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Table of Contents

1. Introduction 2

1.1 Background 2

1.2 Purpose 3

2. Internal analysis 3

2.1 7S-model? Balanced scorecard? 3

2.2 SW(OT) 3

3. Meso-analysis 3

3.1 General market research 3

3.2 Consumer analysis (7W?) 3

3.2.1 Buying decision making models 3

3.3 Competitor analysis 3

3.3.1 5-forces porter 4

3.4 (SW)OT 4

5. Macro-analysis 4

5.1 PESTEL 4

5.2 (SW)OT 4

6. Conclusion/analysis of the problem 4

6.1 SWOT analysis 4

6.2 Confrontation matrix 4

7. Strategy 4

7.1 Strategic options 4

7.2 SFA-principle 4

7.3 Advice 4

8. Marketing plan 4

8.1 4/7 P's or 3 C's 4

1. Introduction

1.1 Background

Groomers Ltd is a leading online distributor of quality animal care products established in the 1990s. The company was originally established to fill a gap in the market for a premium quality shampoo for dogs to reduce dry, itchy skin and hair loss. Today, Groomers  has expanded their animal bathing range considerably, and now supply an extensive range of equipment to professional groomers and a full range of pet supplies (Groomers Ltd, 2018).

 (The Groomers story began in the 1990s with a dog groomer, a vet school and an idea to reduce dry, itchy skin and hair loss in dogs. This led to the development of Evening Primrose Oil Shampoo, designed to help restore their coats and replenish their skin, and boy did it work! Since then, we have expanded our animal bathing range considerably, and now supply an extensive range of equipment to professional groomers and a full range of pet supplies.

We still manufacture our own brand bathing liquids, including that famous Evening Primrose Oil Shampoo, and are now one of the leading supply companies in the industry, doing our best to provide you with everything you need to groom pets with care and get amazing results in the process.

We've recently introduced our My-Pet platform, especially for pet owners, which brings professional expertise to home grooming.

You have been approached by the director of Groomers Ltd (based in Berkshire, England) to carry out a market assessment of current and future market opportunities.

The company was originally established to meet a gap in the market for a premium quality shampoo for dogs. Aimed at professional groomers and breeders, the Groomers brand was originally sold through Mail Order. As the product range expanded, the company began to exhibit at Open and Championship shows.

Today, Groomers is a leading online distributor of quality animal care products in the UK selling its own premium brands via Pets at Home Stores, Pampurred Pets, independent pet shops, wholesalers, agents, discerning breeders, professional groomers, exhibitors, veterinary practices and caring pet and horse owners. The company is also a leading supplier of animal grooming equipment with a diverse product range from professional dryers, blasters, hydraulic & electric tables to new designer dog baths. Groomers also export to Australia, Italy, Sweden, Ireland, Portugal, Japan, Norway, USA and France.

The company has also recently entered the Equine market. The company's website is:  https://www.groomers-online.com/

• Life started as a contract manufacturer, producing Bubble Baths and Children's Gift Ware for Boots, Superdrug and Tescos

• The Groomers brand was born from the local request of professional groomers for dog shampoo

• Approached in 1991 to develop a shampoo that would contain Evening Primrose Oil by Cambridge Vet Sciences

• Early trials showed the shampoo was effective at treating skin disorders e.g., eczema, dust mite and flea bit allergies)

1.2 Purpose

The assignment will respond to a brief set by the director of Groomers Ltd, which focusses on carrying out a market assessment of current and future market opportunities. The purpose is to identify current trends within the groomers industry, assess the external operating environment, provide a profile of the typical buyers of Groomer products, evaluate the purchase decision making process, evaluate key competitors, and finally provide a potential solution to one particular aspect, that is expected to penetrate the market.

