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With their great effort in helping us, we would like to express our gratitude to; Ms Marianne
Bjarstad and Ms Silje Kotte at Bik Bok for providing us with essential information throughout
the project, their financial support and collaboration. Last but not least, we would like to
thank Mr Peter Williams for his encouragement, guidance and experience.
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______________________________ Caroline Ellis
______________________________ Helle Berg Sørensen
______________________________ Magnus Andersen Vyrje
______________________________ Tina Pham
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LIST OF FIGURES .................................................................................................................... 8
LIST OF TABLES ..................................................................................................................... 9
EXECUTIVE SUMMARY .......................................................................................................... 10
CHAPTER 1 - INTRODUCTION .................................................................................................. 13
1.1 Company History .............................................................................................................. 13
1.2 Bik Bok’s Products ............................................................................................................ 14
1.2.1 Designer Collaborations ....................................................................................................... 14
1.2.2 Fast Fashion ......................................................................................................................... 15
1.3 Business objectives in the UK market ................................................................................ 15
1.3.1 Project scope ........................................................................................................................ 15
1.3.1 Research Objectives ............................................................................................................. 15
1.4 Market Overview .............................................................................................................. 16
1.4.1 The current situation of the UK market ............................................................................... 16
1.4.2 Current suppliers in the market place ................................................................................. 16
1.4.3 Leading Companies in the UK market .................................................................................. 17
1.4.4 Future trends in the UK market ........................................................................................... 17
CHAPTER 2 – LITERATURE REVIEW ........................................................................................... 19
2.1 A Theoretical Framework .................................................................................................. 19
2.2 Concepts and theories ...................................................................................................... 25
2.2.1 Segmentation ....................................................................................................................... 25
2.2.2 Positioning and Differentiation ............................................................................................ 26
2.2.4 Retailing ............................................................................................................................... 29
2.2.5 Marketing Communication .................................................................................................. 31
2.2.6 External Analysis .................................................................................................................. 33
2.2.7 Internal Analysis ................................................................................................................... 36
2.2.8 SWOT analysis ...................................................................................................................... 38
CHAPTER 3 – METHODOLOGY................................................................................................. 40
3.1 Introduction ..................................................................................................................... 40
3.2 The Research Process ........................................................................................................ 40
3.2.2 Secondary Research ............................................................................................................. 41
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3.2.1 Primary Research ................................................................................................................. 43
3.3.1 Research That Obtains Quantitative Data ........................................................................... 43
3.3.2 Research That Obtains Qualitative Data .............................................................................. 44
3.4 Chosen Research Methods ................................................................................................ 45
3.4.1 Primary Research ................................................................................................................. 46
3.4.2 Secondary research .............................................................................................................. 48
3.5 Reliability and Validity ...................................................................................................... 49
3.6 Research Ethics ................................................................................................................. 50
4.1 Introduction ..................................................................................................................... 52
4.2 Observation ...................................................................................................................... 52
4.2.1 The Clothing Retailers in Leeds ............................................................................................ 52
4.2.2 Competition Overview in London ........................................................................................ 52
4.3 Semi-structured Interviews ............................................................................................... 53
4.3.1 Interview with Silje Kotte ..................................................................................................... 53
4.4 Survey-research ................................................................................................................ 54
4.4.1 Target segments of Bik Bok, Oxford Street, London ............................................................ 55
4.4 Limitations ....................................................................................................................... 57
CHAPTER 5 – EXTERNAL AND INTERNAL ANALYSIS ........................................................................ 59
5.1 External Analysis .............................................................................................................. 59
5.1.1 PESTEL Analysis .................................................................................................................... 59
5.1.2 Porter’s Five Forces .............................................................................................................. 66
5.2 Internal Analysis ............................................................................................................... 70
5.2.1 The Bakka Framework .......................................................................................................... 70
5.2.2 The Bakka Model Applied to BikBok .................................................................................... 70
5.2.2 The Value Chain ................................................................................................................... 73
5.2.3 Key and Critical Success Factors ........................................................................................... 75
5.3 SWOT Analysis of Bik Bok, UK ........................................................................................... 77
5.3.1 Strengths .............................................................................................................................. 77
5.3.2 Weaknesses.......................................................................................................................... 77
5.3.3 Opportunities ....................................................................................................................... 78
5.3.4 Threats ................................................................................................................................. 79
CHAPTER 6 – THE BRAND ...................................................................................................... 82
6.1 Introduction ..................................................................................................................... 82
6.2 Segmentation ................................................................................................................... 82
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6.3 Positioning ....................................................................................................................... 83
6.4 Differentiation .................................................................................................................. 83
6.5 The Consumer Decision Making Process ............................................................................ 84
6.6 Branding ........................................................................................................................... 86
6.6.1 The Brand ............................................................................................................................. 86
6.6.2 Brand Identity ...................................................................................................................... 86
6.6.3 Brand Image ......................................................................................................................... 87
6.6.4 Brand Pyramid ...................................................................................................................... 87
6.6.5 Marketing Communication ............................................................................................. 88
CHAPTER 7 – THE STORE CONCEPT .......................................................................................... 91
7.1 Retail Management .......................................................................................................... 91
7.2 Store Layout ..................................................................................................................... 91
7.2.1 The External Design.............................................................................................................. 91
CHAPTER 8 - RECOMMENDATIONS ........................................................................................... 94
8.1 Adapt to the Market ......................................................................................................... 94
8.1.1 Ethics .................................................................................................................................... 94
8.1.2 An Increase in Sizes .............................................................................................................. 94
8.2 Differentiation .................................................................................................................. 94
8.2.1 Customer Service ................................................................................................................. 94
8.2.2 Scandinavian Concept .......................................................................................................... 95
8.3 Store Layout ..................................................................................................................... 95
8.3.1 External and Internal Store Environment ............................................................................ 95
8.4 Marketing Communication................................................................................................ 96
8.4.1 Digital and Social Media ....................................................................................................... 96
8.4.2 Celebrity Endorsement ........................................................................................................ 97
8.4.3 E-commerce ......................................................................................................................... 98
8.4.4 M-commerce ........................................................................................................................ 98
8.5 Action plan for the recommendations ............................................................................... 98
CHAPTER 9 – CONCLUSION .................................................................................................. 100
BIBLIOGRAPHY .................................................................................................................. 102
APPENDICES ..................................................................................................................... 112
Appendix 1 – The Different Bik Bok Brands ........................................................................... 112
Appendix 2 – Market Leaders in the UK Clothing Industry ...................................................... 113
Appendix 3 - Qualitative, Quantitative and Mixed Methods Approaches ............................... 114
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Appendix 4 – Research Intelligence ....................................................................................... 115
Appendix 5 – Observation Rapport, Leeds ............................................................................. 117
Appendix 6 – Observation Rapport, London .......................................................................... 120
Pictures of Surrounding Clothing Retailers in Oxford Street ...................................................... 122
The Exterior and Interior Store Layout of Bik Bok, Oxford Street .............................................. 124
Appendix 7 – Interview with Silje Kotte, Bik Bok ................................................................... 130
Appendix 8 – Questionnaire form – Target Segments ............................................................ 134
Appendix 9 – Findings – Target Segments .............................................................................. 136
Appendix 10 – Survey Form – Brand Perception .................................................................... 146
Appendix 11 – Findings – Brand Perception ........................................................................... 147
Appendix 12 - Limitations ..................................................................................................... 149
Appendix 13 – Consumer expenditure on clothing ................................................................. 150
Appendix 14 – The Service Hand ........................................................................................... 151
Appendix 15 – SWOT Analysis – BIK BOK UK.......................................................................... 152
Appendix 16 – Recommended Action Plan ............................................................................ 153
Figure 2.1 – Possible influences on the decision making process 16
Figure 2.2 – Consumer as a “Black Box”: A Behaviourist Perspective on Learning 20
Figure 2.3 – The Brand Pyramid 26
Figure 2.4 – Marketing Communication to build Brand Equity 30
Figure 2.5 – The External Analysis Process 30
Figure 2.5 – Porter’s Five Forces 31
Figure 2.6 – The Value Chain 34
Figure 3.1 – The Research Process 37
Figure 5.1 – Population by gender and age 58
Figure 5.2 – Revenue contributions from the different markets 2010 68
Figure 5.3 – Bik Bok’s Organization Chart 69
Figure 5.4 – Bik Bok’s Value Chain 73
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Table 1.1 – Retailer Categorisation 13
Table 2.1 – Influencing Factors 17
Table 2.2 – Consumer’s Sources 19
Table 2.3 – Key issues of retailers 27
Table 2.4 – The Marketing Communication Mix 29
Table 3.1 – Benefits and Limitations of Secondary Data 39
Table 3.2 – Benefits and Limitations with Primary Data 40
Table 3.3 – Quantitative and Qualitative Data 41
Table 3.4 – Reliability Questions 46
Table 3.5 – Forms of Validity 46
Table 5.1 – The Bakka Framework 67
Table 5.2 – Bik Bok’s KSFs 73
Table 5.3 – Bik Bok’s CFS 73
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This report has been conducted in cooperation with Bik Bok, a Norwegian fast-fashion retail
chain for young females. The company established their operations in the UK market in
2005, and conducts their business in Oxford Street, London. Due to a lacklustre performance
and ineffective operations, an aim has been identified to make the existing London store
more profitable and increase Bik Bok’s brand awareness in the UK market.
In order to acquire information to answer the research aims and objectives, the research
process was conducted in a step by step manner. By collecting secondary and primary data,
important intelligence has been identified. Through a semi-structured interview with Bik
Bok’s store manager, a deeper insight has been obtained into the UK retail market, how the
store operates, the brand and their marketing activities. Additionally, structured interviews
in written formats, observations and surveys have been executed to acquire the latest data
regarding their customers.
The most important findings from our primary research have been identified as the
following. The demographics of the store’s customers show great diversity regarding age.
Moreover, the main respondents were British people living in the London area and tourists,
primarily from Norway. Furthermore, a majority of the customers were first time shoppers
at Bik Bok, which implies that Bik Bok has low brand awareness in the UK market.
Through extensive market research, the authors of the report have been able to obtain a
deeper insight into Bik Bok’s external and internal environment. The UK is considered an
attractive and “low risk” country to conduct business in. After the recession, the country’s
economy is experiencing a slow recovery, which has led to an increase in customer
purchasing power. In terms of social aspects, the country has high standards of living and
education. Moreover, their infrastructure regarding the telecommunication system is of a
high quality and a majority of the inhabitants have access to the Internet. Sustainable
development is additionally of high importance in the UK. Furthermore, local legislation is of
high importance for Bik Bok, hence business tax rates and the congestion charge policy
impacts the company’s operations and ultimate profitability.
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The competitive clothing retail environment in the UK is characterised by strong rivalry,
however there is still considered to be room for small competitors. Combined with the
growth in the womenswear sector, this indicates the attractiveness of the industry.
Moreover, the internal analysis highlights that Bik Bok has great customer service;
nonetheless, their marketing communication is not giving high priority towards the UK
market. Hence, an increase in marketing efforts and a high priority on marketing from the
headquarters is imperative for Bik Bok to become more profitable in the UK market.
By focusing on branding and promotional material Bik Bok can convince the market of its
superior merchandise. The main marketing strategy has been identified as “direct and
interactive marketing” to increase customer awareness and brand equity. Moreover, Bik
Bok should exploit the opportunities that lie in celebrity endorsement by promoting the
guest collection by the renowned Whitney Port. Additionally, an upgrade of the store is
considered a necessity to enhance the company’s success.
The proposed strategy includes recommendations for Bik Bok to attain their goals in the UK
market. By focusing on obtaining a differentiation strategy, they could benefit from
implementing a Scandinavian concept into their brand. Additionally, they will benefit from
visualizing their sustainable business operations by promoting this towards the customers.
Moreover, the long-term recommendations have been identified as adapting to the UK
market in relation to the product lines and addressing the issues of the increase in e-
commerce and m-commerce. By carrying out these proposals, Bik Bok has a great potential
for developing a flourishing business concept.
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1.1 Company History
Bik Bok is a Norwegian clothing retail chain, and is considered as one of the leading
companies in the Norwegian textile industry. The company was founded in 1973 by Kenneth
Sandvold and Olav Kongshaug and became a part of one of the largest Norwegian textile
conglomerates, the Varner Group in 1991. The corporation has almost 600 stores in Norway
and over 1100 in total, and is represented in 9 countries (Datamonitor, 2010a). All the stores
are self-operated by the Varner Group, with the exception of some of the stores in the
Cubus concept in Germany. The running of the company is centralised in Norway and this
applies to all aspects of the business operations such as the general company culture;
corporate social responsibility (CSR), overall organisational structure and production
processes in all the subsidiaries. The company’s headquarter is located at Billingstad, in
close proximity to Oslo (Varner Gruppen, 2011a).
Bik Bok is present in Norway, Sweden, Denmark, Latvia and England and has a portfolio
consisting of 160 stores across these countries (Bik Bok, 2011). The company recognises
Norway and Sweden as its primary market, as being the countries where it has the largest
market shares. The concept’s target market group are young girls, primarily in the age group
15-25 (Bjarstad, 2010).
“Bik Bok aims to be the first choice amongst fashion-conscious girls who follows
trends and all the twists and turns of the fashion world” (Bik Bok, 2011).
The concept operates in the low price and the volume market (Varner Gruppen, 2011a). Bik
Bok had total revenue of NOK 872 million exclusive VAT in 2010 and has an aim of reaching
total revenue of NOK 1.1 billion exclusive VAT in 2011. The production of the manufactured
goods is outsourced to around ten production sites mainly based in East Asia and Turkey
(Varner Gruppen, 2011b).
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Bik Bok chose to expand to the UK in 2005 by opening stores in Covent Garden, London and
in Lakeside, Essex. By using Harper Dennis Hobbs as their letting agency, they found suitable
locations. Their third shop was opened in Oxford Street, where the company signed a 25
year contract. Shortly after opening the last store, they closed the other two locations due
to a tough retail climate. Originally Bik Bok planned to open up to six stores in London.
Nevertheless, they were forced to review their strategy (Chesters, 2005).
The London store is run in the same manner as the Norwegian domestic stores, which
implies that the decision making takes place at the headquarters. This includes areas such as
appointing the shop manager, deciding on its product range and marketing strategy
(Bjarstad, 2011).
1.2 Bik Bok’s Products
The concept sells only in-house brands, consisting of Bik Bok, Never Denim, Westhill
Redbird, Sassymanii and Twentyfive:Seven (Appendix 1). Their product range consists of
clothes, underwear, accessories and a small selection of makeup.
1.2.1 Designer Collaborations
In addition, Bik Bok has had collaborations with various Norwegian guest designers such as
Jenny Skvalan and Charlotte Thorstvedt, which are role models for the target group. This
year they are launching a collection from the international celebrity, “it girl” and clothing
designer, Whitney Port, which will be released in October 2011. Additionally, Bik Bok has a
designer contest called 5x5 (Five by Five) where they encourage young and promising
designers to present a small collection for Autumn/Winter 2011. The five selected
candidates will be given the opportunity to develop and produce their own collection with
Bik Bok, and they will participate in the photo shoot, the launch of the collection and other
marketing related activities. Moreover, the finalists are competing for a position as a trainee
in Bik Bok’s design team (Bik Bok, 2011).
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1.2.2 Fast Fashion
Fast fashion retailers follow trends that are strongly influenced by, or in some cases
replications of catwalk or celebrity style. The category of retailers are further characterised
for changing the stock significantly more often than others in the apparel industry (Hayes
and Jones, 2006).
1.3 Business objectives in the UK market
Bik Bok is recognised as a highly successful retailer in the fast fashion market in Norway. As
a part of the Varner Group they are a market leader within the Norwegian apparel industry
(Datamonitor, 2010a). Despite their success in their primary market, Bik Bok has not been
able to exploit their full potential abroad.
1.3.1 Project scope
Through contact with Bik Bok’s General Manager, Ms Marianne Bjarstad, an understanding
of Bik Bok’s wishes has been developed and the expectations for the project have been
clarified. The company lacks knowledge of the British market and consumers. Therefore, Bik
Bok wants to reveal if the concept has potential in the UK. If the analysis of the UK market is
deemed to be positive, a strategy has been outlined for how Bik Bok can become more
successful as a fast fashion retailer in a highly competitive market. Considering the different
aspects of the company’s situation in the UK, the following aim has been defined for the
project:
”Make the existing store in London more profitable and increase Bik Bok’s
brand awareness in the UK market”
1.3.1 Research Objectives
In order to ensure that the relevant information is acquired regarding the aforementioned
aim, research objectives have been developed. It is important that the objectives are SMART
(specific, measurable, achievable, relevant and time-defined).
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The report will strive to determine the following objectives:
1. Outline the current target segments of the Bik Bok store in London
2. Increase the revenues from Bik Bok’s existing segments
3. Find the most effective communication strategies in order to reach the targeted
segments
4. Find market strategies to increase their brand awareness in UK market
5. Establish a differentiation strategy for Bik Bok in the UK market
1.4 Market Overview
1.4.1 The current situation of the UK market
The following categories: “casual wear, formal wear, active wear, out-wear and essentials”
make up the womenswear market. In 2009, it accounted for a value of £ 22,110 million.
Looking at the womenswear market as a whole, the clothing retailers represented the
largest segment with 77.7%. The UK womenswear market is the third largest market in
Europe (Datamonitor, 2010b).
1.4.2 Current suppliers in the market place
The UK womenswear market consists of a broad variety of different competitors. The different
retailers can be divided into four different categories based upon how the characteristics can be
perceived; entry/value retailers, mass market retailers, premium market retailers and luxury/high-
end retailers (Mintel, 2010a).
Table 1.1 Clothing Retail Categories
Category Example (Brands)
Entry/Value retailers Primark
Mass market retailers H&M, Topshop, Zara, River Island, Gap.
Premium market retailers Lacoste, Armani, All Saints, Jaeger, Ted Baker
and Karen Millen.
Luxury and high-end retailers Luis Vuitton, Gucci, Dior and Burberry.
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Bik Bok can be categorised as an Individual Boutique in the UK market, due to the presence
of only one store. This outlines the significance of competition from both individual stores as
well as large fashion retailers in Bik Bok’s surrounding environment.
1.4.3 Leading Companies in the UK market
The womenswear market is recognised as highly competitive due to the growth of the
market size and the supply of similar products (Datamonitor, 2010b). Some of the major
competitors in the industry are Arcadia Group Ltd, Hennes & Mauritz Ltd, Inditex Group UK
Ltd, New Look Retail Group Ltd, Next plc, Primark Stores Ltd and River Island Clothing
Company Ltd (Key Note, 2011a). A more detailed overview and mapping of the groups’
powerhouses and chains are specified in Appendix 2.
1.4.4 Future trends in the UK market
According to Datamonitor (2010b), the womenswear market in the UK is expected to have a
compound annual growth rate of 1.6% in the period 2009 – 2014. The total market value is
estimated to account for £22,765 million in 2011 and further a total market value of
£23,991 million in 2014, which is an increase of 5.4% (Ibid).
The womenswear sector is predicted to see the fastest growth rates of all the clothing
sectors in the coming years. It is mainly increases in price that will affect the rise in value,
and not just new developments. Further, the clothing accessories sector is predicted to
grow rapidly in the coming period. The fashion industry has experienced a shift in focus in
seeing accessories as an equally important contributor in creating certain looks and styles, in
addition to being a popular essential within the fast fashion market (Key Note, 2011a).
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2.1 A Theoretical Framework
2.1.1 The Consumer Decision Making Process
The Consumer Decision Making Process consists of five stages that the customer goes
through when making purchasing decisions; need recognition, information research,
evaluation of alternatives, purchase decision and post purchase decision. The buying
process starts long before the actual purchase and continues in long time after. It is
therefore important for the marketer to be present in all these stages, and not just the
purchase decision to have an impact on the buyer’s choice (Kotler and Armstrong, 2010).
Figure 2.1 Possible influences on the decision making process
(Dibb et.al., 2001; Dibb, Simkin and Bradley, 2006)
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There are several different factors that have an impact on why and how consumers engage
in buying. By gaining knowledge of these influences, businesses are able to develop more
concise marketing programmes. These influencing factors can be summed up as follows:
Table 2.1 Influencing Factors
Influence Categorisation Influences
Personal influences Demographic issues, situational factors and
involvement
Psychological influences Consumers’ different perceptions, motives and
attitudes towards what and how they purchase
Social influences Individual tastes are influenced by social class
and culture
Media influences Advertising, sales promotion, publicity,
sponsorship and direct mail
By mapping out this process in a step by step manner, businesses can obtain valuable insight
into what affects the customers at each stage of the decision making process. Hence, they
can refine their marketing efforts and target the customers with a more suitable approach
(Dibb, Simkin and Bradley, 2006).
