Introduction

By focusing on the needs of consumers, an organization creates abusiness that can outperform its competitors. Being closer toconsumers and providing exactly what they want is known as marketorientation. A market orientated business carries out research tofind the needs and wants of consumers. It then uses the findings todesign products and marketing strategies to satisfy these needs.This compares to product orientation which focuses first ondeveloping a product and then seeks ways to persuade the consumerto buy it.

This case study describes how JD (part of the JD Sports FashionPLC Group of companies), a large and well-known retailer, managesthe balance of its marketing mix around its consumers’ needs inorder to achieve business growth. The marketing mix is often termedthe 4Ps. It is a useful way of looking at how organizations reachtheir consumers. For example, businesses need to create a mix thatinvolves:

• the right products

• sold in the right place

• at the right price

• using the most suitable forms of promotion.

Founded in 1981 in Mossley, in Manchester, with a single shop,JD today is a well-recognised brand. With 335 stores JD is the UK’sleading retailer of fashionable sports and casual wear. For 20years JD expanded through organic growth. It opened up stores innew locations to grow its customer base and increase revenues. Ittraded on the rising trend, particularly amongst young people, ofwearing sportswear in everyday life.

In addition to organic growth, The JD Sports Fashion Group hasalso expanded in recent years by acquisition and now has a numberof businesses in its portfolio. It has increased its JD store basethrough the acquisition of First Sport and All: sports as well asacquiring Scotts (premium branded menswear) and Bank (young maleand female branded fashion) in the UK. The Group also madeinternational acquisitions including the French sports fashionretailer Chausport and Champion Sports in Ireland. The JD SportsFashion Group has also acquired brands such as The Duffer of StGeorge, Nicholas Deakins, Canterbury of New Zealand, Kooga, Kukriand also the fashion brands Chilli Pepper, Nanny State, andSonneti. Brands such as Mckenzie, Brookhaven, Carbrini and Pure areexclusive brands that are only available at JD stores. With over500 stores in the UK, Ireland, and France, the JD Sports FashionGroup has a reputation for stocking the most exclusive and stylishlifestyle products.

As a B2C (business to consumer) organization, the performance ofthe JD fascia depends on how desirable its brands are to consumers.By providing exactly what the consumers want JD can outperform itscompetitors. It also helps it to remain buoyant in a challengingbusiness environment. JD has continued to grow despite the factthat levels of unemployment are increasing and many consumers nowhave reduced disposable income. The demand for non-essential goods,such as branded clothing, would normally decrease as incomesfall.

Product

The ‘product’ is concerned with the function and featuresoffered by a good or service. The product also encompasses factorssuch as quality, design, after-sales service and branding. JD sellslifestyle products. These are sportswear ranges worn in everydaylife. JD targets different groups of consumers who desire trainersand sports fashion as casual day wear. Many of the products that itsells are from the global ‘power brands’. These are longestablished, popular brands such as Nike and Adidas. These brandsappeal to large groups of consumers and are easily recognized by JDcustomers. They are backed by large marketing budgets which help toboost sales and sustain demand by consumers. Usually, it ismanufacturers who decide what products to produce and retailershave no say in this. However, JD is different. The company has somuch buying power and knowledge of the market that manufacturersare happy to take its ideas. These are then used to produceexclusive products for JD. For example, the Adidas Forest Hills andAdidas Training PT footwear ranges were developed exclusively forthe JD Group and cannot be found in any other retailer. JD workswith suppliers across the world to develop and deliver own-brandproducts. Prior to any orders being placed, all new suppliers mustcomplete the Group’s risk assessment form to ensure that theiractivities are in line with the Ethical Trade Initiative Base Code.This code covers areas such as health and safety, working hours,wages, fire procedures and maternity pay provisions. This ensuresthat the people employed to make JD’s own brand products have goodworking conditions and that product are sourced ethically. Othersocial and environmental factors are also taken into account. Forexample, last year 423.3 tonnes of cardboard, used in packaging,was returned to the Group’s distribution center for recycling.

Price

The price charged for a product will depend on a number offactors: the cost to make it, the level of profit required,competitor prices and the price consumers are willing to pay. Thedemand for necessities, such as bread and fuel, is unlikely tochange much as prices fluctuate. The demand for sportswear andcasual clothing, however, is more likely to be price sensitive.Getting the price right is a key part of an organization’smarketing strategy. This is because it is the price that directlygenerates income, allows debts to be paid, re-investment to occurin the business infrastructure and profits to be made. Businessesneed to ensure that the price charged is perceived by consumers asvalue for money in relation to the quality of goods andservices.

There are different pricing strategies which can be adapted togenerate demand:

• Market penetration – introducing a new product at a lowerprice to help gain market share.

• Competitive pricing – often used for well-known products orbrands that are in high demand. Prices are similar to competitors.To be competitive, JD must ensure it doesn’t charge higher pricesfor the same goods (or similar) than other sports and fashionretailers.

