Marketing Audit for Pets at Home - Essay Example

Pet’s at Home has a wide product range for a wide variety of animals Including dogs, cats, fish, reptiles, birds and small pets Including rabbits and rats. Pets at Home has had a successful financial year with total sales up 7. 1%, reflecting a robust Like for like sales performance of 1. 3% and the impact of the new store opening programmer with a record 32 (2011 : 25) new stores opening in the financial year. The estate now compromises of 313 (2011: 281 ) stores nationwide. Gross margin also increased to 52% (2011: 51. %) reflecting the increasing participation in Pet’s at Home sales mix of directly imported product, improvements through working with suppliers in order to improve margins in both existing and new ranges plus continued growth in the Meany’s own brand offer (PAP Annual Report, 2012). Market overview 2010 (E. 3 billion) despite the difficult economic conditions we’ve experienced over the past few years (the market is expected to grow steadily until 101 6 when it’s estimated to be worth approximately в?3. Billion). The growth has mainly been driven by increased spend on cat and dog foods (Remuneration, 2012) and this growth shows that pet owners are trying not to compromise their spending on their pets. Despite growth in the market, PAP should remain aware of the uncertainty within the UK detail market at present as pressure on consumers disposable incomes remains high, thus directors should be prepared for any future impact from this on the pet market.

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There are two key drivers of growth in the I-J pet care market. Firstly, a range of sociological trends Including the growing number of single-person households which is leading to pets Increasingly being considered as companions. This growing humanistic Is expected to lead to a healthy growth In premium products Including cat and dog treats, clothing and accessories. This has also led to an Increase In toy ales, particularly in households containing children as they are considered to be one type of pet.

Secondly, purchasing insurance is increasingly popular as consumers are more concerned in protecting themselves from unexpected and expensive vet bills, with almost a 1/3 pet owners estimated to be insured in 2011 (PAP Annual Report, 2012). Finally, an increase in popularity of reptiles is evident as consumers have realized they are fairly easy to care for and fit in well with working lifestyles. Marketing Mix Figure 1. When marketing their products, Pet’s at Home needs to create a successful mix of avian the right product, sold at the right price, in the right place, using the most suitable promotion.

Figure 1 shows the marketing mix for PAP: People are also of great importance to the company and there is a strong focus on recruiting staff members with the right qualities and passion for pets and training them via the “Pet’s at Home Academy’. PAP aims to offer “Positively outrageous” customer service, through their knowledgeable staff and dedication to animals to match their tagging “We know pets by heart. ” SOOT analysts PAP has many strengths, and the key strength is the high level of customer service it revises through the quality of staff.

The company was voted second in the Times 25 best big companies to work for, and this is due to the amount of focus the company’s strategy has on training and improving staff knowledge and ability. An internal survey was launched called We’re all ears’ which measures levels of colleague engagement, a metric developed as a measure of both Job satisfaction and employee knowledge (91%, 2011:92%). The challenge remains to maintain and improve on an exceptional score.

A new global sourcing office in Hong Kong in was launched in April 012, and this gives the company the opportunity to work more closely with suppliers in order to strengthen the supply chain and drive further margin improvements. Prices have also been renegotiated in order to pass down great value products to the customers. PAP also offers a large variety of products, including traditional and innovative which gives them a competitive advantage. Convenience is also a key strength as there are over 300 stores in the I-J so it is likely customers will not have to travel that far to find a store.

Weaknesses of the company are evident in the arioso operations carried out, for example; the vet practices often cannot meet the high demand and customers consequently have to experience long waiting times. The store offering is currently inconsistent, I. E. Only selected stores offer vet/ grooming services or certain product ranges (horses/tropical fish). Threats to the business include competition from supermarkets for pet supplies, local dog groomers (including mobile which offer more convenience as they come to your home) and other insurance providers (particularly increasingly popular comparison websites e. Go Compare) for insurance. To maintain a competitive advantage PAP offer customers a freezer voucher as an incentive to purchase their insurance. Figure 2. PAP continues to focus on leveraging its existing market leading position as well as developing new opportunities for growth. The key opportunities are as follows: PESTLE Figure 3. Figure 2 shows the factors considered in a PESTLE analysis (the political, economic, social, technological, legal and environmental factors that can affect a company). This section will analyses PESTLE in relation to PAP.

PAP needs to ensure it maintains good relationships with its suppliers and ensure hat there is political stability in the country in which it is getting its supplies from. If it doesn’t, the company could be at risk from political barriers that could arise and ultimately negatively affect its operations. The economic climate is another factor that can impact a company’s success. There continues to be a significant degree of uncertainty in the I-J retail market as pressure on consumers’ disposable income remains at a high level. The directors must ensure they continue to monitor the macro economic trends and their impact on the pet market.

Sociological factors such s lifestyle trends, consumer attitudes/opinions and ethical issues can have an impact on PAP. Pet owners are increasingly treating their pets as members of the family and are increasing spend on products like pet food and toys. PAP should be careful of negative press; a program from Watch Dog was recently streamed which showed issues of animal neglect (sick animals were being sold to the public including animals with Ringworm). Ensuring their staff members have maximum training and placing a focus on animal health will aid avoiding negativity like this again.

Advances n technology have enabled the company to have an online presence in addition to an inshore presence. Customers have the ability to order online (click & collect) which provides added convenience as the customers doesn’t have to go to the store and can browse in their own time. Pet advice and added customer service is provided through PAP TV which gives information on products and services, pet care advice, supported charities through video’s online. Interaction is also encouraged as customers can submit their pet video’s to go live on the website, and this is great for increasing brand loyalty.

