The Abercrombie and Fitch and Burberry Australia - Assignment Example

?Fashion retail marketing: The Abercrombie and Fitch and Burberry Australia Table of Contents Table of Contents 2 Executive Summary 3 Fashion Retail Marketing: The Abercrombie and Fitch and Burberry Australia 4 Introduction 4 The Abercrombie and Fitch Australia 5 Burberry Australia 5 Retail Management 5 Types of Retailing 6 Definition of Retail Marketing 6 Marketing Role of a Retailer 6 Retailing Strategy 7 The Product 8 Quantity 8 Location 9 Timing 10 Pricing 10 Appeal 11 Conclusion 12 Executive Summary The fashion industry has been undergoing numerous changes and development in the recent years. Since the inception of mass production of clothes, the clothes and textile industry has undergone significant changes to where it is today. Fashion is an evolution of clothing industry, due to increase in customer tastes and preferences. The mode of marketing products has also significantly changed. Many companies in the modern day opt for personalized retailing, and especially the fashion companies. The globalization of modern business has necessitated the use of different modes of retail marketing, with retailers exploiting any available opportunity. Currently, the internet is robust with fashion items being advertised by different companies. It is due to these developments that this paper sought to look at two leading fashion companies that operate retail outlet stores in Australia, Burberry and Abercrombie and Fitch. This paper is generally concerned with how the retail outlets of these two companies have strategized themselves to reach their customers. Fashion Retail Marketing: The Abercrombie and Fitch and Burberry Australia Introduction The fashion industry is a very dynamic industry, due to the many changes that keep taking shape in the business. The uniqueness of this business form other businesses is the fact that the manufacturers of fashion items, inclusive of clothing and other items of fashion is the common ideology of change. Contrary to the traditional perception of the fashion design as a means of fulfilling needs, the modern perception is different, with its intention purpose being lined in conception, production, promotion and the marketing styles in the basis of the customer’s desires. While people’s tastes keep on changing over and over, the manufacturers keep on inventing new fashions with time. With the changes, old fashion items become obsolete and cannot be Fashion is defined by the key players who are involved in it. The interwoven web of the individuals who are part of the industry including designers, stores, factory workers, seamstresses, tailors, embroiders of garments, the press for publicity, fashion analysts and critics, the various models involve in showcasing the garments such as fit models and runaway models, textile manufacturers, pattern makers and sketch makers, and most importantly the customers. The changing tastes and customer wants are what determine the fissionability of the fashion industry. Customers’ wants change by virtue of their attire, or through the icons’ standards. It is with this knowledge that anybody who considers investing in the fashion industry ought to be ready for the dynamics in the market. Losses are inherent and more probable if a retailer do not understand the exact needs of customers, while keeping an eye on the changing market trends in the fashion designs. This paper looks at the two major fashion retail outlets in Australia, the Abercrombie and Fitch Australia and Burberry. The Abercrombie and Fitch Australia Men and women love fashion, and especially the Abercrombie and Fitch garments. “Abercrombie and Fitch” (2012) observes that the young and the youth are willing to spend any amount of money just to expand their collection of the Abercrombie and Fitch. Fashion is classified in terms of class, with the high class setting standards and assuming iconic status in the society, and this is exactly what the company does to its customers. It elevates the customers’ decency and gives them a sophisticated look. The company has carried out product diversification and modification to offer a variety of products such as Abercrombie & Fitch, Hollister, Abercrombie kids & Gilly Hick. Due to its high strong products, it enjoys a strong brand image to the public, giving its outlet shops an upper hand in comparison to other outlet stores. Burberry Australia Burberry Company offers a wide range of products that are durable, and can be used for outdoor activities. The durability of their products makes customers opt to buy them, especially the garments, giving them a value for their money. Their Australian outlets stock a variety of their products such as clothes, fragrances and accessories (“Burberry” 2013). Retail Management Bhatia (2008) defines retail management as a set of steps and activities that are conclusive that are used to sell a product or a service to customers which they can use for their personal use or that of the family. Marquardt, et al. (1983) pointed at the risks involved in the retail business. They were of the opinion that a successful retail manager is one is able to lead the business through the various risks experienced. Types of Retailing There are three types of retailing that are commonly used, which include traditional retailing, organized retailing and modern retailing. According to Madaan (2009), modern retailing is the combined use of both physical stores and the internet to sell products by a retail store. Baker (1998) defined modern retailing as the use of mailing and faxes to buy goods and services. Traditional retailing is the use of the traditional methods of selling products to consumers, which generally mean the use of supply stores to market products. Organized retailing on its part refers to the trading activities of licensed retailers who are registered and pay the necessary taxes involved in retail business (Rama, 2011).  