• Strategic pricing – This might be used to position anexclusive product or brand to make it more desirable for consumersand generate demand or demonstrate value. By buying in largevolumes, the company’s unit costs are lower. For example, discountsachieved by bulk purchases of trainers means the cost for each pairis lower than that paid by smaller retailers. This ensures JDremains competitive.

Place

The place element of the marketing mix involves making productsavailable to the customer in the most convenient way. JD operatesin:

• the high street

• out of town locations

• shopping centers

• e-commerce.

JD wants to make the shopping experience distinctive from thatof its rivals. It does this by innovative displays and creativeimagery to make the store experience fun and exciting. For example,the JD store in Cardiff won a UK Retail Interior of the Year awardfor its design and ambiance. This included a giant table-footballfixture and light-boxes to display trainers.

The JD Property Committee meets regularly to look at theperformance of all stores and consider new locations. This includesanalyzing sales performance and forecasting sales. This type ofdata helps JD to assess where its outlets are giving the bestreturn on investment. The right location can maximize sales, limitcosts and therefore maximize profits. There is a range of factorsthat influence the choice of new store locations.

In addition to traditional forms of shopping, JD has alsoinvested in e-commerce. JD recognizes that with the increasing useof online shopping, consumers now expect very high standards ofservice and functionality from a web ordering site. In order toreach consumers in the best possible way, the company’s webdesigners constantly aim to improve the functionality of the site.It is now possible for consumers to buy products directly from thewebsite.

In a mystery shopper survey of 49 major UK e-commerce sites in2010, JD was the top all-round performer. It scored well for:

• quality of its customer service - particularly its cleardelivery and returns information

• its checkout process - which is simple and easy to use

• its product pages - with photography that provides consumerswith the most helpful views of products before they buy.

Promotion

The purpose of promotion is to create awareness in consumers orgenerate interest and desire to buy products. Promotion can also beused to create or change a brand image and maintain market share.JD wants to position itself away from competitors to give it acompetitive advantage. This means that high profile manufacturersand brands will prefer to release their products to JD rather thanits competitors as they are likely to sell more products andprotect the brand’s positioning.

JD promotional activity uses a mix of above-the-line andbelow-the-line promotions. Its above-the-line activitiesinclude:

• paid-for advertising in newspapers and magazines. JDadvertises in high circulation titles, such as the men’s lifestylemagazine FHM and the music magazine NME

• product placements in a range of publications are used topromote the different brands

• TV and radio advertising. Radio advertising, in particular,allows JD to target its key 13-20-year-old audience quickly and ina way that young people find relevant.

Although these types of media reach a wide audience, they can becostly. It is also difficult to measure response rates. JD alsomakes significant use of other forms of paid-for advertising.Described by JD as ‘ambient marketing’, this uses outdooradvertising such as poster sites and t-sides on public transportand around key stores in areas of high footfall. JD positionsitself alongside professional football clubs such as Blackpool FCand has made kit deals under the Carbrini brand, supplying kits forthe field of play and training wear. The company also advertises ontelevision backdrops, in club shops, and around the grounds. Thisapproach helps to target the young, largely male audience which istypical of its customer profile. It also establishes the brandwithin local communities.

Below-the-line promotions offer opportunities to communicatedirectly with consumers. For example:

• E-mail helps JD to regularly contact its database of consumerswith promotions and product information. Magazines and leafletspresent product and lifestyle content.

• Sales incentives, promotions, and competitions withcelebrities generate excitement and interest in the brand. Thisreinforces its youthful appeal. For example, JD partnered withAdidas to provide VIP tickets for an exclusive N-Dubz event at theO2 Arena for JD.

• Sponsorship and product endorsement by celebrities and musicartists are used to highlight new ranges and products. For example,Tinchy Stryder promoted the Star in the Hood clothing range and TheView promoted The Duffer of St George range in a presscampaign.

• A JD partnership with the Manchester Evening News Arena notonly puts the brand in the arena itself but also enables thecompany to feature competitions and offer prizes to capturepotential custom.

• JD also uses impactful photography and high-qualitypoint-of-sale materials in stores and window displays to attractconsumers and increase footfall.

The growth of social media such as Facebook and Twitter alsoenables the company to use consumer recommendations as part of itspromotional activities. It is estimated that every person viewing apage may pass on information to another 150 people.

Conclusion

JD’s marketing mix has created a unique position for the brandwithin the mind of its consumers whilst remaining true to itscorporate values. The company focuses on stocking the products itsconsumers want, as well as offering distinctive or exclusive rangesthat can only be bought at JD. This, combined with its choice ofstrategies for placing and positioning the brand, has resulted insignificant growth for the business. By uniquely understanding andvaluing consumers, JD continues to grow within a difficult economicand competitive market. By constantly adapting and changing itsmarketing mix through a focus on consumers, it has effectivelymanaged to stay ahead of the competition.

Question: 1 what are some of the key developments and decisionsregarding the ‘place’ element of the marketing mix impactingbusinesses today? (25 mks)