Marketing Plan for Rent a Runway - Essay Example

?Marketing Plan for Rent a Runway Executive Summary The ability to reach new markets with fashion is an objective which is strongly considered for a variety of corporations. Looking at new ways to create the proper fashion statement and linking to fast fashion is one of the alternatives that are combined with this. The company Rent a Runway, is one of the fastest growing alternatives for fast fashion. This is an online company which provides runway and high – end fashion for the season that is rented online then given back to the company. The basic objectives are quickly leading to the corporation being a leading stylist for those interested in fashion. This report will analyze the strengths of this company in creating the right options for marketing while offering new ways and initiatives which the company can use to continue to expand the product line and interest in the runway. Business Mission The basis of Rent a Runway is to assist individuals who like high fashion but are on a budget or only need a fashion item for one occasion. The objective is to offer individual options from professional stylists while assisting with fashion forward looks for any occasion. The mission is based on women being able to look their best at any occasion while providing fashion forward advice and alternatives to assist with the best looks for any occasion. The team has expanded to designers and professionals that are able to assist in creating the perfect outfits for women and men that are preparing for any occasion (Rent the Runway, 2011). External Marketing Audit: Market Competition The fashion items that are offered through the Internet are continuing to grow and bring attention to the runway items of the season. The main competition is coming from emerging fashion stores that are able to offer luxury and brand name items at a lower price. These are combined with wholesale stores that offer even more opportunities for those looking at different fashions and designs. These are known to move higher into the competition based on price, types of designers available and the region which they are located in. They are furthered with competition that is based on finding the right clothes at a lower price. The current marketing competition for fashion is based on an emerging market that is expected to grow by 7 – 15% by the year 2020. These demands are based on the ability to get low priced fashions that are in style for the season and based on luxury and brand names at a discount (BofF Team, 2011). The continuous growth and expectations for online portals is causing several to turn to Internet solutions for their business. There is now advice that is being sent to those who are looking for new ways to promote business to move online, including retailers and those interested in the fashion business. This is leading brick and mortar retailers, wholesale businesses and others involved in creating other links to customers to set up businesses online. This is combined with emerging designers and brand names that are creating the same links to an online presence. Each of these are combining strategies for a stronger presence, leading to competitive alternatives based on customer loyalty and a growing global market. The association is based on creating a stronger sense of customer loyalty through the businesses that are working together (Haley, 2011). Internal Marketing Audit The association with Rent the Runway is one which is taking the main trends with the online presence among fashion lovers and expanding the market into one that holds several strengths. For the online portal to continue to work; however, there is the need to extensively examine the marketing tactics and alternatives that are available. By doing this, there is the ability to create a stronger presence while moving forward with the competition that is online. Operating Results The operations that are a part of the online portal are based on a process that is required for an individual to be a part of. When one goes to the website, they are immediately prompted to sign in to the website without going to a different area. This is followed by one having the capability of finding the latest designs and fashions after the free registration. There are over 95 designers to select from and the ability to rent instead of own cuts back on the price by 90%. When one picks the item, they request a delivery date and fit with the ability to keep the item for 4 – 8 days. There is also a free back up size that is sent with the item. After one has used the rental for a period of time, they are required to send it back for others to use. The clothing is dry cleaned for the next use. All items are available by the type of occasion one is going to and combines with designer fashions that one can choose from. The main advantage that is created with the operations is the relationship management that takes place. The need to register, followed by the specifics of rental agreements, including a back up size, and followed by the process for dry cleaning, are all specific to helping customers get exactly what is needed. These up front processes are followed by the easy navigation on the site, ability to connect to others and security that is associated with payment and getting and sending out the items. The ability to offer more with the customer relationship management, while personalizing the website for better alternatives, is the main strength that is created and is specifically known as an essential part with e – commerce (Smith, 2008: 257). Strategic Issues Analysis While there are a variety of strengths associated with the fashion retail, the strategy that is associated with the operations also has to be considered. The operations of the business can change the reputation which it has and may lead to different outcomes that are associated with the business. This is furthered with the competition which may be able to find and work with the same strategy or which takes different problems as a main key for the policies required. The policies and communication are the most essential competitions with developing the strategy, specifically when working with e – commerce solutions (Heath, Palenchar, 2006: 93). For Rent the Runway, the problems come with the high risk that is a part of the strategy. Being able to send the items at a specific time, having them dry cleaned each time and creating the right rental agreements through the operations may be problematic if not monitored correctly. This is followed by other operations with the fashions that may not be met, such as size differences. While there are some policies that