2. Micro-analysis

2.1 Internal analysis

Models and theories:

An internal analysis is needed to determine the strengths and weaknesses of Groomers Ltd. There are multiple organisational models and strategies to accomplish this. The McKinsey 7S model for instance The 7S model, developed by Pascale and Athos (1981) and further developed by Peters and Waterman (1982) was created as a recognizable and easily remembered model in business (Alshaher, 2013). It is an often used model because it covers important organisational variables and recognises the importance of the interrelationships among all of these seven variables. ‘Using the framework, the current situation of the organization can be determined and necessary changes can be made prior to system implementation (Hanafizadeh & Ravasan, 2013).' Noted that there is no explication of how these seven variables are affected by the external environment (Burke & Litwin, 1992). Burke and Litwin (1992) stated that ‘to provide a model of organisational performance and change, at least two lines of theorizing need to be explored – organisational functioning and organisational change.' While using the strengths of other models like the 7S model and the Nadler-Tushman (1977) model and created the Model of Organizational Performance and Change (Burke & Litwin, 1992).

The balanced scorecard (HBR, 1992) is another way to analyse the company's mission and strategy. The balanced scorecard provides executives with a comprehensive framework that translates a company's strategic objectives into a coherent set of performance measures (Shaw, et al., 1995). It therefore helped companies to track financial results while monitoring progress and acquiring the intangible assets they would need for future growth.  in building the capabilities and acquiring the intangible assets they would need for future growth (Kaplan & Norton, 1996).

• Life started as a contract manufacturer, producing Bubble Baths and Children's Gift Ware for Boots, Superdrug and Tescos

• The Groomers brand was born from the local request of professional groomers for dog shampoo

• Approached in 1991 to develop a shampoo that would contain Evening Primrose Oil by Cambridge Vet Sciences

• Early trials showed the shampoo was effective at treating skin disorders e.g., eczema, dust mite and flea bit allergies

Market segmentation Groomers:

• Professional

– Dog groomers

– Kennels and catteries

– Vets

– Dog trainers

• Domestic

– Pet parents

• Retail

– Pets at Home

– Occado

– Amazon

EIGEN WOORDEN

Since Groomers published their company credentials (see table 1) in limited quantities, no advanced model can be used to analyse the company. A fact is that Groomers objective is to be the leading supplier of animal care products and accessories for professional and domestic customers predominantly in the canine, feline and equine markets.

• Groomers supply over 60% of the professional dog groomers in the UK

• The Dog's Trust will only use Groomers shampoos in their re-homing centres

• Groomers is used and recommended by top breeders and exhibitors worldwide

Annual Turnover £2.5m

Staff 23

Growth 30% p.a.

Premises 12,500 sq. ft

Table 1: Groomers Ltd. Company Credentials

Market share:

2500000 / 4,000,000,000 x 100 = 0,625

60% of 4.000.000.000 = market share Groomers = 240.000.000

Product range etc.

Groomers focusses on two types of segments: professional users and domestic users.

2.1.1 Analysing the website

2.2 SW(OT) and conclusion

The goal of the internal analysis is to gain more knowledge about the mission and strategy of Groomers. Since the company published limited information, the following strengths and weaknesses can be composed:

Strengths Weaknesses

• Positive attitude to customer service

• Increasingly extensive product range

• Fast online ordering and fulfilment service

• Management capability to generate 30% growth p.a.

• Good supplier relationship to support Online Marketing

• Careful financial management

• Low borrowings • Financial resources to fund all existing growth opportunities through investment in people, infrastructure and inventory

• Staff training programme

• Warehousing and manufacturer space

• Technical resources for new product development

. Meso-analysis

3.1 General market research

To understand the Groomers market, the general market insights and trends of the pet market has been analysed. This will be taken into account when giving strategic advice.

The pet market in the United Kingdom is one of the largest in Europe, with 47 percent of people claiming to own any pet in their house. The total pet population in the United Kingdom is expected to reach 51 million animals in 2018, which is a significant decrease over the population in 2010 which stood at 65 million, this showing a clear 14 million drop.

One of the leading UK pet stores, Pets At Home has been around since 1991. This shop specializes in the sale of day to day pet products such as food and pet care products, as well as in store veterinary help. There are currently 448 Pets At Home stores in the United Kingdom.