Problem Recognition
When consumers see a significant discrepancy between his or her current situation and
some desired or ideal state, problem recognition occurs (Hoyer and MacInnis, 2010). In this
state of affairs the term “problem” can be perceived as recognition of an opportunity or a
goal that the consumer wishes to achieve (Wilkie, 1994). The problem can be simple or
complex, small or large, and in either way the problem recognition activates a goal which
encourages the consumer to act. The need can be triggered by internal stimuli such as
hunger and thirst, which rises to a level high enough to be a drive. In other cases it can be
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triggered by external stimuli such as advertisement or a discussion with a friend. At this
stage, marketers should research consumer’s behaviour to find out what brought them
about and how they were led to the particular product (Kotler and Armstrong, 2010).
Information Search
To be able to move towards an achievement of the goal, consumers need adequate
information to resolve it (Solomon, 1999). Information search is the process by which the
consumer scans the environment for suitable data to make a sound decision. There are two
primary modes of consumer information search, internal versus external search. When
confronted with a purchase decision, we may search our internal memory to gather
information about different product alternatives. Often, we need to supplement this
knowledge with external search obtained from advertisement or friends (Ibid). The amount
of research the consumer obtains is a result of the strength of the drive, the amount of
information he/she starts out with, the ease of obtaining more information, how much they
value the information and the satisfaction they get from researching (Kotler and Armstrong,
2010).
Furthermore, a search can be characterised as “deliberate” versus “accidental” search.
“Accidental” search refers to gaining information when not actually making a consumer
decision, such as browsing through a shopping center (Wilkie, 1994). However, our own
internal memory is often not adequate to make a satisfactory decision and we decide to
look for information elsewhere. By deliberate search we browse for information to make a
particular purchase decision (Ibid). To obtain information there are four major sources that
consumers turn to (Kotler et al., 2009).
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Table 2.2 Consumers’ Sources of Information
Personal sources Family, friends, acquaintances etc.
Commercial sources Advertising, web sites, sales personnel, packaging, displays etc.
Public sources Newspaper, radio, television etc.
Experiential sources Handling, examining, uses the product etc.
The relative amount and influence of these sources vary with the product category and the
customer’s characteristics. Although the customer retrieves the most information from
commercial sources, personal sources seem to be the most credible source of endorsement
as they legitimize or evaluate the product for the buyer. Therefore, the marketing team
needs to carefully identify the buyer’s sources of information and the importance of these
(Kotler and Armstrong, 2010). By doing this, businesses are in a better position to design
marketing programs that cater for their needs (Dibb, Simkin and Bradley, 1996).
Commercial Sources
As the consumers acquire more information, their awareness and knowledge of the
available brands and their features increase (Kotler and Armstrong, 2010). By being exposed
to new stimuli and receive ongoing feedback our knowledge of the world is revised
constantly. The consumers therefore modify their behaviour when finding themselves in a
similar situation at a later time. Hence, learning is an ongoing process which can be divided
into two schools, behavioural and cognitive learning theory (Solomon, 1999).
Behavioural Learning Theory
This theory assumes that learning takes place as the result of responses to external events
instead of being an internal thought process. By depicting the mind as a “black box” it is
thought that association of a stimuli or events perceived form the outside world goes into
the box and the responses that come out of the box are reactions to these stimuli (Solomon
et al., 2010). Similarly, consumers will respond to marketing stimuli such as brand names
and jingles based on learned connections, which they will respond to in similar conditions in
the future.
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Figure 2.2 Consumer as a “Black Box”: A Behaviourist Perspective on Learning
(Solomon, 1999, p. 72)
Cognitive Learning Theory
On the contrary, cognitive learning is a result of a mental process (Solomon et al., 2010).
The theory stresses the importance of internal memory, creativity and insight during the
learning process, and views people as active problem solvers that use information to master
the environment (Solomon, 1999).
Evaluation of Alternatives
At this stage, the consumer uses the information to arrive at a set of final brand choices
(Kotler and Armstrong, 2010). How consumers go about evaluating brands depends on the
buying situation and the individual consumer. A customer who is engaged in an extended
problem solving may consider many stores and different brands, whereas someone making
a habitual decision may not consider any other brands than what he/she usually buys
(Solomon, 1999).
Comparisons are made of the salient attributes such as cost, reputation or performance
expectation based upon the potential customers criteria. Based on attributes within the
context of these brand beliefs and attitudes the customer will rank the alternatives and
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form some sort of preferences. By this, the customer will try to satisfy both functional needs
related to the performance of the product, as well as psychological needs associated with
self-image. For example, a designer dress serves the same function as another dress but
might be chosen because it states something about the wearer in terms of status (Gilbert,
1999).
The alternatives that the customer actively considers during the evaluation process are his
or her evoked set (consideration set). When considering the different brands, the criteria
are usually based on the expressed product attributes (Schiffman, Hansen and Kanuk, 2008).
This comprises the products which are already in the memory in addition to those
prominent in the shop (Solomon, 1999). The brands the customer is aware of, but does not
consider buying is his or her inept set, while the brands the customer is indifferent towards
because they do not seem to have any perceived advantage is his or her inert set
(Schiffman, Hansen and Kanuk, 2008).
Sometimes a purchase is made by intuition while others may be a result of rational thinking.
Consequently, it is important for marketers to be knowledgeable of how consumers
evaluate alternatives so that they can take the necessary steps to influence the buyer’s
decision (Kotler and Armstrong, 2010).
Purchase Decision
Although the customer’s purchase decision will be to buy the most preferred brand, the
attitudes of others and unexpected situational factors may come between the purchase
intention and the decision (Kotler and Armstrong, 2010).
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Post Purchase Evaluation
The determination whether the customer is satisfied or dissatisfied with a purchase lies in
the relationship between the customer’s expectations and the product’s perceived
performance. However, almost all major purchases result in cognitive dissonance
(discomfort) caused by post purchase conflict (Kotler and Armstrong, 2010). This is most
likely to happen if there is more than one attractive alternative and the decision is
important (Hoyer and MacInnis, 2010). Marketers can help customer’s reduce post purchase
dissonance and regret, by diminishing the negative feelings related to the product. By
helping the customer’s obtain supporting information about the product and convincing
them that it will satisfy their needs, they can develop a positive attitude towards the
product/brand. How Bik Bok’s customers bring about a purchase is elaborated in section
6.4.
2.2 Concepts and theories
2.2.1 Segmentation
Market segmentation is the division of a mass market into identifiable and distinct groups of
customers who have common characteristics in terms of, needs, buyer behaviour and
display similar responses to marketing actions (Fill, 2006; Kotler and Armstrong, 2010).
Consumer market segments can be divided into two variables; consumer characteristics and
consumer responses. Consumer characteristics consist of geographic, demographic and
psychographic segments, and are used to distinguish if the segments have different needs
or product responses. Moreover, consumer responses are segmentation of the behaviour of
the consumer and can be seen as a good starting point when constructing market segments
(Kotler, 2000).
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To be able to identify the target audience, it is useful to segment the target group by
attitudes. Consequently, it will be easier to find people who share the same attitude
towards category usage and brands within the category (Percy and Elliot, 2005).
When the targeted market has been segmented, it is important for the firm to evaluate the
market segments by looking at the segments overall attractiveness and the company’s
objectives and resources. This is to be confident that the firm ends up with the most
beneficial segments and that the two factors correlate (Kotler, 2000).
2.2.2 Positioning and Differentiation
Positioning is not what you do to a product but what you do to the mind of the prospect.
Further, it is to be able to capture a special place in the target market’s mind with the act of
designing the company’s offering and image (Ries and Trout, 1986; Kotler, 2000).
A brand’s market position can be categorised in relation to the product category (centrally
positioned) or the category need (differentially positioned). A centrally positioned brand has
to deliver all the main benefits in that category and will be categorised as the best
positioned brand. This is normally a category for brands with a strong market position, but
in some cases a “me too” brand can equally deliver it (Percy and Elliot, 2005).
Differentiation refers to the creation of tangible or intangible differences on one or more
key dimensions between a product and its main competitors (Lilien and Rangaswamy,
2004). Hence, if a brand is differentially positioned it will place the brand relative to its
competitors, in terms of the user or of the product itself (Percy and Elliot, 2005).
To sum up, positioning is what you try to do to the minds of customers to help them
perceive the product differences clearly, while differentiation is what you do the product to
distinguish it from competing products. Firstly, positioning states the product’s membership
in a category (i.e. the fast fashion market) and then demonstrates its point of difference (i.e.
better quality and customer service) (Lilien and Rangaswamy, 2004). How Bik Bok should
position themselves and seek differentiation will be elaborated further in section 6.2 and
6.3.
27
Rosser Reeves recommends that a company should develop a “Unique selling position” for
each brand and stick to it (Reeves, 1960, cited in Kotler, 2000, p. 299). If a company has
claimed too many attributes, the brand may risk disbelief and lose a clear position. Thus, the
company needs to avoid the four positioning errors; under positioning, over positioning,
confused positioning, doubtful positioning.
2.2.3 The Brand
2.2.3.1 What is a Brand?
The American Marketing Association defines a brand as “a name, term, sign symbol, or a
design, or a combination of them, intended to identify the goods or services of one seller or
group of sellers to differentiate them from those of competitors” (Kotler and Keller, 2006,
p.276).
Moreover, Murphy (1990, p. 2) recognises a brand as “a product or service of a particular
supplier which is differentiated by its name and presentation.” He further differentiates the
brand from the product by underlining how a product is something that can easily be
replaced by a nearly identical product and which may be fulfilling the same needs. For the
company, the brand is an asset that has become a set of both tangible and intangible values
and attributes, which meaningfully and appropriately differentiate otherwise very similar
products (Ibid).
However, it can be argued that a brand is formed by a combination of activities which
comprises all aspects of the marketing mix, in order to enable the customer to identify the
attributes which makes the product different from the other suppliers (de Chernatony and
McDonald, 2003).
2.2.4.2 Brand Identity
Hatch and Schultz (2000, cited in de Chernatony, 2006) defines brand identity as the
company’s vision, core values and ideas, reflected through the brand. Kapferer (2004)
further illustrates it by defining brand identity as the company’s ways of communication
towards the consumer, defining the path to how they want to be perceived when the
consumer recalls the brand’s logo, design and name.
28
2.2.4.3 Brand Image
Brand image is the result of how the audience decodes the message regarding the brand’s
identity (Aaker, 2002). Furthermore, it is the associations evoked in a consumer’s mind
based on previous experience or other reasons from memory and the consumers’ individual
attitude and feelings towards a brand’s characteristics (de Chernatony and McDonald,
2003).
Consumers do not respond to the reality itself, but to what they perceive as the reality. This
clearly outlines a set of associations experienced by individuals, over a certain period, as the
result of direct and indirect involvements with a specific brand (de Chernatony, 2006).
In addition, brand images are perceived as benefits, which are made through market
communication. They can be categorised as attributes, subjective considerations or
emotions (Percy and Elliot, 2007).
2.2.4.4 Brand Equity
When developing a brand identity, a part of this process includes a value creation, which
can be seen as brand equity (Kohli, Harich, and Leuthesser, 2005). Brand equity is created
when the brand name provides added value to a product, and this value is seen in ether
financial terms, or in how a consumer perceives the brand (Percy and Elliot, 2007).
2.2.4.5 The Brand Pyramid
De Chernatony’s (2006, p.225) brand pyramid is a useful tool in order to demonstrate the
components of a brand and draw attention to the brand’s core. The brand pyramid makes it
possible to communicate the brands internal traits and furthermore enables employees to
fully understand and become aware of the attributes that are important to the consumers.
29
Figure 2.3 The Brand Pyramid
(De Chernatony, 2006)
The model consists of five levels:
1. Attributes – describes the three key functional and quantifiable attributes of the
branded product
2. Benefits – the positive results experienced from using the attributes
3. Emotional rewards – the customer’s emotional rewards from consumption over a
period of time, and the costumer’s understanding of the brand
4. Values – the value created, due to the appreciated emotional reward
5. Personality Traits - the core context and features of the brand (Ibid)
2.2.4 Retailing
Retailing can be defined as a set of business activities that adds value to the products and
services sold to consumers (Levy and Weitz, 2009). In addition to products in stores,
retailing also involves the sale of services and non-store retailing such as sales over the
Internet. A retailer is the final business in a supply chain that links the manufacturer to the
consumer. In addition to enhancing the value for customers, retailers facilitate the
distribution of the products and services for the manufacturers that produce them (Ibid).
These value creating functions include providing an assortment of products and services,
30
breaking bulk, holding inventory, creating new demand for merchandise and providing
services (Madaan, 2009).
2.2.4.1 Retail Store Layout and Design
Sonia Manchanda, the founder and director of Idiom Design and Consulting Ltd has stated
that; “Retail today has a strong element of theater. No longer are stores just selling goods,
there is always a theme, a story that the retailers wish to draw the consumers into“
(Madaan, 2009, p. 192). Hence, external and interior store design; layout and visual
merchandising are crucial to create inspiration and buyer incentive amongst prospective
buyers.
Store layout can be defined as the location of the different sections that facilitate shoppers
in the retail store. It should make optimum use of space, arrange the facilities according to
the desired image and it has to be supported by the merchandise. This is vital for
establishing efficient retail operations and to be able to compete in a demanding
marketplace.
In general there are two dimensions, external and internal design. The external design
consists of elements such as access, frontage, entrance and visibility (Ibid). Internal design
deals with issues such as permanent structures including aisles and fixtures, lighting and
music (Mintel, 2007b). In addition, it is important for the retailer to understand consumer
behaviour and set up a shopping friendly layout.
Table 2.3 The Key Issues of Retailers
Category Description
Maximizing
Customer Value
By building relationships and word of mouth
Merchandising Such as understanding trends and making use of visual merchandising
Traffic Building By making use of promotion to attract a number of customers
Store Design and
Layout
To make the retail experience complete, the retail environment needs to have
an ambient store design and layout with correct merchandising. Layout is also
important in the virtual retail environment where navigation and usability can
determine a company’s success
31
Store Location
and Site
To build up sufficient customer traffic, physical location and high visibility is
important. This is usually a trade-off between estate costs and benefits of the
location
Keeping Pace
with Technology
It is important for retailers to make optimum use of technology by improving
productivity and provide more value for customers. Technology can be
implemented in forecasting, inventory management, Customer Relationship
Management, store layout etc.
People
Management
As retailing is a service- oriented industry, they are highly dependent on human
skills. Hiring people with the right set of skills, training, motivating and retaining
them remain challenges within the retail industry
(Madaan, 2009)
2.2.5 Marketing Communication
Marketing communication can be defined as a firm’s means of attempting to inform,
persuade and remind consumers (directly or indirectly) of their products and brands (Kotler
and Keller, 2006). These communication channels can establish a dialogue and build
relationships with the consumer and can be defined as the “voice” of the brand. Companies
use marketing communication to link their brand to people, places, events, brands,
experiences, feelings and things, which can contribute to brand equity.
The marketing mix is used to pursue the firms marketing objectives and is divided in to
product, price, place and promotion. Further, promotion is divided into the marketing
communication mix, which consists of eight modes of communication (Silverman, 2001;
Kirby and Marsden, 2006).
32
Table 2.4 The Marketing Communication Mix
Advertising Is a paid form of non-personal communication, presentation or promotion of
the company or their products by an identified sponsor
Sales Promotion Different short-term incentives to encourage purchase of a product or service
Events and
Experiences
Activities and programmes that are designed by sponsoring companies to create
daily or special brand related interactions
Public Relations Is an unpaid form of non-personal communications with a variety of
programmes designed to promote a company’s image or their products
Direct Marketing To be able to communicate directly with specific customers and prospects
through mail, telephone, fax, e-mail or the Internet
Personal Selling Making face to face communication with one or more potential customers for
the purpose of making presentations, answering questions and procuring orders
Direct and
Interactive
Marketing
The use of online activities to engage customers and create direct or indirect
awareness. This is an extension of direct marketing and can be used through
online ads and e-commerce websites
Word of Mouth Is an oral, person to person communication where people talk favourably about
a product to the right people in a right way. It is categorised as interpersonal
communication between communicators and receivers to exchange information
about a commercial topic
All of these factors help to create brand equity by creating brand awareness and linking
right associations to the brand image in the consumer’s minds (Silverman, 2001; Kirby and
Marsden, 2006; Kotler and Keller, 2006).
33
Figure 2.4 Integrating Marketing Communication to Build Brand Equity
(Kotler and Keller, 2006, p. 537)
2.2.6 External Analysis
An external analysis includes both general environmental factors and industry factors.
Firstly, an analysis of the macro-economic environment is carried out through a PEST
analysis. Further, an analysis of the industry’s competitive environment should be made.
Together, these two analyses determine the firm’s opportunities and threats. It is important
to distinguish the factors relevant to the company’s environment and find aspects in the
operating country that affect the firm’s strategy (Analoui and Karami, 2003). It is vital that
firms are able to respond offensively or defensively to the different factors and are able to
take advantage of the external opportunities or minimize potential threats (David, 2009).
Figure 2.5 The External Analysis Process
34
2.2.6.1 PESTEL Analysis
The PESTEL analysis is an acronym for “Political, Economic, Socio-Cultural, Technological,
Environmental and Legal” factors and it describes the macro-environmental circumstances a
company needs to take into consideration. It is a useful strategic tool for understanding
market growth or decline, business position, potential and direction for operations (Williams
and Curtis, 2006).
2.2.6.2 Porters Five Forces
The model analyses how an organisation needs to create its strategy in order to exploit
opportunities in its environment and create buffers and protection against competitors and
other threats.
The model consists of five different forces, which together explore the degree of
competition (Lynch, 2006). The collective strength of the five forces also defines the
eventual profit potential of an industry and can be summed up as follows; the bargaining
power of buyers, the bargaining power of suppliers, the threat of potential new entrants,
the threat of substitutes and the extent of competitive rivalry (Porter, 1998).
Figure 2.5 Porter’s Five Forces
(Lynch, 2006, p.103)
Bargaining Power of Buyers
PESTEL Framework
(Macro Environment)
Analysis of the Industry (Micro Environment)
Oportunities and Threats
Competative Rivalry
Suppliers
Substitutes Buyers
Potential Entrants
35
The buyers “compete” with the industry and have power over an organisation by forcing
down prices, demanding higher quality or services and by playing competitors against each
other (Botten and McManus, 1999). Furthermore, they become influential when the
products from the competitors are undifferentiated and if the buyers have the financial
strength to purchase large quantities of the output supply (Lynch, 2006).
Bargaining Power of Suppliers
Porter (1998) implies that the suppliers are more powerful if it is one of few in the industry
and if there are no substitutes for the supplies they propose. In addition suppliers become
powerful if their involvement influences the value added process of an organisation, i.e.
textiles of such a rarity and importance that are essential for the quality and perceived value
of the final product (Lynch, 2006).
The Threat of Potential New Entrants
Regarding the threat of new entrants in the industry, Porter (1998), states that there are
seven main sources of barriers that influence entrance to a market: economies of scale,
product differentiation, capital requirements, switching costs, access to distribution
channels, cost disadvantages independent of scale and government policies. When
substitutes succeed in penetrating the market, it is followed by an increase in rivalry (Ibid).
The Threat of Substitutes
The typical threat from substitutes usually occur when they do not completely replace
existing products, but introduce a new type of technology or reduce the expenses in the
production process. Furthermore, the threat arise when the already existing competitors
experience reduced margins, due to the fact that the substitutes have the possibility of
keeping the prices at a minimum level (Ibid).
The Extent of Competitive Rivalry
Rivalry may lead to the use of tactics such as price competition, advertising battles, product
innovations and improved customer service, which increases costs for competitors (Kotler
and Scheff, 1997). The competitive environment will be perceived as intense, if the different
competitors are of relatively equal size and there exist limitations in the growth of the
36
specific market. Moreover, the industry experiences tougher competition when the
products, services and brands are hard to differentiate (Lynch, 2006).
