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Module: Marketing Planning
Group member:
Date: 7/11/2011
Word count: 1569

Introduction

Kub Nursery is a company that specializes in providing baby furniture, and the company cares about design and creates furniture that helps to make a nursery a warm, stylish and fun place for the child to grow and play. The SBU’s (Strategic Business Units) for Kub Nursery are focused on the baby furniture market, which is created by a big enough market niche for baby furniture products. The aim of the report is to conduct market audit analysis of Kub Nursery. According to Kotler et al (2008), a marketing audit is a comprehensive, systematic, independent and periodic examination of a company’s environment, objective strategies and activities to determine problem areas and opportunities and to recommend a plan of action to improve the company’s marketing performance. External environment analysis, internal environment analysis and SWOT analysis are key elements to be included in market audit.

External Environment

External environment analysis in this section consists of PESTEL and Porters’ 5 Forces analysis. On the one hand, the PESTEL analysis is macro audit that focuses on six key aspects including political, economic, social-cultural, technological, legal and environmental factors (Blythe and Megicks, 2011). Kub Nursery operates in the industry of baby furniture and PESTEL is used to analyze macro environment of baby furniture industry. Firstly, political factors have a positive effect on the industry of baby furniture because political environment in the UK is stable to support the development of the industry. Secondly, economic environment has a negative effect on the development of the baby furniture industry because currently many countries including the UK are experiencing economic depression and people’s willingness of consumption has been greatly reduced due to the poor economic environment and the reduction in income.

Thirdly, social-cultural changes have a positive effect on the industry of baby furniture that parents pay growing attention to the health and safe of their children. Fourthly, technological factors play an important role in driving the development of baby furniture industry because technological innovation makes it possible to provide customers with healthier and safety baby furniture products. Fifthly, legal factors are critical to influence the development of the baby furniture industry because there are high requirements of laws and regulations on security and health of baby furniture and products have to meet the relevant legal requirements. Lastly, people have paid gradual attention to environmental protection so that companies in the baby furniture industry have to attach importance to the use of raw materials and recycling of old furniture.

On the other, the micro audit of Porters’ 5 forces is used to analyze the micro environment of the baby furniture industry and Kub Nursery. According to Porter (1980), Porters’ 5 forces framework consists of five aspects including the buyer’s bargaining power, the supplier’s bargaining power, the threat of new entrants, the threat of substitutes and competitive rivalry. Firstly, the buyer’s bargaining power is weak in the baby furniture industry because there is small volume of customers and there are few substitute products and baby furniture products are vital to health and