Cat and dogs:

In 2018 a total number of 13 million households have one or more pets. This is almost half of all UK households, 45% to be precise. The UK households are owning 9 million dogs, which is an increase by 5%, on last year, and 8 million cats, which is an increase by 17%. Dogs and cats are covering up respectively 26% and 18% of total households. The third most owned pet on the list are rabbits with 900.000 (pfma, 2018). More information can be found in appendix 1 and appendix 2.

‘2018 research highlights an increase in the number of households owning a pet. On closer inspection, it is clear that the rise can be attributed to an increase in families owning pets. (pfma, 2018)‘

Equine market:

• Britain has one of the highest quality equine industries in the world, and is internationally recognised as the leading source of equine expertise, leading to export markets with overseas trade currently valued at over £500m and growing14

• The industry contributes more money to the UK economy, and has more participants, than rugby, fishing, or cricket and employs more people than agriculture15

• There are 446,000 horse-owning households in the UK serviced by over 18,000 equine businesses16

• British horse racing alone generated £3.45bn in direct, indirect and induced expenditure and this industry contributed £276m in tax in 201217

• An estimated 3.5m people in Britain rode in 2010-11 and were further inspired to take up horse sport by the 2012 London Olympic Games medal tally18

• Horse sports engage a higher proportion than other sports of people with disabilities, women participants and participants over the age of 45 and nearly 40% of those taking part in do not participate in other forms of physical activity.  It's unique as a sport in that men and women compete against each other at Olympic level with athletes aged from 18-7019

• Racing is the best attended Sport in the UK after football20

https://www.equinebusinessassociation.com/equine-industry-statistics/

3.1.1 Segmentation strategies?

Market segmentation

• Professional

– Dog groomers

– Kennels and catteries

– Vets

– Dog trainers

• Domestic

– Pet parents

• Retail

– Pets at Home

– Occado

– Amazon

3.2 Consumer analysis (7W?)

To provide a profile of the typical buyers of Groomers products and evaluate the purchase decision making process for the purchase of animal grooming products, a consumer analysis is executed. As mentioned in chapter 2.1 Internal analysis, Groomers focusses on three market segments: (1) professional buyers, (2) domestic buyers and (3) retail.

Professional:

Groomers supply over 60% of the professional dog groomers in the UK. The professional groomers can choose for Groomers because of the wide and deep range of products, varying in prices. This means Groomers can fulfil every professional groomers need, from small shops to bigger salons. Professional groomers purchase their products at Groomers because it is a one-stop shop for their salon needs. Convenience is an important factor in the decision making process of professional groomers. Professional groomers can also choose to retail Groomers' products in their saloons. This is an easy way to gain more revenue. Grooming clients trust their groomer's advice for their pet's health, but not all groomers take advantage of these income generating opportunities. A reason for this can be that a groomer is lacking knowledge and experience that comes with working in a retail environment. The groomers know what products they prefer for grooming, but not which ones to sell in their saloon.  

https://www.groomertogroomer.com/the-art-of-pet-retailing-for-groomers/

Retail:

Groomers collaborates with big online retailers such as Amazon, Pets at Home and Ocado. Groomers offers discounts if a retailer choses to purchase a higher quantity. This gives Groomers advantages, one of them is spreading their product within different retailers whom have different customers. Ocado attracts different customers profiles as Amazon. Groomers spreads their chances on the market by selling their products to different online retailers.

Domestic:

Some facts about pet ownership in the UK are being stated in chapter 3.1 General market research and will elaborate the consumer analysis. The following highlights are found while analysing pet consumers in the UK (more consumer trends can be found in appendix 3):

• Pet owners in the UK are spending 4,165 million pounds on pets and related products in total and is increasing every year since 2012.

