Competitive and Marketing Landscape for Steve Madden - Essay Example

? IMC- Steve Madden inserts his/her s Steve Madden represents a well-known small business in the footwear industry with a strong online and physical presence. The company is primarily associated with selling cutting-edge and fashionable items. However, the company is under threat from various entrants in the market such as BCBG that competes along the same lines as Steve Madden making points of differentiation less visible. Also, competitors such as Nike represent an untapped segment for Steve Madden- that of athletic and sport wear. Nevertheless, Houston represents a booming market for Steve Madden with a high proportion of working population with higher incomes. The paper reviews the internal and external situational factors affecting Steve Madden. The insights offered by this research can provide a basis for further in-depth research regarding the competitive position of Steve Madden. Keywords: Steve Madden; positioning; target market; marketing efforts Introduction The small business chosen for the purpose of this essay is Steve Madden which has a strong retail presence in Houston, Texas. Steve Madden enjoys a strong foothold in the footwear industry and is primarily known for the novelty of its products at a reasonable price. This paper discusses the competitive and marketing landscape for Steve Madden along with the economic, social, technological and demographic factors affecting the business. Part 1: Situation Analysis Product/Service Overview – strengths, weaknesses Steve Madden offers an assorted range of accessories and shoes for men, women and children. It enjoys high brand equity by virtue of its cutting edge styles and fashion statements (Zappos.com, 2013). Another strength is that the products are sold through the company’s own stores, department stores as well as company website, thereby increasing availability of its products. Furthermore, the price matches quality thereby offering value for money for customers. However, the products remain beyond the reach for majority of the customers. Also, repetitive styles result in monotony. Current positioning in the market Steve Madden has positioned itself on the bridge between high-end and mid-range fashion. It currently enjoys a dominant market position with Steve Madden being ranked second to Nike as the customer’s preferred footwear brand (from 2002-2007) (Piper Jaffray Companies, 2013). Target Market Steve Madden targets a broad range of customers. Its core market for women ranges from 16-45 years whereas the sub brand “Stevies” is focused on girls aged 6-12 years (T. Sloan, personal communication, September 02, 2013). The target market for men includes those aged 20-40 years (T. Sloan, personal communication, September 02, 2013). These individuals are primarily fashion conscious individuals with high annual incomes but do not want to splurge in expensive, high-end fashion. Less expensive knock-offs are offered for such customers. Current marketing efforts (traditional, interactive, etc.), messages and effectiveness The company’s marketing efforts can best be described as both traditional and interactive. It has partnered with Katy Perry under “Steve Madden Music” campaign which also featured live performance by Shwayze, a rapper. The company is actively engaged in mobile marketing as well as digital marketing through Facebook where customer feedback is taken via comments on videos, pictures and other content posted by the company. Google ad words and Twitter are also used to broaden sharing of Steve Madden’s content and deepening relationships with customers. Part 2: Competition The three major competitors for Steve Madden are BCBG, Nike and Nine West. These shall now be analyzed one by one. BCBG- Product/Service Overview – strengths, weaknesses Primarily known for its high quality, fashionable apparel, BCBG has increased its offerings to include handbags, shoes and accessories thereby offering high product variety. The mid-range price points appeal to a broad range of customers. Both casual and formal wear are offered (Andrea, personal communication, September 01, 2013). On the other hand, the extensive distribution strategy translates to lost exclusivity. Also, there is often repetition of the same styles during seasons. Current positioning in the market Currently BCBG has been positioned as a mid-range and sophisticated brand as opposed to being hip and trendy. Target Market BCBG clearly targets a mature audience primarily women aged 18-30 who are price-conscious (Andrea, personal communication, September 01, 2013). Current marketing efforts (traditional, interactive, etc.), messages & effectiveness BCBG has hired top models and stars including Madonna, Sharon Stone and Uma Thurman to endorse its brand along with endorsements through popular television shows including “FRIENDS” (Hall, Carne, & Sheppard, 2002). The company has effectively used both traditional media (ads on billboards, magazines and television) along with interactive media as reflected in its presence on Facebook and Twitter. The social media team also works with bloggers to increase its online presence and fan following, thereby generating buzz for its products. NIKE- Product/Service Overview – strengths, weaknesses An iconic sports apparel and footwear retailer, Nike promises ideal comfort and utility for athletes through its products. It offers products through its own stores as well as online. However, its high price points and limited product portfolio act as potential weaknesses. Current positioning in the market Nike is currently positioned as a top notch brand for successful, winning athletes and as offering high quality for a high price. Target Market The primary market for Nike is athletes and sports institutions for whom the company provides its offerings. Customers possessing product intimacy are targeted -- these are not price conscious. Current marketing efforts (traditional, interactive, etc.), messages & effectiveness Nike has partnered with athletic institutions, including college teams for sponsoring sports events. Celebrities such as Ronaldo from Soccer and the Golf superstar Tiger Woods have been used to endorse the brand (Bernstein, 2009). Traditional advertising is primarily used as the specialized