Theoretical Background:

Product Diversification
The route of growing business prospects through additional market prospective of an
existing product is product diversification. This strategy is used by companies to modify their
existing product range and add new product to their portfolio. It can be expensive, risky, time
consuming and requires enough resources. Before implementing this strategy, business should
consider all the angles or pros and cons of the particular product.
Market Segmentation:
A marketing term market segmentation refers to the process of sub dividing buyers into
groups or segments that have common need, want and demand attitudes as they will respond
similarly to a marketing action. The purpose of this is to satisfy every consumer based on their
attributes and manage anticipation of consumers to maximize business growth. Usually three
criteria used for market segmentation and they are given below

Homogeneity

Reaction

Distinction

Product Positioning Strategy:

Product positioning refers to consumers' insights of a product's characteristics, uses, value, and
benefits and disadvantages relative to competition brands. It is a marketing technique intended
to present products in the best possible way to differentiate target audiences as marketers
often conduct marketing research studies to analyze consumer preferences and to construct
product position maps that plot their products' positions in relation to those of competitors'
offerings."

Pricing

IMC Mix

Competitor
Claims

Retailer Mix

Product
Positioning

Product
Features

Media &
Reviews

Word of
Mouth
Packaging

Brand Management:
It is the tactical development and management of diversity through an exclusive parameter and
a communication function in marketing that includes analysis and planning on how
that brand is positioned in the market. As the world is changing at a faster rate, brand
management helps business to continuously innovate their product and service offerings to
create consumer moments and satisfy their demands. It can be explained from three point of
view. They are Strategic

Operational

Organizational

Categories

Superior Brands

Organizational
Structure

Customer
Segments

Communication

Budget

Architecture

Price

Monitoring

Placement

Quality

Promotion

Case Study: Answer to Question 1

Mark & Spencers fortunes took a dip due to the below activities

Supply based company rather than demand based company.

Out dated and old fashioned product line especially in Clothing.
Non-consumer centric approach.
Over reliant on suppliers and unwillingness to outsource to cheaper alternatives.
Continuous increase in profit margins and shift from their core value of value for money
approach.
Failed to comply with continuous brand innovations and sticking up with same products.
Over dependent on consultants rather than relying on internal employees.
Irrelevant cost generating projects continuation (like unused lands or shops, financial
services etc.).

But they were successfully addressed the problems and due to proper and timely initiatives,
they were again in the upward trend. The below activities brought them good fortunes
Consumer
Centric
Approach

Change
Management

Cost
Optimization

Smart and Effective Product Positioning:

Innovation

Product
Positioning

They introduced different clothing lines like good, better and best in distinctive price and
quality, customized and fashionable furniture to enhance and included Coca Cola, Kelloggs, and
Bovril to their food chain to entice consumer even more.
Modern and Timely Consumer Centric Approach:
They change their core value by becoming a demand oriented company from supply based
endorsed famous models like David Beckham, Twiggy, Myleene Klass etc. and targeted organic
foods and energy efficiency products which are more consumer driven ones.
Maximize Cost Optimization through Outsourcing and Vendor Reshuffle:
They changed their suppliers to go for more cost effective solution and outsource many product
materials, trimmed down non feasible lines, sold or leased the unused lands and spaces to
reduce operating expenses. And decreased over reliance of consultants and focused more on in
- house suggestions.
Innovation:
They focused on continuous innovation in clothing (like machine washable mens suits),
branded electronic products inclusion, designer furnitures, superior consumer service like
instant feed backs or furniture delivery and others.
Minimizing the Adverse Effect of Change Management:
Although senior management changes lead to new ideas and objectives, they were able to keep
the changes towards greater well fare of the company which resulted in overall sustainability of
the business time to time.