• Over a quarter of pet owners admit they like to pamper their pets and women in particular find it hard to pass by a new toy or a treat even if they did not plan on buying it (46%). Mintel 2015

• One in five of us splurges £20 a month on outfits for our dog or cat. Mintel 2015

• Animal-loving Brits are spending a fortune on their furry friends with the average owner splurging £1,150 a year - or £95 a month. Mintel 2015

• The craze for dressing up our pets seems set to continue with owners spending, on average, nearly £200 a year on clothes for their pets, with over one in five (22 per cent) admitting they spend up to £20 on outfits each month. Outfits are the third highest expenditure for dog owners and the second highest for cat owners, after food. Mintel 2015

• In total, the UK spends over £10 billion a year on their dogs alone and £8 billion on cats. Mintel 2015

• While eight in 10 consumers have changed their grocery shopping habits to save money, new research shows only one in 10 pet owners have cut back on what they spend on their animals. It finds 42% spoil pets with treats even though their budgets are tight, with more than half of dog owners indulging their pooches with Christmas stockings.

Source: business independent source

• 48% of owners are treating more than twice a day. (PMFA Annual Report 2014)

• 66% of owners buy accessories for their pets as well as birthday and Christmas presents. 


• 32% buy treats and gifts more often for their pets than their partners. 
(Petplan Pet Census 2011)

• £264 is the average annual spend on presents for pets (source: One Poll, 2015)

• 27% of dog owners get their pet spa-style treatments (source: One Poll, 2015)

• 25% of pet owners but their pets birthday presents (source: One Poll, 2015)

• In the last 5 years spending on pet gifts has grown by £286,000,000 (source: One Poll, 2015)

• Men are more likely to buy Valentine's presents for their pets (source: One Poll, 2015)

• Women are more likely to buy anniversary presents for their pets (source: One Poll, 2015)

• 88% of people admit to spending up to £50 on extravagant presents for their pets (source: One Poll, 2015)

The pet ownership behaviour is researched for some time (Belk 1988; Hirschman 1994; Holbrook et al. 2001). Most of the research find that the majority of pet owners consider their pets to be part of the family, with especially dogs filling in this role. Hirschman (1994) explanations of why dogs give a number of positive benefits to an owner because of their ability to exhale human relationships, because they give unconditional love and companionship and because of the fact that they maintain a childlike look throughout most of their lives (Hirschman, 1994). EIGEN WOORDEN. In addition, aging demographics and decreasing numbers of children within some modern societies (such as the United States and the United Kingdom) have also contributed to the increasing popularity of pets.27–32  One of the reasons people tend to spend money on their pets is supported by Belk (1988), who proposes, ‘if pets are an extension of us, spending on one's pet may be tantamount to spending on oneself. Thus, we expect that people who tend to spend excessively on themselves are also likely to spend excessively on their pets (Hill, et al., 2007).' Pet owning British are spending an average of £1,150 a year - or £95 a month on their pets and in total, the UK spends over £10 billion a year on their dogs alone and £8 billion on cats.

Despite the fact that owners are spending more on their pets, Shore et al5 suggest that some products (including services) are more appropriate when studying an owner's consumption behavior than others. In their view, non-necessities, including premium pet food, pet toys and other such accommodations, would be more appropriate for probing into the owner's relationship with his or her pet. Even 66% of UK pet owners buy accessories for their pets as well as birthday and Christmas presents. 32% buy treats and gifts more often for their pets than their partners. (Petplan Pet Census 2011)

 ‘The consumer behavior concept of the extended self (Belk 1988) provides one explanation for understanding the consumption. the common notion that pets are “good for people” or as “medicine” (Belk 1996, p.122) are strong motivators for having a dog.'

Studies of compulsive and excessive buying have received increasing interest in the consumer behavior literature (Black 2001; Faber and O'Guinn 1992; Koran et al. 2006). Unlike compulsive buyers, whose classification depends on financial harm, excessive buyers represent a broader group of consumers who may suffer from emotional consequences, not necessarily financial ones (Ridgway, Kukar-Kinney and Monroe 2005). Thus, excessive buyers represent a broader group of consumers.

