Cotton On Marketing Plan - Essay Example

? Table of Contents Executive Summary 2 Situation Analysis 2 Internal Environment 3 External Environment 3 SWOT Analysis 5 Marketing Objectives 6 Develop Marketing Strategies 6 Select Target Markets and Positioning 6 Product Strategies 7 Pricing Strategies 8 Promotional Strategies 8 Supply Chain Strategies 9 Implement and Control the Marketing Plan 9 Action Plans 9 Budget 10 Measurement and Control 10 References 11 Executive Summary One of the most widely used business principle is the 80-20 Pareto principle (Bunkley, 2008) which states that 80 percent of new business will come from 20 percent of existing customers. This makes knowing and nurturing relationships with existing customers even more valuable. However, the struggle is when a brand wants to expand its image and market. Cotton On is in that crossroad. It grew it business catering to the simple and relaxed 20 something market. However, the entrance of smaller companies that offer the same diversity in design and high class quality is forcing to reinvent itself. This paper will explore the marketing opportunities it can tap in order to reinvent its image to a flexible label that is essential to every fashion genre. Situation Analysis Internal Environment One word. That’s all it takes for a person to know someone inside and out, its history, its sensibilities, its personality, and its relationships. That word is the brand name. Coca-Cola. iPod. Nike. Google. Their identities are so strong and so embedded to the minds of the consumers that no single study, perhaps not even a compound of a thousand, can comprehensively explain how each company built it. Cotton On, despite being a young label, has experienced a certain amount of success in positioning themselves in the market and securing a loyal consumer base who identifies them with the same laidback, simple, and organic image of the country where it originated from, Australia. It is, despite possible apprehension of the fashion elite a brand that exudes style. It started in 1991 in Geelong, Victoria, Australia. Twenty years is considered young in the fashion retail business. Yet, it has expanded to more than 600, employing more than 4,500 people in the same countries where it distributes - Australia, New Zealand, Singapore, Hong Kong, Malaysia and the US. Its success may be credited to the same formula that casual brands like Roxy and Target has (Grail, 2009). It has managed to become an accessible brand but its lines were never tacky or common. By not emphasizing its affordability and flaunting its quality in both engineering and aesthetics have allowed it to develop a stylish image that cuts across all segments age, gender, and social class. External Environment The cards the Australian fashion industry has are not good ones. It seems easier to fold than to call it. The geography itself is a disadvantage of epic proportion. It is more than 20 hours away by plane from all of the major fashion capitals such as Paris, London, and New York. The time difference also means contradicting weather. When it’s summer in Australia, it is winter in Paris. To any fashion expert, that’s a recipe for disaster. The international economic crisis also damaged the value of the Australian, from 53 to 106 Australian cents to the US dollar. Any fashions sales expert will tell you, that’s setting yourself up for suicide and mutilation because it makes any exported product from Australia expensive (Gay, 2010). Juxtapose this with the continuous birth and growth of many other labels from or manufactured in Asian countries where labour and raw materials are affordable and you have a losing formula. The disadvantages don’t end there. The local market is small. There are only 23 million people in a country that highly penetrated by international brand whose volume of production allow them to sell products at a much lower price. The only way for any brand to grow is to go out of the Australia. The complexities continue. Unlike other secondary fashion markets like Brazil, India and China which is difficult because of the factors already mentioned above, difference in season, acquired cost because of transportation and taxes incurred. However, what may be the scariest competitor of Cotton On are the domestic brands that don’t bother to set up physical stores and do their business virtually. Consider that the internet started growing in the 80s and made leaps in 90s. People that were born in these two decades are the same consumers that Cotton On is catering to. They don’t know a world without internet. Therefore, they feel comfortable with it. Since businesses who operate virtually are able to cut operational cost through the absence of office utility bills, lesser manpower requirement, and store space rentals, Cotton On may have found a real threat (Amed 2011). This