are designed to assist with this, many potential customers may have difficulty in building trust through the strategic operations created. Marketing Mix Effectiveness The marketing mix that is used by Rent the Runway is one which also creates an advantage among competitors and works toward new solutions that are associated with the products available. When examining the marketing mix, it can be seen that the main advantages are with the product and the price that is available. Combining this with other factors allows for a stronger opportunity for the online website. Product – The product of Rent the Runway has an immediate advantage because of the runway products and designer brands. These are often difficult to find or may be overpriced. The advantage with this online website is with the ability to create the right image through the brand name items. The weakness; however, is with the limited time of having the product for only 4 – 8 days while having used clothing items that may have been rented by others. While there are a variety of operational strengths with the brand name, receiving brand name loyalty from the website may cause questions to the operation. Promotion – The association with online products for Rent the Runway offers more solutions and opportunities. There is online promotion which occurs through the website, social media, PR and other formats that are online. This is combined with coupons and promotion codes that are continuously offered through the online portals. The different facets of online portals are used to help with the right promotions needed. However, the promotion doesn’t combine with offline solutions that are needed, such as working with fashion magazines or other areas for the right alternative. This may make it difficult for those interested in fast fashion to find the necessary outlets and to connect correctly to the needed format. Price – The price that is associated with Rent the Runway is another factor which holds a main strength with the products offered. The price is set back by an average of 90% for the fashion items, specifically because they are rented for the week then returned. The price indicator is one of the main ways to find interested individuals who may want to look at their best for one occasion but won’t use the items in the future. However, the reduction by 90% for a rental is often at a higher price, specifically because the fashion items have a higher rate then other types of clothing. While this may fit into the budget needed for others, it doesn’t provide the correct solutions for others who are trying to find clothing that lasts for a longer period of time for every occasion. This may limit the options available to those using this specific site. The mentality of others may be to pay more so the fashion is always available, as opposed to renting and returning the item. Place – The place that is associated with the Rent the Runway is all available through the online portal. The advantage of this comes with the convenience of use and the ability to have a central location for the shipping that is required. However, fashion often becomes problematic with the place, specifically because there is not the ability to try the different dresses on or to have the right appearances seen in physical form. Rent the Runway has this covered with the complimentary size and the ability to work with designers online. However, building the right level of trust toward the products requires continuous implementation of the right combination for the fashion that is online. Marketing Structures and Systems The marketing structures and systems required with technology and to work online is based on moving into multiple levels of connecting with others. This is based on the offline promotions through advertisements and promotions. This is furthered with online portals that have various levels, including direct marketing, social media, indirect marketing and search engine friendly results. For this to work correctly, there is the need to add in socio – technical transformations, which is inclusive of connecting with others at a personal level and with the use of innovation processes and structures incorporated with the specific needs. The incorporation of multi – level structures with the system used is then able to provide calls to action to potential customers while working effectively with those who are online and looking at innovative features for fashion (Markard, Truffer, 2008: 596). The multi – level structure that Rent the Runway has is one which incorporates a variety of alternatives through online tactics. When one signs in, their information for future promotions is available, allowing for direct marketing to be easily associated with the products. This is combined with the RTR insider, a magazine, blog and video type promotional item that is added into everyday. This connects to social media and Web 2.0 portals that continue to create links to those who are interested in different ideals with the products. The Web 2.0 alternatives are combined with Google Adwords and connections to coupon sites that allow individuals to take off from the rentals when they begin to take the items. This offers even more with the items available while connecting in a variety of portals to grab interest. The promotions are furthered with partnerships, such as with US Magazine, that are offering more promotions and deals to enhance the website and items which are available. SWOT Analysis Strengths – Even though there is a large amount of competition for fashion, Rent the Runway is one of the only websites that has this organizational structure. The ability to take 90% off, rent for a given period of time and to have the latest fashions is creating a different ideology for those who are interested in fashion clothes. The strengths combine with the multi – layered marketing that is allowing the Rent the Runway to have a stronger presence while building the needed alternatives for those who are interested in developing a different fashion statement. Weaknesses – While Rent the Runway has a variety of advantages over competitors, there are some association that may not offer the best deals. The first is the online presence that doesn’t allow women to try on the different looks while getting the apparel. While there are some ways to offer compensation for this, there isn’t the ability to guarantee the right fit for the rental. The rental fees aren’t low enough to provide compensation for the problem and may lead to conflicts of interest by customers. This is combined with the risks that are associated with the organizational processes, specifically from using only the