2.2.7 Internal Analysis
The internal analysis evaluates the strengths and weaknesses of the organisation. It further
looks at the current situation of the company. The Value Chain and Bakka framework will
give a complementary outline of the organisation’s internal situation.
2.2.7.1 The Value Chain
The value chain links the value of independent activities of an organisation with its core
functional parts. The series of activities that are executed, contributes to the added value of
the organisation. Further, the framework attempts to make a calculation of the contribution
from what each part makes to the overall added value of the business (Ibid).
Moreover, there is a connection between the different activities that exists in the
organisation. The way an activity performs affects the cost or effectiveness of other
activities. In addition, the linkage requires the activities to be coordinated (Porter, 1998). In
the framework, the added value is defined as the margin, which is considered as the
difference between the total value and the costs of performing the activities. The activities
are categorised as the company’s primary and support activities. Additionally, competitive
advantage regarding differentiation or cost is a function of the different activities (Lynch,
2006; Porter, 1998).
37
Figure 2.6 The Value Chain
(Lynch, 2006, p. 75)
2.2.7.2 Bakka Framework
The Bakka Framework has been utilised to obtain a better grasp of which factors that
influence a company’s decision making process in the different phases of
internationalisation. The Framework divides the internationalisation process into five
different phases from trial export, extensive export, intensive export, multinational
marketing to global marketing. The model describes the factors that may influence the
company’s decisions in the different phases (Solberg, 2009).
In the Trial Export phase the knowledge about the most elementary market conditions such
as the business culture, distribution structure, potential customers, and competitors is very
limited. This first exporting attempt is therefore often a costly and time consuming process.
The Trial Export phase is followed by Extensive Export where deals have been signed in up
to eight to ten countries. Nonetheless, the goals are unclear and the business doesn’t have
enough resources to follow up the deals. When situated in the Intensive Export phase, the
38
company is able to take more rational decisions, is starting to make money and is becoming
more influenced by the export. Hence, they will concentrate their resources towards their
primary markets. In Multinational Marketing, the export is regarded as an active tool to
reach the company’s goals and has become an integral part of the company. The Global
Marketing phase portrays how the different phases in Bakka’s Internalisation process are
expected to turn out regarding the different variables such as export motives, choice of
market and marketing mix (Ibid).
2.2.8 SWOT analysis
A SWOT analysis is a useful way of outlining the current situation of the organisation. Thus,
the analysis consists of critical strengths and weaknesses that involve the resources of the
organisation and the opportunities and threats that reflect on the organisations surrounding
environment. It is essential that the SWOT analysis distinguish between the current
situation of the company and where it wishes to be. Hence, the four different categories of
the framework outlines where the organisation should focus its attention (Kotler et al.,
2005; Lynch, 2006).
39
40
3.1 Introduction
“Research is an intensive and purposeful search for knowledge and understanding of social
and physical phenomena”, (Kumar, 2008, p. 3). Research is a scientific activity that involves
defining and redefining problems, collecting, organizing and evaluating data. The results will
finally lead to conclusions that will be considered with the aims and objectives (Ibid). The
methodology refers to the choices that are emphasised in the case to study, methods of
data collecting, and the forms of data analysis when preparing and executing a research
study. Moreover, it is preferable that the methodology contains a preference for certain
methods, theory of scientific knowledge, range of solutions and sequential procedural steps
(Silverman, 2006).
Chapter 3 will outline a review of what types of research methodology that have been
utilised throughout the project. Most of the research methods that we see today consist of
a range of techniques to assemble data. Furthermore, there are three more distinctive
forms of data collection. The three categories are outlined in Appendix 3.
3.2 The Research Process
To meet the information requirements in a cost effective and timely manner, the research
process should be carried out in a systematic way (Herbst and Codwell, 2004). The process
can be outlined as follows:
Figure 3.1 The Research Process
(Gripsrud, Olsson and Silkoset, 2007; Boone et al., 2010)
41
Firstly, a well defined problem needs to be established to permit the researcher to focus on
securing the exact information needed for the solution. To increase the speed and accuracy
of the research process it is vital that the question is clearly defined (Boone et al., 2010).
Based upon this, a few objectives are stated. Together, this establishes the foundation for
the research (Gripsrud, Olsson and Silkoset, 2007).
When the problem definition has been clarified, one needs to distinguish how one can
resolve the marketing problem by creating a research design. This is a plan for conducting
marketing research which ensures that the study will measure what it intended to measure.
Each objective may need different type of data and thus a different research design and
analysis. An important element of the research design is consideration of the selection of
respondents. At this stage, marketers often use sampling techniques to determine which
consumers to include in the study (Boone et al., 2010).
The next stage consists of the collection of data. In marketing research there are two
primary modes of data: primary data and secondary data. However, most statistical
enquiries use a combination of these research methods (Curwin and Slater, 2008). The norm
is to apply secondary data to gain familiarity and to establish a context (Patzer, 1995).
Thereafter, this is supplemented by primary research for the information needed (Curwin
and Slater, 2008). The final stage in the process consists of interpreting and presenting the
research information (Boone et al., 2010).
3.2.2 Secondary Research
Secondary research is previously published or compiled sources that have been collected for
some other purpose (Boone et al., 2010). It often provides a useful overall description of
social trends and general statistics (Curwin and Slater, 2008).
Secondary data can be categorised as either internal or external. Internal generated data is
information from within the company such as reports, sales numbers and expenditure on
various activities. External data is information from external sources such as Office for
National Statistics (ONS), government departments and census material (Gripsrud, Olsson
and Silkoset, 2007).
42
Secondary research can be useful in a marketing research project when defining the
problem, designing the research, analyzing the data and discussing the result (Patzer, 1995).
Important advantages of secondary data are that it is usually low cost for researchers to
obtain, as well as one spends less time to locate and utilize the information (Boone et al.,
2010). Furthermore, it provides comparative and contextual data, makes long-term studies
and new findings possible (Saunders, Lewis and Thornhill, 2007).
Depending on the acquired research material, the information might not be sufficient for all
aspects of the enquiry. There are also limitations when obtaining secondary research. As it
has been collected for a specific purpose, it may be presented in a way that is influenced by
the initial intention. Additionally, one has little control over the quality of the material and it
can be expensive or challenging to obtain. Kumar (2005) further argues that validity,
reliability and personal bias can be issues that need to be taken into consideration.
The project has utilised secondary research in order to obtain information about the UK
retail market. However, primary research was carried out to acquire more specific
information about Bik Bok.
Table 3.1 Benefits and Limitations of Secondary Data
(Boone et al., 2010; Saunders, Lewis and Thornhill, 2007)
43
3.2.1 Primary Research
The distinguishing feature of primary data is that it refers to information that is collected for
the first time specifically for the current research project. Hence, assembling of primary data
is often a time consuming and costly process. Nonetheless, the results can provide richer
and more detailed information, particularly current attitudes and opinions which secondary
research cannot obtain (Boone et al., 2010). Demographic/socioeconomic data, behaviour
and motivation are also obtained through this type of research (Wrenn, Stevens and
Louden, 2006). Sources of primary data include observation, questionnaires, interviews,
experiments and group discussions (Curwin and Slater, 2008). Due to the nature of the
assignment, primary research was carried out to acquire specific information about the
brand.
Table 3.2 Benefits and Limitations of Primary Data
(Boone et al., 2010; Saunders, Lewis and Thornhill, 2007)
3.3.1 Research That Obtains Quantitative Data
In business research, one needs to recognise the importance of the range of material
available and to what extent this information is numerical or non-numerical by nature.
Depending on the use of the findings and the aim of the research study, it is essential that
the measurement and analysis of the variables are obtained to fit the purpose (Kumar,
2005). It can be useful to distinguish between quantitative and qualitative approaches
(Curwin and Slater, 2008). In many studies, both methods need to be applied to provide
depth to the analysis (Kumar, 2005).
44
Table 3.3 Quantitative and Qualitative Data
(Cresswell, 2003; Bryman and Bell, 2007; Authors, 2011)
A quantitative procedure starts with hypothesis and theories where the researcher’s role is
to observe and measure with an objective approach (Glesne and Peshkin, 1992).
Quantitative research involves analysis of numerical data and seeks precise measurement
and analysis of target concepts (Bryman and Bell, 2007). Essentially, emphasis will be given
to the collection of data (i.e. questionnaires) or data analysis procedure such as graphs or
statistics that generates or uses measurements and amounts (more and less, larger and
smaller, often and seldom, similar and different) (Saunders, Lewis and Thornhill, 2009;
Thomas, 2003). In quantitative research, careful sampling strategies and experimental
designs are exerted so that it is possible to identify a specific sample to further generalise
the population (Creswell, 2003). The method is deductive and seeks consensus (Curwin and
Slater, 2008).
3.3.2 Research That Obtains Qualitative Data
The qualitative research method stands in a strong contrast to a quantitative approach. The
processes are perceived similar; however qualitative techniques rely heavily on image and
text data, have unique steps in data inquiry, and highlight diverse strategies of analysis.
Qualitative research has an emerging character rather than being firmly prefigured. When
operating with a quantitative method it is possible to change and rephrase questions as a
part of the development of the inquiry. Hence, the gathering process is also possible to
45
change, which further gives the opportunity of discovering new aspects of the data
collection (Creswell, 2003).
Qualitative research holds the attribute of being interpretative which includes developing an
illustration of individuals or settings and data analysis of categories. It further leads to an
interpretation or a personal and theoretical understanding, that sums up and points out
new questions to be asked about further research. This illustrates that the research method
holds the preferences of having a more open minded approach and therefore being less
structured (Bryman and Bell, 2007).
Qualitative data can be obtained through communication with people, observation and
document analysis such as written material and pictures. The aforementioned can further
be collected as qualitative data by using a flexible approach and open interaction.
Qualitative research is executed by asking questions such as “What?”, “Why?” and “How?”
(Gripsrud, Olsson and Silkoset, 2007).
3.4 Chosen Research Methods
When deciding upon the appropriate research methods, it was necessary to consider the
information that needed to be obtained in order to answer the different research
objectives. To obtain a general insight into the UK retail market we executed observations.
Additionally, to acquire information about the, customer demographics, perceptions,
attitudes, buyer behaviour, motivation and what they associate with the brand we
conducted structured interviews in a written format and questionnaires. Furthermore, a
semi-structured interview was carried out to get a deeper understanding of the UK retail
market, Bik Bok as a brand, how the store operates, their future plans, their customer base
and their marketing activities.
46
3.4.1 Primary Research
3.4.1.1 Observation
Observation is an important method within qualitative research. It is used to capture
activities in different settings where the information is seen, heard or felt by the researcher.
Participant observation is the active form of observation. This is where the researcher takes
part in the activity to get closer to the object and to acquire a broader experience and
understanding. Field notes are a vital part within this research method as they are the
foundation for subsequent analyses (Stake, 2010; Marshall and Rossman, 2011).
3.4.1.2 Interviews
An interview is defined as a purposeful discussion between two or more people to be able
to acquire information about a specific topic (Saunders, Lewis and Thornhill, 2007; Kumar,
2005). Interviews are beneficial when gathering valid and reliable data relevant to the
research question and objectives. The key difference between the various forms of
interviews lies in the degree to which the interview is structured and how formal it is. These
types consist of structured interviews, semi-structured interviews and unstructured or in-
depth interviews (Saunders, Lewis and Thornhill, 2007). For this project, structured
interviews in the questionnaires and a semi-structured interview was utilised.
Structured Interviews
The structured interviews use questionnaires based on a set of predetermined and
standardised questions and is also known as interviewer administered questionnaires. Each
question is recorded on a standardized schedule, usually with pre-coded answers. To avoid
indicating any bias when conducting oral questionnaires with social interaction between the
researcher and the correspondent, one should read out the question exactly as written and
in the same tone of voice (Ibid). Structured interviews are also referred to as quantitative
research interviews as they are used to collect quantifiable data (King, 2004). This approach
has been adapted in the surveys to collect uniform and comparable information.
47
Semi-Structured Interviews
On the contrary, semi-structured interviews are known as qualitative research interviews
where the researcher will have a list of themes and questions to be covered. This means
that one will omit and adapt some questions given the specific organisational context that is
encountered in relation to the research topic. Depending on the flow of the conversation
the order of the questions may also vary. In addition, the researcher may add
supplementary questions to explore the research questions and objectives given the nature
of events within particular organisation (Saunders, Lewis and Thornhill, 2007). This approach
has been made us of in the interview with Bik Bok’s store manager in London, Silje Kotte. By
utilising this method it was possible to have a conversation with the interviewee and go into
detail on the areas of interest. Recording was found beneficial to allow a free flow in the
conversation, avoid interruptions and to obtain precise information with intonation (Collis
and Hussey, 2003).
Surveys
Surveys are a method of data collection that adapts questionnaires or interview techniques
to collect data from people regarding demographics, opinions, attitudes, their way of
thinking and behaviour (Ghauri and Grønhaug, 2005). It is a positivistic methodology where
a sample of the population is studied to make inferences about the population as a whole.
There are two major categories of surveys, descriptive and analytical surveys. Descriptive
surveys are often conducted in business research as attitude surveys since they are
concerned with identifying and counting the frequency of a specific population, either at
one point in time or at various times for comparison. Analytical surveys have the intention
of determining whether there is any correlation between the various variables (Collis and
Hussey, 2003).
The surveys, as important research instruments have carefully been designed in order to
meet the aforementioned objectives. By conducting self-completion questionnaires, the
questions were easy to follow to avoid misunderstandings (Bryman and Bell, 2007). Survey 1
(Appendix 8) is a descriptive survey and is designed to acquire general characteristics of the
targeted segment in terms of demographics as well as attitudes, motivations, beliefs,
48
opinions and buyer behaviour. Survey 2 (Appendix 10) is designed to convey the customer’s
perceptions of the Bik Bok brand. Both questionnaires were carried out at Bik Bok’s store in
Oxford Street to get an insight into their customer base and their perceptions of the brand.
In order to deal with missing and unclean data and get precise analysis, it is essential to
make use of an analytical tool. The results and findings of the surveys have therefore been
analysed and carried out with IBM SPSS Statistics.
3.4.2 Secondary research
Secondary research has been crucial for this project, due to the budget and operating costs.
Both internal and external sources have been used to obtain necessary data. The internal
sources consist of presentations regarding the Bik Bok brand and the organisation. In
addition, communication with Bik Bok’s General Manager and the London manager has
been a valuable resource to enhance the assignment.
Through different databases we have had access to vital and trustworthy information. The
secondary data gives answers concerning areas such as; information about the
womenswear market and apparel industry in the UK, the different external trends
concerning the development of Bik Bok in the UK market, what methods that have been
used in previous research as well as opportunities and market predictions of the UK market
concerning Bik Bok.
For the project to be adequate and satisfactory, it is essential that the secondary research is
considered to be reliable and relatively new. Hereby, the report has concentrated on
secondary sources from Leeds Metropolitan University’s Library (Civic Quarter), The Library
at The Norwegian Business School BI and appropriate web pages. The report also includes
research intelligence from Datamonitor, EBSCO, Emerald, Key Note, Mintel Oxygen, ONS
and WARC. A full description of the different research intelligence sites can be found in
Appendix 4.
49
3.5 Reliability and Validity
Reliability refers to the extent to which the collection or analysis procedures will give
consistent findings (Smith, 1975). When a research tool is consistent, stable, predictable and
accurate it can be defined as reliable. Nevertheless, there can be aspects affecting the
reliability of the research such as; the mood of the respondent when answering the
questions, a change of physical setting for data collection or the nature of interaction
between interviewer and interviewee (Kumar, 2005). Therefore, it can be useful to keep the
three following questions in mind when finding out the reliability of the research (Easterby-
Smith, Thorpe and Lowe, 2002, p. 53).
Table 3.4 Reliability Questions
Will the measures yield the same results on other occasions?
Will similar observations be reached by other observers?
Is there transparency in how sense was made from the raw data?
Validity is to which extent the collection of data and the methods used accurately measure
what they were intended to. Further, it is to the degree on how the research findings are
truly in relation to the original purpose (Saunders, Lewis and Thornhill, 2007). According to
Kumar (2005) there are three types of validity.
Table 3.5 Forms of Validity
Face and
Content Validity
When each research question has a logical link to the objectives of the
study (face validity) and when the question covers the range of attitudes
being measured (content validity).
Concurrent and
Predictive
Validity
Occurs when a research is compared with previous studies, and the
findings are comparable and have a significant similarity. If discovering
similar results, the study will on this basis achieve a higher validity.
Construct
Validity
When data analysis is measured through a statistical procedure in order
to establish how each component contributes to the total variance.
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In the context of the primary research that was executed for Bik Bok, the findings have “face
and content validity” and “construct validity”.
3.6 Research Ethics
All students of Leeds Metropolitan University (2011) are obligated to follow the guidelines
for good ethical procedures. Subjects of the surveys have been informed about the nature
of the questionnaires they have participated in, additionally given their consent for
participation. The authors of the Bik Bok dissertation have had exclusive access to the data
and treated the personal interests of the respondents with respect.
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4.1 Introduction
In order to identify some of the areas concerning the research objectives, it was essential to
obtain primary data. A general impression of the competitors in the industry was gathered
from the observation reports. This highlighted which areas that needed more detailed and
specific information. Hence, it was appropriate to perform an interview with the Store
Manager at Bik Bok in London and further to implement questionnaires.
4.2 Observation
The observations were performed both in Leeds and London, where a general overview
of customer related matters of the different clothing retailers were mapped out.
4.2.1 The Clothing Retailers in Leeds
To get a better impression of the different retailers in the UK, Zara, Topshop, H&M, River
Island, Miss Selfridges, Urban Outfitters, Primark, and New Look we observed. First the the
street windows were observed in order to see how they exploited the outer surface of the
store. Thereafter, the interior, design and layout of the shops looked upon. Moreover, it was
noted what the different stores had to offer regarding their collections and accessories. It
was found important to observe the staff and degree of customer service; hence the service
in different setting were tried out in order to get a better knowledge of how they operate.
The overall impression highlighted that the product range is wide, with sizes and styles to fit
the market. They offer a spectre of accessories containing scarves, hats, bags, jewellery,
make up and shoes. The customer service was variable, as some stores have more focus on
it, but the general perception was that it was fairly poor. A descriptive overview of the retail
stores in Leeds can be found in Appendix 5.
4.2.2 Competition Overview in London
Having the observation in Leeds in mind, a trip was to London was found appropriate to
gather an impression of Bik Bok and the surrounding retail stores. This was in order to
identify and distinguish the points of difference for Bik Bok. The same salient attributes
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were used for the evaluation in London. The different retailers had in general much bigger
and eye catching facades and the interior were modern and more colourful compared to the
shops in Leeds. They managed to utilise their location better because they were large of
scale and therefore had bigger departments with accessories and clothes. The customer
service was of virtually the same (i.e. poor) even though they had more employees at work.
The observations have been explained further in Appendix 6.
4.2.3 Bik Bok, Oxford Street
Regarding Bik Bok’s shop in Oxford Street, it was observed that the store was difficult to
“spot” when walking down the street. Bik Bok’s signs have low customer visibility, as they
are mounted parallel to the wall of their premises. Further, it was noticed that Bik Bok did
not utilise the windows above the entrance, which could have made the store more
noticeable. The store windows were basic and did not stand out from the surrounding
stores. Inside, the store was well organised with the layout of clothes and accessories. The
fitting rooms were spacious and some of them were designed for and catered for
handicapped people. It was difficult to notice that there was an additional sales floor
downstairs, and it was observed that there were many customers that did not go downstairs
due to the lack of signs or posters. The till area was large and took a lot of unnecessary
space. The customer service was variable, as the employees were helpful at the fitting
rooms, but at times difficult to find in store. The observations of the store have been
explained further in Appendix 6.
4.3 Semi-structured Interviews
4.3.1 Interview with Silje Kotte
In addition to the observations that were carried out, a semi-structured interview was
conducted with the shop manager in London; Silje Kotte (Appendix 7). This was carried out
in order to acquire information about the store, its location, and a perspective of how the
concept functions. Further, to observe the customers to see the store design and layout and
who Silje perceives to be Bik Bok’s present customers.
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Marketing and Promotion
The most important findings from the interview can be summed up as follows. There is no
existing marketing budget, in addition to this, Bik Bok does not market itself or
communicate through the use of digital media to the British market. The lack of
communication through the Internet became clearer before Christmas, when Grazia (a
fashion magazine) displayed Bik Bok garments in the magazine. This created a demand from
other parts of the UK, which Bik Bok failed to fulfil and capitalize on, due to the lack of
distribution and e-commerce channels. In addition, Silje believes that Bik Bok needs to
strengthen their brand awareness before considering an expansion.
