In 1979, Chipman-Union was a medium size company which primarily manufactured unbranded socks sold as private label merchandise. The market of socks in the U.S. was characterized by severe price competition and limitation of product differentiation. There were only two companies which manufactured branded socks, and companies except those two companies had 20% gross margins or below. To get higher gross margin, CU had to venture into new business branded socks. They began to investigate the marketing program for the new product, and recognized that there were not only valuable possibilities, but also problems they would have to solve before launching the product.
In this case, first of all, the product will be evaluated focusing on the unique features of the new product introduced. Basically, it can be asked whether or not deodorizing socks appeal to consumers in the traditionally price competitive socks market in the U.S. Second, the market situation will be examined. There was already a company which manufactured deodorizing socks, and promoted deodorizing as a product characteristic. So, it is important to ask how to make effective price strategy, and attempt to know the unique aspects of competition in the market. Finally, as we know, what is the most important question they should ask is how to make consumers aware the "brand." For Chipman-Union, brand awareness is one of the most important objectives they should achieve. To do this, communication strategy should be carefully examined.
Product Evaluation
Limitation of Product Differentiation
According to consumer research conducted by GFM, both consumers and retailers regarded socks as a product category, which was hard for companies to achieve product differentiation. In fact, most companies in this market like Chipman-Union manufactured unbranded socks for private label merchandise, because it was extremely hard to get consumers' brand awareness, and to make them recognize the product features. As a result, there were only two companies which manufactured branded socks : Burlington and Interwoven.
Compared with those two competitors, Chipman-Union was not known well to consumers. To attract consumers' attention to their products, first of all, physically prominent features of the product should be introduced. For them, it seemed impossible for CU's brand to compete with competitors' established brands without unique product characteristics. For this purpose, deodorizing socks could be a reasonable physical feature for differentiating the product from other competitors' products. In addition to this deodorizing feature, various types of socks should be developed.
The closure of Finish Line sportwear stores, reasons and outcome Finish Line is a regional sportswear retailer in the United States. A few of the significant peers of the firm are Dick’s Sporting Goods and Foot Locker. In the past 5 years, the revenue of Finish Line, Foot Locker and Dick’s Sporting Goods increased at a CAGR of 8.4%, 7.1% and 8.7% respectively as shown in the graph below. Source: Televisory’s Research. Revenue growth was due to an increase in Finish Line stores.
Companies realize what people need and they take it as sources to produce commodities. However, companies which have famous brands try to get people’s attention by developing their products. Because there are several options available of commodities, people might be in a dilemma to choose what product they looking for. In fact, that dilemma is not real, it is just what people want. That is what Steve McKevitt claims in his article “Everything Now”. When people go shopping there are limitless choices of one product made by different companies, all choices of this product basically do the same thing, but what makes them different is the brand’s name. Companies with brands are trying to get their consumers by presenting their commodities in ways which let people feel impressed, and that are some things they need to buy. This is what Anne Norton discussed in her article “The Signs of Shopping”. People are often deceived by some famous brands, which they will buy as useless commodities to feel they are distinctive.
The company is affronting several challenges; the industry of sports and medicine is very competitive. There are big companies and multinationals that have a high power of negotiation and dominion in scale economy that allow them to enter in any market and introduce their products. If Smith & Brown apply the strategy of the balanced scorecard with the four perspectives, it can discover and improve its strengths and comparative advantages against the other competitors in the market (Norreklit, 2000). To create the comparative advantages against the high street drug and supermarket chain’s own labeled products, which are normally considered as average quality products, Smith & Brown can focus on producing luxury products using their brand profile, which insures the customer that these products are widely used and trusted by sport celebrities. The retailers cannot be considered as new rivals in the market, but an empowered client that new negotiation conditions have to be considered. In an aspect the company needs to revise which internal aspects give them an advantage against the other companies (Marlys & Steven,
Price: They have pricing strategy for different group of consumer. The price of their shoes varies depending on the type of the shoes, the feature of the shoes, and even design and edition matter. The shoes can be price at a standard price where most customers can afford. Yet some special feature shoes are specially design and created for premium customer who can afford to pay a higher price. For this reason they can capture different group and level of customer.
Only a week earlier, on June 28, 2001, Nike had held an analysts' meeting to disclose its fiscal-year 2001 results.1 The meeting, however, had another purpose: Nike management wanted to communicate a strategy for revitalizing the company. Since 1997, its revenues had plateaued at around $9 billion, while net income had fallen from almost $800 million to $580 million (see Exhibit 1). Nike's market share in U.S. athletic shoes had fallen from 48%, in 1997, to 42% in 2000.2 In addition, recent supply-chain issues and the adverse effect of a strong dollar had negatively affected revenue.
