Marketing Strategy and Planning Individual Report
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Assignment 5 Chloe Butler N0751513 3022 words
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I confirm that this work has gained ethical approval and that I have faithfully observed the terms of approval in the conduct of this project. Signed ………………………………… Date…..…………………………………
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Contents . . . Introduction 09 Methodology
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Brand history 12 Where is
Paperchase now? 13 Brand health 16 UK retail market 18 Uk Competitors 20
UK target consumer
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UK SWOT analysis
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Where should Paperchase go?
USA Target consumer
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PESTLE
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Ansoff Matrix
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How is paperchase going to get there? Brand vision & objectives
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Social media
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Influencers
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Marketing strategy plan
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Recommendations
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Challenges
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USA retail market 30 USA SWOT
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Introduction . . .
This report aims to produce a marketing strategy for Paperchase to launch into the US market. It will take into account the brands current position in the UK in terms of its current competitor position, brand health, brand essence and vision and mission values. This information along with primary and secondary research will be used to create a marketing plan for a US launch. Challenges that Paperchase may face will be explored as well as the benefits. The conclusion of this report will be suggest recommendations for the brand taking into consideration the research and analysis made.
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Methodology . . .
Primary and secondary research via a survey and in-store insights have been be conducted to support and inform this report. Alongside an Ansoff’s growth matrix, a SWOT and PESTLE analysis will also be completed to gain insights into the companies potential and weaknesses, to inform decisions for the US launch. The survey was split into two, one was distributed in the UK and one in the US via Facebook,Facebook groups, family and friends. A sample size of 130 participants where collected in the UK and 100 participants in the USA. The UK survey helped to establish the brand health, perceptions and awareness and the USA survey helped to form recommendations after gaining an insight into the consumer in the US.
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Brand History . . .
Paperchase was founded in 1968 by two art students, Judith Cash and Eddie Pond (figure 1). The company went through various owners before receiving investment from WHSmith in 1985. The company then continued to expand and in 1996 became Paperchase Products Ltd. With the administration and closure of UK Borders in late 2009, the company lost a large presence on the British high street as Paperchase had a concession within every UK Border that was closed down. To replace these lost UK retail sites, Paperchase concessions were opened in a number of HMV and Waterstones stores during 2010. In late 2010, the company was bought out and is now owned by Primary Capital and its board of directors meaning Paperchase could open its stand alone stores and has slowly re-appeared back on the British high-street.
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Figure.1-Eddie Pond
Where is Paperchase now?
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“
Paperchase is the UK’s number 1 shopping spot for exciting and innovative design-led stationery. For over 40 years we’ve inspired with stylish stationery, unique greeting cards, distinctive gifts as well as quality art and craft materials. (Paperchase.co.uk. 2018).
”
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Brand Awareness Out of 130 people asked in the UK 11% of people had not heard of Paperchase and 14% had not seen a physical store or a concession store. Considering Paperchase claim to be the UK’s number one for design lead stationary these figures are rather high. Also a massive 86% have never seen;
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A Paperchase TV advert A celebrity or influencer promoting the brand An advert on the radio Adverts on social media
Out of the 62% of people asked that use Instagram, only 2% follow Paperchase, despite 36% stating that they’ve shopped in Paperchase between 5 times and regularly. This overall proves the brands general awareness is rather poor in terms of advertising, social media and high-street presence. (Survey legend 2018 see appendix 1)
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Brand Perceptions Respondents in the UK where asked ‘if you do, or do not shop in Paperchase, why or why not?’ Respondents where instructed to answer with ‘I do because...’ or ‘I do not because...’ ‘I do not because it is too expensive’ appeared 20% of the time. This gives a the impression that consumers have a pre conceived perception that Paperchase are an expensive company. When in reality most of their products are within the same price range of their competitors, and cheaper than luxury ranges in WHSmith. Paperchase
WHSmith
Brand Health . . . After looking at consumer awareness of the brand and their perceptions, Paperchase have some work to do in creating more awareness about the brand, as well as highlighting their lower than expected prices. However; “Mintel estimates that consumer spending on greetings cards will grow 4.8% to £2.1 billion in 2017.” (Mintel 2017) And Paperchase made a ‘£4m profit on £102m turnover in the year to January 2015’ (This is Money 2018)
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UK Retail Market . . . Love; True romantics British people prefer a meeting of minds with their partner, but for American it is more about shared experiences a relationship can create Finance; Home Improver’s The UK indexes highly in the home improvements sector. This may explain Brit’s love for retailers like John Lewis
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Finance;Careful spenders British shoppers seem to be taking the recession to heart, as they are three times more likely to be careful with their money than Americans.
