The Marketing Opportunities for Cotton On to Reinvent Its Image - Assignment Example

Table of Contents Table of Contents Executive Summary 2 Introduction 3 Situation Analysis 4 Internal Environment 4 External Environment 4 SWOT Analysis 7 Marketing Objectives 7 References 9 Executive Summary One of the most widely used business principle is the 80-20 Pareto principle (Bunkley, 2008) which states that 80 percent of new business will come from 20 percent of existing customers. This makes knowing and nurturing relationships with existing customers even more valuable. However, the struggle is when a brand wants to expand its image and market. Cotton On is in that crossroad. It grew it business catering to the simple and relaxed 20 something market. However, the entrance of smaller companies that offer the same diversity in design and high class quality is forcing to reinvent itself. This paper will explore the marketing opportunities it can tap in order to reinvent its image to a flexible label that is essential to every fashion genre. Introduction Cotton On is one of the few organically Australian ready-to-wear (RTW) fashion label. Fairly young in the industry at less than 30 years old, they now have shops all over Australia, New Zealand, and America. It has uniquely mirrored the same image that Australia has project all over the world, relax, simple and comfortable. Its primary target is the youth, 15-30, who feels wants a simple no-nonsense style that is flexible yet fashionable. Through the years, there have been constant effort from the brand to reinforce their image through TV commercials, print ads, and out-of-home advertisements. However, the fashion industry has witnessed an incredible shift of media consumption from traditional to digital. Many of this digital adaptors belong to the same target market that Cotton On caters to, young from the broad C. Many businesses have taken advantage of this by, early on, exerting the same effort digitally as they do above the line. Unfortunately, Cotton On came in late. They, in fact, established their online store less than three years ago. Outside of the online store, very little effort has been exerted to utilize the digital media to reach the Cotton On target market. This lack of digital presence resulted to one of the biggest digital scandal in the business world when facebook members started spreading complaints and protests against Cotton On Children’s line. The protest claimed that Cotton On’s pieces contained “disrespectful” messages. Cotton On reacted late and not without considerable damage to the brand. If there is a lesson in this, it is the realization that there is a need for Cotton On fully embrace the digital medium. Situation Analysis Internal Environment One word. That’s all it takes for a person to know someone inside and out, its history, its sensibilities, its personality, and its relationships. That word is the brand name. Coca-Cola. iPod. Nike. Google. Their identities are so strong and so embedded to the minds of the consumers that no single study, perhaps not even a compound of a thousand, can comprehensively explain how each company built it. Cotton On, despite being a young label, has experienced a certain amount of success in positioning themselves in the market and securing a loyal consumer base who identifies them with the same laidback, simple, and organic image of the country where it originated from, Australia. It is, despite possible apprehensions of the fashion elite, a brand that exudes style. It started in 1991 in Geelong, Victoria, Australia. Twenty years is considered young in the fashion retail business. Yet, it has expanded to more than 600, employing more than 4,500 people in the same countries where it distributes - Australia, New Zealand, Singapore, Hong Kong, Malaysia and the US. Its success may be credited to the same formula that casual brands like Roxy and Target has (Grail, 2009). It has managed to become an accessible brand but its lines were never tacky or common. By not emphasizing its affordability and flaunting its quality in both engineering and aesthetics, it allowed itself to develop a stylish image that cuts across all segments age, gender, and social class. However, their growth is not being translated or carried on to their digital presence. Cotton On has some of the fewest fans and followers on different SNS, they are also falling prey to many online fashion critics who are always on the lookout for any weakness a brand may show (Gay, 2010). Recently, Cotton On was criticized heavily for coming out with a children’s line with “offensive” messages. Cotton On was unable to respond quickly and they were unable to control the blow up simply because their presence online is not strong. They didn’t have the right people that could have gotten wind of the issue early and countering it early. Digital presence is the one aspect Cotton On must work on. External Environment The cards the Australian fashion industry has are not good ones. It seems easier to fold than to call it. The geography itself is a disadvantage of epic proportion. It is more than 20 hours away by plane from all of the major fashion capitals such as Paris, London, and New York. The time difference also means contradicting weather. When it’s summer in Australia, it is winter in Paris. To any fashion expert, that’s a recipe for disaster. The international economic crisis also damaged the value of the Australian Dollar, from 53 to 106 Australian cents to the US dollar. Any fashions sales expert will tell you, that’s setting yourself up for suicide and mutilation because it makes any exported product from Australia expensive (Gay, 2010). Juxtapose this with the continuous birth and growth of many other labels from or manufactured in Asian countries where labour and raw materials are affordable and you have a losing formula. The disadvantages don’t end there. The local market is small. There are only 23 million people in a country that highly penetrated by international brand whose volume of production allow them to sell products at a much lower price. The only way for any brand to grow is to go out of the Australia. The complexities continue. Unlike other