Definition of Retail Marketing Retail marketing is making products available to the end consumer for their personal use, and is part of the supply chain (Bhatia, 2008). The main purpose of retailing is the distribution of goods and services from the manufacturer to the consumers. They are the final group in the supply chain. It is part of the marketing strategy since it plays a major role in the in ensuring that the product reaches the target consumers. The importance of retail marketing is the fact that it matches the end user with the manufacturer, acting as an intermediary between the two groups involved in business. According to Sullivan & Adcock (2002), a retailer is a person or organization that is involved in interaction with the consumer in the supply network, whose main aim is to meet the needs, wants and desires of the a specific group of customers. In the fashion industry, retailing typically involves the transfer of ownership of the clothes and other accessories to the customers. Marketing Role of a Retailer Marketing is not just the sale and the promotion of goods, but rather all the activi9ties assumed by a supplier that are aimed at satisfying the needs and wants of the customers. The best way of achieving this objective is offering an acceptable, yet affordable combination of goods or services. Offering the goods at the right time and place is the best way of achieving this goal. The right place gap is filled by retailers who offer goods close to the customers’ reach (Sivakumar, 2007). Retailing involves direct contact with the actual consumer, which is a distinguishing feature of retail. The fact that retailers are in direct contact with the customers, they are able to deduce and note their needs and desires, which they can subsequently communicate with the manufacturers to improve customer satisfaction (Lamb, et al., 2012). Fashion retailers come handy in feeding their manufacturers with the information regarding the tastes and needs of end user customers. Single retail outlets, either selected by manufacturers or owned by the manufacturers are best in giving feedback regarding the field to the manufacturers. This applies to the retail shops of both companies in question. The fact that the companies are not only involved in trendy wear only, but also in event swear design is a good way of reaching the potential customers at the heart of Australia and the common people living in the major cities of the country. The impossibilities of any company setting plant in any other country are what exactly necessitate the use of retail outlets by companies. Retailing Strategy Knee & Walters (1985) stated that the best way to strategize in the retail business is through diversification of the various products offered by the retail store. Mathur (2010) tends to think differently, giving more relevance to creativity for success in any business. According to him, creativity is what distinguishes a successful business from an unsuccessful business. It involves the defining itself in a distinctive characteristics from other retailers by developing a strategy for identifying the ways and means of satisfying the preferences of customers. This strategy is what constitutes a retail mix, and involves careful consideration of products to sell, the quantity of the product to avail to the consumers, the location in which to sell the product, time of a making sale, pricing of the product and the appeal that is aimed at captivating the interests of the customers (Mathur, 2010). The difference between the companies’ marketing strategy and retail strategy is that while the marketing strategy aims at The Product According to Lamb, et al. (2012), retailers strive to offer products that are appealing to customers by matching their tastes, quality and function properly. In some instances, the product ought to meet the psychological and emotional benefits of consumers such as prestige and convenience Burberry Company’s selected outlets major in clothes retail, fragrances and fashion accessories. The shops available around Australia ensure that they stock the original Burberry products. A reason why any person is willing to pay any amount of money for Burberry’s products is their high quality garments and longevity of their products. Uniqueness of their products like outdoor attire is a reason good enough for people’s preference on their products on offer. Abercrombie & Fitch is a retail chain that has carried out market research and understands the kind of products to stock. The product diversification and modification of the company offers a variety of products such as Abercrombie & Fitch, Hollister, Abercrombie kids & Gilly Hick, which people love. Many people, especially the young love to associate with Abercrombie & Fitch products due to their trendy nature. By the virtue that the company enjoys a strong brand image to the public, its products are priced at a higher value than other products, but still their demand is high. Quantity Contrary to the wholesalers who sell goods in quantities that are too large to have any significant use to individuals or families, retailers on their part offer products on reduced quantities which are convenient to the end consumers of their products. The retail outlets get bulk products from the manufacturers and then stock in single form or small quantities that are useful to their customers (Lamb, et al., 2012). Burberry is an outlet known to do this practice, by offering the company’s perfumes at various quantities in order to meet the demands of their customers. This is a practice known as repackaging where, large volumes of goods are repackaged to meet the requirements of consumers. Not every designer perfume user can afford to buy the products in large quantities, just like they are shipped from the manufacturing plant. Some will prefer little amounts of the same product, which are offered at a reduced price. To maintain these types of customers, the company has allowed its retail outlets to repackage colognes in quantities that are affordable to the people. Location According to Sivakumar (2007), retailers’ locations should be convenient to the customers, by accessibility and time. The biggest consideration by retailers when setting up shop is the proximity to large numbers of customers. These are most probably large towns and cities. The size of the store matters a lot to the retailers, in respect to stock and display of their goods. Products of Abercrombie & Fitch are found in one roof. In short, theirs is a one stop shop for any type of product that a person needs. Their location in the heart of the Canberra and other major towns and cities such as Sydney, Newcastle, Gold Coast, Adelaide and Melbourne is a good placement method of ensuring that their products are available to as many people as possible. Customer targeting ensures