In order to beat its competitors, Under Armour Company can engage in market sensitive fresh product invention. New products are more likely to draw curiosity amongst the populations especially if they commensurate well with the prevailing trends (Hill & Jones 2009, p. 308). UA concentrated on the outside-in (market responsive) approach to carry out its strategies. It is reported that it sourced unique synthetic materials and employed on field product development. This enabled it to create the performance apparel segment in the athletic apparel market.
Nike’s goal is to remain unique and different from others in terms of the items offered on the market. Arguably, Nike belongs to a monopolistically competitive market as there only a few organizations with the ability to regulate the amount charged for their product which means they cannot make their prices high as this is likely to make customers move on to other available choices (Nike, Inc., 2012). However, Nike can find a balance between the prices to charge for their products and remaining competitive with other companies in the industry. Nike has formed a distinction between the appearance and performance of their footwear and that of their competitors. Although products are differentiated from other companies, they still influence each other because they are items of the same
We propose a branding strategy which takes into account the brands capabilities and competencies, strategies of competition brands and the outlook of consumers experience in their respective societies. As an international brand there is the challenge of staying connected with local customers. We will overcome this by adapting marketing strategy to local needs using a variance of standardized marketing mix and an adapted marketing mix.
The Shoe Industry consists of a multitude of footwear categories, varying in utility, style and occasion. When overseeing the market for the shoe industry, we must look at the influence of all shoe trades universally to comprehensively understand how the disparities in sales relate to the needs of specific regions. The global retail market within the shoe industry currently represents $185 billion, driven primarily by Asian and Latin American economies and is expected to reach $211.5 billion by 2018. The growth rate globally was 6% between 2004 and 2008, contrasting to the 2% compound annual growth from 2008 to 2012. The United States holds over 24% of the overall industry size it projected over $48 billion in annual revenue in 2012. Domestically, the growth rate has been flat at 0.3%. On a unit volume basis, global footwear consumption for 2012 is approximately 11,421.3 million (in pairs), where the United States makes up roughly 2,741.1 million (in pairs). By 2018 the U.S. Census Bureau has forecasted a steady decline within demand domestically of 3% and an increase of 1% globally.
This project concentrates on the Nike Sports shoe; Nike is one of most significant shoe manufacturing company worldwide. Sportswear manufactured by Nike is known for quality and is most liked brand of athletes. (Daniel, 2011)
The reason for this is they are trying to save costs for producing there shoes
There are many products in each product line because a trendy company like Steve Madden offers many different styles of shoes. Flat shoes, boots, heels, and super high heels. Every season the styles and colors change for the shoes that they sell and the older styles go on sale. The Brand name for the company is Steve Madden and their brand mark is the name in the circle. The name is in the Brand Mark so that it is always clear what company the brand mark is talking about. You can never get confused with what company makes the shoe or posted the ad because the name is always on it. The company has been continuing moving forward. There may have been some rocky points, Steve Madden knows exactly how to continue running strong. What competition is there? None.
Lastly, brand awareness is a crucial consideration. And It may be thought of as a consumers’ ability to find a brand within a group in adequate detail to make a purchase. It is important to remember that adequate detail does not always need identification of the brand name. Often “brand awareness is no more than a visual image of the package that stimulates a response to the brand.” Moreover, recall of the name is not necessarily required because brand awareness in which can try via brand recognition. According to Emma Macdonald and Byron Sharp (2003), suggested, when a brand is recognized at point of purchase, its brand awareness does not need brand recall. This is a major point in the consideration of brand awareness as the most important communication objective. In fact, the difference is misunderstood by marketing and advertising managers. The difficulty is to relate to the essential difference between recognition and recall, that is extremely important to advertising strategy. Brand recognition and brand recall are two separate types of brand awareness. The difference depends upon the communication effect that occurs primarily in the consumers’ memory.
The shifting of the consumer’s taste of simple products to high quality branded products is not sudden. It grew out in the middle of the 20th century and the companies selling various products needed a new way to differentiate their products from the others giving it a unique identity.
Charles and Keith uses synthetic materials and polyurethane to ensure affordable prices of their products (Singapore Press Holding, 2009). However, the qualities of the products are not compromised despite its inexpensive prices. The managing director Charles Wong reassured the customers that although the ...