Market Analysis

INTRODUCTION 

Liberty London is a luxury store that opened its doors to the public for the first time in 1875 and is still open one hundred and forty-two years later (Moore, 2017, p.191). The high-end department store started out selling ornaments, fabrics and objets d’art from Japan and the East but has diversified its products to include cosmetic services, top designer fashion accessories, furniture, home accessories, fabrics and trims. This development over the years also reflects in its marketing strategy.

Marketing strategy includes the marketing mix, which is a combination of many factors, for example, resources and market tactics that can be controlled by a brand to influence customers’ purchase of its products or services (Stimpson, & Joyce, 2017 p.113). Dividing their consumers into segments, identifying the target consumers and knowing their position in the market is also part of the market strategy. Additionally, studying the behaviour of consumers and doing market research is essential. 

Marketing Mix of the brand

Liberty London uses a variety of marketing tools to appeal to customers and achieve the company’s objectives. Through evaluating the marketing mix of Liberty London, we can see if the positive and negative aspects of Liberty London’s marketing. 

Product

Liberty store is one of the leading luxury brand stores in London and the United Kingdom. Liberty London provides an exemplary shopping experience to its customers giving them a variety of both products and services to choose from. Products that are sold in the luxury store can be divided into four categories; fashion accessories, clothing, food, and home accessories. These products are made for women, men and children. Liberty London designers exclusively make a substantial number of the store’s products. Other luxury brands present in the store include Calvin Klein, Gucci, and Hermes. 

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The store also offers a variety of services that are offered in a variety of rooms such as the Biologique, dermalogica, omorovicza, the Sisley, and the skin laundry treatment room. All of this rooms are concerned with cosmetics. Additionally, there are grooming services that are offered for both men and women, advice on interior design and restaurants.

From the services and products outlined, one can see that the store has a variety of services and products to choose from. However, it seems to be heavily invested in becoming a fashion store with all the beauty products present in its product and services as well, and this might make it lose its customer base. 

Price

Liberty UK is a luxury store that sells luxurious goods, and this is why most of the prices can be seen expensive. For example, bags under accessories range from £195pounds to £495 pounds (Liberty Products Bags, 2017). The cheapest piece of clothing is a handkerchief priced at £5.95, and one of the most expensive pieces of clothing are pyjamas at £295 (Liberty London Clothing, 2017). Customers sometimes see the clothes from the store as ridiculously high, and this draws negative feedback, citing why pyjamas or piece of handkerchief should be so expensive. However, there is a variety of products to choose from apart from highly priced clothes that consumers can purchase. 

Place

Liberty London is situated at Regent Street, London WIB 5AH. The main entrance is located on the Great Marlborough Street. This is the only physical store there is. Liberty London also a virtual shop site on the internet. 

The store is located in London, and this gives it access to one of Europe’s largest luxury markets. As of 2014, London’s beauty luxury market was the third largest after France and Italy. The market is forecasted to be the fastest growing developed luxury market in Europe with an annual growth rate of six percent (Owen & Ozuem, 2015, p.201). However, Liberty London only has one physical store; this makes it hard to cater for different people in different localities. It would be advisable to take this Liberty London shopping experience to multiple areas.

Promotion

From the physical location of the store, we see heavy investment in the concept of window shopping which is used to promote the commodities to the passers-by. The windows have themes which change from time to time. Other promotion strategies include advertising on the internet and television stations. There is also a collaboration with vloggers to promote themselves to the younger generation. The store also a launched a Television Series, Liberty of London, launched in 2015. The television series was based on the new renovation of the store based on the new management. 

The promotion strategy sees huge gains through the use of its space and windows as the structure is huge and quite appealing. However, the store needs to do more collaborations with public figures to promote itself more as a luxury brand. 

People

The store employees a variety of staff members. They are friendly and treat many people well. However, the staff need to be genuine in their replies to the customers as some have complained that their responses were often fake.

Process

The process in which many of this good and services are sourced is from within Liberty London itself. This makes it cheap to make and reserves most of the profit made to the store. However, the sourcing of many of the store’s good from inside the store makes the products foreign to the consumer. Reason being that the products are not as widely advertised. 

Physical evidence

The company website gives an insight of the company’s services and products. As stated earlier, there is only one physical store located in Regent Street, London W1B5AH. The main entrance is located on Great Marlborough. Despite its physical evidence giving it access to one of Europe’s largest luxury market, the presence of only Liberty store is a disadvantage. 

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Segmentation, targeting, and positioning

The business system used by the London Liberty stories B2C. This is Business to consumer, whereby Liberty London operates by focusing on selling and marketing products for personal use. 