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UK Competitors . . .
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N.O of followers/likes Paperchase
Hobbycraft
Flying Tiger Happy Jackson
219.7K
229.7K
164K
4.1K
140K
39K
114K
19.9K
31K
29K
10.2K
N/A
30.1K
89.2K
60.1K
480 (Wiltshire, A. 2017)
Paperchase due to their wide range of products have many competitors, firstly in stationary with companies such as TheWorks, WHSmith and Flying Tiger Copenhagen, but also in gifting with Smiggle, Happy Jackson, Skinnydip and Clintons. Other companies that become competitors that would not immediately be expected are Primark, Card factory and Poundland due to the sale of cards, stationary and novelty gifts. The graph above shows followers/likes from Paperchase’s most relevant competitors social media accounts. Strength and weaknesses in numbers vary between platforms and companies however, other than on Pinterest Paperchase appear to be on top for all other accounts. Skinnydip who have a very similar target audience to Paperchase however, have a considerably larger following on instagram (513k)
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UK Target consumer . . . Anya Clark. 14 Lives in Primrose Hill, with her parents and two siblings. In Year 8 at an all girls school. Enjoys taking pictures and scrap-booking. Has been attending ballet classes since she was 3. Favourite shops are Urban Outfitters and Topshop. Her friends would describe her as goofy, caring and ambitious. Loves bubble tea, sushi and frozen yoghurt. Likes to watch Maddi Bragg, Suede Books and Devon Carlson on Youtube. In summer she likes to go to Hampstead Ponds with her friends. Is excited to be 16. Motto: Carpe Diem.
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Type of Segmentation segmentation Criteria Geographic Demographic
Behavioural
Psychographic
Starbucks target customer segment
Region
UK
Density
Urban/City
Age
18-28
Gender Life Cycle Stage
Occupation
Males & Females (Mainly females) Bachelor Stage; young, single people not living at home Newly Married Couples young, no children Full Nest II youngest child six or over Full Nest III teenagers buying stationary for school Students, employees, professionals
Degree of loyalty
‘Hard core loyals’
Benefits Sought Personality
High quality fun quirky stationary that is different Easygoing, determined and ambitious
Social Class
Middle and upper class
Lifestyle
Mainstreamer, Aspirer, Succeeder, Explorer
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SWOT analysis UK. . . STRENGTHS • Leader in design led stationary in the UK • Has a wide range of products and branch into other categories e.g. wedding, gifts and home etc. • 400 suppliers in 16 countries • Loyalty with customers (sentimental) • High quality products • Great at capitalising special occasions ie valentines stationary.
WEAKNESSES • High price point-doesn’t match target market which creates a narrow target market, makes it more difficult to be able to attract millennials and especially those who are studying which is a large potential target group for the brand • Lack of advertising • Low social media presence • In-store experience varies largely, between concession stands, standard Paperchase store and the large flagship stores that are spread across 3 levels with a coffee shop inside. This means inconsistency in experience for customers
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THREATS • Lots of companies do the same stationary but cheaper e.g. Primark • Stores aren’t as popular-more online focused • With the rise of E-commerce, millennials opt for faster, a rise in technology and communication means could mean trouble for the greeting card industry
OPPORTUNITIES • Rising use of e-commerce means that more people are increasingly using social media and online shopping- Paperchase could focus on promoting more on these platforms in order to reach a wider audience. (Millennials now make 54% of their purchases online) which is Paperchases target market. (Ecommerce statistics)
• Paperchase could sell their products through other popular online shopping sites e.g. Missguided (Their innovative design led products could be a perfect match for Missguided’s quirky fashion ranges) • They could create competitions enabling talented artists (potentially university students) to create designs
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Where should Paperchase go?
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US Retail Market . . .
