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Macro and Micro Environment

The Value Chain

The value chain connects the values of independent practices of a company to its mail=n functional parts. The chain of activities that are carried out, contributes to the value addition to the company. Further, the connections attempt to make bring together the contribution from each section of the organization to the overall value of business. In addition, there are links among various activities within the organization.

The way an activity is performed impacts the cost and effectiveness of other connected activities. The connection demands the activities to be controlled. In micro environment, the added value can reflects the margin cost of performing activities. The micro activities in Tip-Top are classified as company’s support and primary activities (Mullin, Hardy, & Sutton, 2000).

Political Environment

The industry and means by which the businesses are operated are directly impacted by political states, such as regulations and laws in UK. The UK regulatory system has provided a sustainable political environment. The UK has a highly stable government that reflects the nation’s ability to observe rules and regulations, in addition to government’s commitment towards the population.

According to Griffin (2010) UK is classified as one of the economies with lowest risk in operating business. These macro factors provide a sustainable environment for Tip-Top business operations in the UK.

Internal Market

The UK has a significant role in the European Union. This position commits the UK to a corporate trade policy, such as free movement of commodities, services, labor, and capital and allows the UK to be part of the richest and most stable free markets. The UK is a member of European Economic zone that implies that the economy is indulged to follow the European’s registration to maintain a united market. This enables the distribution process for Tip-Top and allows UK exports and expatriation into the UK.

Globalized Economy

The UK has one of the developed economies in the world and is ranked at number six based on the purchasing power of global economies. UK economy is regarded as one of the largest economies based on the fact that London is the largest financial Centre globally. The UK has a long history of conducting with the rest of Europe (Coughlan, 2001).

Impact on the Clothing and Accessories Industry

The clothing industry in the UK is expected to undergo transformation in the near future. After a decade of deflation, the purchasing power has started to improve, which has a significant impact on Tip-Top’s targeted segments. Furthermore, the price on cotton has also increased. These factors indicate that the organization has to advance its effort to retain customers.

Social Environment

The population in the United Kingdom is approximately 62.7 million, and is ranked among the most developed economies in terms of education, healthcare and living standard (Jones, & Silverstein, 2009).

Increased Expenditure on Low Priced Clothes

Though the recession has had negative impact on the clothing sector, people are still spending more cash on discounted retailers rather than purchasing in luxury market. Additionally, the spending on clothes has remained stable due to high promotional activities. The age group between 16 and 24 years seems to be better influenced by economic meltdown and is expected to continue spending more on accessories than the higher income groups in the coming year. This is an indication that their target group has strong purchasing power and would benefit Tip-Top Accessories (Coughlan, 2001).

Increase in VAT and Minimum Wage

Due to financial strain and the UK’s budget distresses, the national legislation raised the VAT by 2.5 percent in 2011. This is an element that will impact on the price offered to the customers. In addition, the UK minimum wage has significantly increased over the last three years, which subsequently Impact Tip-Top accessories market and their operating costs.

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Micro Environment Factors

Competitive Rivalry

The rivalry amongst Tip-Top’s competitors is significantly strong in UK. The clothes industry is fragmentized and constitute of a large number of equal retailers, which have market shares in other countries. The competitive business environment regarding Tip-Top has increased, notwithstanding fewer competing companies. Tip-Top experiences rivalry from both nationwide retailers and independent boutiques, which established or represented in the UK clothes market. The fast fashion sector’s strong stress on their collections, updated designer fashion perspective, has increased rivalry in the market Tip-Top operates.

Barriers to Entry

Generally, barriers to entry are insignificant and there is high chance of many new companies enter the women-wears market. Over the recent time, the market has grown significantly in value making it more attractive for new entrants. The impacts of the global financial meltdown had negative to the clothes industry since it is labor intensive. In the UK, the entry barriers are low, such that individuals have a possibility to enter and establish themselves in the industry. However, several organization accounts for a lion share part of the market in the UK. Coupled with their enhanced position in consumers’ mind, it poses challenges for new entrants and small retailers such as Top-Tip to establish a strong brand. The big companies can use their economy of scale to establish new outlets and still remain advantaged in negotiations with their suppliers. Therefore, this has deterred new entrants in industry (Kotler, & Armstrong, 2012).