The Customers
Moreover, the shop is not attracting enough customers which imply that the revenue is not
optimal. Further, she explained that the high real estate costs and business tax rates are
major factors to their low gross profit. The existing customers have diverse backgrounds,
however Silje underlines that a large proportion of the consumers are tourists, in particular
Norwegians or people from Scandinavia in general. This is especially evident during the
typical Scandinavian holidays, such as autumn and winter break as well as the Easter
holiday.
Competitors
Additionally, based on what kinds of shopping bags the customers carry with them into the
store, Silje recognises the shop’s largest competitors in Oxford Street to be River Island,
Bershka and New Look.
4.4 Survey-research
In order to obtain the satisfactory primary data, this report outlined the need for two
surveys. The survey research was executed in two stages. In the first phase, data was
collected concerning the target segments of the Bik Bok store in London. The second stage
obtained data on the perception of Bik Bok as a brand. Data concerning both of the areas
were collected at Bik Bok’s store in London.
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4.4.1 Target segments of Bik Bok, Oxford Street, London
In order to conduct a beneficial research survey regarding the target segments of Bik Bok in
the UK, it was necessary to execute the surveys in the store in London. The location gave the
research a proper segmentation, in terms of the demographic allocation of the customer
base. It further provided the ability to collect data including psychographic elements of the
consumers’ attitudes, values and lifestyles. Being in the environment gave the opportunity
to obtain information about the respondents’ perceptions of the store, their attitudes and
an indication of Bik Bok’s main competitors. Responses were gained from a total amount of
40 female customers. The questionnaire and the respective findings can be found in
Appendix 8 and Appendix 9.
Demographics (Question 1 – 4)
The part regarding demographic variables was made in order to establish an understanding
of customers’ age, living, nationality and occupation. These areas were important for the
outlining of a marketing communication strategy, which is further discussed in section 6.6.5.
Moreover, it would give indications if the target age group, which Bik Bok operates with,
were appropriate in the UK market. The survey found that the largest age group were 15 –
18 years (35%). Nevertheless, 22.5% of the respondents were from 27 years and up.
It was noted that 45% of the respondents lived in the London area, whereas 7.5% were from
other parts of the UK and further 47.5% tourists. Moreover, 26.5% of the tourists came from
Norway. In addition, the major part of the customers in the store was British. In terms of
occupation it was highlighted that the customers worked in many different sectors and the
major part of the customers were students.
General Customer Information (Question 5 – 9)
In the survey five questions were asked on areas of general information and perception
about the Bik Bok store in Oxford Street. The general impression is that most of the
customers’ first meeting with the store was mainly as passer buyers and further some made
the initial contact as result of word of mouth. Regarding the area of how often the store was
visited, 52.5% of the respondents were there for the first time. Further, it was clear that
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people living in the London area visited the shop more often than the other categories. The
respondents’ overall impression of the store tended to be considered as good. In terms of
customer service the respondents overall impression was positive. None of the respondants
gave an answer pointing at poor customer service. Regarding the product line, a diverse
perception was given; nonetheless the general impression was good.
Online Shopping (Question 10 – 13)
The four questions in this part of the survey intended to highlight future e-commerce
possibilities for Bik Bok in the UK. The survey indicated that 65% stated that they shopped
for clothes online. In consideration of the respondents’ use e-commerce, the majority (61%)
stated that they made use of a service like this at least once a month. Furthermore, the
survey indicated that only a minority had visited Bik Bok’s homepage (12.5%). In contrary, a
significant part of the respondents (67.5%) stated that they would have made use of a
potential Bik Bok e-commerce service.
Personal Shopping Information (Question 14 – 17)
The questions concerning personal shopping information, was included in order to establish
awareness on the typical shopping patterns of the respondents. The survey highlighted that
shopping was executed rather frequently. 77.5% of the respondents shopped clothes at
least two or three times a month. Furthermore, a total of 47.5% did the same activity once a
week or more. When it came to average expenditure on clothes per month the most
frequent answer was £51 – £100 (50%), followed up £101 - £150 (22.5%).
The questionnaire found that the customers had a variety of other clothing retailers they
found favourable. The biggest chains such as Zara, Topshop and H&M were given the most
frequent answers. Furthermore, the surrounding smaller retailers were also mentioned
quite often.
The last question was regarding what the respondents saw as the most important factors
when shopping for clothes. The most frequent answers were the importance of price and
quality. Moreover, style, looks and comfort were seen as important attributes for a large
part of the respondents.
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4.4.2 Brand name association of Bik Bok
The survey regarding the brand name association of Bik Bok, was implemented in the
primary research in order to establish the brand’s position amongst the customers. Further,
the data from the survey would outline the brand’s position in comparison with Bik Bok’s
positioning strategy. A total of 23 interviewees responded. The survey form and the results
of the customers’ perception of Bik Bok can be found in respectively Appendix 10 and
Appendix 11.
The Customers Associations
The respondents were asked what kind of associations they had with Bik Bok. The research
comprised 18 different words, including an alternative where the respondents were given
the opportunity to write a “missing” word. The words were carefully chosen in order to give
the customers options regarding their perception of the brand. The given choices included
words that Bik Bok uses in their positioning, descriptions which can be seen as describable
for the brand. Further words that were different from Bik Bok’s positioning were included.
The descriptions that were most frequently mentioned were affordable, fashionable and
good quality. The words were mentioned respectively 83.33%, 62.50% and 50.00% by the
respondents. Moreover, feminine and good value for money was indicated as describable
words of the brand. In addition, Scandinavian was mentioned quite frequently (25%). This
was quite surprising, as Bik Bok both perceives themselves, and focus on a position as an
international brand.
4.4 Limitations
It is important to recognise that there are limitations considering the research process.
These have been outlined in Appendix 12.
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5.1 External Analysis
5.1.1 PESTEL Analysis
5.1.1.1 Political Environment
Political Stability
The industry and the way a business operates are often directly affected by political
decisions, such as laws and regulations made by the UK’s. The countries regulatory system
provides a stable political environment which is further detailed in a report regarding
political stability by Kaufmann, Mastruzzi and Kraay (2009). The report ranks the nations
that have a highly effective government, which reflects the countries ability to apply rules
and regulations, in addition to commitment towards the population (Ibid). Griffin and
Pustay (2010) give a supplementary illustration regarding the political risks on a global basis,
where the UK is categorised as one of the countries in the world with “lowest risk”. These
factors provide a stable environment for businesses to operate in the UK.
The Internal Market
The UK has an important role in the European Union (EU). This commits the country to a
common trade policy, most important being the free movement of goods, services, capital
and labour and allows the country to be a part of one of the world’s richest and most
successful free markets (Datamonitor, 2010c; Griffin and Pustay, 2010). Norway is a part of
the European Economic Area, which implies that the country is obliged to follow the EU’s
legislation and policies committing to maintaining a single market (Griffin and Pustay, 2010).
This facilitates the distribution process for Bik Bok and enables Norwegian exports/imports
and expatriation into the UK.
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5.1.1.2 Economic environment
A Globalised Economy
The United Kingdom has one of the largest economies in the world and is ranked as number
six by purchasing power of world economies. The British economy is considered as one of
the most globalised economies because of their capital London, which has the reputation of
being the largest financial centre in the world (EconomyWatch, N.D). The UK has extensive
experience with conducting business with Norway, and the Norwegian-British Chamber of
commerce was established to promote trade and investment between Norway and the UK
(Norwegian-British Chamber of Commerce, N.D).
Impacts of the Recession
The financial crisis had a major negative impact on the United Kingdom in 2009. From being
one of the largest economies in the world, they had to increase government borrowing and
stimulate industrial output. This resulted in major debt, the highest UK unemployment rate
and lowest Gross Domestic Product (GDP) in 12 years. Nonetheless, the UK’s GDP is
experiencing a slow recovery after the financial crisis. In relation to Bik Bok, the crisis has
affected UK consumer’s purchasing power, which is further discussed in the section about
the socio-cultural environment (BBC, 2010).
The Monetary System
Despite their role in the EU and being a part of the single market, the UK still makes use of
the Pound Sterling GBP as their monetary system (Ibid). Their currency has been
depreciating since 2008, when the pound lost more than 25% of its value compared to the
Euro and Dollar. This is affecting the growing deficit in the country and will raise the already
existing debt. Furthermore, the weak currency reduces Bik Bok’s potential profit in forms of
depreciating gross profit margin and revenues generated from the Bik Bok store in London.
These effects are mainly due to the fact that the organisation operates with Norwegian
Kroner (NOK) as its official currency, and given the strong performance of the Norwegian
economy and its positive outlook, NOK has appreciated significantly against the GBP.
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Impacts on the Clothing Retail Industry
The clothing retail industry in the UK is expected to see changes in the near future. After a
ten year period of deflation, prices have started to rise steeply, which will have a major
impact on Bik Bok’s targeted segments. In addition, the price on cotton is also continuously
increasing. These factors imply that the company has to make a greater effort in retaining
customer loyalty from their young consumers and proving “that they are still worth it”
(Mintel, 2010b; Key Note, 2011a).
5.1.1.3 Social Environment
Demographics
The population in the UK is estimated to reach 62.7 million in July 2011 (CIA, 2011), and is
ranked as one of the most developed countries when it comes to standard of living,
education and healthcare.
Figure 5.1 Population by Gender and Age
(ONS, 2010a)
The diagram above illustrates the age distribution of the population in the UK in 2009.
According to Mintel, life expectancy is increasing and the fertility rate is falling which is
creating a shrinking workforce. In addition, the female population is expected to increase by
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3.1% with a change in structure where the age group 15-24 will decrease. This will affect the
womenswear market, as they are considered the highest spenders on clothing. As this is Bik
Bok’s targeted segment, it might have an impact on their sales in the coming years.
Moreover, overweight has become an issue, as over a quarter of the women in the UK are
considered obese. This will lead to more demand for larger sized clothing, as well as
shapewear (Mintel, 2010c). Considering that Bik Bok’s largest size is a UK 12 and some of
the competitors go up to a UK 18, this may limit their potential customer base and needs to
be reviewed.
Social Infrastructure
The UK is moving towards a more stable social infrastructure but is still struggling with a
high unemployment rate. To help the youngest part of the population acquire skills and
experience in sectors with strong future demand, the government has decided to spend
over 260 million GBP on training and subsidies. The elderly and the poor will also receive
benefits from the government, which will help the overall social welfare in the country
(Datamonitor, 2010c). Furthermore, as the economy improves, the spending power will
increase which will have a positive impact on Bik Bok.
Increased Expenditure on Low Priced Clothes
Although the recession has had an impact on the clothing industry, people are using more
money on discount retailers and supermarkets rather than clothing in the luxury market. In
addition, the expenditure on clothes has been steady due to heavy promotional activities by
retailers. The age group 16-24 appear to be the least influenced by the recession and is
expected to spend more on clothes than the higher income households in the coming year
(Mintel, 2010c). This indicates that their target group has strong purchasing power and is
likely to benefit Bik Bok.
Increase in Tourism
According to research by VisitBritain (2007), who are responsible for marketing and
developing Britain’s visitor economy, the UK will benefit in many areas from the Olympic
Games in London in 2012. The pre-games period is estimated to account for 17% of the total
tourism benefits for the UK as a whole. During the Olympics this number is predicted to
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increase to 35% and respectively 48% for the aftermaths. Research has found that over a
ten year period, the gross visitors “spend”, generated by the games, will be £1.85 billion in
London. Furthermore, all tourists see London as a shopping “mecca” and this will no doubt
increase the potential market and may be of significant benefit to Bik Bok.
5.1.1.4 Technological Environment
Payment Systems
Technological development is of great importance to the UK and the experienced progress
regarding payment systems has demonstrably made the buying process more convenient
for customers. This can be seen in relation to the decline in the use of cash and the increase
in use of debit and credit cards (CRR, 2011).
Intellectual Property Rights
Moreover, the UK Intellectual Property Office oversees the protection of intellectual
property, which offers protection of Bik Bok’s trademarks, designs, logos, copyrights and
patents (Datamonitor, 2010c).
Telecommunication System
The infrastructure of the telecommunication system in the UK is known to be of a high level.
Currently, there are approximately 39 million people with access to the Internet and the
amount of broadband Internet subscribers is on the increase (Key Note, 2011a). In Great
Britain, almost 70% of the adult population have access to a high speed Internet connection
(Mintel, 2011b). ONS (2010b) has published that there is Internet access in about 73% of the
country’s households, accounting for 19.2 million people. Additionally, the same report
shows that approximately 31% of users accessed the Internet through a mobile phone.
Further, it states that there were 31 million of the population who made use of the Internet
to buy or order products or services. In 2010, this led to a £4 billion sale of clothes and shoes
online in the UK (Ibid).
E-commerce
Findings by the Centre of Retail Research (CRR), forecast that e-commerce retailing will
experience a 14% increase of sales in 2011 (CRR, 2011). In connection with the continuously
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growing Internet web, online retailing has become more mainstream, giving retailers an
opportunity to stay in touch with their target audience. Moreover, Mintel (2010b) states
that women are the most active users of online fashion.
Several of the world’s largest women’s clothing retailers have exploited this opportunity,
and in 2010 Gap, Zara and H&M introduced a complete online offer (Mintel, 2011b). The
trend is going in the direction of launching transnational sites, and in combination with the
wider choice of retailers, this will boost customers overall online spending. This is further
enhanced as the customer online experience is improving continuously due to better
presentations on the web sites, video content, trend advice and more convenient delivery
and returns services. In addition, many retailers are also starting to offer applications on
Smart phones, which further improve access (Mintel, 2010b). Nonetheless, the fear of fraud
is found to be strong and makes one third of cardholders rule out shopping online (CRR,
2011).
5.1.1.5 Environmental
Sustainable Development
In 2008 the government started with a “green initiative” to influence and increase the
environmental awareness in the country (Datamonitor, 2010c). Environmental policy has
embraced the approach of ‘sustainable development’, where economic and social factors
are considered alongside the environment (POST, 2004). Ethics is an important aspect and
takes sustainable development into account. For this reason, international firms have made
ethical values an important part of their strategies and people within the industry are taking
an active role in ethical sourcing, designing and producing clothing throughout the supply
chain (The Guardian, 2007). Consumers are increasingly making ethical choices when buying
clothes and in 2008 nearly three quarters (72%) of the British consumers regard ethical
production of clothes as important (TNS, 2008). As the focus towards a green environment
within the clothing industry increases, Bik Bok should take this into account.
Impacts of Global Warming
Furthermore, the unpredictable weather, caused by global warming, has an impact on
clothing retailers. This has made it much more difficult for apparel retailers to plan the two
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season collection system (Autumn/Winter and Spring/Summer) and is something Bik Bok
will need to take into consideration. Sales have in particularly been affected, as the mild
weather before Christmas makes it difficult to sell coats, jackets and knitwear. This has
made brands and retailers design transnational ranges of clothes that can be worn in
different seasons (Mintel, 2008).
The clothing retailers expect to continue and intensify this approach as climate patterns
change. “Overall, the UK’s climate is generally forecast to become milder and wetter, giving
scope for development of women’s collections involving lightweight breathable rainwear,
lighter knitwear and more shower proof garments and fabric treatments” (Ibid). Not only
does the climate affect the seasonal collection, it affects the transportation of goods. The
UK struggled with heavy snowfall in December 2010, which had an impact on air, road and
rail transportation (The Telegraph, 2010). Hence, the UK Government has taken these issues
into consideration and has developed aims of becoming better prepared for the future
(Datamonitor, 2010c).
5.1.1.6 Legal Environment
Stable Business Environment
In 2010, the World Bank ranked the UK as the 4th least complicated country to establish and
run a business in, within a report including 183 economies (The World Bank Group, 2011).
Furthermore, the country is categorised as having a low level of corruption, which leads to a
stable business environment (Transparency International, 2010).
Increase in VAT and Minimum Wage
Due to the financial crisis and the UK's budget distresses, national legislation increased the
value added tax by 2.5% in January 2011. This is a factor that will have a direct effect on the
prices offered to the consumers (Key Note, 2011a). In addition, the UK national minimum
wage rate will rise from October 2011, which consequently impacts Bik Bok’s operating
costs (Directgov, 2011).
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Congestion Charge Policy
Businesses that operate in London are additionally affected by local legislation. In February
2003, the congestion charge policy was brought into force, and is relevant to Central London
(Dix, 2003). Costs apply for the hours between 7 am to 6 pm on weekdays, which may
affect daytime shoppers (TFL, 2011). The scheme can be seen as a threat to the potential
customers for Bik Bok, who prefer to drive into London to go shopping. Moreover, the
public transportation system may limit potential consumer’s desire to travel into the city,
which further impacts what they purchase.
Business Tax Rates
Furthermore, a business tax rate applies to commercial properties, and is a tax that is
required by the State to pay for the local services provided. The overall business rates for
the time period 2011- 2012 affect all of England, whereas the costs for the city of London
are 0.4% higher, which has an impact on Bik Bok’s costs (Business link, 2011).
5.1.2 Porter’s Five Forces
Porters Five Forces is a tool which has been utilised to analyse the UK retail industry. The
framework can help Bik Bok develop an understanding and an awareness of the industry’s
current situation (Porter, 1998). Furthermore, it establishes a good overview of typical
patterns among the biggest competitors in the market (Lynch, 2006). The framework can
give Bik Bok worthy information about their business environment. By taking considerations
of the data the framework acquires, Bik Bok can take advantage of opportunities and avoid
threats that may lead to a higher chance of achieving success (Lynch, 2006; Porter, 1998).
Power of Suppliers
The power of the suppliers is moderate in the apparel retail industry. The suppliers consist
mainly of clothing manufacturers and wholesalers, which are described as small to medium
enterprises (Datamonitor, 2010d). These sectors are impartially fragmented. The retailers’
ability to choose from foreign manufacturers outlines an even greater fragmentation of the
sector. Due to international trade liberalisation, the supplier’s power has decreased,
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because of the competition from low wage countries like China, India, Bangladesh and
Vietnam. Furthermore, the switching costs that apply to Bik Bok tend to be very low. Hence,
choosing the right manufacturer includes a risk, given the aspect of settling with a supplier
with a more extended supply chain. This may include possibilities of coping with sudden
changes regarding the demand from the market. The power of the suppliers is also
weakened by their lack of diversity, which makes the womenswear industry an essential
part of their business (Ibid).
Availability of Substitutes
The threat regarding availability of substitutes for Bik Bok is seen as moderate. Substitutes
concerning Bik Bok are likely to be fashion and designer clothes. However, the dissimilar
prices prevent a distinctive need to switch (Key Note, 2011a; Mintel, 2010b). It is more likely
that Bik Bok’s customers will complement with fashion and design brands, as a part of their
overall fashion interest. Furthermore, the market provides niche retailers such as the
opportunities to buy from specialised online shops, in addition to homemade and custom
made clothing (Datamonitor, 2010d).
Power of Buyers
The overall bargaining power of the buyers (consumers) is considered as moderate. Literally
all buyers are individual consumers, which decreases their bargaining position
(Datamonitor, 2010d). Fast fashion retailers such as Bik Bok, can differentiate themselves
very strongly through the styles and range of clothes offered. There tends to be high brand
awareness in the market, however loyalty towards particular brands is moderate and there
is a broad variety of choices that enhances the bargaining power for the buyer (Ibid). For
many women, fashion clothes represent a type of lifestyle or social status. This enables Bik
Bok to influence the supply of products through marketing communication. However, the
fast fashion industry is characterised by unpredictable and fast changes, giving a very short
product life cycle (Kotler & Keller, 2006). Further, this leads to an obligation to offer buyers
what they are demanding (Mintel, 2008; Datamonitor, 2010d).
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Barriers to Entry
In general, the barriers to entry are low and there is a significant likelihood of many new
entrants to the womenwear market. In recent years, the market has grown moderately in
value, which makes it an attractive industry to enter. The effects of the financial crisis and
the global economic situation in general, influence the labour intensive market. The barriers
to entry are low, as individuals have a possibility to establish themselves in the sector.
