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Theoretical Background:

Product Diversification

The route of growing business prospects through additional market prospective of an

existing product is product diversification. This strategy is used by companies to modify theirexisting product range and add new product to their portfolio. It can be expensive, risky, time

consuming and requires enough resources. Before implementing this strategy, business should

consider all the angles or pros and cons of the particular product.

Market Segmentation:

A marketing term market segmentation refers to the process of sub dividing buyers into

groups or segments that have common need, want and demand attitudes as they will respond

similarly to a marketing action. The purpose of this is to satisfy every consumer based on their

attributes and manage anticipation of consumers to maximize business growth. Usually threecriteria used for market segmentation and they are given below

Product Positioning Strategy:

Product positioning refers to consumers' insights of a product's characteristics, uses, value, and

benefits and disadvantages relative to competition brands. It is a marketing technique intended

to present products in the best possible way to differentiate target audiences as marketers

often conduct marketing research studies to analyze consumer preferences and to constructproduct position maps that plot their products' positions in relation to those of competitors'

offerings."

Homogeneity

DistinctionReaction

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Brand Management:

It is the tactical development and management of diversity through an exclusive parameter and

a communication function in marketingthat includes analysis and planning on how

that brandis positioned in the market. As the world is changing at a faster rate, brand

management helps business to continuously innovate their product and service offerings to

create consumer moments and satisfy their demands. It can be explained from three point ofview. They are -

Product

Positioning

Pricing

Retailer Mix

Media &

Reviews

Word of

Mouth

Packaging

Product

Features

Competitor

Claims

IMC Mix

Strategic Operational Organizational

Superior Brands

Communication

Price

Placement

Quality

Promotion

Organizational

Structure

Budget

Monitoring

Categories

Customer

Segments

Architecture

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Case Study: Answer to Question 1

Mark & Spencers fortunes took a dip due to the below activities

Supply based company rather than demand based company. Out dated and old fashioned product line especially in Clothing.

Non-consumer centric approach.

Over reliant on suppliers and unwillingness to outsource to cheaper alternatives.

Continuous increase in profit margins and shift from their core value of value for money

approach.

Failed to comply with continuous brand innovations and sticking up with same products.

Over dependent on consultants rather than relying on internal employees.

Irrelevant cost generating projects continuation (like unused lands or shops, financial

services etc.).

But they were successfully addressed the problems and due to proper and timely initiatives,

they were again in the upward trend. The below activities brought them good fortunes

Smart and Effective Product Positioning:

Consumer

Centric

Approach

Innovation

Product

Positioning

Cost

Optimization

Change

Management

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They introduced different clothing lines like good, better and best in distinctive price and

quality, customized and fashionable furniture to enhance and included Coca Cola, Kelloggs, and

Bovril to their food chain to entice consumer even more.

Modern and Timely Consumer Centric Approach:

They change their core value by becoming a demand oriented company from supply based

endorsed famous models like David Beckham, Twiggy, Myleene Klass etc. and targeted organic

foods and energy efficiency products which are more consumer driven ones.

Maximize Cost Optimization through Outsourcing and Vendor Reshuffle:

They changed their suppliers to go for more cost effective solution and outsource many product

materials, trimmed down non feasible lines, sold or leased the unused lands and spaces to

reduce operating expenses. And decreased over reliance of consultants and focused more on in

- house suggestions.

Innovation:

They focused on continuous innovation in clothing (like machine washable mens suits),

branded electronic products inclusion, designer furnitures, superior consumer service like

instant feed backs or furniture delivery and others.

Minimizing the Adverse Effect of Change Management:

Although senior management changes lead to new ideas and objectives, they were able to keep

the changes towards greater well fare of the company which resulted in overall sustainability of

the business time to time.