Segmentation

Market segmentation is the subdivision of a large market into distinct and identifiable groups of clients with common characteristics in terms of buyer behavior, demands and shows similar responses to the market practices. To conduct a significant study on the target segments of Tip-Top in Oxford, it would be necessary to study the clothes stores in London. The Location provides the study with a proper segmentation, according to demographic assigning of the customer base. Segmentation makes it easy to collect data that include psychographic factors of the consumers’ values, attitude and lifestyles. Being in a specific environment provide the opportunity to attain information concerning customers’ perceptions of a store and an indication of Tip-Top’s competitors.

Reposition

Tip-Top aspire to attain the position of the best choice for the fashion conscious customers. Therefore, it is significant for Tip-Top that there be a significant correlation between the customer’s perception on the product and their positioning.
In their preliminary market, Tip-Top is considered as a centrally positioned product, while in other European market, the company should create a distinguished position as they are currently unpopular brand. The lack of differentiation in regards to customers’ perception of Tip-Top is more conspicuous, common associations are fashionable clothes, affordable prices and good quality (American Marketing Association, 1991).

Buyer Behavior

Power of a Buyer

The ultimate bargaining power of the consumer is regarded as moderate. All customers are unique persons, which lowers their bargaining location. Fast fashion traders such as Tip-Top should differentiate themselves strongly through their products and brands offered. There tends to be strong product awareness in the market, nevertheless loyalty towards a given products is moderate in the midst other varieties of choices, which enhances the buyer’s bargaining power.

For ladies, fashionable clothes reflect a social status or a lifestyle. This has enabled Tip-Top to influence the distribution of products through communication marketing. However, the advanced fashion market is characterized by irregular and fast changes, providing a short brand cycle. Further, this has resulted to a task to provide buyers with what they demand (Healy, 2008).

Marketing Mix

Tip-Top’s products are usually standardized and uniformly distributed to Tip-Top’s outlets. However, the local managers in the stores have the power to regulate their supply need. All Tip-Top’s external and internal marketing strategies are controlled from the marketing office the head-quarters, while local activities and events are organized locally. In the local market, the company uses brand promotion to higher extent, though their key focus for advertising and promotion is on their media channel; blog, web page, Facebook and Twitter.

In addition, Tip Top runs promotional campaigns through periodicals and internet platforms. The export markets are rarely promoted, notwithstanding some local PR events. Their products’ prices are comparable and compete at the same range as their rivals in the fashion segment.

Marketing Communication

Tip-Top marketing communication mix for the United Kingdom market is subdivided into several marketing channels.

Advertising

The Tip-Top outlets in London are not presently subscribed for any form of advertising by renowned sponsor. Previously they had used magazines but this was just a coincidence that was not even carried out by the company’s initiative.

Sales Promotion

Tip-Top uses different short-term promotional campaigns to promote their products, such as banners, handouts and posters that promote sales in their local outlets.

Experiences and Events

Experiences in terms of treading news , activities, occurrences or event to promote a brand has not been exploited by Tip-Top’s marketing department as a medium of marketing.

Public Relations

The company does not advocate the use any form of PR, such as articles or promotional news to promote their accessories and company.

Direct Marketing

The Direct distribution and communication towards their clients does not entail usage of the internet, mobile phones or emails.

Personal Selling

Customer service is a crucial part of Tip-Top’s communication and distribution mix. Here the company invests in face to face communication as this is the point of initial contact with their potential customer. The company’s staffs create an additional value by focusing on establishing a lasting relationship with their customers.