nature of product does not warrant interactive campaigns. NINE WEST- Product/Service Overview – strengths, weaknesses The company offers a variety of fashionable products including footwear, apparel and accessories. Versatility, affordability, availability and reliability all translate to an ideal combination of value and quality (Super Brands UAE, 2012). On the flipside, the product range is limited and does not include sport wear. Current positioning in the market Nine West has been positioned as a low-price, high quality apparel, accessories and footwear retailer. Target Market The company primarily targets women who eye for the hottest and upcoming fashion trends to satisfy their fashion cravings (Super Brands UAE, 2012). Current marketing efforts (traditional, interactive, etc.), messages & effectiveness The company has engaged in interactive marketing which is reflected in its strong presence on Facebook that allows users to comment on the content posted. The “Shoelaborations” platform allows Nine West to partner with talented, upcoming artists (Super Brands UAE, 2012). Furthermore, it has collaborated with a British Supermodel for the design of its collections (Super Brands UAE, 2012). Part 3: Marketing Environment Demographic As per the data provided by the Census Bureau, the population of Houston has an almost equal proportion of males and females with majority of the population lying in the 25-34 years cohort followed by 35-44 years (U.S. Census Bureau, 2007-2011). Almost 61% of the households are “family households” with the rest being “married couples” (U.S. Census Bureau, 2007-2011). Over half of the family households have children less than 18 years of age (U.S. Census Bureau, 2007-2011). This could suggest mature consumer purchasing patterns as opposed to those of singles. Also family responsibilities could translate to having lesser income to splurge on. It also suggests tremendous potential for children’s shoes in the under 18 cohort. Furthermore, Houston has now taken the lead from New York in terms of being one of the most ethnically and racially diverse region in the U.S. (Kotkin, 2013). Economic The economic downturn of 2007-2009 has resulted in slowed growth of the footwear sector. The growth rate has been slow with unemployment rate rising to 7.7% (U.S. Bureau of Labor Statistics , 2013). Despite the overall slow growth, Houston is one of the regions with the fastest GDP growth (Kotkin, 2013). Income levels also tend to be high and diverse in Houston with approximately56% of the population $15000-$75000 (U.S. Census Bureau, 2007-2011). Majority of the population is employed suggesting a high working population. Technological The trend of high costs of labor and demand for “fast fashion” in the footwear sector makes large investments in technology quintessential. Technology in this case pertains to expediting the distribution process, automating manual processes and reducing cost of production. Online business models have gained momentum with dot.com retailers such as Zappos and ShoeBuy gaining customers (Kirsner, 2009). Use of RFID and point-of-sales data has become the standard for most footwear and apparel retailers. Social/Cultural One of the popular social trends has been the increased use of Facebook, Twitter and Instagram. The growing millennial generation has translated to increased exuberance, confidence and self-expression (Pew Research Center, 2010). These individuals radically accept new fashion trends and are upbeat. There is an increasing number of women taking up work which has led to an increase in their disposable income. Furthermore, the number of Americans possessing mobile devices has increased significantly (Pew Research Center, 2013). This suggests a potential for mobile marketing as well as digital marketing. The use of social networking sites has also increased, particularly amongst the 30-49 age group (Pew Research Center, 2013). Conclusion To conclude, the promotional program for Steve Madden must focus on points of difference against its competition. The small business faces tough competition in the midst of increase in number of online retailers and rising incomes of households in the Houston community. However, the customer demographics including growth of millennial population is strongly in favor of the business as it enjoys a huge target market from this population. Furthermore, the increased growth in mobile phone usage provides scope for mobile marketing. References Bernstein, J. (2009, May 17). Long-term Nike deal holds key to Ronaldo's future at Manchester United. Retrieved from Mail Online: http://www.dailymail.co.uk/sport/football/article-1183616/Long-term-Nike-deal-holds-key-Ronaldos-future-Manchester-United.html Hall, M., Carne, ?., & Sheppard, ?. (2002). California fashion: from the old west to new Hollywood. New York: Harry N. Abrams. Kirsner, S. (2009, May 24). Tiptoeing to online success. Retrieved from Boston.com: http://www.boston.com/business/technology/articles/2009/05/24/tiptoeing_to_online_success/ Kotkin, J. (2013, April 8). Houston Rising—Why the Next Great American Cities Aren’t What You Think. Retrieved from The Daily Beast: http://www.thedailybeast.com/articles/2013/04/08/houston-rising-why-the-next-great-american-cities-aren-t-what-you-think.html Pew Research Center. (2010, February 24). Millennials: Confident. Connected. Open to Change. Retrieved from Pew Research Center: http://www.pewsocialtrends.org/2010/02/24/millennials-confident-connected-open-to-change/ Pew Research Center. (2013). The Daily Number. Retrieved from Pew Research Center: http://www.pewresearch.org/data/ Piper Jaffray Companies. (2013). Piper Jaffray Taking Stock With Teens Survey. Retrieved from Minnesota. Super Brands UAE. (2012). NINE WEST. Dubai: Super Brands UAE. U.S. Bureau of Labor Statistics. (2013). Labor Force Statistics from the Current Population Survey. Retrieved from Bureau of Labor Statistics: http://data.bls.gov/timeseries/LNS14000000 U.S. Census Bureau. (2007-2011). SELECTED ECONOMIC CHARACTERISTICS: 2007-2011 American Community Survey 5-Year Estimates. Retrieved from U.S. Census Bureau: http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ACS_11_5YR_DP03 Zappos.com. (2013). Steve Madden. Retrieved from Zappos.com: http://www.zappos.com/steve-madden Read More