State of mind; Americans are more likely to be affected by emotional advertising than Brits.
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Confidence; Self-assured Americans are more than 5 times more likely to be self confident than brits State of mind; Downharted Americans are more likely to be optimistic and view a difficult time as a road to a better future.
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SWOT analysis USA . . . STRENGTHS • • •
Able to target a larger customer base, especially millennial that require stationary for education A direct investment market entry strategy will lead to new employment opportunities in the USA. Launching in the USA will increase sales for Paperchase
WEAKNESSES • • •
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Paperchase may have to adapt their product and product range according to different cultures. The USA has the second largest e-commerce market in the world, and Paperchase currently have a weak social media in terms of following and likes. Moving to the USA will mean Paperchase will gain a new set of competitors that already have strong customer loyalty, such as | target.
2018
THREATS • •
Paperchase will have to strategically decide their location in the US so they are not very close to competitors. The US has discounted stores that sell similar products such as Target, Walmart and Dollar-tree, Paperchase will need to focus on its USP to overcome this threat
OPPORTUNITIES • •
Paperchase could look at current/popular topics in the US to prevent cultural complications. A US study stated that 60% of online shoppers like to receive an incentive or promotion from a brand before shopping. Paperchase could use this to their advantage by offering student discount in the US as well as general discounts and loyalty schemes.
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USA Target consumer . . . Olivia Harris. 19. Originally from Malibu Currently a freshman UF College of Journalism and communications, Enjoys going to gigs and brunch with her friends. Works at Brandy Melville. Likes to shop at I AM GIA and UNIF. Studies Journalism. Loves to go to the beach. Enjoys yoga Her friends would describe her as sentimental, creative and intelligent Motto: Everything happens for a reason.
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Type of Segmentation segmentation Criteria Geographic Demographic
Behavioural
Psychographic
Starbucks target customer segment
Region
USA
Density
University Cities
Age
18-28
Gender Life Cycle Stage
Occupation
Males & Females (Mainly females) Bachelor Stage; young, single people not living at home Newly Married Couples young, no children Full Nest II youngest child six or over Full Nest III teenagers buying stationary for school Students, employees, professionals
Degree of loyalty
‘Hard core loyals’
Benefits Sought Personality
High quality fun quirky stationary that is different Easygoing, determined and ambitious
Social Class
Middle and upper class
Lifestyle
Mainstreamer, Aspirer, Succeeder, Explorer
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PESTLE analysis USA . . . P
olitical The USA is the second largest democracy in the world. The country enjoys a stable political climate, even though there have been some challenges recently. It also has an enormous influence over the political dynamics of many countries around the world. The USA advocates and promotes democracy around the world. With a stable political environment, advanced infrastructure, and technology, the USA positions itself as a great destination for foreign direct investment. Consequently, the country has been the first choice for many multinational companies for foreign direct investment for a long time. However, countries such as China, India, Brazil, Turkey, Nigeria, South Africa, and many others came forward as contenders for foreign direct investment.
E
S
conomic The USA has the largest economy in the world. It is a country from where companies such as Coca Cola, McDonald’s, Subway, Microsoft, Apple, Facebook, Google, and many others are shaping and leading discussions of the world. Unemployment fell in 2015, and income levels improved in 2016 (Amadeo,K 2018). However, labour is not cheap in the USA, particularly when compared to that in China, India, and Mexico. Availability of cheap labour elsewhere has encouraged many US firms to outsource many of their business activities. ocial The USA is the third most populated country in the world with a total population of approximately 326 million. It sees one birth in every 8 seconds, and one death in every 11 seconds (Census.gov 2018) The USA is a very diverse country. By 2020 almost 1 in 3 Americans will have African, Asian, Latino, or Native American ancestry. The US education system is one of the best in the world; so is the health care system. However, health care is not usually free and certainly not cheap for many people. People are generally health conscious; however, fast food culture has contributed to obesity and other illnesses in the country. A majority of the population has a liberal mindset; however, the country witnessed racial tensions recently.
