Sainsburys TU clothing: Analysis

The only changes that often influence the human is trend in fashion, the fashion is directly related to clothing sector which has its own identity and remark on its brand value. In UK, there are number of brand retailer and I am going to discuss on the new and upcoming brand, SAINSBURY TU.

Company background:

The parenting group, Sainsbury was founded in1869, which is grown to the 3rd largest retailer in UK next to Tesco and Asda. The chairman is David Tyler, CEO Justin King. The Sainsbury family hold the 15 % share, Lord Sainsbury of Turville with 5.83 %, Lord Sainsbury of Preston Candover 3% and Qatari royal family with largest share of 26.145% of J Sainsbury plc (Sainsbury website, 2010). The company had tried its hand on almost all the product from fresh fruits to leather accessories.

The company in 2004 introduced its new brand SANISBURY TU clothing to replace Jeff Banks designed range, Jeff & Coto to step in to the clothing retail.

THE ENVIRONMENT:

The major Environmental analysis is MICRO and MACRO:

MACRO ENVIRONMENT: The MACRO environment consists of Political, Environmental, Social, Technological, Employment and Legal factors which determines the company’s opportunities and threats (book).

Political Factor: The political factor refers to the government policy on the degree of intervention in economy of the government, the policy which effect the trade are:-

Trade policy: The limitation on quota and trade rate in terms of both volume and cost of goods within the EU, regulated by ATC – Agreement on Textiles and Clothing (mintel, 2010).

To import clothing from EU there is no restriction however VAT and excise duty apply, but to import from other countries outside the EU a valid Import licence is needed but it can be restricted to product-specific or trade-specific. However to sell an imported cloths there are some safety and labelling requirement. It is also important to comply with UK domestic business standard (business link, UK).

To import children’s clothing it should satisfy the BSI – British Code of Practise such as the General Product Safety Regulation 2005, the Children’s Clothing Regulation 1976, and the Nightwear Regulation 1985 (business link, UK).

Employment Law: There is numerous numbers of laws which govern the Employment Law in UK such as Dress code should be only to equalise the staff irrespective of any factor, Reason to dismiss an employee to avoid unfair dismissal. Health and Safety during their work such as uniform, working environment etc.

Get Help With Your Essay

If you need assistance with writing your essay, our professional essay writing service is here to help!
Find out more about our Essay Writing Service

National Minimum Wage: The entire employee’s must be paid at least the national minimum wages set by the government. The working hours are restricted to 48 hrs per week and 1 day off in a week unless the employee is wished to do so in writing. The employee must be produced a employment contract with terms and condition. He should be given Itemised payslip, Sick pay and Annual leave (direct gov, UK).

Taxation : Each and every retailer should satisfy the VAT as per declared by the UK government from time to time, however you can have some Tax reduction if you want to buy specialist clothing or tools for your job (direct gov, UK).

ECONOMIC :

Interest Rate: The high soaring price and increase in air charges keeps the inflation at high points. The Daily mail Reporter on 12th Oct 2010 says that the living expense of people in UK has gone high up to 2% due to increase in petrol price. And verily the interest rate are also gone up by 2.5% (Daily mail, 2010)

Exchange Rate : There has been a dramatic change in the Exchange Rate since the time of recession in UK, it was the first time from 1990’s that the price of cloths has increased by 6.4% (Telegraph, 2010)

STAGE OF BUSINESS CYCLE :

Boom: The health express magazine declares that the need of bigger size in cloths has boomed the clothing sector. It is estimated that fashion industry will profit by 3.8 billion pounds from this (Health express, 2010)

There has been significant boom in the Luxury clothing in UK market due to the change in trend and fashion, Luxury brand like Burberry, Hobbs, Reiss have grown four times than in early 2000’s (U talk marketing, 2007)

Recession : The following reasons support the recession over the period where high rate in unemployment, consumer demand reduces, fall in share market and high interest rate

The Sainsbury has announced that it will raise its fund to 445m pound to fund its growth. To overcome the recession it has pledged to add 15% selling space by march 2011(Daily mail, 2010)

Recovery : Every company tries to boost its growth and profit, likewise Sainsbury has boosted its sales by “Back to school cloths” by which the sales has increased by 2.8% compared to 2008 (BBC, 2010)

The Sainsbury’s ‘Switch and Save’ campaign also sees rise in sales, by which the TU clothing has increases its sales revenue 20% over the last quarter in 2009 (Daily mail, 2009)

SOCIO-CULTURE :

Branding: The Company mostly focuses on its branding strategy as this influence the trend in the market, this trend was originated in jeans and copied to many other things like shoe, shirt, pant etc. The brands have mass advertisement to attract the customers and to feel royalty of wearing it.