However, a few large organisations account for a major part of the market share in the UK
(Appendix 2). Coupled with their strong position in the consumer’s mind, it makes it difficult
for newcomers and small retailers such as Bik Bok to establish their brand. The big
corporations can exploit their economies of scale to establish new retail outlets and further
stand much stronger in negotiations with suppliers. Hence, this can deter a new
establishment in the industry (Datamonitor, 2010d).
Competitive Rivalry
Rivalry amongst Bik Bok’s competitors must be seen as strong in UK. The industry is
fragmentised and composed of a large number of comparable retailers that have market
shares in many countries (Datamonitor, 2010d). The competitive environment concerning
Bik Bok has in general increased, despite fewer rivalling companies overall (Key Note,
2011a). Bik Bok experiences competition from both independent boutiques and nationwide
retailers, which are all represented in London. The fast fashion industry’s strong emphasis
on their collections, with a continuously up to date fashion focus, has intensified
competition in the market Bik Bok operates in (Datamonitor, 2010d).
There are three specific areas which create opportunities for Bik Bok. First of all, analysts
consider that there is space for a great quantity of smaller players such as Bik Bok in the UK
market (Ibid). Secondly, there has been a shift in consumer consciousness regarding the
latest trends. It has moved towards a greater focus on the relatively low cost clothing,
rather than the investment in expensive garments for long term use. Thirdly, this has led to
a continuing increase in the market share for the fast fashion retailers (Key Note, 2011a).
Hence, this implies that there is a strong potential for the Bik Bok concept in the UK.
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5.1.2.1 Summary of Porter’s Five Forces
Overall, the framework indicates that the attractiveness of the UK fast fashion industry is
considered as moderately high. After the economic downturn in 2008, the womenswear
sector has grown at a slower pace than previously. Nevertheless, between 2006 and 2010
consumers spending on clothing increased by 12.5%. After the recession there has been a
shift in the demands of the market. More consumers have changed their preferences, with a
stronger focus on value, seeking cheaper alternatives. This increases the attractiveness for
Bik Bok, being a fast fashion retailer and belonging to the lower price segment of the
industry. The consumer’s expenditure on clothing has slowly increased from 4.5% in 2008 to
4.8% in 2010 of their total expenditure. In 2010 the value of the UK clothing retail market
saw a remarkable increase, presented in Appendix 13. It resulted in a growth of 6.3%, which
has been the largest yearly growth during the five year period (Key Note, 2011a).
In the UK fast fashion industry, the most important area is the competitive rivalry. It is also
essential to look further, regarding the competitive environment. It must be taken into
consideration that the different forces are not static, but constantly changing due to the
dynamic environment in the clothing retail industry. Another area of further notice
regarding the framework is the “buyers”. The customers must be must be considered with a
greater importance than the other aspects of the framework (Lynch, 2006).
Moreover, a key factor for success in the fast fashion industry is the focus on customer
driven strategies. Hence, it is important that Bik Bok obtains good information about their
targeted segments, which can further develop their differentiation strategy and is clearly
where the company's main resources should be invested (Ibid). This will be further
discussed in section 6.3.
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5.2 Internal Analysis
5.2.1 The Bakka Framework
To describe the factors that influence Bik Bok’s decisions in the different phases of export,
the Bakka Framework is an important tool. The Framework gives a good insight into where
Bik Bok is in the internationalisation process and which factors that influences them in the
different stages.
Table 5.1 The Bakka Framework
(Solberg, 2009, p. 87)
5.2.2 The Bakka Model Applied to BikBok
Bik Bok’s position in Bakka’s internationalisation process is mainly in phase two, Extensive
Export as they have unclear aims and objectives and a lack of resources to fully utilise the
export market’s potential. Due to this, they have difficulties establishing a loyal customer
base. The competition in the UK is extensive and fierce, and although the revenue has
increased, the costs are significant. Nevertheless, Bik Bok has elements from Intensive
Export, as the company has started to become influenced by their export activities and has
an export department. The analysis is based upon information from Bik Bok’s general
manager (Bjarstad, 2010).
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602
300
45
10 15
Norway
Sweden
Denmark
Latvia
UK
Export Motive
Bik Bok has a dominant market share in the primary market and has therefore decided to
seek expansion to increase its’ sales and brand awareness. Their export motive seems to
have little strategic footing and can therefore be characterised as mainly operative (Ibid).
Market Choice
Bik Bok has a solid foothold within the fast fashion market segment and has shops in
Sweden, Denmark, Latvia and the UK. Sweden and Denmark have been selected as the most
suitable for expansion, as they are neighbouring countries, while Latvia and England have
been relatively randomly selected (Ibid).
Market Share
Bik Bok has a dominant market share in their primary market, while their contribution from
the sales in Denmark, Latvia and England is relatively insignificant (Ibid).
Figure 5.2 Revenue Contributions From the Different Markets 2010
(Million NOK exclusive VAT) (Bjarstad, 2010)
Organisation
Bik Bok is organised centrally from the HQ in Norway, where all the decision making and
export activities are controlled. In addition to the general manager who is extensively
involved in the exporting decisions, there are three managers who are responsible for the
foreign markets. Furthermore, there are store managers abroad who are in charge of the
general administration and smooth running of the shops (Ibid).
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Figure 5.3 Bik Bok’s Organisation Chart
(Bjarstad, 2010)
Entry Strategy
Bik Bok has shops in all its export markets. Customers can buy Bik Bok’s clothes in 89 shops
in Norway and 60 in Sweden, while there are six shops in Latvia and Denmark and one shop
in London, UK (Ibid).
Marketing Mix
Bik Bok’s products are standardised and equally dispatched to Bik Bok’s stores. Nonetheless,
the local managers have some empowerment to control their product range. All of Bik Bok’s
internal and external marketing is controlled from the marketing department at the HQ,
while local events and activities are organised locally. In the primary market, Bik Bok uses
product promotion to a large extent, although their main focus is on their own media
channels; the store, Facebook, blog and web page. In addition, they run promotion
campaigns through magazines and the Internet. The export markets have little promotion,
despite some local PR-activities. Their product’s prices are competitive and are in the same
range as their competitors in the fast fashion segment (Ibid).
General Manager
Purchasing
Product Managers
Designers, Purchsers, Assistants, Trainees
Merchandise (Distribution of
Goods)
Merchandise in Foreign Markets
Head of Order/Delivery
Store Operations
Country Managers
Region Managers, Store Managers
Visual Merchandising
Marketing
Marketing Communication
Logistics
Inbound Logistics, Import, Stock,
Outbound Logistics
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Economic Result
Bik Bok is highly dependent on their home market with total revenue in 2010 of NOK 902
million exclusive VAT. The contribution from the foreign markets can be characterised as
marginal or negative, with total revenue in 2010 of NOK 70 million exclusive VAT (Ibid).
5.2.2 The Value Chain
5.2.2.1 Primary Activities
Inbound Logistics
Bik Bok outsources their textile manufacturing to ten countries, mainly from China, Hong
Kong, Turkey, Bangladesh and India. These consist of around 120 suppliers, which diversify
risk, as they are not dependent on one sole manufacturer. The HQ is responsible for the
range of products and distribution. However, the managers in the different stores are able
to adjust the range of products to some extent to meet local customer demand (Bik Bok,
2011).
Operations
The product development and design is located at their HQ in Norway. There are five
product managers who are responsible for the different product ranges and the design of
the different collections Bik Bok offer, such as Sassymanii (accessories), Westhill Redbirds,
Never Denim and TwentyFive:Seven (Appendix 1). In addition, they have designers, buyers,
trainees and assistants who contribute to the development of the collections.
Moreover, Bik Bok has developed healthy business operations due to an ethical code of
conduct. By implementing an operative system for monitoring working conditions, they
have increased their focus on corporate social responsibility. By emphasising on ethically
manufactured clothing, they create a sustainable business environment, which enhances
customer value (Varner Gruppen, 2011b).
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Outbound logistics
The collections are shipped from the different producer’s directly to their two warehouses.
The Norwegian warehouse supplies the Norwegian stores, whilst the Swedish storage space
supplies the stores in Sweden, Latvia, Denmark and the UK. Additionally, the warehouse in
Sweden stores the extra stock to further supply demand from the shops.
Marketing and sales
In terms of internal and external marketing, there is a team representing visual
merchandising, one person with responsibility for the marketing, and two employees who
are in charge of the company’s blog. Together, these people make up the company’s market
division (Bjarstad, 2011).
Bik Bok has various marketing activities in their primary markets, such as billboards, poster
advertisement on the outer surface of public transport and advertisement in magazines.
Moreover, the company has an international web page and offers Bik Bok news through
SMS. The company’s digital/social media is carried out through Facebook and a blog for the
Norwegian and Swedish markets (Bik Bok, 2011). However, Bik Bok’s marketing
communication is not giving high priority towards the UK market. In addition, they do not
have a blog or Facebook profile for their UK customers.
The most important form of marketing for Bik Bok is their stores, which represents the
company’s core values. In the stores, the physical connection between the company and the
customers creates value in terms of high level of customer service.
Service
The focus towards the customer is the most essential part of the company’s values and the
main contributor to the sales. “The shop assistants at Bik Bok love working with our clothes,
which makes them both good sellers and Bik Bok’s most important contact with customers”
(Ibid). The staff are usually trained in the stores, where they are taught the different
costumer service routines as for example the service hand (Appendix 14). In order to
enhance the employee’s commitment regarding customer service, Bik Bok has established
certain incentives. Underlining the importance of keeping the employees motivated and
satisfied, Bik Bok arranges company events and bonuses to maintain and further improve
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the working environment and loyalty to the business. The system is further strengthened by
the fact that all employees are required to deliver a high level of customer service, in order
to take advantage of the bonus scheme. Their service routine also concerns the matter of
after sales treatment, where the employees are trained to answer customer queries
effectively.
5.2.2.2 Support activities
It is vital for Bik Bok to use low priced fabrics that have a satisfying quality to be able to
produce clothes that meet customer expectations in the price category that they compete
in. Being in a competitive and rapidly changing industrial environment, efficiency and
technological advancement regarding product development contributes to increased value
for Bik Bok. Furthermore, it is important for the company to keep their clothes up to date
regarding trends in the industry to meet customer demand (Ibid).
5.2.3 Key and Critical Success Factors
The key success factors (KSF) and the critical success factors (CSF) for Bik Bok are based
upon the external aspects that influence the industry and the internal analysis of the
company.
Table 5.2 Bik Bok’s KSF
Key Success Factors
Give the customers value for money
Motivation
Knowledge of the UK market
Awareness of cultural differences
Attitudes
Resources
To give the customers value for money it is crucial to get a high level of procurement.
Furthermore, it is essential to be able to build customer relations and obtain loyal
customers. Motivation within the company makes the employees and administration strive
for new goals, and affects the perception of the company (Ibid). Bik Bok’s attitude towards
competitors and the market is also vital to show that their aim is to be every fashion
conscious girl’s first choice. Resources make the foundation of what Bik Bok is able to
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deliver to the customers and the human resources department is important in this aspect
(Ibid). A specific KSF is the knowledge of the UK market and culture. Developing the most
important areas that create value is essential for the organisation. Hence, Bik Bok needs to
maintain a strong focus, in order to exploit their value generating activities.
Table 5.3 Bik Bok’s CFS
Critical Success Factors
Keep abreast of development
regarding market communication
Obtain loyal customers
Stay up to date regarding trends
Continuous work regarding product
development
A core matter for Bik Bok in the UK is to be able to create brand awareness, by making use
of the most effective media channels to reach the targeted market. For Bik Bok to achieve
its mission, it is critical with continuous work concerning the product development to meet
the constantly growing knowledge base of the consumers. Additionally, when operating in a
highly competitive market with low entry barriers demands that the company has a large
amount of loyal customers. In order to become or maintain a top of mind position, it is
crucial for Bik Bok to match the availability of products that is being offered to the
consumers (Ibid). Being able to grow with the consumers will strengthen the customer
relationship by building a “bond”. By taking all the factors into consideration the following
value chain will be outlined for Bik Bok.
Figure 5.4 Bik Bok’s Value Chain
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5.3 SWOT Analysis of Bik Bok, UK
The main findings from Bik Bok’s external and internal environment have been summed up
in a SWOT Analysis (below). The full analysis is outlined in Appendix 15.
5.3.1 Strengths
Effective Use of Promotion in the Primary Market
Bik Bok has a dominant market share in their primary markets, Norway and Sweden. In
these markets they make effective use of promotional material to promote their brand.
Moreover, they have a strong focus on digital and social media, which further has created
strong brand awareness.
Strong CSR Policy
Additionally, Bik Bok has a strong CSR policy, which enhances business operations.
Furthermore, their corporate culture emphasizes on customer service, which has led to the
staff’s great efforts in this area.
Central Location
Another factor is that Bik Bok is situated in the heart of Central London, a major tourist
destination. This offers many benefits for Bik Bok and facilitates customer flow.
5.3.2 Weaknesses
On the other hand, Bik Bok seems to have unclear aims, objectives and goals regarding
operations of the London store. Due to the lack of priority from the HQ, they are not able to
fully exploit the markets potential.
Limited Use of Promotion in the UK
As Bik Bok’s promotion and marketing communication, is literally “non-existent” in the UK,
they are not able to create strong brand awareness which weakens their competitiveness.
Furthermore, their current operations are effected by high real estate costs and business tax
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rates, which result in a marginal gross profit. Additionally, the fact that they have not
effectuated an online store weakens their competitive edge as this has become mainstream
in the fast fashion market.
5.3.3 Opportunities
An Increase in Purchasing Power
There are several areas where Bik Bok has opportunities in order to cope with the
increasingly competitive market. As the country is experiencing a slow recovery from the
recession, purchasing power and customer expenditure on clothing is on the increment,
which can be beneficial for Bik Bok.
Adapt More to the Market
Bik Bok’s merchandise is standardised, which implies that the product lines have not been
adapted to the UK market. As obesity is becoming more wide- spread, Bik Bok may need to
produce larger sizes in order to meet customer demand. To become more competitive, this
is something Bik Bok may need to take into consideration in their future design and
production process.
Digital Media and E-commerce
Further, in terms of the services provided online, Bik Bok will benefit from increasing their
presence. As it lays great potential in e-commerce, it is of vital importance for Bik Bok to
implement these measures to be able to compete with the leading actors in the market
place. Moreover, the use of digital media and social networks enables businesses to
communicate with the targeted segment. As there is a significant discrepancy between Bik
Bok’s marketing and what competitors provide, this is something they will need to take into
consideration to be able to compete successfully in the fast fashion industry. Hence, Bik Bok
should explore the possibilities for this essential marketing and communication channel in
the UK by establishing profiles on social networks such as Facebook and Twitter. By
executing these means, they will be able to strengthen the knowledge of the brand and
create awareness.
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M-commerce
In addition to this, Bik Bok will need to address the highly relevant position m-commerce
has captured in the minds of consumers. Although this retail channel has not yet been
adapted by the general public, this is something they need to be aware of in the coming
years to keep up with the rapid development in the world’s technology level.
Ethical Behaviour
Another growing demand in the market is in context of ethical business behaviour. This has
led to more conscious consumers in terms of the demand towards retailers. In order for Bik
Bok to tend to this growing demand, the company will need to further implement their ways
of ethical operations on a greater scale. The company can similar to other players in the
market devote a specific product line to inform existing and potential customers that ethical
decisions concerns all the stages in the production process.
Increase in Tourism
Lastly, the UK is hosting the Summer Olympics in 2012. This presents great opportunities for
Bik Bok, due to its prime location in one of London’s most frequently visited shopping
streets. The event is expected to increase the number of tourists and additionally boost the
economic environment for the time before, during and after the games.
5.3.4 Threats
Currency Fluctuation
The company’s gross profit is affected by the currency fluctuation, which implies that the
difference between the Sterling’s worth compared to the NOK has an impact on the total
revenue. Moreover, the yearly rise in the minimum wage leads to increased costs for the
company, which involves more expenses. Hence, they need to make up for these
expenditures by increasing their income.
An Increase in Prices
Additionally, prices on clothes have experienced a rise, due to the increase in VAT and the
long term deflation in the country. Compiled with the augmented cotton prices, these
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factors will come at an expense for the customers. Thus, the company will need to direct
focus towards customer loyalty to obtain the customer base.
Demographic Changes
Another factor that Bik Bok has to keep in mind is related to future demographic changes.
As the age group 15-24 in the UK is expected to shrink, this implies that their targeted age
segment will decrease in the coming years, which may impact their revenue.
Effects of Global Warming
Moreover, Bik Bok needs to consider the effects of global warming. As the weather
conditions change, this impacts both a modification in the demands for clothes as well as
logistics and the distribution process.
The Congestion Charge Policy
Lastly, there is local legislation such as the congestion charge policy, which applies to
Central London. Due to the fact that these costs affect daytime shoppers, this may prevent
customers from visiting the store. Additionally, public transportation might influence
customer’s desire to travel into the city and further impacts what they purchase.
The Competitive Landscape
Finally, competition of different scales from nationwide chains and individual boutiques are
threats for Bik Bok. The competitive landscape of the industry is strong, due to a large
number of similar retailers and major chains that have a strong foothold in the market. This
deters the establishment of new brands and affects Bik Bok by making it difficult to acquire
a top of mind position.
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6.1 Introduction
The chapter addresses the following theories in order for Bik Bok to gain a stronger
awareness in the UK market. This involves being able to identify and divide the market in a
manner corresponding to the different characteristics, and accordingly utilise suitable
marketing to reach the appropriate segments. Further, the decision making process
describes how customers are brought about and how Bik Bok can influence them. The fact
that Bik Bok operates to in a highly competitive environment emphasises on the importance
of developing a point of difference.
6.2 Segmentation
Bik Bok’s targeted segments needs to be identified in order to obtain knowledge of which
marketing communication strategies that are the most effective to reach their customers.
Hence, primary research was conducted in order to distinguish their targeted segments and
they have been classiefied as follows:
Segment 1
The first segment mainly consists of female students and shop employees from surrounding
stores in the age group of 15 – 29. Furthermore, they live in the London area and have an
interest in fashion. Important areas of concern are; price, quality, comfort and following
trends.
Segment 2
The second segment are female scandinavian (primarily Norwegian) tourists, in the age
range of 15-25. Thus, they have good knowledge of Bik Bok. The most important attributes
are; style price and quality.
These segments can be brought about by marketing strategies that are elaborated in
chapter eight.
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6.3 Positioning
Bik Bok aspire to obtain the position of the first choice among fashion conscious girls.
Hence, it is important for Bik Bok that there is a significant correlation between their
positioning and the customer’s perception of the brand. In their primary market, Bik Bok is
considered as a centrally positioned brand, whilst in the UK, the company needs to create a
differentiated position as they are currently perceived as a “me too” brand. The lack of
differentiation was underpinned by the survey regarding the customer’s perception of Bik
Bok, where the most common associations were affordable prices, fashionable clothes and
good quality.
6.4 Differentiation
For a product to be differentially positioned it first needs to state its membership in a
category. According to the brand perception survey, Bik Bok’s merchandise can be described
as affordable, fashionable and of good quality. This indicates that the respondents perceive
Bik Bok as a member of the fast fashion industry. In addition, Bik Bok needs to convey its
point of difference to place the brand relative to its competitors.
Moreover, the research implies that the brand is associated with being Scandinavian.
Although Bik Bok is not fostering its origin as a part of the company’s brand strategy in their
primary market, this can be viewed as a “unique selling position” in the UK. This outlines the
importance of implementing this “Scandinavian concept” as a part of an overall
differentiation strategy in the UK.
Furthermore, the research indicated that Bik Bok was perceived as a company with good
customer service. Mary Portas’ documentary (Channel 4, 2011) and the observations of the
different retail stores in Leeds and London, emphasise that customer service in the fast
fashion industry is at a fairly poor level. In order for Bik Bok to be perceived as a
differentially positioned brand among the consumers, it can be influential to focus on their
high level of customer service.
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6.5 The Consumer Decision Making Process
Need recognition and problem awareness
The initial step for Bik Bok is to discover how the customers are brought about and what
encourages them to act. Hence, the main goal for their marketers are to make their
targeted market realise that there is a problem that needs to be resolved that can move
them to an ideal state. Thus, the target market needs to realise that they want to be a part
of the new trends by renewing their wardrobe. This is a critical stage where the customers
need to be motivated, encouraged to act and search for information. This process is often
spurred by marketers and Bik Bok can make desire arouse and bring about demand by the
following efforts:
Social Media (Digital)
Free advertisement such as social networking and digital media provides Bik Bok with free
media coverage and enables them to interact with their customers. These social networks
also have a significant word of mouth effect as people can invite friends and acquaintances
to take part in the experience. Moreover, YouTube and blogs are important marketing tools
which offer visual opportunities for the customers and can further bring about demand.