that a business is as close to a large number of people as possible. The fact that a large number of rich people live in cities is reason enough why these retail shops to be located where they are found today. Burberry Company makes use of its own shops as distribution outlets. This is a strategy of ensuring that they offer customers first class services and can receive feedback upfront from their customers. The retail shops of Burberry targets largely wealthy populated cities, avoiding smaller less wealthy ones, which the company believes are the stronghold markets of its products. Timing The advantage of a retailer is that they avail products to their customers at the right time when the customers need them. They study the purchasing patterns of customers, and then adjust their working hours, change their levels of inventory, and their promotional programs to accommodate their customers. Successful retailers are those who identify the special times that mostly generate opportunities to sell their merchandise such as holidays, the seasons in which various products are in higher demand than others, special occasions such as weddings and school graduation ceremonies. Sivakumar (2007) advises that for a retailer to be a successful timer, good records must be kept in order to keep track of the types of merchandise that are required in specific time periods in the past, as well as keeping track of what is does not sell in the current season. Good timing ensures high returns to the retailer, as they take opportunity of the peak seasons. Pricing Different retailers use different strategies to attract different customers. While some offer low discounts to prices to bring on board more economically customers, others set high prices to convey an upscale image of their products. Fashion comes with expense, and thus, it is unlikely to find cheap fashionable commodities in any part of the world. Fashion products are designed for the high end market, who does not feel the pinch when shopping for prestige. Burberry use competition pricing by pricing at similar prices with competitors in the market, a strategy that the retail outlet passes on to the end. The company’s products are very expensive to maintain brand image of the company, a marketing strategy that is aimed at maintaining the high class customers. Abercrombie & Fitch garments are priced at very high prices to create a strong brand image. Little is done by these retailers in attracting the low market users, as their price tags show this trend. Quality and price go together, and thus, as they charge exorbitant prices to their customers, they ensure that they provide high quality and durable products worth the money. Appeal Madaan (2009) observes that retailers spend extra time and effort in creating an image of their stores, or stocking products that customers find more appealing. They use promotional techniques such as advertising and public relations to create awareness campaign and spark interest in their products. These techniques are either aimed at attracting potential customers to their stores, providing valuable information about the retailers and persuading customers to buy their products. The emerging trends in marketing such as internet have enabled companies to improve their product awareness to the people. Bhatia (2008) notes that internet provides retailers with both an opportunity to market their products as well as sell them to potential customers. He notes that with the increase in the ownership of personal computers, more and more retailers are likely to consider using internet as a marketing tool. Abercrombie & Fitch embarked on the uses the internet to market its products through company website. The Australian outlets run and operate websites that inform their customers on the type of products available and are in stock at any particular time. To make their customers even more satisfied, the retailers also offer online marketing and sales w here, customers who cannot reach an outlet store can purchase goods online, which are shipped to them. Physical evidence of the company is felt by the many outlets that it operates in the country, while the high popularity that the company enjoys the company enjoys is an indication of the people’s acceptance of its products. Burberry in the past had majored in stocking men products, but diversified to women and children garments. The diversification has won the company more customers, since people of all ages and both genders can buy their products. The use of celebrity endorsements as a promotion tool appeals to the people more, as they like being associated with them. For more publicity, the company uses banners and websites as tools for advertising. Conclusion Retail marketing has numerous advantages to the manufacturers. Not only do they offer guaranteed outlets for their products, they also act as a link between the manufacturers and the consumers. The phenomenon has evolved overtime, to a point that big manufacturing companies operate their own retail outlet stores. Their increased importance to manufacturers has led to them investing heavily in their success, just like the two companies, Burberry and Abercrombie and Fitch, Australia. References “Abercrombie and Fitch.” (2012). Abercrombie and Fitch Australia. Retrieved from www.auabercrombieonline.org  “Burberry.” (2013). Burberry Australia. Retrived from http://au.burberry.com/store/ Baker, M. J. (1998). Marketing: Managerial foundations. South Melbourne: Macmillan Education Australia. Bhatia, S. C. (2008). Retail management. New Delhi: Atlantic Publishers & Distributors. Knee, D., & Walters, D. (1985). Strategy in retailing: Theory and application. Oxford: Philip Allan. Lamb, C. W., Hair, J. F., & McDaniel, C. D. (2012). Essentials of marketing. Mason, Ohio: South-Western Cengage Learning. Madaan, K. V. S. (2009). Fundamentals of retailing. New Delhi: Tata McGraw Hill Education Private Limited. Marquardt, R. A., Makens, J. C., & Roe, R. G. (1983). Retail management: Satisfaction of consumer needs. Chicago: Dryden Press. Mathur, U. C. (2010). Retail management: Text and cases. New Delhi: I.K.International publishing house pvt. ltd. Rama, M. R. K. (2011). Services marketing. New Delhi: Pearson. Sivakumar, A. (2007). Retail marketing. New Delhi: Excel Books. Sullivan, M., & Adcock, D. (2002). Retail marketing. 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