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T
echnological The USA is the global leader in science and technology. Americans have a longstanding fascination for technology, and companies such as Apple, Microsoft, Google, Facebook, and many others have addressed the technological needs of the Americans and the people around the world. And in doing so, they have become the global leaders in technology. Technologies have changed the ways many things are done. Many jobs have been transferred from the USA to other countries and production facilities have been relocated. This has helped companies reduce their production costs, the rate of technological innovation and change is extremely rapid in the USA. However, the country faces strong challenges from a number of countries e.g. China, South Korea, and India.
L
E
egal The last element to address in this PESTEL analysis of the USA is the legal environment. Though a detailed discussion on the legal environment of the USA is beyond the scope of this article, the article addresses some of the key areas in brief. Each state in the USA has its own government structure and legal scheme. Businesses come under the regulatory environment of the state in which they operate. The country upholds equal treatment of nationals and foreigners. Expatriate employees can expect an unbiased trial from the judicial system. The USA also offers a strong legal system to protect Intellectual Property Rights. nvironmental The USA has an extremely diverse climate, and wildlife. This diversity coupled with other factors has been a driving force to draw millions of tourists to the country. 75 million visitors from around the world travelled to the United States in 2014 (SHAREAMERICA, 2015). Canada, Mexico, United Kingdom, Japan, Brazil, & China are the top six countries sending tourists to the USA. However, the USA faces some of the toughest weather conditions in the world. The country has sustained 218 weather and climate disasters since 1980. In 2017 alone (as of October 6), there have been 15 weather and climate disasters with losses exceeding $1 billion each across the United States (Ncdc.noaa.gov 2018). Apart from financial damages, these disasters also cause disruption to everyday life and business. (David, J. 2017) UK-USA Report-
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Existing markets
ANSOFF’S Growth Matrix . . .
Existing products
New products
Market penetration
Product development
• Updated social media approach (use influencers)
New markets
Market development
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• Expanding into the USA
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• University based stationary, IE with the universities name on
Diversification
• British Themed memorabilia
How is Paperchase going to get there?
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Brand vision and objectives . . . WHO ARE PAPERCHASE? Paperchase is the UK’s number 1 shopping spot for exciting and innovative design-led stationery. For over 40 years they have inspired with stylish stationery, unique greeting cards, distinctive gifts as well as quality art and craft materials. WHAT DO THEY DO? Always ready with fresh and inventive ideas, Paperchase is constantly bringing new products with many new products launching in stores and online every single week. Many of these items are created in-house by a talented team of designers, so great ranges exclusive to us can be enjoyed. Alongside innovation, Paperchase maintain a great variety of essentials too, tried and tested by loyal customers. Paperchase as a company currently have an objective to launch in the USA, and have already got plans in place to open two stores in 2018.
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“Stationary, but never still.” (Linkedin. 2018) “The Paperchase brand is synonymous with creativity, imagination, and provides high quality products.” (Linkedin. 2018) Specialties; Luxury stationery and gifts, Quirky novelty gifts, Unique design led wrap and card selection, and Innovative diaries and notebooks
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Anglophilia . . .
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Anglophilia is the admiration for England, English ways, or things that are English. (Merriam-webster.com 2018) American people are notoriously famous for loving England, The love of the Englishman and accent has been depicted in many films such as Love Actually (Love Actually, 2003) This was also demonstrated and supported by the fact 2.9million Americans tuned in to watch the wedding ceremony of Price Harry and Meghan Markle. As well as the nearly 30 million TV viewers many Americans joined the 1000’s that lined the streets of Windsor.
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Media Landscape . . .
As of 2018, consumers are deemed as impatient, impulsive and in pursuit of immediate gratification. The increase in the amount of digital shoppers demonstrates how consumers are interested in getting their products as soon as possible. and the media landscape in the UK and USA are very similar. E commerce sales, and especially sales made on smart-phones, are significantly increasing in both countries by the year and are expected to continue rising in the future. A US study from 2015 stated that 32% of consumers browsed and surfed the web whilst watching TV. Paperchase can use this trend to their advantage by putting a lot of consideration into improving their mobile commerce. This can include having a faster loading E-commerce site and checkout service such as a guest checkout to avoid the process of signing up, as well as having a strong social media presence.
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Social media . . .