Segmentation

The luxury market is a broad market and is not homogenous. Market segmentation is the process of dividing or splitting consumers or potential consumers into different groups or segments (Kardaras & Karakostas, 2013, p.). 

Psychographic segmentation

Luxury brand consumers who shop at Liberty can be divided into four segments according to their personality traits. 

The first market segment is the potential customers of liberty who can be termed as the non-luxury consumers. This group believes that the luxury materials are overpriced goods (Teimourpour et al., 2013, p.1686). They do not believe that luxury goods are a sign of social class. Additionally, they do not view luxury goods as a sign of social class. The most negative attitude towards the luxury market can be seen in this market. However, Liberty London can see how to persuade this cluster as such perceptions exist in society. 

The second cluster of consumers that are within Liberty London’s customer range is rational customers. The members of this group do not buy luxury goods for pleasing others but because they reflect their ideas (Teimourpour et al., 2013, p.1686). Societal factors such as to gain respect and impress others are irrelevant.  Rational customers believe that luxury goods are not unique and see no need to show off their luxuries. The positive aspect of this group is that they are more likely to be loyal to the brand because societal factors are not at play. 

The third group is the social value seeker consumers. This cluster holds the social value view of luxury goods in high esteem. They take the social value aspect of luxurious goods into account, and the decision to buy the product is influenced by other people’s opinion rather than theirs (Teimourpour et al., 2013, p.1686). The positive thing about this cluster is that they are more likely to buy products when promotion of Liberty London is a success but are not loyal customers to the brand but social perception of which brand matters. 

The fourth group of consumers is the materialistic consumers who attach a higher level of materialistic value than all of the clusters mentioned before. These are customers of Liberty London whose self-esteem relies on the possessions of the products (Teimourpour et al., 2013, p.1687). This group is a loyal customer base to the store, but the negative factor is that they have a low self-esteem.  

Behavioural segmentation

Consumers of the liberty brand can also be divided according to their behaviour, particularly, spending behaviour. This further is based on how recent they purchased their product or service, how frequently they purchase the products or services, and the amount of money that they spend on them (Royal Mail MarketReach, 2012, para.1). 

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Demographic segmentation 

Due to the fact that Liberty London is situated in London, its demographic segmentation closely resembles that of London and the United Kingdom at large. London is a metropolitan that has diversity in race and social classes as well as having both men and women who have a strong purchasing power. 

Target customers

The target customer of Liberty London are customers who fall in the rational, value seeker and matristic customers. This is because these customers see the need for luxury products, unlike the latter, non-luxury customers, who see no need for luxury goods. While promoting the product, Liberty London seeks to sway the public opinion to their favour and gain the social seekers customers. The materialistic and rational consumers are the consumers which the brand seeks to make loyal customers out of. 

Positioning

Liberty London has positioned itself as one of the leading brands in the Luxury market in the United Kingdom. However, people should start to see the store as less of a tourist site where people come to view ‘overpriced goods’ but a rather a place where goods are bought. 

Consumer behaviour analysis of liberty london

There are many factors that come into play that influence the behaviour of customers. These factors affect buying behaviour of customers and potential customers of Liberty London. They include the following;

Cultural factors

Cultural factors are the beliefs, traditions, language, moral values and las that are held in high esteem by a community. Such factors vary in social classes, from the lower middle-income class and the middle-income class to the upper-middle-income class and the super-rich. If one belongs to the rich class of society, then they are heavy users of the luxury brand. The not rich form the smaller share of the heavy luxury users. A study by RISC shows that the rich form sixty-one percent of heavy luxury users while the not-rich from thirty-nine percent of this share (Kapferer & Bastien, 2012, p.115).

The rich will consume luxury products from Liberty London not simply for the symbols they hold in status and power, but the beauty and design of the products (Hont, 2015, chapter 5). This explains why a person buying Gucci would want that the shoe and the belt to have the Gucci trademark label on them. This is also the same as the middle-income part of the social class. However, part of the middle-income part of society views luxurious products as symbols because they do not frequently but it. 

Social factors

There are a variety of social factors that influence whether a customer will come but a product of Liberty or not. First, the reference group. A reference group is a group of individuals that will influence the opinion, beliefs and attitudes of consumers. There are two types, the normative reference group and the comparative reference group (Urry, 2013). The normative reference group plays a huge role in the purchase of luxuries goods by rich societies. This is because it involves values, norms and attitudes that are impacted through direct association by friends, associates, peers, parents, siblings and teachers. 

To the lower and middle-income part of society, the comparative reference group plays a huge factor in the purchase of luxury products. The comparative reference group serves as a reference point that individuals aspire to be like (Pizam, 2012, p.558). This refers to celebrities and heroes in society.  