Professional customers:

Retailing:

3.2.1 Buying decision making

Chen et al. (2012) proposed there are three clusters which influence the buying decision making process of pet owners: (1) Anthropomorphic owners who value quality, (2) attached owners who seek a service's epistemic value and (3) owners who look for interaction and a service's functional (economical) value (Chen, et al., 2012). This research proposes that the type of relationship between owners and pets can be used to derive clusters of consumption values and behaviors. While making a marketing plan for Groomers, there is a need to recognise the different aspects of service offerings when targeting the different types of pet owners. Et al proposed that pet companies cannot target on traditional demographic segmentation anymore (Boya, et al., 2012). Boya et al. (2012) grouped the segments of pet owners as different factors: (1) dog-oriented lifestyle, (2) anthropomorphism, (3) structure and discipline, (4) utility-oriented, (5) boundaries/physical proximity and (6) appearance. An explanation of the factors can be found in appendix 4.

With the different perspectives on the different segments in the pet owner market, a conclusion could be that every customer has a different buying decision making process and thus should be targeted differently. After understanding the buying decision making process, the domestic customer personas in chapter 3.2.2 are created.

The targeting should be done on clusters because every pet owner is different from one and another. Every cluster should be approached differently to gain revenue. The clusters change depending on the pet/grooming company. In addition, dog people like to talk with other dog people and are influenced by early adopters, those people influence the decision making of the majority of dog owners.

Domestic customer personas :

Customer personas for each of the customer segments were created to understand the most important types of clusters and customers that are involved with Groomers and the general answers each segment gave. The personas are shown below in ….. :

Domestic:

John:

Demographics:

• Working father

• 43 years old

• Lives in Reading, works in London

• Married, 2 kids

• Household 70k/yr

John loves his two Labradors and sees them dogs as true companions and loves to interact with them. John is a busy man, he works hard so he is a big fan of time savers. The capacity to enhance the animal companion's interactions with both John and the John's social network will be the crucial factor behind the John's purchasing decisions. John's income is average, but not very high. That is why John emphasises the economical value of pet services, it must have a fair price and the quality does not matter too much. John likes to shop for pet services when there is sale.

In terms of media consumption, John watches a lot of broadcasting media, this will influence his decision making process.  

(These opportunities are magnified by the simplicity of this segment, as these owners primarily seek services that are economical and can enrich their pet's ability to interact with them or empower the animal companions' capacity to become a social mediator between the owner and his or her social environment. However, targeting this group has its challenges because they are only responsive to broadcast media and do not display any significant preferences when selecting service providers. Furthermore, they have limited financial resources to spend on pets.)

Goals:

• To get the best price possible

• A quick and painless (online) purchase

• Be inspired

Kristie:

Demographics:

• Working woman with masters diploma

• 30 years old

• Lives and works in London

• Lives with her boyfriend, which is her age and evenly career driven

• Household 120k/yr

• Smart, values novelty

Kristie believes that her little dogs should be treated as her children, she feels unbelievably attached to them. For this reason, when purchasing services for pets, Kristie only wants superior quality and epistemic value. The strong emphasis on quality has to do with the fact that Kristie has enough financial resources and no children. It does not matter how much the pet services cost, as long as the quality is good and her dogs are happy. Although, Kristie sees her relationship with her cats as intimate and should be restricted to a small social network.

Kristie actively searches for information about pet services on internet because it can be more novel and entertaining, but values other types of print media such as newspapers, because this is more informative.

(To appeal to these owners, providers need to view the consumer's pet as a human customer. In addition, the quality and novelty of their services should be emphasized. However, service providers should not underestimate these consumers, as they can be demanding due to their perceptions of their animal companions as family members. In addition, they tend to be experienced and informed shoppers, which may bring other difficulties to providers' interactions with these customers.)

Goals

• High valuable and quality for her cats

• Stay financially independent

• Be successful in life

• Doesn't care about social value of pet products

3.3 Segmentation

3.3 Competitor analysis

It is necessary to identify the key competitors of Groomers, in order to understand the market more. There are multiple strategic tools to analyse the competition and understand the focus of the environment that could affect Groomers. There has been chosen to use the 5-forces of Porter and a positioning map to analyse the competition of Groomers.

3.3.1 5-forces Porter

Harvard Business School professor Michael Porter published Porter's Five Forces of Competitive Position Analysis in 1979, and is still highly useful today to analyse the market (Porter, 1979).  As the most referenced management scholar (Davenport & Prusak, 2003), Porter has had immense influence on the strategy field (Narayanan & Fahey, 2005).