But, the Sainsbury’s own brand pushes a strong growth for its product, it showed 7% sales growth to 11.9bn Pounds over the first six month in 2010, with a profit before taxation of 466m Pounds (Brand republic,2010).

Life style changes : The consumers are more interested in buying Jeans, which shows the change in consumers life style over the past years of wearing formals (Mintel, 2010)

The Global warming has also influenced people to change their way of dressing and life style, people prefer to wear cotton cloths instead of polythene or synthetic wears (reuters, 2008)

TECHNOLOGICAL: Every day the technology is developing, certainly in clothing sector, where internet plays a huge vital role enabling remote ordering, tracking and management. Incorporate is enabling clients to access online garments ordering and delivery.

Energy and cost : It is necessary for any organisation to reduce its energy consumption and keep the cost as low as possible, it is estimated that every person throws 30 kg of average cloths every year, which can sent to charity or even to recycling productivity by which the carbon emission can be reduced, In 2006 UK alone produced 2m tonnes of waste, 3.1 million of CO2 and 70 million tonnes of waste water (BBC, 2009)

The Sainsbury and other leading brands have signed to increase their range of Fair Trade and organic fashions also to take back the unwanted cloth wastages (Guardian, 2010).

ENVIRONMENTAL :

The Sainsbury has promised to cut the CO2 emission by 25% by 2010, the ongoing commitment on refrigeration, Eco-stores and program reset will help to achieve their environmental factor (Sainsbury, 2010)

Packing: Most of the wastage are created by packing and using polythene cover, the Sainsbury has promised to reduce its own brand packing weight by 33% by 2015, this uses packing redesign (Sainsbury, 2010).

The Sainsbury has launched a fully compostable packing in 2002 and in 2006, the first organic packing. It says that 90% of its organic produce is recyclable which include trays, labels, netting etc.

Recycling: Sainsbury has introduced re-usable shopping bags in mid 1990’s and increased its recycle capacity in 2008, also started issuing Nectar loyalty points when they use their own bags (Sainsbury, 2009).

The Sainsbury has not only recycled waste in to bags, but also as cloths like which these will be set in stores under the brand name of TU in more than 500 stores across UK, these material will feel like viscose and also added that to save time and transport emission these will be manufactured within UK (Guardian, 2008).

3.2 MICRO ENVIRONMENT: The factors which are close to the company’s direct impact on the organisation are known as MICRO environment. The factors follow such as:-

Strength: The main strength of Sainsbury TU is its Parent support Sainsbury plc which provides financial and human resource support, apart from this its wide variety of cloths with low cost delivering high product satisfaction. It considers environmental, colleges, local community people to get benefit. The employers are provided with bold orange and blue uniform so that they can be identified easily.

Customers: The customers are the pillars for any organisation from which the company earns profit by giving service to them. Now the new trend in shopping is the online purchase, but UK has show growth of 13% in annual online sales (Internet retailing, 2010).

The fair trade of Sainsbury’s clothing brand TU has boosted its customers by 65% since now, the launch of online stores has increased its customers by 20% and available in 290 stores (Guardian, 2009).

Weakness: The main weakness is the less variety of cloths to choose from, especially the costly cloths which have only few styles, since they give very cheap cloths from 1.5 pounds, they have to check on their quality. The shopping space is less when considering other giant clothing retailers.

Competitors: There are number of retails stores in UK which has their own brand value and loyalty, however the major competitors of Sainsbury TU are Primark, Matalan, M&S, Peacock Group, Next, Debenhams, these are continuously trying to improve their product in terms of both quality and quantity (Mintel, 2009)

Opportunities: The big and best opportunities that Sainsbury have apart from their competitors is that, it can give the customers all in one shopping experience starting from milk to furniture’s

Treats: Since the clothing market has many up and downs in the recent years, Sainsbury TU have managed to survive. But it has to keep updated in the fashion trends and customer needs and other competitors strategy.

4.0 THE ORGANISATION MATRIX MIX :

4.1 Product: The Sainsbury TU has almost all the product in clothing sector, all these products have a brand reputations TU. The Sainsbury is trying to bring new change in the clothing market fashion trend.

4.1.1New product development: The huge retail giant Sainsbury has achieved its entire target for growth and it’s trying on non food items to grow its business more and more.

Planning for growth: It’s now time for growth and it has been succeeded in its entire product, but to keep increase the sales revenue additional growth of infra structure, increase in number of staffs and quality must be maintained with promoting new product. Sainsbury says that its number of stores with more than 60,000 sq feet will be doubled to 60 in addition it has introduced new fixtures and merchandising solution to improve holding of stocks and new product presentation. Its next sales target is 3.5 billion pounds (Idg, 2008).