Celebrity Endorsement
Celebrity endorsement can give credibility to a brand and give many benefits. In October
2011, Bik Bok will launch a collection by Whitney Port, a renowned actor and clothing
designer.
Word of Mouth
All the advertisement and salespeople in the world will not beat the power of word-of-
mouth (Silverman, 2001). As friends and family are important reference groups, they
function as social influencers on the customer. Their experience with Bik Bok’s products will
therefore have an important word of mouth effect. This is something Bik Bok need to be
aware of in the post evaluation stage as both positive and negative experiences can be
spread by word of mouth and influence potential customers.
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Information Search
When customers realise that they need a new garnment, they will search for information
regarding the product. As customers first will brows through their minds, this is where Bik
Bok will need to persuade the consumers and be able to emphasise that they are the first
choice, and most suitable brand.
Our research has indicated that the most typical Bik Bok customer are infrequent users such
as passer byers or people who visits the store due to word of mouth. This emphasises that
personal and experiential sources are of great importance for Bik Bok. Moreover, it stresses
that the UK market lacks knowledge of Bik Bok which accentuates the significance of
commercial sources to increase their brand awareness. To increase customer knowledge of
Bik Bok, it is vital that they enhance the advertising and start networking in the UK.
Evaluation and Purchase
Customers make comparisons based on the salient attributes such as cost, reputation or
performance and will rank their alternatives. Hence, they will form some sort of preference
to satisfy both functional and psychological needs. Consequently, it is important for the
marketers at Bik Bok to communicate the product attributes effectively to influence the
buyer’s decision and become a part the customer’s evoked set. A purchase is more likely to
occur if Bik Bok succeeds in becoming the preferred brand in the consumers’ mind. In
addition it is essential that the attitudes of others and unexpected situational factors does
not come between the purchase intention and the decision.
Post Purchase Evaluation
Bik Bok needs to be aware of the customer’s expectations, to be able to satisfy their needs
and avoid post purchase conflict. As cognitive dissonance often occurs, the marketers in Bik
Bok should seek to diminish any negative feelings related to the product. By helping the
customer’s obtain supporting information, they can convince them that the product will
satisfy their needs. Thus, they can develop a positive attitude towards the product/brand
and retain the customer relationship. As the consumer’s post purchase evaluation will feed
back as experience to their psychological field it will influence future related decisions
(Schiffman, Hansen and Kanuk, 2008). When a customer is dissatisfied with a purchase, Bik
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Bok should seek to exert optimum service to create a favourable attitude and influence
word of mouth. If Bik Bok succeeds in diminishing post purchase conflict they can convince
the customer’s that they have the superior brand and develop brand loyalty (Ibid).
6.6 Branding
Successful branding is achieving the top of mind position, implying that the target market
perceives the brand to be the only one capable of fulfilling their needs. This is achieved
through the brand’s ability to communicate and deliver its features. Moreover, it is essential
how the potential customers interpret the message. Further, it concerns their
understanding and perception of the brand’s liability, uniqueness and their ability to
remember it (Aaker, 2002).
6.6.1 The Brand
The strong foothold the company holds in its primary market indicates that the combination
of Bik Bok’s brand name, symbol and design has been able to influence the consumers and
developed a top of mind position. However, the brand does not have the same perceived
value as it is not familiar amongst the British consumers. The aforementioned sections have
established the bases for the following brand analysis.
6.6.2 Brand Identity
The company’s vision of becoming the first choice amongst fashion conscious girls builds the
foundation for the brand. This is achieved by building confidence and the ability to surprise
the customer through their products. Onwards, their vision includes creating excitement
throughout the store environment, by devoted, enthusiastic and engaged employees. These
are all factors that will facilitate the brand, and develop true friendship with the customers.
Overall, this is enhanced through their marketing communication.
Bik Bok is additionally trying to create a relationship with its consumer’s, hence, the Five by
Five competition was executed. This is a competition that will engage and inspire the
targeted audience, further evoking positive emotions in the consumer.
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Moreover, the brand identifies itself with “it girls” such as Jenny Skavlan, Charlotte
Thorstvedt and Whitney Port through their designer collaborations. These are role models
for the targeted segment, due to their achievements and high status. By being trendy,
fashion conscious and up to date, they share similar characteristics with the brand.
6.6.3 Brand Image
The findings from the survey illustrated how the customers perceive Bik Bok. The costumers
associated the brand with being both feminine and providing them with good value for
money. Another perception that was frequently mentioned was that the customers
connected the brand to being Scandinavian (Appendix 11).
The questionnaires identified the customers’ experience of the Bik Bok shop in Oxford
Street. Overall, the respondents’ opinions were that the shop was perceived as nice, and
that they experienced a high level of customer service.
To conclude, it is apparent that the brand’s equity in the UK is low. There is an existing gap
between how the brand desires to be perceived and how the customers actually perceive
the brand, which implies that Bik Bok’s communication is not optimum concerning the UK
market. In order to effectively deliver the message to the consumers, it is critical for Bik Bok
to create stronger brand awareness. In addition, they need to provide an advantage in
terms of developing from product parity and creating a competitive difference (Aaker,
2008).
6.6.4 Brand Pyramid
Regarding the Bik Bok concept, the following parts of the brand pyramid have been
perceived as the most relevant, to gain a broader knowledge regarding the components of
the brand; attributes, benefits, emotional rewards and personality traits.
According to the findings, the majority of the customers perceived Bik Bok’s most important
attributes as fashionable, good quality and value for money. The benefits based on the
result of consumption, are that the consumers experienced the clothes as contemporary,
long lasting and affordable. In terms of the customers’ emotional rewards, these are the
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feeling of increased self- esteem, happiness and satisfaction. Lastly, the personality traits of
the brand are being fashionable and similar to the before mentioned “it girls”.
6.6.5 Marketing Communication
Bik Bok’s marketing communication mix for the UK market is divided into eight marketing
channels.
Advertising
The Bik Bok store in London does not currently use any forms of advertising by an identified
sponsor. They had a post in Grazia magazine but this was a mere coincidence and was not
carried out on an initiative by Bik Bok.
Sales promotion
Bik Bok makes use of different short term campaigns to encourage purchase of their
products, such as posters which promote sale in the store (i.e 50% discount on the entire
product range).
Events and Experiences
Events in terms of activities or happenings to promote the company’s brand, has not been
frequently as a part of Bik Bok’s marketing communication.
Public Relations
Bik Bok does not use any form of PR, such as promotional news or articles to promote their
clothes and company.
Direct Marketing
The direct communication towards their customer does not include usage of the Internet, e-
mail or telephone.
Personal Selling
Costumer service is an important part of Bik Bok’s communication mix. Foremost, they focus
on face to face communication as this is where they the make initial contact with their
customers. The employees create an extra value by focusing on building a relationship with
their customers.
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Direct and Interactive Marketing
Marketing through online activities such as web based ads and e-commerce websites are
not used by the Bik Bok store in London.
Word of Mouth
The oral, written or electronic communication between customers and their friends is
important for Bik Bok as this can benefit the company. The survey of the target segments
showed that some of the customers had heard about the store through word of mouth. This
indicates that people have a positive experience at Bik Bok the store and that word of
mouth can be beneficial for the company.
6.6.5.1 Summary of the Marketing Functions
To sum up, the Bik Bok store in London uses very few tools to promote their brand and
company. Bik Bok has had limited focus on the usage of advertising, events, public relations,
as well as “direct and interactive marketing”. As marketing communication is defined as the
“voice” of the brand it is important to use the most effective tools to reach their targeted
segments. Based on the lack of resources from the HQ and the increase in e-commerce
usage, the best promotion tool for Bik Bok, UK is the use of “direct and interactive
marketing”. This will be elaborated in section 8.4.
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7.1 Retail Management
By providing an assortment of products and services, breaking bulk, holding inventory,
creating new demand for merchandise and providing services, Bik Bok offers important
functions that increase the value for customers.
To create inspiration and spur demand, Bik Bok emphasise on the external and interior store
design as well as the layout and visual merchandising.
7.2 Store Layout
7.2.1 The External Design
By utilising the theories of Madaan (2009) one can evaluate Bik Bok’s external design based
upon; access, frontage, entrance and visibility.
Bik Bok is situated in Oxford Street, one of the busiest shopping streets in the world with
five million people visiting every week (BBC, 2011). This prime location in Central London, in
close proximity to public transportation, surrounding businesses and tourist attractions
provides easy access for Bik Bok’s customers. In addition, Oxford Street is a destination for
visitors as the street consists of two miles, non- stop shopping and more than 500 shops.
Although their site facilitates customer traffic, their location comes at a great expense due
to high rental costs and business rates.
Bik Bok has a wide entrance and spacious windows, which consist of trendy decorations and
mannequins. Although the shop is marked with their brand logo, it is quite small in relation
to the size of the store. In spite of the lighting around the sign which makes it more
prominent, the store has low customer visibility as it is mounted parallel to the wall of their
premises.
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Additionally, the facade is fairly basic and indistinguishable from its competitors, which
implies that the store does not “stick out” from its rivals. Moreover, the store windows on
the first floor have not been made use of which further weakens visibility. Nonetheless, the
store is more noticeable at night time due to extensive lighting, covering both the store
itself and windows. Pictures of the exterior design can be found in Appendix 6.
7.2.2 The Internal Design
Internal design deals with issues such as permanent structures such as aisles and fixtures,
lighting and music (Mintel, 2007).
To create inspiration and buyer incentive amongst prospective buyers, Bik Bok pays special
emphasis to the internal store design. By utilising a visual merchandiser, they have arranged
the merchandise in an appealing manner. Nevertheless, the till area and some of the walls
do not match their desired image as they can be viewed as outdated. As this area is very
large and bulky, this does not optimise the use of space. Moreover, the store has not been
optimum designed in relation to navigation and usability. The observation report has
indicated that the basement is not made visible enough as customers are not aware of the
additional sales floor which further limits the store’s potential.
Lighting and music are also important elements in creating a favourable atmosphere. This is
something Bik Bok has taken into consideration as their store has a bright and welcoming
lighting, which makes the clothes stand out and appeal to the customers. Furthermore, the
retail environment is enhanced by music suitable for the target group. Although Bik Bok has
made sufficient effort in making the retail experience complete, there are measures they
can execute to improve customer experience and establishing effective retail operations.
Pictures of the interior design are gathered in appendix 6.
To sum up, one can conclude that Bik Bok should make improvements regarding both the
external and internal store environment to further the company’s success. This will be
elaborated in section 8.3.
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8.1 Adapt to the Market
8.1.1 Ethics
The focus on ethics within the fast fashion industry has increased, and both consumers and
international companies have taken a stance towards a green environment. Ethical values
have an active role within the consumers’ decision making process as nearly three quarters
of the UK population base their choice upon this. Some of Bik Bok’s major competitors have
already implemented ethics as a part of their differentiation strategy by offering vintage and
organic clothes. Thus, it is important that Bik Bok meets the needs of tomorrow’s customers
by focusing on ethical and sustainable variables that affect the company’s triple bottom line:
people, profit and planet. Bik Bok’s CSR policy shows a strong focus towards ethically
manufactured clothes and a sustainable business environment. To be able to enhance
customer value, Bik Bok should consider an environmental friendly collection and promote
their healthy business operations and ethical conduct
8.1.2 An Increase in Sizes
Obesity has become an increasing issue among the female population in the UK. There is
therefore a demand for larger sizes, which is underpinned by the research. Bik Bok’s
competitors have already taken this into consideration, and the current industry standard is
a UK 18. As Bik Bok use standardised sizes and their largest size is primarily a UK 12, they
should increase their sizes to be able to reach a broader customer base, in addition to
adjusting to existing customer trends. Hence, it is recommended that Bik Bok take this
increasing problem into account and focus on this growing demand in the future.
8.2 Differentiation
8.2.1 Customer Service
Customer service is a vital aspect to create customer value. Bik Bok’s employees are an
important asset for the company as they have the face to face contact with the customers.
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The different incentives that company creates for the employees, contribute to motivation
and satisfaction amongst the staff. The strong focus towards customer service brings Bik
Bok to a higher level of service compared to their competitors. For Bik Bok to be perceived
as a differentially positioned brand in the consumers mind they should take advantage of
this attribute in their differentiation strategy.
By focusing on and promoting a Scandinavian corporate culture, with its related positively
perceived values in the UK, Bik Bok can continue to provide higher levels of customer
service than many of their competitors.
8.2.2 Scandinavian Concept
It is imperative that Bik Bok develops a better position in the UK market. The strong rivalry
among many similar retailers underlines the concept of implementing the associations of
Scandinavia in a differentiation strategy. Scandinavian companies implement a “low power
distance” business culture with anti-authoritarian leaders who have a humane and people
centred management style. They are known for their embraced team working and
employee participation, which leads to motivated employees and a healthy business
environment (Carlzon, 1989; Hofstede, 2009). The Scandinavian business concept can be
further emphasised throughout the whole organisation and stores, by being an essential
part of Bik Bok’s values.
Scandinavia is renowned for good products that consumers want to buy, by having a focus
on simple, elegant and affordable design (Brand Strategy Guru, 2009). Furthermore, the
Scandinavian design and fashion industry is being increasingly more recognised by
international media (CFW, 2011). A long term objective is to implement the association even
more, by having a sub category brand which is perceived as being strongly Scandinavian.
8.3 Store Layout
8.3.1 External and Internal Store Environment
Regarding the external and internal store environment, there are measures Bik Bok can
execute to make effective changes in their retail operations. Firstly, they need to make a
trade-off between their prime premises and thus real estate costs and the benefits of the
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location contra to moving to less central premises with lower costs. Secondly, they need
focus on becoming more visible, as they do not stand out from their competitors. This can
be done through mounting a more visible and protuberant shop sign and exploiting and
utilising their window space in a more effective manner.
Thirdly, Bik Bok can benefit from updating their interior design to appeal more to the target
market and create a shopping friendly environment. By giving the store a face-lift, they can
create a more appealing shop appearance and thereby increase revenues.
Lastly, Bik Bok should find ways of promoting the basement in their London store as
insufficient use of this space limits their potential. This can be effectuated by hanging up
posters and signs that guide customers down stairs, and by making the staircase more
appealing.
8.4 Marketing Communication
8.4.1 Digital and Social Media
The increased use of the Internet has led to a consumer base more competent in collecting
information. Additionally, the daily implementation of the Internet underlines the
importance of the medium (Cheng et al. 2009).
In order to keep abreast of the developments regarding interactive media, it is crucial for Bik
Bok to prioritise this form of marketing communication. Currently, the other major players
in the market are able to reach and communicate with their target segment through a
variety of Internet based services. Their use of contemporary media enables the companies
to address the desired individuals in order to gather intelligence effectively, and has in
addition to this created an evolution of commerce (Chiagouris and Lala, 2009).
Considering the nature of the industry, Bik Bok has to re-evaluate the company’s full
potential in the UK. The brand is not addressing the constantly increasing and most effective
channels available, in order to promote and communicate the brand’s strengths and further
increase brand awareness in the UK. Taking into accord that Bik Bok’s communication
towards the market is insufficient, this needs to be recognised as an urgent matter. Their
existing webpage is in some ways inadequate and can be regarded to be incomplete. It is
97
recommended that Bik Bok make changes in terms of the information provided in English.
This can be achieved through making the necessary information available in terms of
supplying English information related to the existing English headings and especially
regarding the blog. Secondly, by establishing a profile on Facebook, Bik Bok can
communicate their collections, offerings and events. In addition, Facebook enables Bik Bok
to post video content and pictures which further spurs customer desire. Thirdly, the
company needs to acknowledge the marketing trend beyond this. In regards to the
escalating use of Twitter, companies in the retailing sector has started to acknowledge the
tool’s major potential, in terms of brand management. They are additionally experiencing
positive effects from it. Although Bik Bok is not planning to do this immediately, it is of grave
importance that Bik Bok creates a Twitter account in order to claim the
username/trademark (Blenkinsop, 2009). Taking into consideration the growing trends in
relation to Internet communication tools, Bik Bok needs to make use of Gowalla, Mobile
Applications and YouTube in the near future.
8.4.2 Celebrity Endorsement
The company’s autumn/winter collection represents a major opportunity for Bik Bok in the
UK market. International celebrity, designer, actor and idol, Whitney Port is guest designing
for the brand. However, the brand is not yet communicating this towards the British market.
There are several ways in which the company can take advantage of this event. Starting with
the store, it should be promoting the event as soon as possible, by making use of the
window display on the first floor. This will serve as an opportunity for Bik Bok to take
advantage of its prime location in London, and as previously mentioned the constant flow of
pedestrians. Another recommendation is for Bik Bok to arrange an in-store event when the
collection has arrived. The optimum way for Bik Bok to carry out this event would essentially
be to have Whitney Port make an appearance. Although this may involve high costs, it is
also a major investment for the brand in the UK, in terms of creating ripple effects. These
are positive results with regards to creating word of mouth, brand awareness, attracting
new customers; on the whole increased revenue. In addition to this, it is essential that the
marketing beforehand needs to be executed in an appropriate manner, which essentially
involves making use of all the communication channels described above. By making use of a
98
well known and attractive personality with good taste, the brand will begin to share similar
characteristics (Easey, 2009). Hence, by further promoting this collection, Bik Bok can bring
about increased customer demand.
8.4.3 E-commerce
The UK retail market is more customised than Bik Bok’s primary market, and the majority of
the country’s apparel retailers provide the service of an online store. It is recommended
that Bik Bok evaluate this measure, in order to attain point of parity and to reach out to
potential and existing customers.
8.4.4 M-commerce
Mobile phones today have many options, which have led to an increased use of smart
phones. An article by Warc news (2011) states that “More than 10million consumers in the
UK have undertaken at least one form of mobile commerce transaction”. Additionally, the
article states that 23% of the population in the age from 16 years old and above has made
use of m-commerce the past year. These are factors that provide further possibilities for Bik
Bok in the UK.
8.5 Action plan for the recommendations
In order to meet the SMART objectives from section one in the report, the
recommendations have been categorised in terms of what is most achievable and most
crucial. These have accordingly been divided into short and long term measures, in order for
Bik Bok to achieve a sustainable growth in the UK (Appendix 16). The short term activities
can be defined within the scope of two years, whilst the long term activities should be
executed within three to six years.
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It is essential that Bik Bok reach a decision regarding their operations in the UK. Is Bik Bok
prepared to increase focus on the London store to increase recognition of its brand name,
and hence profitability of the UK operation? If not, then the most sensible conclusion may
be to end operations in the UK and consolidate in their primary market.
This report demonstrates that through a lack of focus on the UK operation, especially in
terms of branding and marketing, there are several areas where Bik Bok can improve. Many
of these recommendations are concrete, simple and can be implemented at reasonable
expense. The report further splits these into short term and longer term actions.
Examples of short term actions are: an improved advertising sign at the store entrance;
better exploitation of the store environment and signs guiding the customers to the shop
basement; improving the company’s web site; differentiation through continued focus on
the Scandinavian corporate culture and management to enhance and promote the
motivation of their staff for best possible customer service; branding via Facebook and
Twitter, together with establishment of other internet based services such as Gowalla,
YouTube, etc.
Other actions are of a longer term nature and demand focus and resources. Examples of
these are: development of a range or sub group of apparel with a strong Scandinavian focus;
providing an internet based information and shopping solution by development of e-
commerce and m-commerce; increasing the range of clothing sizes to account for obesity
trends in the UK population.
Furthermore, Bik Bok needs to plan a range of celebrity endorsed product ranges and
advertising campaigns (both in the short and longer term) where use is made of these
celebrity endorsements via live events. A typical example would be a live event this autumn
at the London store spearheaded by the renowned Whitney Port.
101
On a strategic basis, a stepwise plan is the preferred option for the UK market. This allows
Bik Bok to primarily focus on improved performance and an “Individual Boutique” concept
in London. Once the necessary profitability and brand name recognition is achieved (such
goals still need to be defined by Bik Bok), then a further role out of shops in key UK cities
may be considered. A stepwise plan would also reduce downside risks for Bik Bok should
their strategy in London not succeed.
Given a greater management focus and additional resources for the London operation, the
authors believe that the company can have a bright future in the UK market.