Expenditure on Low Priced Clothes

Although economic meltdown had an impact on the fast accessories industry, the economy has recovered but people are still using more money on the discounted retail stores and supermarket as opposed in the luxury stores. In addition, the investment into clothes has remained steady at Tip-Top’s stores due to their consistence in pricing their products. The young adults appear to be impacted by the changes in economy status and are expected to spend on clothes proportionally to their economic status and the economic status. Therefore, Tip-Top seems to understand this fact very well as they rarely change their prices, despites significant changes in brands Davidson, Keegan, & Brill, 2004).

Adapting more to the Market

The company’s products are standardized, which means that the brands lines have not been adapted to the market beyond UK. The obesity is increasing among the teenagers and adults, thus Tip-Top should focus on producing larger sizes of all their products to meet this emerging market. To compete favorably, this is a factor Tip-Top may need to consider in their future brands and marketing process

Digital Media

Further, in terms of better online service provision, the company will benefit by increasing their online activities. As it provide great potential in online platform, it is also important for Tip-Top to initiate these measures so as to compete with its rivals in the fashion market. Moreover, the application of digital media and online social platforms allows business to communicate effectively with the targeted market segment. Considering there is a significant difference between Tip-Top’s marketing approach and what its rivals are offering, this should be considered in order to compete favorably in the industry.

Therefore, Tip-Top should venture and explore all the possibilities for this important communication and marketing channel not only in UK, but also to the international fashion industry. They should whole embrace social media such as Twitter, Facebook among others.

By implementing these medium, the company will be able to advance the awareness of the products and the company (Fabozzi, Anson, & Fabozzi, 2007).

M-Commerce

In addition to the above, Tip-Top will be required to cover the highly significant position mobile commerce has occupied in the minds of consumers. Though this retail medium has not been exploited by public, it is a factor that needs to be considered in the future to keep on foot with the rapidly advancing in the world of technology and trade.

Celebrity Endorsement

The Tip-Top’s holiday collection represents a significant opportunity for the company in the UK market. International designers, celebrity and actor such Whitney Port should be approached during the launch of the new brands. However, the brand has not explored this marketing and communication approach. There are several ways through which the business can take advantage of the holidays. Starting with outlet, the company should focus on promoting such event as soon as possible through display on the windows. Such move will offer an opportunity for Tip-Top to take advantage of its location in Oxford and London. The continuous flow of pedestrians would be served window display at the company’s stores.

Another commendation is for the company to arrange their store experiences and events when they have received new collection. The best way for the company to conduct such event would be to invite celebrity such as Whitney Port and others to make an appearance in their new brand.

Although this promotion approach may involve high expenses, it would be a worth investment for the brand in the UK market, in terms of generating ripple effects. These would be positive results in regards to the word of mouth, attracting new customers, creating brand awareness, and sustaining competition. In addition to this approach, it is important that the fashion marketing requires to be implemented in a suitable manner that essentially includes making use of internet communication channels

Conclusion

It is important that Tip-Top reach a conclusion concerning their activities in the UK. The question that needs to be answered is whether Tip-Top Accessories is prepared to enhance focus in the United Kingdom outlets to advance the awareness of its brand name, thus becoming profitable. If the company is not prepared, then most optimal conclusion would be to terminate its operation in other city in the UK and concentrate its effort in London and Oxford market.

The current report illustrates that Tip-Top has not committed itself in its operation in UK, especially in terms of marketing and branding, there are various sectors where Tip-Top should improve. Most of the endorsements are concrete and can be implemented at rational cost.

Furthermore, Tip-Top needs to strategies a celebrity endorsement campaign to its products. They should also focus on promotion campaigns through social media and digital medium such as TVs. Atypical illustration would be to conduct a live event during holiday at their stores graced by a renowned celebrity. On a planning, stepwise strategy is preferred for the UK fashion industry.

This will allow the Tip-Top to focus on the improvement of its performance in its major outlets.

Once the significant productivity and brand name awareness is attained, then some other outlets in major UK cities may be enrolled.

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