online portal. Opportunities – The position that Rent the Runway is in is leading to new innovation and development for online portals. The increase in online shopping and the expectations for the next years can help the project to continue to grow. It is already noted that the online website is continuing to increase in sales and interest while allowing several of the shoppers that are online to have a different way to build the right look for every occasion. Threats – The threats associated with Rent the Runway come from the continuing competition that is online. Wholesale deals, coupons, promotions and brand name items that are online are emerging into the market place and creating a high amount of competition for those that are interested in online shopping. The competition not only offers other lower deals but may compete with offering low prices for brand names that individuals can own instead of rent. The mentality of the target market may make a difference with the online competition that is associated with those who are a part of the fashion industry and which are looking for different alternatives for finding the right clothing. Marketing Objectives The marketing objectives will be to create a stronger market with the online presence and to have a stronger way to reach those who are interested in the clothing line. Specifically, the marketing objectives will consist of: Finding new avenues for multi – level marketing Expansion into a global network for marketing Ability to remain ahead of the competition through the organizational structure Initiatives to build trust through online portals The objectives will be based on working with the nature of the online market by creating a stronger presence with those who are associated with the fashion market. Strategic Thrust The strategic thrust that will be used for the Rent the Runway will be based on innovative forces that build trust among consumers. The initiative will be combined with enhancing the marketing to offer more alternatives to those who want to try the portal. The trust will be based on offering more initiatives to show that the rental scheme works with the online fashion while building a stronger presence with how the system works. The innovation will be based on the concept of adding in product innovation, flexibility and a connection to the culture that is associated with the main structure. This will provide even more alternatives to those interested in creating more opportunities while offering more fashion items that individuals may be interested in. The main initiative will be based on building an environment that enhances trust and highlights the innovative system that is associated with the business (Laforet, 2008: 753). Strategic Objectives The strategic objectives are as follows: Build more trust among consumers shopping online Build a larger target market of those interested in renting fashion clothes online Connect to the cultural needs of those shopping for the clothes Create a stronger environment and connection to the website for the initiatives used Enhance the structure of the website and with the market to ensure positive results from consumers Core Strategy The strategy used will begin with the website that is developed. Currently, the structure includes a basic sign in and the ability to browse through the commerce shop. However, the trust can be enhanced with the website by upgrading into different formats that are associated with this. The credibility is the first area which can be enhanced, specifically by using testimonials, feedback forms and community based options within the website. Creating a sense of dialogue can then assist with the overall look and feel of the website while helping with the reputation of the company. The second area is perceived use. The security and the feedback can both add into this to ensure that the system which is used is not high risk while adding into the overall components of the website. The risk is the third change to make. This has the same concept of adding in testimonials and feedback forms while creating trust through security and credentials that are highlighted throughout the website (Corritore et al, 2005). The second component of building the right marketing strategy is to enhance the current multi – level model of advertising. The basis will need to change to creating multidimensional trust that can be used for the website. This will be used to create different perspectives of the website and to create a stronger sense of what is offered through the website. This will further enhance the customer interactions that are a part of the online exchange. The trust building mechanisms require the different levels of modeling to be enhanced with personal interactions and relationships while creating a stronger presence with the available alternatives through the online portal (Kim et al, 2005: 143). This can be enhanced through personal advertisements, ability to link to the clothing and other alternatives. For instance, having prize giveaways for individuals and advertising this on social media, or showing specialized items and linking this to individual buys can help to increase the amount of activity on the website while building more trust among consumers that are interested in the products. Target Market The current target market for the Rent the Runway website is for women ages 15 – 30 and a secondary category of women ages 30 +. The idea of having high end style for specialized occasions is the main area which the Rent the Runway focuses on. At this point, there isn’t the need to expand the market. However, specialized advertising campaigns can be created for specific products, such as having specialized dates for shopping by occasion. For instance, there are divisions of work date and honeymoon dresses. Highlighting these on different portals and in specific seasons will increase the activity of the current target market while finding more prospects for the available clothing. Competitor Markets The competitive markets are based on others who have wholesale stores and which offer designer fashions at a competitive price. These are continuing to emerge in the market and are currently one of the strongest areas for Internet shopping. It is now known that an average of 80% of individuals between the ages of 32 – 44 buy products on the Internet. An average of 32% of this is retail clothing shopping and is known as the second highest type of product bought online (Williams, 2010: 1). For Rent the Runway, this causes a large amount of competition from others who have retail clothing online and which are emerging brick and mortar businesses with the available