102
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Appendix 1 – The Different Bik Bok Brands
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Appendix 2 – Market Leaders in the UK Clothing Industry
Name:
Turnover (£ million): Year:
Alexon Group PLC
£250.30 2010
Alexon Eastex
Ann Harvey Kaliko
Dash Minuet Petite
Arcadia Group Ltd
£67.90 2009
£67.90 2009
Burton Topshop
Dorothy Perkins Topman
Evans Wallis
Miss Selfridge
Aurora Fashions Holdings Ltd £507.70 2010
Coast Oasis
Karen Millen Warehouse
Austin Reed Group Ltd £110.00 2009
Debenhams PLC £2,100 2010
H&M Hennes & Mauritz UK Ltd £565.90 2009
House of Fraser (Stores) Ltd £581.40 2010
Inditex Group UK Ltd £ - -
Zara Massimo Dutti
Pull & Bear Bershka
Laura Ashley Holdings PLC £268.40 2010
Marks and Spencer PLC £9,500 2010
Matalan Retail Ltd £1,100 2010
Monsoon Ltd £ - -
Moss Bros Group PLC £128.70 2010
New Look Retail Group Ltd £1,500 2010
Next PLC £3,410 2010
Primark Stores Ltd £1,740 2009
River Island Clothing Company Ltd £736.60 2009
114
Appendix 3 - Qualitative, Quantitative and Mixed Methods Approaches
Tend to or Typically
Qualitative Approaches Quantitative Approaches Mixed Methods Approaches
Use these philosophical assumptions
Constructivist/Advocacy/Participatory knowledge claims
Post positivist knowledge claims
Pragmatic knowledge claims
Employ these strategies of inquiry
Phenomenology, grounded theory, ethnography, case study, and narrative
Surveys and experiments
Sequential, concurrent, and transformative
Employ these methods
Open-ended questions, emerging approaches, text or image
Closed-ended questions, predetermined approaches, numeric data
Both open- and closed-ended questions, both emerging and predetermined approaches, and quantitative data and analysis
Use these practices of research, as the researcher
Positions himself or herself, Collects participant meanings, Focuses on a single concept or phenomenon, Brings personal values into the study, Studies the context or setting of participants, Validates the accuracy of findings, Makes interpretations of data, Creates an agenda for change or reform, Collaborates with the participants
Tests or verifies theories or explanations, Identifies variables to study, Relates in questions or hypotheses, Uses standards of validity and reliability, Observes and measures information numerically, Uses unbiased approaches, Employs statistical procedures
Collects both quantitative and qualitative data, Develops a rationale for mixing, Integrates the data at different stages of inquiry, Presents visual pictures of the procedures in the study, Employs the practices of both qualitative and quantitative research
(Kumar, 2005)
115
Appendix 4 – Research Intelligence
Datamonitor
“The Datamonitor Group is an independent, premium business information and market
analysis company” (Datamonitor, 2011a). They provide market analysis and country and
industry profiles that has helped the report to get a broader and deeper understanding of
the UK market.
EBSCO
EBSCO gives the customers integrated services that combines reference databases,
subscription management, online journals, books, linking services and A to Z solutions. It
operates as a large business search tool with the full text of over 2,800 journals. Their
service has contributed in our research to find a wide spectre of databases. It has made a
foundation in the report by providing useful resources and information (EBSCO, 2011).
Emerald
The Emerald Group is an international provider of intelligence, primarily in the field of
business and management. Additionally, the assignment has made use of their international
journals, articles and books in other areas such as the scientific study of human society and
social relationships (Emerald, 2011).
Key Note
Key Note is a business that offers global market research services, that specializes in data
regarding the UK. The company’s database provides access to over 7 million UK based
businesses, and provides more than 1000 intelligence reports over the most important
industry sectors. Moreover, Key Note is able to present data concerning corporations’
figures, such as “profitability, liquidity, gearing, efficiency and employee performance” (Key
Note, 2011b).
Mintel Oxygen
Mintel is a provider of market intelligence, delivering information, analysis and critical
recommendations within retail, media, leisure and education. This has facilitated the report
with useful information about the market and the country Bik Bok (in London) operates in
(Mintel, 2011a).
116
The Office for National Statistics
The Office for National Statistics (ONS) is a government run branch which functions as the
primary producer of official national data. The organisation is in charge of collecting,
analyzing and producing a wide spectre of intelligence concerning financial and social
aspects. Primarily, they produce reports on areas such as “UK’s national accounts and
balance of payments, population, demography and migration, government output and
activity, business output and activity, prices, the labour market, prices, vital events, and
social statistics” (ONS, 2011).
WARC
Warc is the most comprehensive marketing information service in the world. They are a
trusted resource, recognised for the provision of the latest in-depth information and
cutting-edge thinking. Their unique online service is relied upon by the global marketing,
advertising, media, research and academic communities. They provide authoritative
forecasts of advertising expenditure for all major economies, used by researchers
worldwide. Warc.com is one of the best source of case studies, practice guides, marketing
intelligence, consumer insight, industry trends and latest news from around the world
(WARC, 2011).
SPSS
SPSS is among the most commonly used programs for statistical analysis in social science. It
is used by market researchers, health researchers, survey companies, the Government,
education researchers, marketing organisations and others. It is a computer program used
for surveys, data collection, text analytics, statistical analysis, and collaboration and
deployment. It is a usefull tool to gather and perform analysis of primary research. (SPSS,
2011).
117
Appendix 5 – Observation Report, Leeds
Leeds 18 February 2011
Observations made of the different retailers regarding areas such as: service, the ques, staff, general
impression, store lay out, concept, location etc.
Zara
Street window Appealing, fashionable, trendy, eye-catching, minimalistic, white background making the mannequins stand out and the clothes more visible
First impression Fashionable, trendy, organised, open and light, atmosphere, spacious
Staff/Service Helpful but stressed, the staff wore uniforms which made it easy to find them
Overall impression Clean, neat, trendy
Topshop
Street window Not very visible window displays, large entrance and posters of the collection in the windows.
First impression Spacious store lay out, small fitting rooms, wide product range, well exploited sales area/floor, avast accessories collection, clothes for petite/tall, well organised
Staff/Service Helpful when addressed, not forthcoming
Overall impression Should make the window displays better, very small fitting rooms but a helpful staff
H&M
Street window Colourful, eye-catching
First impression Low prices, trendy, basic. A broad collection of clothes (maternity and large sizes), accessories, and underwear. Large fitting rooms
Staff/Service Mediocre customer service
Overall impression Broad selection of clothes and eye-catching and large windows
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River Island
Street window Many windows exploited from different angles which make you see the store from any direction. Utilised the space in the windows well, could use more colours
First impression Unmotivated staff
Staff/Service Poor service, the first staff member we saw looked unmotivated and was not very welcoming. Many people at work, still inefficient, one cashier with a long que although there are many employees behind the counter
Overall impression Unorganised, poor customer service, appealing street windows
Miss Selfridges
Street window
Unappealing logo, could utilize the windows better and be more eye-catching. Unflattering and not very visible window displays.
First impression Nice with the exhibition along the escalator, makes a better impression of the store windows, large fitting rooms with a waiting area
Staff/Service Helpful and friendly, made an effort to find what we were looking for.
Overall impression Broad product range, big accessories selection, and a helpful staff, clothes for petite/tall
Urban Outfitters
Street window Large windows, poor use of the mannequins
First impression Welcoming, organised, good selection of clothes and accessories, expanded product range with books, shoes, cards, hats, underwear etc.
Staff/Service Polite, welcoming, forthcoming
Overall impression Unique store, with a broad collection and welcoming staff
Primark
Street window Basic, boring, big logo wich makes you recognise the store
First impression Unorganised, cluttered
Staff/Service Not helpful, the staff does not have good knowledge of the products, little focus on customer service
Overall impression Very disorganised and large store
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New look
Street window Poor usage of windows, not welcoming etrance – too dark
First impression Unorganised store. They have a wide range of Candy, cards, lip-gloss etc. By the counter – leads to additional sales. Big fitting rooms with waiting area in the middle of the room, good accessories collection, could have utilised the store better, boring interior with few colours, could have used the walls and the space better. Unflattering lighting
Staff/Service Helpful to some extent
Overall impression Poor usage of sales space, location and store windows
120
Appendix 6 – Observation Report, London
London 03/03/2011
Field research: Oxford Street, London in order to observe the environment. Main focus: the
surrounding retail shops and independent boutiques in close proximity to the Bik Bok store.
Topshop/Topman
Street window Gigantic entrance, tempting
First impression An extremely large amount of products, personal shopper desk, customer service desk, one floor with only accessories, cafe shop – cup cakes, candy department. Broad product range, vintage, petite/tall, big fitting rooms with a waiting area
Staff/Service A variety in customer service, many employees at work
Overall impression Very big store, they have made it a destination and offer a broader product selection
Jack and Jones, Vero Moda, Pieces, Only
Street window Big, welcoming lighting, lots of colours
First impression First impression: Flashy, colourful, trendy interior. Broad selection of clothes, and accessories (scarves, bags, hats, etc.)
Staff/Service Helpful and service minded staff. Welcoming Overall impression New and trendy with a service minded staff
American Apparel
Street window Basic, alternative, casual, oldschool
First impression Basic, old school, differentiation in product range, no labels
Staff/Service Average service, helps you if you ask for something
Overall impression Basic, different and unique
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Zara
Street window Colourful, trendy, eye-catching, stylish, minimalistic, big windows
First impression Nice, trendy, organised, open and light atmosphere
Staff/Service Helpful but stressed, the staff wears uniforms which makes it easy to find them
Overall impression Clean, neat, trendy
H&M
Street window Lots of colours, eye-catching, big windows, easy to spot
First impression Cheap prices, trendy, basic. A broad collection of clothes (maternity and big sizes), accessories, and underwear. Big fitting rooms. Very big store and easy to find what we were looking for. Clean and well organised.
Staff/Service Average to poor customer service, difficult to find staff when we needed them
Overall impression Broad selection of clothes, eye-catching windows, well organised staff with and poor customer service
BIK BOK
Street window Basic, could have utilised the store windows better
First impression Difficult to spot, does not stand out. Organised store, but the cashier takes a lot of space. Difficult to notice that there is an additional floor downstairs. Big fitting rooms, they even have fitting rooms facilitated for handicaps
Staff/Service Variation in helping customers; Good at the fitting rooms, poor in store
Overall impression Could utilize the store and windows better but they had a helpful staff and an organized store
Other information
Pictures were taken of all the surrounding stores of Bik Bok (to compare the window
displays). Furthermore, pictures were taken inside the Bik Bok store in Oxford Street. Some
of the pictures are presented in the next pages.
122
Pictures of the Surrounding Clothing Retailers in Oxford Street
Topshop, Oxford Street
Zara, Oxford Street
Next, Oxford Street
123
New Look, Oxford Street
River Island, Oxford Street
124
The Exterior and Interior Store Layout of Bik Bok, Oxford Street
The Facade during the day
The Facade during the day
125
Facade druring the evening
The till area on the ground floor
126
The till on the basement floor
Entrance to the basement floor
127
The Westhill Red Bird Collection on the ground floor
Picture of the the ground floor
128
Display and clothes, basement floor
Display and clothes, basement floor
129
The fitting rooms, ground floor
Accessories next to the till, ground floor
130
Appendix 7 – Interview with Silje Kotte, Bik Bok
A meeting and semi-structured interview was arranged with Silje Kotte, Store Manager at
Bik Bok Oxford Street, UK. The Interview was executed at the store on the 3rd of April 2011.
1. What do you think is necessary in order to attract more customers in to the store?
Having a location in the high street makes it difficult to stand out. Therefore it is essential
for Bik Bok to utilise a higher level of marketing in order to attract more customers and to
be perceived as equivalent to their opponents.
2. What do you perceive as Bik Bok’s strengths and weaknesses?
Their greatest weakness is perceived to be the non-exciting use of external marketing, not
having an online shop for the customers from outside of London. The store experiences a
delivery delay of up to two weeks compared to the stores in Scandinavia. Which is a
drawback considering new collections and in context with when the costumer finds the
products online.
Silje considers customer service as one of their strengths, and also their loyal customer
base.
Bik Bok’s strengths lay in the customer service and the loyal customers that have been with
them since Covent Garden.
3. Do you have any influence regarding the distribution of clothes?
The UK shop receives everything in the collections.
The distribution of the clothes is primarily done at Billingstad, whereas it is possible for Silje
to influence the amount and additionally the supply to meet the demand.
4. Are you experiencing a demand for instance categories such as petite and tall?
Silje has had some customers asking for shorter jeans and pants lengths, additionally a few
inquiries for sizes larger than 12. However she does not think that the demand experienced
for the specialised categories is great enough to be of significance.
5. Which forms of marketing are being made use of for the store in London?
At the moment the store is doing no marketing, commercials or PR. This is something that
the manager wants to increase in some way. Try to find cheap and effective marketing
strategies.
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Before Christmas, Grazia Magazine used some of Bik Bok’s clothes in their magazine. It was
only by coincidence that Grazia magazine contacted the store, as they normally do not use
any type of marketing. There is no existing budget on marketing and since advertisement in
magazines is very expensive, it is not very likely that this will be repeated in the future. On
the other hand, this was a great success and the store experienced an increase in demand of
the clothes shown in the magazine. This influx was from all over the country, unfortunately
Bik Bok failed to supply to the customer needs, due to the lack of distribution/net
distribution (Online shopping).
Bik Bok, UK is not exploiting marketing channels within digital media.
Silje believes that the marketing focus towards digital media has contributed to the sales in
the primary markets and represents a major opportunity for the UK market as well.
Silje also stated that there were many different ways of communicating with the customers,
both in-store and in general marketing. She also claimed that this communication would be
different in Scandinavia and UK.
6. In what ways do you see Bik Bok different from its competitors?
The shops main competitors in Oxford Street are River Island, Bershka, and New Look.
7. Is customer service a focus area for your store?
There is no exceptionally focus regarding customer service. When it comes to customer
service Silje Kotte states that the focus is “a little different than in Norway”. She says that
customers shopping in London “really don’t need that much help”. Silje emphasises that this
is an area where the average British customer differs from the Norwegian consumer. The
ordinary UK customer does not want as much help, which makes it more difficult to uncover
the persons needs in order to promote additional sales and in building customer relations.
8. How is the British market different from the Norwegian? Do you know if there is any
major difference in demand from the UK compared to Norway?
In Norway the customers are used to better customer service and therefore it is easier to
help them and achieve additional sales. In Norway you get a much more personal
relationship with the customers but In London I don’t feel it’s that same kind of personal
shopping. We try to give the British consumers the same service but they have a different
relation towards customer service and we experience that they do not want as much help.
There is a greater demand for accessorize, shoes and handbags in the British market and we
also sell a lot of jeans and tights.
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9. Why is the store non-profitable?
The shop has approximately the same revenue as Bik Bok Grensen in Oslo (One of the
biggest shops in Norway).This indicates that the store has a good turnover compared to
Oslo, but since the rental prices are extremely high in London, it is difficult to get a profit. In
addition we see that a broader customer base could help us achieve a profit.
10. How do you see the customer’s purchasing power compared to the customer base?
Bik Bok has a goal of selling 2.5 items per customer but is currently selling approximately
1.75. Silje says that it is difficult to achieve additional sales due to the (reduced/lower)
purchasing power of the customers.
11. Do you think Bik Bok has potential in cities other than London?
I think it is important to strengthen the brand value in London first, before even considering
for a further expansion.
Additional information
Personal, customers and customer service
The store has 12 employees. In detail there are 6 Full-time and 6 Part-time employees. 2 of the girls working there are English and the rest is Scandinavian. In-store everybody talks English, both with each other and the customers.
The shop experiences that they have a lot of Norwegian/Scandinavian customers.They see this especially during the holidays. This indicates that the marketing department of Bik Bok should mention more about the UK shop in the media during these periods (Christmas, Winter, Easter and Summer holiday), in Scandinavian marketing channels and media.
The collection designed by Witney Port that will be released in for the autumn/winter collection 2011, has already shown its popularity, even in the UK despite no promotion.
At the moment Bik Bok does not have an online shopping web page. The UK store has many loyal customers, which is important and valuable for the Bik Bok brand in the UK. It is also important in terms of a digital marketing strategy.
Silje Kotte wants to try out some type of digital media, such as facebook and twitter, and look at how the customers respond to such a concept. One of her ideas is to have a survey on the facebook page with rewards. The theme is “How have you become familiar with the Bik Bok shop in London and the brand”.
133
BIK BOK has student discount, but this is something that is very discreetly advertised in the store.
The prices on the different clothes needs to be regulated a lot more due to the fact that the British pound is weak towards the Norwegian Crowner.
Once a month they have merchandisers from the HQ in Oslo visiting the store.
The store is approximately 360 square meters (175 sq/m and 183 sq/m).
Silje Kotte’s response to our question regarding the biggest differences with a shop in Norway and the shop in London: “In Norway you get a much more personal relationship with the customers”. “In London I don’t feel it’s that same kind of personal shopping”.
134
Appendix 8 – Questionnaire form – Target Segments
________________________________________________
Questionnaire
Target segments Bik Bok Oxford Street, London
________________________________________________ Demographics
1. Age: _________________________________________________
2. Where do you live: _________________________________________________
3. Nationality: _________________________________________________
4. Occupation: _________________________________________________
General information
5. Where did you hear about this shop?
a) Word of mouth b) Passing by c) Live in the area
d) Media e) Other
_________________________________________
6. How often do you visit Bik Bok in Oxford Street?
a) More than once a week b) Once a week c) Two/three times a month
d) Once a month e) Seldom f) First time
7. How was your general impression of the store? ________________________________________________________________________________
8. How did you experience the customer service? ________________________________________________________________________________
9. What do you think about the product-line?
________________________________________________________________________________
135
Online shopping/Digital media
10. Do you shop for clothes online?
a) YES b) NO c) NO ANSWER
11. If yes on the previous question. How often do you order clothes online?
a) More than once a week b) Once a week c) Two/three times a month
d) Once a month d) Once every two/three months e) Seldom
12. Have you visited Bik Bok’s web page?
a) YES b) NO c) DON’T KNOW
13. Would you have made use of a Bik Bok online shop?
a) YES b) NO c) DON’T KNOW
Personal shopping information
14. How often do you shop?
a) More than once a week b) Once a week c) Two/three times a month
d) Once a month e) Once every two/three months f) Seldom
15. What is your average expenditure on clothes per month?
a) Less than £ 50 b) £ 50 – £ 100 c) £ 101 – £ 150 d) £ 151 – £ 200
e) More than £ 200 f) More than £ 300
16. Which other clothing retailers do you shop at?
_________________________________________________________________________________
17. What are the most important factors when you shop for clothes?
________________________________________________________________________________
E-mail address: Telephone Number:
___________________________________ ____________________________________
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Appendix 9 – Findings – Target Segments