 Figure 1 – Porter's 5 Forces

 

Image Source - https://www.cgma.org/resources/tools/essential-tools/porters-five-forces.html

Rivalry among existing competitors is high

(See Figure 1) The rivalry of competitors is influenced by the other four forces. Each competitor must deal with the threat and/or power that gives the rivalry a higher tension (Porter, 1979).  

Groomers is not new in this particular market, although Groomers was founded in the early 1990s, the company was definitely not the first one selling groomers products. There is a lot of pressure from rivals who offer quite the same wide and deep product range. There can be argued about the fact that Groomers produces and sells their self-owned brands next to other brands. The competitors do not offer this service.  

A threat of new entrants is low

If the market is profitable, it attracts new entrants and could affect the profitability of the market (Porter, 1979). In addition to not requiring a large capital to enter the market, it may be easier for competitors to enter.  

The majority of the competitors of Groomers has been around for over 10 years, which means the threat of new entrants to this market by a new organization is very likely. Although it is not very hard to open a webshop for new entrants, there are not many.  

The threat of substitute products or service is moderate

Similar products at the competing market that user might use instead  (Porter, 1979).  

Groomers is located in a traditional market, the products over the years stayed the same. But professional Groomers, large or small, can sell their own grooming products in their saloons. Argued can be with the fact that Groomers' products are being sold in saloons as well. Offline pet retailers can be seen as substitutes for Groomers as well, since Groomers does not have a offline store.

Bargaining power of suppliers is low. In some cases, suppliers affect whether a product can be developed or not (Porter, 1979).  

Groomers has its own grooming brands and is responsible for the production of it. The competitors don't have their own brands, so they rely on their suppliers more than Groomers. In additions, there are many suppliers with the same kind of qualiy to choose from for (online) retailers, which means that switching suppliers will not damage its image.

Bargaining power of buyers is moderate. If customers know exactly how much they should pay for the product, they are in a good position. If the price is too high and buyers are aware of the market, they will go elsewhere (Porter, 1979).  

As mentioned at ‘existing competitors', there are many direct competitors for Groomers. Yet, 60% of the professional groomers chooses for Groomers. The power of buyers could be a factor to be concerned of for Groomers, but there is something that makes the company unique and makes customers come back. Groomers is well known and offers high-quality products.

3.3.2 Positioning map

3.4 (SW)OT

After analysing the meso-environment of Groomers, another part of the SWOT can be conducted. This can be found underneath.

Opportunities Threats

O1. Groomers market grew by 9% T1. Competition with same width and depth in product range

O2. Pet owners spend more and more on their pets, increasing since 2012 T2. Groomer shops can sell their own products

O3. Threat of new entrants is low T3. Online retailers such as Amazon and Ebay

O4. Britain has one of the highest quality equine industries in the world T4. (Small) offline pet retailers

5. Macro-analysis

The SWOT analysis is a strategic tool to use to find product potentialities, but a more systematic and detailed framework to complement the SWOT analysis is the PESTEL analysis by Kotler and Armstrong (2004). The PESTEL analysis is also used in strategic management (the political, economic, social, technological, environmental and legislative framework), with its variations of PEST, PEST-E, SLEPT and others as such (Kotler & Armstrong, 2004). A PEST analysis has been conducted for this research.

Important to note is that this type of strategic framework is an environmental analysis, usually conducted to reveal the factors that enhance or hinder dynamics of products or brands, but also to understand the market growth, business position and operations (Kotler & Armstrong, 2004).

5.1 Political

5.2 Economic

5.3 Social

5.4 Technological

5.2 (SW)OT

6. Conclusion/analysis of the problem

6.1 SWOT analysis

6.2 Confrontation matrix

7. Strategy

7.1 Strategic options

7.2 SFA-principle

7.3 Advice

OMNI CHANNEL

7.3.1 Market segmentation

7.3.2 Target group

7.3.3 Positioning

8. Marketing plan

8.1 4/7 P's or 3 C's

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