As identified in the swot and tows analysis Paperchase’s social media presence is rather weak. instagram has been unidentified as the best platform to improve usage on as it is predicted to rise by 61 million US users by 2021. (billions 2018) The biggest and most apparent weakness on their instagram is the account name which is ‘from paperchase’ which means the account itself is hard to find. Content on their instagram is really eye catching and their feed is very aesthetically pleasing however they only have 139k followers and average around 1.5k likes per picture, whereas skinny dip that sell similar products have 513k followers and can fetch up to 11k likes per picture. This is a big disadvantage for Paperchase and before they launch they need to increase their social media following. UK-USA Report-
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Social media influencers . . .
These two social media influencers are from and are highly popular in the USA. They are young and fit into Paperchase’s target market. They are both Youtubers with large social media following across all platforms. If Paperchase where to use one or both of these influencers to endorse their products then it will create hype in the USA and draw more peoples attention to the brand and make the products more popular. As part of these influencers video series they share their morning and night-time routines with their following, within these videos the girls can often be seen talking and showing new stationary and writing do to lists and daily plans in journals and notebooks. This would be a great way for Paperchase to boost their social media, aforementioned their content is already of high quality, it is just the following and interaction that is not adequate in comparison to competitors.
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Level of education in the USA . . .
Paperchase have a target market of age 18-25, the pie chart shows that only 12% of USA in that age range did not graduate, meaning 88% of 18-25 year old’s in the USA education, meaning college, school and university suitable products will be a good in the USA. It also opens up options for store locations, University/student heavy best such as Boston, New York, and Chicago.
people in the are currently in range to launch areas will be
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Market entry strategy . . . Direct investment Direct investment as a market entry strategy is to open stand alone store and Paperchase will have direct ownership of stores in the USA. After researching the brand direct investment will be the best option for Paperchase, mainly due to its history with the USA and the fact the company have already started to put plans in place to open stores in 2018.
Pros;
Cons;
Paperchase will have 100% control over the store, staff and products
Can be financially expensive
Better market adaptation so a higher chance of success Higher profit returns (Chung and Enderwick 2001)
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Requires the biggest amount of commitment
Draw conclusions that highlight how the brand can maximise its global potential in USA
Another reason for suggesting Paperchase make a direct investment is due to the fact they currently sell their cards within Target and Staples in the USA so the brand already has a presence. If Paperchase where to have a concession stand in a department store it likely would not create anymore awareness or brand loyalty as Staples and Target are huge retailers in the USA.
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Recommendations . . . As aforementioned nearly 30million Americans tuned in to watch the royal wedding of Megahan Markle and Price Harry. This huge interest in British culture and the royal family is called Anglophilia. Due to this huge interest and commitment from American citizens we launching Paperchase’s British themed range would be a huge success in the USA. This has been backed up by research as American respondents where asked if they would purchase British themed stationary and memorabilia which 94% agreed that they would. (See appendix 4) Part of this range includes British themed notebooks and other stationary as well as party and novelty accessories. By launching this range in American stores it will further encourage aspects of British culture. People in USA value experiences (Euromonitor International Blog 2018)- So the aim is to ensure the stores themselves are experiential by hosting workshops and events, as well as hosting a British street party as part of the launch using Paperchase’s party wear, this aims to bring British culture to the USA as well as encouraging customers into the store and to advertise the products sold.
Another recommendation is to use the social media influencers to promote and create a social media hype around the company which will increase the following of Paperchase’s social media platforms, especially Instagram, to keep up with competitors.
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Challenges that may be faced . . . The retail market is generally moving online. However Paperchase have successfully opened 23 new stores outside of the UK in 2016 and the company has seen their sales rise by 12% since doing so. (Euromonitor 2017) Also within the survey American respondents where asked if they prefer to buy their stationary online or in-store and 80% said they would rather purchase in store. (See appendix 4)
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Some products sold are potentially becoming outdated. Products such as scrapbooks and photo albums have decreased in popularity since the rise of digital photography, unlike film photography people are less likely to have physical prints than when film photography was the only way to get prints. To combat this Paperchase can run interactive workshops within their stores to encourage people to come into the stores, buy scrap-booking and photo album equipment and learn how to use it efficiently. This will be a fun friendly environment to encourage people into the store and also to raise knowledge of the breadth of products sold in Paperchase.
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Marketing Strategy and Planning Individual Report
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