1. Age:
RESPONDANT ANSWER
1 20 21 23
2 21 22 16
3 22 23 16
4 28 24 17
5 21 25 17
6 28 26 18
7 28 27 21
8 25 28 17
9 29 29 17
10 22 30 26
11 24 31 17
12 17 32 20
13 17 33 20
14 17 34 27
15 23 35 20
16 29 36 30
17 23 37 16
18 20 38 15
19 22 38 45
20 17 40 24
2. Where do you live?
RESPONDANT ANSWER
1 Portsmouth 21 Switzerland
2 London 22 Canada
3 London 23 Canada
4 London 24 Norway
5 London 25 Norway
6 London 26 Germany
7 London 27 Romania
8 London 28 Norway
9 London 29 Norway
10 London 30 Germany
11 London 31 Norway
12 London 32 The Netherlands
13 London 33 The Netherlands
14 London 34 South Africa
15 London 35 Germany
16 London 36 Germany
17 London 37 Spain
18 Reading 38 Spain
19 Kent 38 USA
20 London 40 London
137
3. Nationality:
RESPONDANT ANSWER
1 British 21 Swiss
2 British 22 Canadian
3 British 23 Canadian
4 British 24 Norwegian
5 British 25 Norwegian
6 British 26 German
7 British 27 Romanian
8 British 28 Norwegian
9 British 29 Norwegian
10 British 30 German
11 Spanish 31 Norwegian
12 British 32 Dutch
13 British 33 Dutch
14 British 34 South-African
15 British 35 German
16 South-African 36 German
17 British 37 Spanish
18 British 38 Spanish
19 British 38 American
20 British 40 Chinese
4. Occupation:
RESPONDANT ANSWER CATEGORY
1 Therapist 6 21 Student 1
2 PR Administrator 4 22 Student 1
3 Modelling 5 23 Student 1
4 HRM 7 24 Student 1
5 Student 1 25 Student 1
6 Retailing Manager 2 26 Retailing Assistant 2
7 PR TV-presenter 4 27 Student 1
8 Unemployed 8 28 Student 1
9 Entertainer/Dancer 9 29 Student 1
10 Modelling 5 30 Student 1
11 Public employee 10 31 Student 1
12 Student 1 32 Student 1
13 Student 1 33 Student 1
14 Student 1 34 Retailing Merchandiser 2
15 Design/Art 3 35 Student 1
16 Design/Art 3 36 Student 1
17 Student 1 37 Student 1
18 Student 1 38 Student 1
19 Design/Art 3 38 Manager 1
20 Student 1 40 Student 1
138
5. Where did you hear about this shop?
RESPONDANT ANSWER
1 Passed by 21 Passed by
2 Word of Mouth 22 Passed by
3 Passed by 23 Passed by
4 Live in the area 24 Passed by
5 Word of mouth 25 Word of mouth
6 Passed by 26 Passed by
7 Passed by 27 Passed by
8 Passed by 28 Passed by
9 Passed by 29 Passed by
10 Passed by 30 Passed by
11 Passed by 31 Passed by
12 Word of mouth 32 Passed by
13 Word of mouth 33 Passed by
14 Word of mouth 34 Passed by
15 Passed by 35 Passed by
16 Passed by 36 Passed by
17 Passed by 37 Passed by
18 Saw it on the highstreet when it first opened
38 Passed by
19 Passed by 38 Passed by
20 Word of mouth 40 Word of mouth
6. How often do you visit Bik Bok in Oxford Street? (a=1, b=2, c=3, d=4, e=5, f=6)
RESPONDANT ANSWER
1 2 21 6
2 2 22 6
3 2 23 6
4 3 24 5
5 4 25 5
6 4 26 6
7 6 27 6
8 6 28 6
9 5 29 6
10 6 30 6
11 2 31 6
12 6 32 6
13 4 33 6
14 1 34 5
15 4 35 6
16 5 36 6
17 6 37 6
18 3 38 6
19 6 38 0
20 5 40 3
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7. How was your general impression of the store? (a=1, b=2, c=3, d=4, e=5, f=6)
RESPONDANT ANSWER CATEGORY
1 Neither/or 3 21 Good 4
2 Very good 5 22 Very good 5
3 Very good 5 23 Very good 5
4 Neither/or 3 24 Good 4
5 Good 4 25 Very good 5
6 Good 4 26 Good 4
7 Very good 5 27 Very good 5
8 Good 4 28 Very good 5
9 Good 4 29 Good 4
10 Very good 5 30 Good 4
11 Neither/or 3 31 Very good 5
12 Neither/or 3 32 Good 4
13 Neither/or 3 33 Neither/or 3
14 Very good 5 34 Neither/or 3
15 Good 4 35 Good 4
16 Very good 5 36 Very good 5
17 Good 4 37 Very good 5
18 Good 4 38 Very good 5
19 Good 4 38 Poor 2
20 Neither/or 3 40 Good 4
8. How did you experience the customer service? (a=1, b=2, c=3, d=4, e=5, f=6)
RESPONDANT ANSWER CATEGORY
1 Neither/or 3 21 Good 4
2 Very good 5 22 Good 4
3 Very good 5 23 - 0
4 Good 4 24 Very good 5
5 Good 4 25 Very good 5
6 Good 4 26 Good 4
7 Very good 5 27 Good 4
8 Good 4 28 Good 4
9 Very good 5 29 Neither/or 3
10 Very good 5 30 Good 4
11 Very good 5 31 Very good 5
12 Very good 5 32 Neither/or 3
13 Very good 5 33 Good 4
14 Good 4 34 Good 4
15 Good 4 35 Very good 5
16 Good 4 36 Very good 5
17 Good 4 37 - 0
18 Good 4 38 Good 4
19 Good 4 38 Good 4
20 Good 4 40 Good 4
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9. What do you think about the product-line? (a=1, b=2, c=3, d=4, e=5, f=6)
RESPONDANT ANSWER CATEGORY
1 Good 4 21 Neither/or 3
2 Very good 5 22 Good 4
3 Very good 5 23 Good 4
4 Good 4 24 Good 4
5 Good 4 25 Very good 5
6 Good 4 26 Good 4
7 Neither/or 3 27 Good 4
8 Very good 5 28 Good 4
9 Good 4 29 Good 4
10 Neither/or 3 30 Neither/or 3
11 Neither/or 3 31 Very good 5
12 Good 4 32 Poor 2
13 Good 4 33 Good 4
14 Very good 5 34 Neither/or 3
15 Good 4 35 Good 4
16 Good 4 36 Good 4
17 Good 4 37 Neither/or 3
18 Good 4 38 Good 4
19 Good 4 38 Poor 2
20 Good 4 40 Very good 5
10. Do you shop for clothes online? (1=Yes, 2=No, 3= No answer)
RESPONDANT ANSWER
1 1 21 2
2 1 22 1
3 1 23 1
4 1 24 1
5 1 25 1
6 1 26 2
7 1 27 2
8 1 28 2
9 1 29 2
10 2 30 1
11 2 31 2
12 2 32 1
13 1 33 1
14 1 34 2
15 1 35 2
16 1 36 1
17 1 37 2
18 2 38 1
19 1 38 1
20 1 40 2
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11. If yes on the previous question. How often do you order clothes online?
RESPONDANT ANSWER
1 4 21 0
2 1 22 5
3 4 23 4
4 3 24 5
5 6 25 3
6 2 26 0
7 5 27 0
8 3 28 6
9 3 29 0
10 0 30 4
11 0 31 0
12 0 32 5
13 4 33 5
14 2 34 6
15 4 35 0
16 6 36 4
17 4 37 0
18 0 38 3
19 5 38 3
20 5 40 0
(1: More than once a week, 2: Once a week, 3: Two/three times a month, 4: Once a month, 5: Once every two/three months, 6: Seldom)
12. Have you visited Bik Bok’s web page? (1=Yes, 2=No, 3= No answer)
RESPONDANT ANSWER
1 2 21 2 2 2 22 2 3 2 23 2 4 2 24 1 5 2 25 2 6 2 26 2 7 2 27 2 8 2 28 1 9 2 29 1 10 2 30 2 11 2 31 2 12 2 32 2 13 2 33 2 14 2 34 2 15 2 35 2 16 1 36 2 17 2 37 2 18 1 38 2 19 2 38 2 20 2 40 2 (1: More than once a week, 2: Once a week, 3: Two/three times a month, 4: Once a month, 5: Once every two/three months, 6: Seldom)
142
13. Would you have made use of a Bik Bok online shop? (1=Yes, 2=No, 3= No answer)
RESPONDANT ANSWER
1 1 21 2
2 1 22 1
3 1 23 2
4 1 24 3
5 1 25 1
6 1 26 2
7 1 27 2
8 1 28 3
9 1 29 1
10 1 30 1
11 2 31 1
12 1 32 2
13 1 33 3
14 1 34 2
15 3 35 2
16 1 36 1
17 1 37 3
18 1 38 1
19 1 38 1
20 1 40 1
14. How often do you shop?
RESPONDANT ANSWER
1 1 21 3
2 1 22 2
3 2 23 2
4 2 24 4
5 3 25 3
6 1 26 2
7 2 27 1
8 2 28 4
9 3 29 4
10 2 30 4
11 2 31 3
12 3 32 3
13 2 33 4
14 1 34 2
15 3 35 1
16 3 36 4
17 3 37 4
18 6 38 3
19 4 38 1
20 3 40 2
(1: More than once a week, 2: Once a week, 3: Two/three times a month, 4: Once a month, 5: Once every two/three months, 6: Seldom)
143
15. What is your average expenditure on clothes per month?
RESPONDANT ANSWER
1 2 21 6
2 5 22 2
3 4 23 2
4 2 24 2
5 3 25 2
6 4 26 5
7 3 27 6
8 2 28 2
9 2 29 2
10 3 30 2
11 3 31 2
12 1 32 1
13 1 33 3
14 2 34 3
15 3 35 3
16 2 36 1
17 2 37 2
18 3 38 2
19 2 38 5
20 2 40 2
(1: Less than £ 50, 2: £ 50 – £ 100, 3: £ 101 – £ 150, 4: £ 151 – £ 200, 5: More than £ 200, 6: More than £ 300)
144
16. Which other clothing retailers do you shop at?
RESPONDANT ANSWER
1 Primark, Top Shop
2 Top Shop, River Island
3 Bershka, Pull and Bear
4 Top Shop, Vero Moda, H&M
5 FCUK, Zara, Dorothy Perkins, United Colours of Benetton
6 River Island, Top Shop
7 Zara, Selfridges, GAP, Miss Sixty, Motel, BooHoo, Quantum.com
8 Top Shop, River Island, Primark
9 Top Shop, Zara, Pull and Bear
10 Top Shop, Zara, Vintage
11 H&M, Topshop, Mango, Zara
12 New look, select, h&m, primark, risky
13 H&M, Topshop, Bershka, Zara, new look
14 h&m, new look, river island, primark
15 oasis, miss selfridges, asos
16 topshop, h&m, cos, zara, uniqlo
17 topshop, american aparell
18 all saints, adidas, topshop, zara
19 h&m, new look, topshop
20 bershka, h&m
21 Zara, Mango
22 American Apparel, H&M
23 H&M, American Apparel
24 H&M, Zara
25 H&M, Zara, Top Shop, and so on
26 Zara, Top Shop, H&M
27 Pull & Bear, Bershka, River Island, Top Shop
28 H&M, Zara, Vero moda
29 H&M, Zara, Vero moda
30 Top Shop
31 Vero Moda, H&M
32 H&M, Vero Moda, Man at work, Sting
33 H&M, Zara and other Dutch shops
34 H&M, Next
35 Top Shop, H&M
36 H&M, Top shop, Bench
37 I like at t-shirt and shoes
38 Zara, Mango and Bershka
38 Top shop, river island, bershka and new look
40 Zara, Top shop
145
17. What are the most important factors when you shop for clothes?
RESPONDANT ANSWER
1 Colours, pretty and girlee 21 Style, Looks
2 Price, Size 22 clothes organization, easy to browse
3 Quality and price 23 Fit, Look
4 cost 24 Price, Quality
5 Style and comfort 25 The price, The quality
6 Catwalk trend at good prices 26 Style
7 Size, comfort, price 27 Look Nice
8 The Fit 28 Price, Quality, location, what the clothes look like
9 Selection 29 Price, Quality
10 Unique, Suit my style 30 Price, Quality
11 price, trend 31 The style, price, some what quality
12 what i need, find attractive 32 The price, how it fits
13 what suit me 33 Quality/Price
14 the display of how the outfits og 34 Fit, Price
15 quality clothes, not massively overpriced
35 Different clothes
16 cut, colours, fit 36 Price
17 if it looks good, quality 37 If I like the clothes I buy
18 feel and look comfortable 38 That the people be ok with her clothes
19 comfort, trend 38 Fashion, good quality, price
20 it expresses my personality, how i feel 40 Quality and price
146
Appendix 10 – Survey Form – Brand Perception
________________________________________________
Survey
- Brand Perception
________________________________________________
What kind of associations do you have with Bik Bok?
(Please tick the appropriate boxes (MAXIMUM 5 options)
Fashionable Affordable prices Good quality
Different Scandinavian Luxurious
Poor Quality Expensive Unique
High Fashion Feminine Ordinary
Tacky Main stream Good Value
Anonymous Casual British
Other:
_____________________
147
Appendix 11 – Findings – Brand Perception
BIK BOK Brand Perception
NR RANK ASSOCIATION WORDS
FREQUENCY FREQUENCY PERCENTAGE
PERCENTAGE OF TOTAL
1 1 Affordable prices 20 83.00% 21.51%
2 2 Fashionable 15 63.00% 16.13%
3 3 Good quality 12 50.00% 12.90%
4 4 Feminine 9 38.00% 9.68%
5 5 Good value for money 8 33.00% 8.60%
6 6 Scandinavian 6 25.00% 6.45%
7 6 Different 6 25.00% 6.45%
8 6 Casual 6 25.00% 6.45%
9 9 Unique 4 17.00% 4.30%
10 10 Ordinary 3 13.00% 3.23%
11 11 Poor Quality 2 8.00% 2.15%
12 12 High fashion 1 4.00% 1.08%
13 12 Basic 1 4.00% 1.08%
14 14 Luxurious 0 0.00% 0.00%
15 14 Expensive 0 0.00% 0.00%
16 14 Tacky 0 0.00% 0.00%
17 14 Main stream 0 0.00% 0.00%
18 14 Anonymous 0 0.00% 0.00%
19 14 British 0 0.00% 0.00%
0.00%10.00%20.00%30.00%40.00%50.00%60.00%70.00%80.00%90.00%
Frequency Percentage
Frequency Percentage
148
0
5
10
15
20
25
Frequency
Frequency
16.13%
21.51%
12.90%
6.45%
6.45%
2.15%
4.30%
1.08%
9.68%
3.23% 8.60%
6.45% 1.08%
Percentage of total
Fashionable
Afordable prices
Good quality
Different
Scandinavian
Poor quality
Unique
High fashion
Femenine
Ordinary
Good value for money
Casual
149
Appendix 12 - Limitations
There are certain limitations that have affected the report that needs to be taken into
consideration.
Due to limited resources and time constraints, this has had an impact on the research
process, how the research has been conducted and the amount of research that was able to
be executed. Firstly, our restricted budget made it difficult to be able to travel to London as
many times as we could have wanted to. This further impacts the amount of research that
has been obtained. Our survey regarding Bik Bok’s targeted segment was conducted on a
Thursday, which might have had an impact on the customer flow, and the diversity of
customers. Moreover, there was limited amount of time spent in store with the surveys
which may have impacted the amount of respondents and the answers given. As the data
was collected mid-day, the customers could have been stressed (i.e. get to work in time)
and therefore not answered the questioners satisfactory.
Regarding that a vast amount of the customers consists of tourists, these may have
misunderstood the questions due to language barriers. Although some of the customers
might have answered the questions in the best way possible, others may have
misinterpreted the survey thus answered insufficiently. As the survey only was conducted
once, we have not been able to test the frequency between results and compare
differences. Hence, the data may not give reliable results. Additionally, it is important to
underpin that the results of the survey may be seen as subjective, as the participants were
people who purchased products from the store. As these have a favourable opinion of Bik
Bok’s merchandise, the results may have been “coloured” by these factors.
In terms of the communication with the company, this was conducted mainly through e-
mail, which has limited the amount of information access. Furthermore, we did not always
acquire sufficient information or data when we needed it, due to the fact that we did not
always get a prompt response.
As Bik Bok is a company operating within the fashion industry, this involves intense rivalry.
Consequently, this restricted the amount of information we were able to obtain from the
company due to company policies.
The assignment acknowledgedes these limitations in relation to the data collected. In
addition we have been aware of the limitations when listing the strategies and
recommendations, and further the conclusions that have been drawn.
150
Appendix 13 – Consumer expenditure on clothing
Key Note, (2011a), Clothing Retailing, [Internet], March 2011, pp. 1-134. Available from:
<http://www.keynote.co.uk/academics/index> [Accessed 22.03.2011]
151
Appendix 14 – The Service Hand
The hand describes the different stages of the decision making process for a customer in a
situation with Bik Bok. Moreover, the different stages of emotional experiences for the
customer and the overall energy that enhances and improves the experience. It is an
extension regarding of the company’s values and customer service (Bjarstad, 2011).
152
Appendix 15 – SWOT Analysis – BIK BOK UK
The table shows a listing of the respective Strengths, Weaknesses, Opportunities and
Threats regarding Bik Bok in the UK womenswear market.
Strengths Bik Bok has a strong CSR policy Dominant market share in the primary
market Effective use of product promotion in their
primary market A well-established promotion through digital
and social media and the store concept in the primary market
A high level and strong focus on customer service
Authority and strong power balance towards the suppliers
Central location, being part of a tourist destination (Oxford Street), in London
Being a fast fashion retailer, considering that people are spending more money in this category of retailers
Weaknesses The high business tax rates and estate
costs in London increases costs Unclear aims and objectives regarding
operations abroad Lack of priority from the HQ to fully
exploit the export markets potential Bik Bok’s limited promotion and
marketing communication in the UK Marginal economic results from the Bik
Bok store in London Not offering the customers a possibility to
shop clothes online Bik Bok does not offer organic or vintage
products
Opportunities Increasing purchasing power in the UK Produce larger sizes and reach a broader
customer base, due to the increase in obesity Tourist benefits from the Olympic games,
London 2012 E-commerce retail Mobile phone applications (M-commerce) Consumer demand for ethical production of
clothes A shift in customer focus towards value and
cheaper clothing alternatives Customer expenditure on clothing is on the
increase Differentiation through styles and clothes A stronger focus on marketing
communication and promotion
Threats Currency sensitive in terms of revenue
and gross profit Increase in prices on clothes, due to
deflation and cotton prices A reduction in their targeted age group An increase in obesity Majority of the competitors offer online
stores Global warming effects the seasons,
demand, logistics and distribution The increase in the VAT effects the prices
for the consumers A rise in the minimum wage may affect
the gross profit The congestion charge policy may prevent
customers travelling to London Strong rivalry due to a large number of
similar retailers in the UK Short product life cycle on fast fashion
clothes Major competitors strong foothold deter
the establishment of new brands
153
Appendix 16 – Recommended Action Plan
The action plan includes a punctual description of the different activities, how they can be
implemented, in addition to when they should be launched. Further, they are categorised in
long and short term activities.
Action Plan
Short Term Activities
Activity Description Marketing Channels/Effects
Launch
Differentiation Strategies
Customer service
Development of the high quality of customer service
Differentiation. Refer to the high level of customer service in the digital media.
Ultimo 2011
Scandinavian concept
Implement Scandinavia as a positioning strategy and value of the organisation Subcategory brand which is perceived as Scandinavian
Differentiation in the fast fashion market. Create awareness through digital media. International fashion, inspired by Scandinavian trends. Association with simple, elegant and affordable design
Ultimo 2012 Primo 2013
Store Layout
External environment
Improvement of signs, exploit window space more effectively
Create awareness of the store in the high street. Eye catching, create attention and curiosity.
Primo 2012
Internal environment
Update interior design Improve awareness of the basement floor
Keep the theme inspired by Scandinavia/Norway. Express this in a much greater sense throughout the whole concept of the store Signs, easier access, part of the store experience to visit the basement floor
Ultimo 2012 Primo 2012
154
Short Term Activities
Activity Description
Marketing Channels/Effects
Launch
Marketing Communication
Digital and Interactive Media
Link webpage towards Facebook, Twitter, YouTube and Gowalla
Make the webpage a total experience, increased awareness and brand equity
Ultimo 2011
Create profile for Bik Bok UK
Store events for members, news, interactive communication between customers and the company, Updates on campaigns, limited offers.
Medio 2011
Create profile for Bik Bok UK
Newsfeeds on events, campaign, offers. Awareness among customers
Medio 2011
Gowalla Create Bik Bok London check in point, link it with the other social media
Top 10 users on check in lists are provided with special offers and discounts
Ultimo 2011
Mobile application Integration with web page
Campaigns, Limited offers, News, Discounts
Primo 2012
Whitney Port Campaign
Promotion of campaign, In-store release event
Implement marketing through web-page, Facebook, twitter
Medio 2011
155
Long Term Activities
Activity Description Marketing Channels/Effects
Time of Implementation
Adapt to the Market
Ethics
Launch ethical clothes. Combine it with the 5x5 design contest (Vintage remake, Organic collection)
In store, Web-page, Facebook
Medio 2014
Addressing the Obesity Issue
Expand the range of larger sizes, from size UK 12 to UK 18
Expanding the target segment,
Medio 2013
Distribution Channels
e-Commerce
Online store with the entire product range
In- store, Web-page, Facebook. Become more competitive. Point of parity
Medio 2014
m-Commerce
An extension of the online store customised for smart phones
In store, Web-page, Become more competitive and prepare for increase in future market demand
Ultimo 2014
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