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Published by leye02

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Published by: leye02 on Oct 23, 2009
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Argos is a multi-channel retailer recognised for choice, value and convenience that sellsgeneral merchandise and products for the home throughout the UK and Republic of Irelandusing various retail formats (HRG, 2008).Argos majors in home enhancement products, electrical goods, toys, jewellery, sports andleisure equipment with electrical goods making up 50% of its sales mix.Argos intends to capitalize on customers need for HDTV compatible equipments asgovernment intends to change fully to digital signal by the end of 2012. The major challengeis designing a package that will be appealing enough to get customers to change their old TVsfor a new HDTV ready TV set in the face of deepening economic turmoil and uncertaintyabout when it will end.Argos has decided to capitalize on the two major months (December and January) whencustomers are expected to trade the most to take advantage of customers already formed habitof trading during these seasons. Differentiating and positioning itself on superior (value)service and empathy for customers, Argos intends to synchronize its marketing andcommunications efforts effectively to be able to achieve its goal of increasing market shareand holding its former customer base.
To take advantage of the full switch-over to digital signal, Argos has decided to capitalize onthe two major months (Dec, Jan) when customers are expected to trade the most. Argos willbe holding its present customer base and building new market share through variouspromotional and advertising strategies.Considering the present state of the economy, Argos has decided to focus on the segment thatseems most profitable while relying on its P-O-S displays and advertising to bring in othercustomers as a spill-over effect of advertising is bound to happen. Argos major challenge isto convince its customers who already possess a TV set to change it for an advanced HDTVready/iDTV TV set.The present price wars in the retailing market have to be avoided. Argos already sells at a lowprice and consequently, entering into such wars may hurt the company as it might be forcedto cut price below cost price.Argos is a multi-channel retailer recognised for choice, value and convenience that sellsgeneral merchandise and products for the home to its numerous customers.
Argos’ mission is to be a leading retailing group that offers customers a broad range of products that is relevant to their present needs through various payment and retail channeloption at a comparatively better price than its competitors.
2.0 EXTERNAL AUDIT2.1 Political Factors
– The government of UK intends to change its old televisionbroadcast signal from analogue to digital (digital switchover). It will have achieved this inevery region by the end of 2012. As a result, everybody is obliged to ensure that they eitherupgrade their television sets or buy a new one if they want to continue receiving televisionbroadcast after the switchover is completed.
2.2 Economic Factors
There is presently an economic crisis in the country majorly dueto weakening property markets, a global credit crisis and high commodity costs (BBC, 2008).Unemployment rate is at 5.8% (Financial Times, 2008) and projected to rise significantly toover 8% by end of 2009 (OECD cited in BBC, 2008).Inflation is presently at 4.5% and Interest rate has been cut to 2% on 4
of December (Bank of England, 2008). Banks are currently withdrawing on the amounts they lend out eventhough the lending rate has been said to drop (BBC, 2008)Speculations of the severity of the economic crisis is making consumers spend less, withdrawfrom “premiumisation” and some delay purchases as the pattern has been in previousrecessions in the hope that product prices will still come down further. (Timesonline, 2008).This “delayed spending” coupled with declining inflation is a threat as they could furtherworsen the economic downturn (BBC, 2008).
2.3 Socio-cultural factors
– the most obvious lifestyle change is cocooning. Job loss,economic crisis, devaluation of the pound, expensive abroad vacation prices (which has beenreflected in an 8% drop in Air traffic (Financial Times, 2008)) are together pushing morepeople to stay indoors.
It has consequently had an effect on the demand for consumerelectronics such as flat-screen TVs and surround sound systems (GMID, 2008).
2.4 Technological Factors
Government has decided to change to digital transmissionbecause it offers more services than analogue and allows households to pick digital stationswith ordinary aerials (DigitalTelevision, 2008). This is forcing flat screens out of marketbecause they are not HDTV compatible.

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