secondary fashion markets like Brazil, India and China which is difficult because of the factors already mentioned above, difference in season, acquired cost because of transportation and taxes incurred. However, what may be the scariest competitor of Cotton On are the domestic brands that don’t bother to set up physical stores and do their business virtually. Consider that the internet started growing in the 80s and made leaps in 90s. People that were born in these two decades are the same consumers that Cotton On is catering to. They don’t know a world without internet. Therefore, they feel comfortable with it. Since businesses that operate virtually are able to cut operational cost through the absence of office utility bills, lesser manpower requirement, and store space rentals, Cotton On may have found a real threat (Amed 2011). This is, of course, compounded by unique marketing strategies that pull in the influence of non-mainstream. They live and thrive on organic reviews posted by real consumers and not from those who got paid millions to appear in 30-second ad or a full page print ad. These brands talk about unique styles achieved through their non-existent mass production (Gers, 2009). Online brands and stores like Shopbop, Net-a-Porter, Modcloth, Delia’s and Topshop are able to deliver the orders at the consumer’s doorsteps. This market is so strong that Australia is now the third or fourth most important market for many international fashion e-tailers, a ranking that is disproportionate to the country’s relatively small population. This is surprising considering Australia was slow to adapt this technology infiltration of the fashion environment. Many retailers claimed to be unable to delivery domestically because logistics complications. The lack of automated system that would allow each other to go in their system, confirm the orders, confirm the payments, and pull the stocks out to be delivered to the customer was the primary hindrance. It is, perhaps, this apprehension that allowed many small labels or international ones to come in early. Brands like Roxy, Billabong, and A&F were early in setting up their online ordering system. They also opened their online shops to different parts of the world including Australia (Tungate, 2008). This pushed many of the Australian online customers to gravitate towards international brands and away from Australian brands. International brands also learned how to adjust their line to fit the Australian market understanding that there is a gap between the weather of the North to Australia. Zara decided to customize its line and products to suit the Australian culture and weather (Jackson & Shawn, 2006). When the first store opened last year in Australia, every lifestyle and entertainment writer went wild and Zara officially released a statement that their Australian opening was one of the most successful Zara openings ever. Several styles actually went out of stock. There are many competitors that vary in size, style and image. The strength of these competitions is heightened by the technology at extends the reach of the every brand to every consumer (Hines, 2006). They are quick to adapt and quick to expand their online presence. If you go on facebook, twitter, youtube and other SNS, you will see that these are the brands that have the biggest fanbase. They are also the ones that have made an active daily effort to communicate with their fans even if it is simply responding to fan inquiry or complaints (Easey, 2008). This is the same presence that Australian brands, Cotton On particularly, will have to push and strengthened. SWOT Analysis Marketing Objectives The brand has to evolve as fast as international brands are evolving to achieve a higher amount relevance to the Australian market (Abellan, 2010). The consumers now are aware of the availability of choices laid in front of them and they are more unwilling to compromise. They want, and they will, get what they want in style, quality, and economy. Brands must be able to adjust to this climate if they have intention of competing against international brand and smaller brands. The objective is single-minded but the roll out has to be comprehensive as to reach even the rural areas and cut across all fashion segments. The main objective is to establish a stronger relationship between the digital fashion market and the Cotton On brand. This is going to be done by: releasing advertising and marketing materials that will originate digitally creating an interactive campaign that will allow the market to participate in building a project or material for the brand building a community that is concerned about Cotton On The new materials that will be released will demonstrate how Cotton On’s easy and casual look makes it flexible enough to be transformed to different styles spanning different genres, sophisticated to street chick, edgy to preppy, rock and roll to pop. The look will be designed by the leading fashion bloggers in Australia. Their captive audience will benefit Cotton On since they can push traffic to the site of Cotton Up or on Cotton On’s social networking site. References Abellan, M. (2010). Fashion Branding. Spain: Instituto Monsa de Ediciones Amed, I. (2011). Australia, Against All Odds. The Fashion Trail. Retrieved from http://www.businessoffashion.com/2011/05/the-fashion-trail-australia-against-all-odds.html Bunkley, N. (2008). Pioneer in Quality Control, Dies. NY: New York Times Easey, M. (2008). Fashion Marketing, NY: John Wiley & Sons Gay, M. (2010). Australia Pressures Fashion Industry to Bulk Up Models, AOL News, Retrieved http://www.aolnews.com/2010/06/29/australia-pressures-fashion-industry-to-bulk-up-models/ Gers, D. (2009). Social Climbing: Luxury Fashion Brands Must Embrace Social Media. Forbes Magazine, NY: Forbes, 45 Grail Research (2010). Global Fashion Industry, NY: Grail Research, LLC. Hines, T. (2006). Fashion Marketing: Contemporary Issues, LA: Butterworth-Heinemann Jackson, T. & Shaw, D. (2006) The Fashion Handbook, LA: Routledge Tungate, M. (2008). Fashion Brands: Branding Style from Armani to Zara, NY: Kogan Page Cotton On Logo Cotton On Print Ad Competitor Logos and Print Ads Read More