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Market Analysis

The goal of the market analysis is to determine the attractiveness of a market and to understand its evolving opportunities and threats as they relate to the strengths and weaknesses of a firm (ICMBA, 2008).

Positioning
Positioning is a crucial phase for the creation of the operational strategy (Kotler et al, 2006); the marketing mix of Toys R Us will be influenced by the positioning of their products within the various market segments. The purpose of positioning is to give the product a specific place in the consumers mind in relation to the competition (Johnson, 2005). Companies must segment the market according to the needs of the buyers and place each of its products into the most appropriates segment. In the consumers mind, Toys R Us have positioned themselves as the leading toy specialist, having a well-established brand image with a wide variety of products at each megastore location.

This position has been achieved through: Stocking a diverse product range Their brand name clearly stating their purpose and position Advertising focused on their size and brand name Being the first megastore toy retailer in the UK

Table 6, overleaf, has been created after studying relevant theories

and comparing Toys Rs positioning strategy against its competitors.

Toys R Us POPs
- Toy Retailer

Smyths
- Toy Retailer

Hamleys
- Luxury Toy Retailer

ELC
- Infant Toy Retailer

Argos
Catalogu e Toy Retailer Catalogu e Retailer Househol d Name - Wide Market

Tesco
- Mixed Retailer

PODs

- Diverse Range Recognise d Brand -Toy Expertise

- Diverse Range - Dominance in NI Market - Toy Expertise - Follower

- Luxury Toys - Prestige

- Unique Brand Educationally Based

- Mixed Retailer - Dominates High Street - Household Name - Wide Market

Positio - Market Leader ning Strateg y

- Niche Market

- Niche Market

Table 6 Positioning Strategy

Pricing Strategy
The pricing strategy plays a very important role in the market strategy. The decision to fix a price can influence the demand, the profitability of the firm, the brands perception or the comparison with competitors (Shuiling, 2005). The pricing strategy depends on: Company Objectives a company objective may be to provide customers with a reasonably priced product or to achieve high product margin through high pricing.

Targeting the perceived wealth of the target market.

Elasticity of Demand inelastic demand will allow a higher price to be charged with a minimal effect on sales.

Product Cost has to be absorbed into the retail price to ensure a profit.

Competitors the price set must be inline with that of competitors to remain competitive (Peter and Donnelly, 2004).

As the market leader, Toys R Us set the benchmark price that is generally followed by the competitors. The growing trend of price comparison websites makes it easier for consumers to compare the prices of numerous retailers. To defend against any pricing attack

from competitors, the company offers price matching. This is carried out in two ways: if a customer mentions that they saw a product cheaper with another retailer then the store will match this price, head office also compare their prices against major competitors and change their prices to match these. Table 7, overleaf, compares Toys R Uss pricing strategy against that of a number of its competitors. It has been compiled after studying marketing pricing strategies and that used by Toys R Us.

Table 7 - Pricing Strategy Toys R Us Pricin g Strate gy


Competitiv e orientated - Market Based

Smyths
Competitive orientated - Market Based

Hamleys
- High Price - High Quality Specialised

ELC
- High Price - High Qualit y

Argos
Competitive - Market Based

Tesco
- Low Price - Create Demand

Promotion Strategy
Promotional strategies are one of the main forms of marketing communication, this is the means by which firms attempt to inform, persuade, and remind consumers about products and brands they sell (Kottler and Keller, 2006) The basic promotional mix consists of advertising, sales promotion, personal selling and public relations (Blythe, 2008). Toys R Us makes use of this promotional mix, in order to boost the sales of certain products at particular times of the year. The main forms used include: Advertising Seasonal Advertising Toys R Us put a large focus on television, radio and newspaper advertisements leading up to the Christmas period.

Sales Promotions Coupons Coupons are posted out to those customers who

are on their loyalty scheme. These coupons can be redeemed against the cost of a particular product. This encourages customers to stay loyal and allows Toys R Us to market certain products at certain consumers.

Flyers These are sent out to the surrounding market, via the local paper. These flyers contain discounts for customers when a substantial payment is made for a product, for example, 10 off when you spend over 100 on a bicycle. This allows the company to promote the sale of the slower moving consumer goods that are more expensive.

Personal Selling In Store They use their stores to achieve personal selling to customers. This involves personal interaction with sales staff, pre and post purchase.

Public Relations Through the media Toys R Us use press releases to announce important news and events.

Although the business has a promotional strategy in place it is not a key element in their marketing strategy. These promotional activities are mainly used at certain times of the year, especially Christmas, and to increase sales of certain products.