PAP ensures it adheres to all laws and regulations including the Pet Animals Act 1951 which includes regulations such as; pets should not to be sold to children under 12, animals to be kept in accommodation suitable as respects size, temperature, lighting, ventilation and cleanliness; and animals (being mammals) will not be sold at too early an age. The Animal Welfare Act also ensures that animals are bred in comfortable surroundings, and makes sure the animals wellbeing is an absolute priority. The environment is the final element and corporate social responsibility plays an important part of the company’s strategy.

The company ensures it remains environmentally friendly and maintains corporate social responsibility as a top priority by doing the following: ensures it sources with integrity by abiding by the law, regularly inspecting suppliers to make sure they meet Pap’s high standards and ensuring that they have the right attitude towards animals. Developed, work closely with them to also ensure that the social development and welfare of their employees are protected. Caring for animals beyond their stores is important to the company and it has undertaken 2 major initiatives to help Figure 4.

Figure 4. Less fortunate pets shown below in figure 3: Pet’s at Home makes sure it recycles as much as possible by cutting down on packaging waste, using less electricity and becoming more fuel efficient. Finally, giving back to the community is of great importance to PAP and it works closely with the scouting organizations to offer local Beaver and Cub Scout groups free workshops to help members gain their animal care badges. The stores also work closely with local schools as PAP is a family focused business and the majority of customers are young families and first time pet owners.

This can help children understand the importance of caring for animals. Competitive analysis – Porters Five Forces Figure five below shows a diagram of the framework that Michael Porter created which outlines the five forces that influence industries. Figure 5. Figure 5. Figure 6. The first element of Porter’s Five Forces is the threat of new entrants to an industry. If new entrants move into the industry, they will gain market share and rivalry will intensify, thus Pet’s at Home needs to carefully monitor the barriers to entry in order to assess the threat of potential competition.

There are multiple barriers to entry in the pet shop market, and this could deter new entrants from breaking into the industry; these are shown in figure 6 below. Competition should also be considered as a barrier to entry, and the veterinary practice is subject to heavy competition because the practice within each store is relatively small (average of two consultancy rooms), and most towns have an established local practice. Home breeders are common in the industry and are also a threat to Pet’s at Home, however many individuals will be deterred from creating professional pet shops due to high costs associated with a premises and licensing.

Nonetheless, online search engines and websites have made it a lot easier to access individual sellers e. G. Ending pet sellers through websites such as Gummier. The second force is the bargaining power of suppliers, if Pet’s at Home’s suppliers have bargaining power they will, exercise that power, sell their products at a higher price, and squeeze industry profits, thus it is important to make sure Pet’s at Home maintain more power, or at least maintain a balance of powers between themselves and their suppliers.

If customers have strong bargaining power, they are able to exert pressure to drive down prices or increase the required quality for the same price. Thirdly, customers tend to enjoy strong bargaining power when there are only a few u to the large size of the business, and the extensive number of suppliers in the industry, Pet’s at Home can be seen as quite a powerful customer and the suppliers less powerful. The fourth force is threat of substitute products.

Pets at Home are at risk of substitute products from online suppliers, as it is increasingly popular to purchase online and the ability to buy from other countries and access a wider variety of products is relatively easy. However, due to Pet’s at Home being well established and strong brand image, the willingness of customers to switch is less keel. If Pet’s at Home experiences a significant threat from a rival product, the firm will have to improve the performance of their products by reducing costs and therefore prices and by differentiation.

The fifth force is the industry, and it is ultimately influenced by the degree of competitive rivalry. The factors which determine the degree of competitive rivalry are shown below in figure 7. Conclusion Overall, PAP ensures it maintains a focus on satisfying customers by providing a wide range of pet supplies and expanding its product range, including veterinary practices ND dog grooming parlous inshore to increase convenience for the customer. The company places an emphasis on providing excellent customer service through their knowledgeable staff to give advice on which products to choose (I. . Dog/cat food selection) and after sales care for the purchase of pets. The company has many strengths and many opportunities to focus on, however it must ensure it stays aware of the PESTLE factors and the five forces from Porter’s framework which could impact the company. References Remuneration. (2012). Market Overview. Pet’s at Home Annual Report. Peg 4. Jim Riley. (2012). Porter’s Five Forces Model: Analyzing industry structure. Available: http:// www. Tutor. Net/business/strategy/porter_five_forces. Tm. Last accessed 16th Novo 2012. The Times 100 Business Case Studies. (2012).

The extended marketing mix. Available: http://fastidiousness’s. Co. UK/business-theory/marketing/the-extended- marketing-mix-ups. HTML#capitalization. Last accessed 15th Novo 2012. The Times 100 Business Case Studies. (2012). Marketing Mix. Available: http:// fastidiousness’s. Co. UK/business-theory/marketing/marketing-mix-price-place- promotion-product. HTML. Last accessed 15th Novo 2012. Remuneration. 2012). Pet’s at Home Annual Report. Available:http://www. Potatoes. Com/Wooster/Pets thatHomemotic Pagepagesmer Serviceservicesentre/BcentreTrading/ Last accessed 14th Nov 2012.Appendix * Figure 1: The PAH producPAPange includes pet supplies (toys, pet food, pet cages and small pets), veterinary services, dog grooming services and pet insurance. The dog and cat foods are allocated under wet or dry food, and are then further “Everyday Brands”. There is a wide range of dog and cat toys which cost between seventy-five pence, to twenty-four pounds. Pet’s at Home is licensed to sell small nimals andanimalsntly sells rabbits, guinea pigGuianarded dragons, snakes, rats, chinchillas, degus, dwadeedsmsters and fish.