Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
DesignerWear (DW) is a new Sri Lankan SME that is involved in importing branded clothing
items for 1.5 years. It features many world renowned brands such as Abercrombie and Fitch,
and French Connection. DW has recently entered into a contract with Reebok International to
import the innovative Reebok PlayDry line of t-shirts (with cooling fabric design) to Sri
Lanka for the purpose of retail selling.
FEASIBILITY STUDY
1. Organizational feasibility
HR
-
campaigns.
Training need analysis: Hiring new retail staff that are competent in the English
language (Training needed after selection)
Risk:
-
A section of the annual budget is allocated for each brand; to introduce at least one
new line of clothing to the local market. The budget will be explored in depth later in
this report.
2. Industrial feasibility
Nature of the branded clothing Market in Sri Lanka: Oligopoly
Reeboks competition in is not with local brands in Sri Lanka however with
global competitors like Nike (alternatives within the local market).
3. Product feasibility
-
Special attributes:
Innovative fabric technology of the PlayDry range of clothing,
Elegant design,
Durable material
Demand analysis:
Need analysis: Sri Lankas western provinces have a hot climate; there is an
4. Market feasibility
-
The following SWOT analysis summarizes the findings from both the internal and external
audits done via the Porters 5 Force (P5F) and the PESTLE framework. (Appendix 1)
Strengths
-
specialized fabric
Prominent and suitable store location
Weaknesses
-
Opportunities
-
local context
Need for individualism,
External conformity,
Staying fit
(Discussed in depth in Appendix 1; Cultural factors)
Threats
-
Site like EBay/Amazon allow customers more alternatives than retail stores
Depreciation of the LKR currency
As DWs inventory depends on importing from international distributors; this
increases costs
Higher dependency rate
Threat of new fashion brands entering the market
Due to favorable government and trade policies
OBJECTIVES SETTING
ORGANIZATIONAL OBJECTIVES
1. To increase revenue by within 18 months from product launch.
MARKETING STRATEGY
SEGMENTATION
Segmentation
Segment 1
Segment 2
Segment 3
base
Demographic
Social
grade
A,B, C1
B, C1
C2, D, E
(NRS) 1
Age;
21-39
19-29
(Refer Appendix 1: Social, for; central bank statistics)
Disposable
20000+
15,000+
income [LKR]
Education
35-59
5000 or less
Undergraduates/Post
Undergraduates/
No
graduates/
Vocational/After ALs
education/
Professional
formal
secondary
education only
Geographic
Climate
Population
Warm
Urban, suburban
density
Warm/ temperate
Urban,
suburban,
Cold
Rural, semi-rural
semi-rural
Psychographic
Lifestyle
Loyalty type
Need Level
Behavioral
Type of product
Corporate, active
Conservative
brand loyal
shop
shop loyal
Esteem, Social
loyal
Esteem, Social
Security
branded clothing
branded
Unbranded items
purchased
loyal/
brand
clothing/
unbranded clothing
Desired
style,
brand
attributes
External
design, material
Conformist
value,
Functionality,
design, material
Conformist
cost
Ritualism
low
conformity3
TARGETING
A single segment concentration strategy is used where a firm concentrates on one market.
(Kotler & Keller, 2006)
DW should concentrate its resources on satisfying the needs of 'Segment 2' as it matches the
criterion it is looking for.
-
branded clothing without spending their half their salary on it. Thus the
affordability aspect is leveraged.
-
Buyer behavior:
- Shopping is a social experience as they (I.e. likely university students) prefer
to do so with their friends (fun loving, adventurous).
-
features more
Whereas Segment 1 would not have an opportunity to wear these items as they
are involved in more corporate lifestyles, thus needing office wear.
POSITIONING
Positioning is the act of designing the company's offering and image to occupy a distinctive
place in the mind of the target market. (Kotler & Keller, 2006)
Brand essence:
Positioning statement; "Global brands. Local reach"
Explanation: The statement communicates that DW provides access to a
collection of the worlds most renowned brands to the local market.
