Australia Based Huggalugs - Essay Example

?Marketing Plan Australia based Huggalugs offers artistic leg and arm huggers for children. The marketing plan (with reference to the marketing mix) of the company is detailed below. Product The product is at the heart of any marketing mix. Huggalugs offers a wide range of leg warmers and arm warmers for children. The apparel is so designed that it provides the basic need of warmth and serves as a fashionable piece of clothing. The present product suite of Huggalugs includes leg and arm huggers, tops and maternity wear. The company would do well to expand into hats, pettiskirts, shoes, socks, track suits and swimwear. Thereafter towels, bed sheets and blankets could be added in the company’s product repertoire. All these products can be manufactured to fit into Huggalugs’ core proposition of fashion and function. Most of the new product additions rely on the same raw materials that are used in existing products. By increasing the volume of purchase, the company can exercise more bargaining power over the suppliers of raw materials and gain a cost advantage. Likewise synergies can occur in the production processes (knitting process) as well as the channels of distribution. The skill sets of the existing labour will suffice to produce the proposed products. A product wise profitability analysis can be conducted to determine which of the items need to be removed from the present product line. The company can, after launching the proposed products, claim to be catering to the apparel needs of little ones from head to toe. These outfits would be the children’s best friend whether they are in bed or in the playground. Price A penetration pricing strategy (low price) would entail catering to the masses and dealing in volumes. However this strategy does not justify the quality of the product in question. The skimming pricing strategy (high price) on the other hand would mean that only the top rung of the society is the target market. The thoughts of ‘discounts’ and ‘value for money’ always loom large in the minds of the shoppers (in this case the parents) as kids tend to outgrow apparel pretty fast. It is therefore recommended that the company should adopt a cost plus pricing or ideally a competitive pricing model. A buyer of Huggalugs thus gets the dual benefit of function and fashion at reasonable prices. In other words, the Huggalugs brand gets associated with being stylish, multipurpose and yet inexpensive. Such a pricing strategy may prolong the break even period; however the company would be able to capture a large market share and would stand to gain in the long run Given that the company has increased its product range, it could use product bundle pricing. For e.g. if Baby Vintage Smitten (Legruffles) are priced at $ 15, Cheetah (Leghuggers) at $ 15 and Angel Daisy Bonnet (Beanie) at $24.95, a combination of all these 3 product items may be offered at $50. While this combo price saves $4.95 for the customer, it results in higher turnover for the company. The company should also employ ‘special event pricing’ for e.g. during Halloween and Christmas, promotional pricing may be done to encourage giving Huggalugs as gifts. The company should resort to ‘Sales’ sparingly otherwise customers tend to become ‘deal-prone’ Distribution The essence of distribution is that the product has to be made available at the place where the customer expects it to be. Furthermore customers have a tendency to form an opinion about the quality of the product on the basis of the place where it is available. To that extent, exclusive distribution conveys a premium image. However, an exclusive distribution will not be in line with the competitive pricing strategy that has been recommended. An intensive distribution, on the other hand, would erode the quality perception from the customer’s minds. Thus a selective distribution is recommended as against an exclusive or intensive distribution. This distribution strategy is in line with the competitive pricing strategy recommended earlier and would give Huggalugs good market coverage with more control and less cost. It is said that the three most important factors for retailers are location, location, location. Huggalugs should make reasonable effort to have its products placed at apparel stores and shopping malls that are strategically located. It is imperative to remember that a significant portion of children apparel is purchased in discount stores. Therefore a presence in such stores is a sine qua non for Huggalugs. What Huggalugs needs to ensure is that the wholesalers provide timely deliver of the requisite products in a timely manner and that the retailers do not under cut on prices. For better coverage of the market, Huggalugs can adopt a multi channel distribution model. The company’s products are already available in the brick-and-mortar stores and the online store. Additionally Huggalugs could employ the catalog shopping method. In terms of delivery of products ordered via this channel, the company can use the same logistics as it does in case of online sales. Few years down the line, the company can look at opening company owned stores as well. Promotion While Huggalugs can advertise in newspapers, an advertisement in The Australian Women’s Weekly should also bring in good results. Additionally Huggalugs should look at out –of-home advertising on billboards, bus shelters, news racks, mall kiosks etc. Associating itself with any sports events, painting competition etc. especially for children would get good mileage for the company. Huggalugs can distribute its own apparel as prizes to the winners of these competitions. A small token from its own product line can be given to all the participants. The company should ensure that such events are covered by the local press so that the company gets positive publicity, which any day, has a bigger impact than advertising. To build long term brand preferences and customer relationships, Huggalugs can use one or more of the sales promotion tools like coupons and contests. These techniques help prop up sales instantaneously. Huggalugs can look at devising a loyalty program akin to what major retailers and airlines have. Under this scheme, a customer would get loyalty points on the purchase of any Huggalugs product. The customer would have an option to redeem the points so accumulated with any Huggalugs product. All said it is imperative to remember that the marketing mix is dynamic and should be constantly reviewed and modified according to the need of the hour. References Delaney, J. 1994, Crafting a marketing plan that works, Earl G. Graves Publishing Company, Inc, United States, New York. De Simone, M. 2002, "How distribution strategies are evolving", National Underwriter.Life & Health, vol. 106, no. 44, pp. 21-21. Forbus, R. & Hanis, M. 1997, "Advertising, promotions and public relations", Independent Banker, vol. 47, no. 8, pp. 27-27-29. Fratto, G.M., Jones, M.R. & Cassill, N.L. 2006, "An investigation of competitive pricing among apparel retailers and brands", Journal of Fashion Marketing and Management, vol. 10, no. 4, pp. 387-387-404. Huggalugs Funky gear for little bodies. [Online]. Available at http://www.huggalugs.com.au/ [Accessed 28 September, 2011]. "Streamlining apparel distribution", 1994, Apparel Industry Magazine, no. 01921878, pp. QR10-QR10. Read More