Another social factor is the status and role that a person has. For the rich, one might buy a luxurious item to reaffirm it or just because he or she can. However, for the poor, luxurious items are bought to symbolize something. For example, the first salary or an engagement ring for a loved one.

Psychological

Psychological also influences why a person might buy a luxurious product from Liberty London. Psychological influences are particularly present in the customer types that are outlined. For people to buy the products, some people seek gratification from others. These consumers lie under the value seeker consumers. Some consumers will seek luxury products from Liberty London to raise their self-esteem. This is the cluster of consumers known as the materialistic consumers. Psychological thus does play an important factor in the purchasing of products and has its toll on the two customers mentioned. 

Importance of market research for the brand

Despite the field in which a business deals with, its market share or the size of the business, market research should be carried out. Market research is vital because it helps a company like Liberty London identify the problematic areas that exist within the company, understand the needs of the existing customers and discover potential customers and how to incorporate their needs into the business. Liberty London has carried out market research before.

In one market research carried out by Liberty London, they wanted to know what made clients read their mails. This is mainly because Liberty keeps in contact with its customers through a loyalty scheme. The scheme is known as Liberty Rewards. This is where members receive invitations to sales, shopping events, sales previews and special offers. The plan also includes vouchers that are rewarded twice yearly (Royal Mail MarketReach, 2012, para.1). 

The source of data

The source of data in this market research was primary. This is because it came directly from the customers of Liberty London themselves. In order to arrive at a conclusion on what made their custormers read their mail, they studied their customers instead of a random study group.

The methodology used

The methodology used was both qualitative and quantitative. To collect the qualitative and quantitative data, Liberty London consulted Royal mail. Royal Mail presented them with an eye-tracking research. Eye tracking is whereby eye movement is monitored. In this case, the eyes of liberty London customers were monitored when they received their mails. The research was able to reveal which design element motivated people to open envelops, and furthermore, read the contents inside. Before this research, liberty envelopes were plain only entailing the liberty logo.

The qualitative data collected after this was what kind of envelope was more likely to be opened and how did its cover look like. The first envelope which only had a liberty logo was not used for this study but an instead another which had the simple words, ‘open your envelope’. The quantitative data collected after this was the reaction in terms of expenditure after the consumers received the new mails when compared to the older mail. 

The objective of the market research 

The objective of this marketing research was exploratory. It aimed to find out which mail produced the best results. Through the research, Liberty London found out that the change in envelope increased the redemption rates of the vouchers from 5% to over 60% (Royal Mail MarketReach, 2012, para.5). Among the high-spending customer, the increase was more significant. Through this, we can see the importance of market research in business. 

Recommendations for liberty London based on the marketing analysis

Through the marketing analysis of Liberty London, one notices that there are areas of improvement on which the company can work on. The first area is the place under the marketing mix of the brand. It is true that Liberty London the brand is also tied to the building in which it is situated in. Building another structure of such architecture is hard. However, to make the brand bigger and take into consideration the needs of some customers, another store is advisable. One advantage of multiple chain stores is economies of scale where an increased level of production results in a proportionate saving (Trigwell-Jones, 2016, p.42). One specific is it can invest in expanding is services offered by the store which center around cosmetics and do not necessarily have a strong connection to the building. 

Another area in which the store needs to improve on is its promotion. Through the market analysis, we can see that within the middle and lower middle class, for consumers of luxurious goods to make meaning them to them, they need to see it with people in society whom they regard as heroes or celebrities. Liberty London should, therefore, invest in endorsing celebrities with their products.  There are many celebrities in the United Kingdom such as Adele, Sam Smith and Charlie XCX who can help propel the brand to a local and international audience. 

Liberty London also needs to work on the logo it uses to show that they design a particular product in addition to the floral design. Citing the market research done by the store which concerned the mails, words do make an impact. There are many products from liberty London made by Liberty London that does not show it came from the store. This might make consumers choose Gucci and Louis Vuitton over Liberty House products. Factors influencing clients discussed earlier such as psychological factors, and social factors show that these luxurious goods serve as symbols. The store should also try to change the perception of potential consumers who fall under the non-luxury customers.

Conclusion

Liberty London is a popular high-end store that is not only known in London but around the world as well. It has been able to stand the test of time and still be one of the most preferred high-end stores in London and Europe at large. However, the market analysis has shown it has areas it still has to work on if it is to get a larger market share of the luxury market and be more competitive. These areas include how it promotes its products and trying to lure potential customers especially those who fall on the non-luxury cluster.

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