Re-focussing a company's culture and marketing mix An Argos case study
Page 3: The marketing mix at Argos
As well as changing the culture at Argos, management appreciated the need to change the extended marketing mix to improve the customer experience. Argos has always been associated with 'low prices, more choice, less hassle'. The management team wanted to build on these values and develop the marketing mix to boost the company's sales and profits.
Market research following the 1998 takeover showed that the Argos brand was seen as boring and stuffy. Argos set about modernising the brand to give it greater appeal. This included a new brand strap line -"Brighter Shopping"- and a new logo.
The company has also widened its product range; by 2002 it offered twice as many products than four years earlier. In 2002 alone it added an extra 2,400 product lines, taking the total to nearly 12,000. In particular, Argos has moved further into furniture and white goods such as fridges as well as services such as pet insurance.
Given that the brand is so well known and that over 70% of the population shop at Argos, the company's management thinks the best strategy to boost revenue is to convince existing customers to buy more rather than work specifically at attracting new customers. It aims to do this, in part, through offering a wider choice.
The company has used advertising to appeal to its different market segments. Argos segments its market not just in terms of the traditional demographics (e.g. age and gender) but also in terms of people's brand awareness. Argos divides its customers into 'the don't get its' (who use Argos only occasionally) and 'the get its' (who regularly shop at Argos). The latest advertising campaign has two characters - an ageing rock star (a 'don't get it') and his personal assistant (a 'get it'). In the course of a series of adverts, the 'get it' gradually introduces the 'don't get it' to the wide range of Argos products and solves all his purchasing problems.
The campaign is designed to promote a more modern image for the business, to attract the 'don't get its' to spend more and to reinforce the loyalty of the 'get its'. In 2003 the television adverts won Retail Week's Marketing Campaign of the Year award and the 'Retail' category in the Marketing Week Effectiveness Awards 2003.
Argos continues to revamp existing and open new stores, making its products more accessible to customers throughout the UK. Between 2002 and 2003 the company opened a further 36 outlets; its long run target is to have around 600 stores. Its catalogue is a key part of the Argos distribution system and can be found in 70% of British households.
Argos's pricing strategy focuses on providing low prices. The management team has strengthened this approach e.g. with low price DVDs and CDs. The company works closely with suppliers to keep costs, and therefore prices, as low as possible.
Argos | Re-focussing a company's culture and marketing mix