is, of course, compounded by unique marketing strategies that pull in the influence of non-mainstream. They live and thrive on organic reviews posted by real consumers and not from those who got paid millions to appear in 30-second ad or a full page print ad. These brands talk about unique styles achieved through their non-existent mass production (Gers, 2009). Online brands and stores like Shopbop, Net-a-Porter, Modcloth, Delia’s and Topshop are able to deliver the orders at the consumer’s doorsteps. This market is so strong that Australia is now the third or fourth most important market for many international fashion e-tailers, a ranking that is disproportionate to the country’s relatively small population. This is surprising considering Australia was slow to adapt this technology infiltration of the fashion environment. Many retailers claimed to be unable to delivery domestically because logistics complications. It is, perhaps, this apprehension that allowed many small labels or international ones to come in early. On the other hand, international brands like Zara decided to customize its line and products to suit the Australian culture and weather (Jackson & Shawn, 2006). When the first store opened last year in Australia, every lifestyle and entertainment writer went wild and Zara officially released a statement that their Australian opening was one of the most successful Zara openings ever. Several styles actually went out of stock. There are many competitors that vary in size, style and image. The strength of these competitions is heightened by the technology at extends the reach of the every brand to every consumer. SWOT Analysis Marketing Objectives The brand has to evolve as fast as international brands are evolving to achieve a higher amount relevance to the Australian market (Abellan, 2010). The consumers now are available of the choices laid in front of them and they are more unwilling to compromise. They want, and they will, get what they want in style, quality, and economy. The objective is single-minded but the roll out has to be comprehensive as to reach even the rural areas and cut across all fashion segments. The main objective is to demonstrate how Cotton On’s easy and casual look makes it flexible enough to be transformed to different styles spanning different genres, sophisticated to street chick, edgy to preppy, rock and roll to pop. Develop Marketing Strategies Select Target Markets and Positioning Perhaps the most critical part in any effort to develop a brand and a marketing plan of an existing brand is to take a closer look at the target market and the actual buyers of the product. Many marketing plans fail because brand owners refuse to accept that there is big difference between who they want their brands to cater to and who are actually buying them (Easy, 65). Even giant fashion brands are not spared. Abercrombie & Fitch was intended to be worn by the jocks who walk the road of Ivy League universities driving either pimped vintage cars or luxury ones less than 12 months old. Who are buying them? High school students who aspire to look like the jocks who walk the road of Ivy League universities driving either pimped vintage cars or luxury ones less than 12 months old. Cotton On products are created to cater to the humble upper class fashionistas whose effortless fashion allows them to exude their casual but exclusive class. In reality, the one who buys are is the broad c market who wishes to look like the humble upper class fashionistas whose effortless fashion allows them to exude their casual but exclusive class. This distinction is very important because the aspirational tone of the brand has propelled it to growth. Thus, it must keep its aspirational tone but roll out the materials to venues and media that will extend its reach to the wider market. Product Strategies Core Product: Clothing and Accessories Actual Product: Cloth quality, design, cut, styles, for women, men, and kids Augmented Product: Extensive collection for every season in almost every colour, and flexible designs that may be used, reused, mixed and matched with other pieces without looking too simple or too formal A new line will be launched for the 2012 that will be consistent with the simple, relaxed, and comfortable styles found in all clothing and accessories that came out of the Cotton On. However, a new packaging will be designed to reflect the different look that will be used in all other materials. Pricing Strategies Many tactical campaigns default to reducing the price of the product in an effort to encourage consumption. This, however, could create apprehension on the consumers because they are forced to the realization that the product “could” be sold for a lower price. Cotton On has always been affordable from the get-go and is known in the fashion industry as such. It has been