(Detailed analysis in Appendix 3: Positioning)
In a market development strategy "the organization moves beyond its immediate customer
focus into attracting new customers for its existing product range". (Lynch, 2007)
Which strategy is used in DWs case depends on perspective. From Reebok's perspective (as
an international firm) the introduction of clothing with PlayDry features is a market
development strategy; as it is an already existing product (In foreign markets) which is being
introduced to a new market (Sri Lanka). From the DW perspective (as a retail store) it is a
7
product development strategy; as the t-shirts with PlayDry technology (new line of clothing)
are being targeted at the existing market. This product development strategy is justified by
DW's move towards an increasingly sustainable market advantage that aims to exploit
opportunities while retaining a more loyal customer base.
COMPETITIVE STANCE
1. Product
Stage in PLC: In the Sri Lankan context the Reebok Play Dry range of t-shirts is at an
Introduction phase; thus, promotion expenses would be high with low market share. However
internationally the Play dry range has reached maturity level, and is not promoted
aggressively. (Kotler & Keller, 2006)
Core benefit:
Clothing
Actual Product:
T-shirt s with cooling features, high quality durable polyester fabric, elegant design
Expected Product:
authentic branded Reebok clothing,
psychological benefits: status and esteem, thrill, heightened self confidence
Augmented Product:
Friendly and helpful sales staff, high quality interior store design (psychical evidence)
using themed brand colors, the branded shopping experience
Thus DW needs to import the product from Reebok suppliers in India. Reebok's
production cost cannot be controlled however a markup can be maintained by DW to
ensure a profit is made on each unit. The tactic would be to target potential market
that has the purchasing power required.
Through a strategic viewpoint Reebok's pricing for Dry Fit t-shirts is competitive in
relation to Nike which is premium.
Matches the price elasticity of demand in the Sri Lankan market. Customers that
compare prices with premium brands i.e. Nike would chose Reebok's product due to
the higher value for cash spent.
The key focus is to ensure a smooth flow of stocks within the supply chain from distributors,
wholesalers and final retail stores. This would ensure that DW effectively responds to
demand in the local market. Prior agreements would have to be drawn up with distributors in
India.
10
4. Promotion
An integrated marketing communications (IMC) approach is adapted by DW to promote the
PlayDry range using multiple elements of the promotional mix.
Advertising:
These methods promote sales by raising awareness, persuading, reminding and reassuring
customers on the authenticity of Reebok's products.
-
Billboards in prominent locations (i.e. in high street fashion store areas in Colombo).
This needs to feature a simple message capturing the brand identity (logo as well as
tagline).
Social media: Facebook's ad service could target the specific demographic needed
(i.e. youth) which are highly active users of social media. Further this is a relatively
cheaper medium of advertising.
Public relations
Sponsorships: Sri Lankan player uniforms for International Cricket matches are sponsored by
Reebok which increases brand awareness as well as relates to the local culture.
(Detailed analysis of IMC; Appendix 3)
5. People
This element of the marketing mix recognizes that front line employee competency and
emotions can have an impact on customer satisfaction. DWs retail staff needs to be friendly
and helpful while giving the customer the freedom of choice in product. Importantly retail
staff should be competent in the English language as dealing with a higher end segment.
Selection of competent staff that have the right attitude, providing on the job training,
reinforcing and motivating staff can have a positive impact on customer satisfaction.
6. Process
Effective business processes are needed to retain a customer base (and facilitating positive
word of mouth). DW can minimize the customer waiting time when purchasing Reebok items
by using ICT systems like Point of Sales (POS) ones that automate the sales transactions to
great extents. Getting the item information via bar code recognition and generating sales
11
receipts faster. Support for credit and debit card payment methods with a fast response time is
also important.
7. Physical evidence
As DW is acts as a franchisee to Reebok maintaining high standard of interior store design is
important. The store design needs to reflect the brands personality. This can be achieved by
using the brands logos, theme colors as a color scheme both internally and externally. Even
though these are smaller details elegant colors (that are not too bright) can help evoke that
unique emotional experience provided by the brand image.
