity, public relations, and advertising. Particularly the advertising of John Lewis is to be done with the help of broadcast ads that intends to attract successful business personalities and celebrities in China as the face of the brand.

Involvement in publicity and public relations in China by John Lewis will be provided via the periodical release of publications and press kits along with organizing community relations, seminars and speeches. To execute a business marketing campaign is determined to be so compelling that is shared by the people to spread it like a virus. Thus, John Lewis brand in China will make use of viral marketing to promote the brand within Chinese marketplace. Moreover, viral marketing of John Lewis is to be implemented with the use of social networking local popular websites such as Weibo, Penyou and Renren.

Hollensen Global Theory

Hollensen global marketing theory is based on the practices and techniques that are involved controlling and directing the international organizations. This theory helps in overcoming with the issues that takes place due to the consequences of global and international strategies. Thus, at the senior level of an organization the management, strategy and practice are inter-related. The theory will help John Lewis to have a careful management of the business ventures. It will be useful for the organizations considering different perspective based on the organizational functions such as, finance, human resources and operations as well as marketing. It will support the activities of the company such as, legal, development and research issues. With the use of global management theory the organization will be able to identify the complex issues of the organization. It will help John Lewis to focus upon the functional areas of the organization. The top level managers of John Lewis must use this strategy to make appropriate decisions that will prove to be beneficial for the company. The theory helps the organization to focus upon the issues of innovation, technology and knowledge. 

Conclusion

The paper concluded by demonstrating SOSTAC strategies that are implemented in the current marketing strategies of John Lewis and Partners. It provided with the current marketing strategy of the organization. It discussed each element of SOSTAC strategy that could be applied within the organization. It is observed that the company gains profit by implementing the SOSTAC strategy. It focused upon the factors of macro environmental analysis and marketing mix that provided with the impact that will affect the organization in various ways. The paper aimed to evaluate the effectiveness of using SOSTAC strategy as well as the implementation of the strategy in the international market.

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