TU Sainsbury launches new home ware products such as curtains, children’s wear, rugs, bedding and offers 70% of them at lower than 10 Pounds (Sainsbury, 2008).

Sainsbury recently on early Nov 4th 2010 published that in consideration with environmental factor and fashion trend in clothing sector, it introduced a new model of dress made from used carrier bags of Sainsbury and named it as Flamenco – style (Sainsbury, 2010).

4.2 Price: Sainsbury has always been consistent to reduce its price far from its competitors, apart from this offering many discounts and loyalty points. Its school uniform clothing rate starts from 2 Pounds; now special offer is made of which it gives flat 25% off on all in stores clothing (Sainsbury, 2010).

4.3 PROMOTION :

4.3.1 Push promotion: Sainsbury to sponsor 8 UK TV programming for Christmas to attract the customers from different society and age. Mead Vickers BBDO will feature on 15 different products for sale on Christmas. The Adv Manager says that it would enable Sainsbury in to a competitive retailer advertisement (Brand republic, 2010).

It has also introduces a new strategy known as Sainsbury’s Business Direct which uses the gift vouchers and gift hampers to choose for themselves across all the stores on all Sainsbury’s product. Additional it is using extra service such as free delivery, no expiry date on vouchers, incentivise for staffs, competitive discount on certain products, Loyalty schemes and point and first class customer service (Marketing week, 2010)

4.3.2 Pull promotion: Sainsbury introduces many products, but to increase its sales it’s organising many fashion shows where the model shows the outfit of its new product which currently replaces Jeff & Co line, designed by Jeff Banks. It also had considered TV campaign in many shows to target customers (Marketing magazine, 2009).

At present Sainsbury offer flat 25% discount on in store purchases during this winter season.

Another new promotional method was signing a deal with EMI music publisher, which will feature song lyrics and promoted in 281 stores, it will also include the lyrics of items for men, women and children’s in the catalogue (Media week, 2008). 5. THE SEGMENTATION, TARGETTING AND POSITIONING STRATEGY :

Clothing market

5.1 The segmentation: It is the process of dividing a larger market into smaller piece based on meaningful characteristics. Here the Sainsbury TU can be segmented into number of ways

Segmenting consumer markets:

Women

Men

Old age

Adult

Teens

Children

Baby

Occasions

Party wear

Casuals

Formals

High quality

Medium price

Good quality cheap price

Less expensive

The Sainsbury TU segmentation can be segmented in to number of segment mainly

Clothing sector: Major two segmentation are :

Men

Women

Segmentation by consumer markets: These are segmented by consumers

Baby

Children’s

Teens

Adult

Old age

Segmentation by Psychographics: These are segmented on the mentality of the consumer

Formals

Casuals

Party wear

Occasions

Segmentation by Behaviour: These are segmented based on the outcome of their decision

Less price

Good quality cheap price

Medium price

High quality

5.2 The Targeting:

From the segmentation analysis it can be said that there are equal chances of interest for both men and women

Segmentation in consumer market can be analysed with psychographics, the diagram reveals that teens and adult are the major TARGET since they focus on more than two psychographics

Segmentation by psychographics with relation to Behaviour relates that consumer target on two factors namely,

Good quality and cheap price

Medium price

So in conclusion the most targeted consumers are

Teens buying casuals of good quality less price and medium price.

5.3 The Positioning: The final stage is the positioning, it is based on certain factors such as

Product

Price

Promotion

Distribution

Product: Since the product is targeted on teens, it should be up to date in clothing fashion, Sainsbury TU has nevertheless down in fashion trend, it also guarantee its product which makes the consumer to believe as a best product

Price: The targeted teens or adults are just started to earn or in their university so, the price must be as low as possible without affecting its quality. TU has proven that it gives at very low cost than its competitor

Promotion: Marketing the product at right place at right time always have its fruit, TU uses the young artist to promote its product and also through media and NEWS channels which significantly promotes the product

Distribution: Almost every Sainsbury have multi buy at one stop, which enable the consumer to buy more and more of its own product. The online stores are a great method to influence people of certain age who don’t want to go foot shopping

6. Recommendation: TU Sainsbury has captured a mile stone in retail clothing sector; however it is progressing at higher level than its competitors. But it should keep an eye on day to day changes in fashion. As of now TU has its own brand value and quality which has reputation in the clothing sector. The developments are on fast process to increase the growth of sales.