12
IMPLEMENTATION
CONTROL MECHANISMS
Balance Scorecard
Measures for DW
Sector
based on; (Kaplan &
Norton, 2007)
Financial
Customer
Operational
Learning
13
SCHEDULE
14
BUDGET
Activity
Units (if
Amount
applicabl
[LKR]
e)
Market research and planning
Secondary research
150,000
agency
Supply chain activity
Reebok contract
Initial order
3 year
300,000
contract
150 units
Play dry t-
440,000
shirts
Store design
Taxation
Assembling store
500,000
132,000
30,000
components
Promotional
Graphic design firm
Printing billboard ad
billboard leasing
Facebook Ads cost
50,000
15,000
150,000
150,000
Implementing
Recruitment ads
Administration expenses
Maintenance costs
Contingency cost
18,000
300,000
15,000
15,000
2,265,000
15
WORKS CITED
cbsl.gov.lk.
(2012).
Retrieved
from
http://www.cbsl.gov.lk/pics_n_docs/10_pub/_docs/efr/annual_report/AR2012/English
/10_Chapter_06.pdf
Key
Economic
Indicators
cbsl.gov.lk.
(2012).
Retrieved
04
2014,
from
http://www.cbsl.gov.lk/pics_n_docs/10_pub/_docs/statistics/other/econ_&_ss_2013_e
.pdf
cbsl.gov.lk. (2013). Retrieved from http://www.cbsl.gov.lk/roadmap/RM2013.pdf
Household Income and Expenditure Survey. (2013). Retrieved 04 14, 2014, from
http://www.statistics.gov.lk/HIES/HIES2012PrelimineryReport.pdf
Key
Economic
Indicators.
(2013).
Retrieved
04
2014,
from
http://www.cbsl.gov.lk/pics_n_docs/10_pub/_docs/efr/annual_report/AR2013/English
/3_KEI.pdf
Key
Social
Indicators.
(2013).
Retrieved
04
2014,
from
http://www.cbsl.gov.lk/pics_n_docs/10_pub/_docs/efr/annual_report/AR2013/English
/4_KSI.pdf
Key
Social
Statistics.
(2013).
Retrieved
04
2014,
from
cbsl.gov.lk:
http://www.cbsl.gov.lk/pics_n_docs/10_pub/_docs/efr/annual_report/AR2013/English
/4_KSI.pdf
trc.gov.lk.
(2013).
Retrieved
08
19,
2013,
from
http://www.trc.gov.lk/information/statistics.html
corporate.reebok.com.
(2014).
Retrieved
03
24,
2014,
from
corporate.reebok.com/en/about_reebok/default.asp
cwx.prenhall.com.
(2014).
Retrieved
from
http://cwx.prenhall.com/bookbind/pubbooks/macionis6/chapter6/medialib/ma0601.jp
g
16
Ahlstrom, D., & Bruton, G. (2009). International Management: Strategy and Culture in the
Emerging World. Cengage Learning.
Blanchard. (2007). Macroeconomics. Pearson Education.
Blythe, J. (2008). CIM Coursebook Marketing Essentials. Elsevier.
Boundless. (2013). Sociology.
Doole, I., & Lowe, R. (2008). International Marketing Strategy: Analysis, Development and
Implementation. Cengage Learning EMEA.
D'Souza, E. (2009). Macroeconomics. Pearson Education.
Glendhill, M. (2011). Stakeholder Marketing. Elsevier.
Hill, C., & Jones, G. (2009). Strategic Management Theory: An Integrated Approach.
Cengage Learning.
Jones, G., & Hill, C. (2009). Strategic Management Theory: An Integrated Approach.
Cengage Learning.
Kaplan, R. S., & Norton, D. P. (2007, 07). Using the Balanced Scorecard as a Strategic
Management System. Retrieved 05 2014, from The Harvard Business Review:
http://hbr.org/2007/07/using-the-balanced-scorecard-as-a-strategic-managementsystem/ar/1
Kotler, P., & Keller, K. L. (2006). Marketing Management. Pearson Education.
Lynch. (2007). Corporate Strategy. Pearson Education.
Macionis. (2006). Sociology. Pearson Education.
Solomon, M. R. (2012). Marketing: Real People, Real Choices. Pearson Education, Limited.
17