online options. This is combined with the growth that is expected in the next years and the push for fashion designers and clothing stores to emerge their specific market with the online retail alternatives that are a part of the shopping experience. Competitive Advantage Even though there is a large amount of online retail stores in clothing, the organizational design of Rent the Runway helps to create a niche that has no competitors. The structure of renting the latest runway clothes and the ability to pay 90% less than what is expected for a week long use is offering more alternatives to those who are in need of high – end fashion in a short period of time or for one occasion. This advantage is one that is not yet matched online and is able to offer those who are interested in the different types of clothes to tap into the high – end fashion at a price that is affordable for the occasion. Marketing Mix Decisions The marketing mix that is associated with the product is one that has a strong basis but which can be expanded. The products and price are the two highlights, specifically with offering high – end designer clothing at a low end price. This is combined with promotions that combine the multi – level marketing scheme and which provide better alternatives through the use of the Internet. These need to be continued in order to assist with even more alternatives. The expansion into the new marketing endeavors also leads to an expansion of the available alternatives for the online marketing mix. The multi – level marketing scheme and promotions needs to expand to include a personalized option to those who are interested in the online alternatives. Specifically, the company should create an offline promotion through magazines or runway areas. This allows women to try on the clothes if they don’t want to rent or are uncertain of the products. This is combined with the promotions that will help to build trust and recognition among those who are associated with the store. Combining this with enhancing the website and building personal interactions through social media provides even more options to those who are looking for better alternatives to fashion. Budget The advertising and promotional budget will consist of $5000 per month based on the newer promotions and ads that will be a part of the website. This will begin with adding a testimonial and reviews section of the website. This will continue with the advertising and promotions maintained on each of the social media portals and through the direct marketing. These will consist of personalized ads and promotional deals that will expand the target market. Each of these will connect to events that will allow women to try the products before deciding to rent, specifically to show more trust and options available. Combining these several portals for advertising will then build a stronger response to those interested in the products. Organization and Implementation The organization and implementation of the advertising will consist of 6 week increments for the advertising. Phase 1 will be to add in the different alternatives to the website for reviews and to connect to individuals. There will then be a series of 6 week advertising campaigns, each which will focus on a given segment or target market. For instance, specials on work clothes may be the first campaign, followed by 6 weeks focused on wedding clothing. Each of these will fit with the specific season and will work with continuous maintenance for the campaign. Within each one of these will be personalized campaigns, such as giving one woman a free item then advertising what the winning is. By doing this, more direct advertising will be used while building customer trust and loyalty. After three advertising campaigns are complete, there will be a review to determine the effectiveness of this, followed by slight changes to increase the interest in the website. Control The control and monitoring will be done first with the preparation of the advertising campaigns. This will be defined by having one statement or set of ideas which are expected over the six week campaign. This will be followed by monitoring of the results, such as the ROI and the activity on the website. Analysis and traffic will be created to build the right alternatives in finding the results and in recognizing the trust among customers. All of the reviews will be monitored before going into final use; however, these will also help to add into the campaigns and the growing structure of the website. The ability to monitor, evaluate and respond to the main website will then create a different response to the main campaign. References Aspers, P. (2008). “Order in Garment Markets.” Acta Sociologica 79 (1). B of F Team. (2011). “Merchant Prince, Clothes Without Frivolity, Spartoo’s Growth, Coco’s Story, Quiet Entrepreneurship.” Business of Fashion (October). Barnett, J, G Grolleau. (2008). “The Fashion Lottery: Cooperative Innovation in Stochastic Markets.” University of Southern Indiana. Cillo, P. (2008). “Search Styles in Style Searching: Exploring Innovation Strategies in Fashion Firms.” Long Range Planning 58 (1). Corritore, Cynthia, Robert Marble, Susan Wiedenbeck, Beverly Kracher, Ashwin Chandran. (2005). “Measuring Online Trust of Websites: Credibility, Perceived Eases of Use, and Risk.” AMCIS 2005 Proceedings. Easey, M. (2008). Fahion Marketing. New York: Routledge. Haley, Victoria. (2011). “The Best Things Come in Online Packages.” PR Fire (October). Heath, Robert, Michael Palenchar. (2006). Strategic Issues Management: Organizations and Public Policy Challenges. New York: Sage. Kim, Dan, Yong Song, SB Braynov, HR Rao. (2005). “A Multidimensional Trust Formation Model in B – to – C E-Commerce: A Conceptual Framework and Content Analysis of Practitioner Perspectives.” Decision Support Systems 40 (2). Laforet, Sylvie. (2008). “Size, Strategic, and Market Orientation Affects on Innovation.” Journal of Business Research 61 (7). Markard, Jochen, Bernhard Truffer. (2008). “Technological Innovation Systems and the Multi – Level Perspective: Towards an Integrated Framework.” Research Policy 37 (4). Rent the Runway. (2011). “About Rent the Runway.” Retrieved October 23, 2011 from: http://www.renttherunway.com/story. Smith, Alan. (2008). “Online Payment Service Providers and Customer Relationship Management.” International Journal of Electronic Finance 2 (3). Sull, D. (2008). “Fast Fashion Lessons.” Journal of International Fashion 19 (2). Williams, Alec. (2010). “Online Shopping Statistics.” Fifth Gear Retrieved October 23, 2011 from: http://www.infifthgear.com/news/blog/2010/08/02/quick-online-shopping-statistics/. Read More