able to largely avoid being a brand for the lower class by not emphasizing their price but their value. Products should retain its retail price points. Any additional service that will be rendered to deliver the product outside of the traditional in-store purchase should be charged accordingly. Cotton On was, and will continue to be, never about the price. Promotional Strategies The objective is to make the brand cross over to the experimental, edgy, unconventional market that makes no distinction between mainstream and alternative fashion sources. Although it is imperative that media reach should still be considerable to ensure that brand imaging increases in terms of awareness, the nature of the campaign cannot be hinge don traditional principles and traditional efforts (Hines, 2009). The digital medium and all the power it provides in terms interactivity and intimacy must be tapped. The campaign should begin and end online. On ground activities will be used to support the digital efforts but no above the line marketing, advertising or PR will be used. The promotion’s primary objective should be not be focused on sales but on the participation in quality and quantity. The campaign will have four stages. Phase 1: Awareness. A video will be released of the different looks in different genres using pieces from the new line. Each look will be styled by the top bloggers for each look. The existing pull of the bloggers will automatically have a captive market. The video will be released online, through youtube, the webpages of the bloggers, Cotton On Social Networking Site (SNS) and websites. The key is to create a video that will communicate how the label takes over Sidney, the fashion capital of Australia. Phase 2: Participation. A computer will be installed inside the Cotton On stores with direct access to Facebook. Everyone who fits clothes can take a photo of themselves and post it on facebook directly from the computer found in the Cotton On store and ask their friends to comment. Phase 3: Fulfilment. The top 10 posts with most likes will have a chance to design the next ad of Cotton On. Phase 4: Sustaining. Continuous communication and interaction with Facebook fans will be pursued including posting daily questions, tips, and even doing random acts of kindness. Supply Chain Strategies Considering the campaign will be focused on branding rather than sale, rolling out the new lines will be no different from the way other products are rolled. There is a possibility that the online transactions would witness some increase because the campaign will be a primarily online effort. However, Cotton On already has an efficient online distribution system that will accommodate orders or sales that come in through the website. The only other value that may be added is to allow free delivery to everyone who will participate in the activities and shop on cottonup.com Implement and Control the Marketing Plan Action Plans How do we make our marketing plan happen? Activities Involved Divisions Timeline Phase 1 Video release Forum posting Blogs Facebook Posts Marketing and Promo group One month Phase 2 In-store Activity Blogs Forum Posting FB Social Ad Sales Operations Marketing and Promo Two months Phase 3 Announce winners Publicity on the winners and upcoming ad Shoot of Ad Marketing and Promo Group One week Phase 4 Release of the new Ad SNS activities Marketing and Promo Group Nine months Budget Items Price Phase 1 Ten Bloggers Video Production Facebook Social Ad AUS $10,000.00 5,000.00 1,000.00 Phase 2 Computer Set Ups 5 Part Time Social Media Managers 50,000.00 10,000.00 Phase 3 Winner Publicity New Ad 5,000.00 TBA Phase 4 5 Part Time Social Media Managers 45,000.00 TOTAL AUS $126,000.00 Measurement and Control Target Number of Facebook Likes = 200,000 Target Number of Participants = 200 Target Number Youtube Views = 100,000 References Abellan, M. (2010). Fashion Branding. Spain: Instituto Monsa de Ediciones Amed, I. (2011). Australia, Against All Odds. The Fashion Trail. Retrieved from http://www.businessoffashion.com/2011/05/the-fashion-trail-australia-against-all-odds.html Bunkley, N. (2008). Pioneer in Quality Control, Dies. NY: New York Times Easey, M. (2008) Fashion Marketing, NY: John Wiley & Sons Gay, M. (2010). Australia Pressures Fashion Industry to Bulk Up Models, AOL News, Retrieved http://www.aolnews.com/2010/06/29/australia-pressures-fashion-industry-to-bulk-up-models/ Gers, D. (2009). Social Climbing: Luxury Fashion Brands Must Embrace Social Media. Forbes Magazine, NY: Forbes, 45 Grail Research (2010). Global Fashion Industry, Grail Research, LLC. Hines, T. (2006) Fashion Marketing: Contemporary issues, LA: Butterworth-Heinemann Jackson, T. & Shaw, D. (2006) The Fashion Handbook, LA: Routledge Tungate, M. (2008) Fashion Brands: Branding Style from Armani to Zara, NY: Kogan Page Read More