The Failure of Ralph Lauren Rugby - Essay Example

The failure of Ralph Lauren Rugby A burgeoning and attractive marketing offers numerous opportunities for prosperity of brands. Then again, without proper research and evaluation of future conditions, taking any strategic step can be risky and prove financially disruptive. A similar situation had occurred with Ralph Lauren Rugby brand, owned by Ralph Lauren. The lifestyle apparel brand had launched a high-end brand extension, when demands appeared to be high. However, the company was unable to appropriately judge the target market segments and ultimately, failed to generate enough customer loyalty and recognition. Though Ralph Lauren is one of the most preferred luxury clothing brands, customer segmentation was completely different for its new arm. This had not only created confusion among customers, but also dissolved the overall brand identity of the Rugby brand. The objective of the current report is to analyze the failure of Ralph Lauren Rugby, an extended sports clothing line of the brand. On November 2012, the Rugby line of the brand had come to an end. Subsequently, website of the line was also closed down and the links were automatically directed to the parent site of Ralph Lauren. Contents Introduction 4 Ralph Lauren Rugby 4 Conclusion 8 Reference List 9 Introduction Known for high-end, bold and sassy styles, Ralph Lauren Corporation is one of the finest clothing retail organizations. The luxury retail chain was started in the year 1967 by Ralph Lauren, when he was funded by a manufacturer of clothing lines. He was asked to launch a line for men’s ties with the brand name, Polo. While studying in high school, Ralph had already started selling ties. Following that, he was approached by Norman Hilton and in the year 1969, he opened his first boutique in Manhattan (Ralph Lauren, 2014). The business was further expanded by selling tailor made women suits. The first solo shop was opened in the year 1971 in Beverly Hills. Ralph Lauren gained global recognition in a very short time period and by 1981, he was able to open his maiden international shop in London (Ralph Lauren, 2014). The brand has now expanded in various apparel and accessories sections, such as, semi-formal and formal clothing, luxury wear, fragrances, accessories and furniture. The brand has also ventured into restaurant business by opening a high-end restaurant in Chicago. The purpose of this report is to analyse various situations under which the sports arm of Ralph Lauren was pulled out from the market. Ralph Lauren Rugby Launched in the year 2004, Rugby Ralph Lauren was a famous clothing brand of America. The brand focused on preppy or rugby inspired apparels for women and men. The major target segments were customers of the age group 16-25 years. This segmentation strategy was different from that for Lauren’s normal target customers, who fall in the age group of 25-40 years. In order to increase brand equity and awareness among target customers, a café was also launched named Rugby Food and Spirits, which was modelled and designed to complement the rugby theme and subsequently, Lauren’s new brand line. The brand merchandise could be found in 12 stores across United States. The brand also opened an online selling website in the year 2008 (The Independent, 2012). However, the brand was not growing, compared to its other counterparts. Losses and inventory was becoming high and demand seemed to reduce. Also, overall preference of the brand’s target customers changed and a steep decline was seen in the brand loyalty. As a result, the brand line of Ralph Lauren Rugby was shut down in the year 2013 (New York Daily, 2013). The closure of this Ralph Lauren brand was not the only one in this line; rather, several other similar brands of clothing saw closure too. General factors, which can be attributed, are inability of these brands to serve a mix of ultra-conservative and traditional wardrobe for casual wear as well as constantly changing trends among shoppers (Pettigrew, Whittington and Thomas, 2006). Ralph Lauren Rugby was introduced as a preppy and punk brand for college students. Nonetheless, the brand failed to woo its target customers and with time, consumers changed their loyalty towards the brand. Another factor attributed to the diminishing loyalty was inability of the brand to meet changing needs of the customers (Marieke, 2004). The closure of Ralph Lauren Rugby not only indicated the changing pace of the apparel industry, but had also signified increasing need among retailers to get back to the fundamentals. Fashion brands are continuously reviewing their strategies and operations in order to stay ahead in the competitive market. As a result, more and more brands are now focusing on their core business, which provides them with strongest brand identity. In this industry, product differentiation is very low as designs and styles can be replicated in no time (Kotler and Keller, 2012). Price war occurs when smaller and less known brands offer styles and designs at a price, which is much lower compared to the real and luxurious brands. This not only shelves their brand image, but also hampers their overall revenue. Though the brand was able to taste success through various brand and line extensions, the preppy look offered by Ralph Lauren Rugby could not engage its customers for a long time and quickly started losing its identity. Critics have also argued that there was not much demand from the college goers or students. As a result, it was unnecessary for Ralph Lauren to start a whole new brand extension directed at these students and college goers. According to critics and experts, Ralph Lauren Rugby got their fundamental strategies wrong. It has been argued that the Rugby brand lacked an identity of its own, much of which was shadowed under the parent brand, Polo (Wood, 2000). The first lot of merchandise of Ralph Rugby was distributed in London. Nonetheless, many critics have argued that neither the timing nor the placements of products were working for the brand. According to company officials, closure of Ralph Lauren Rugby was prompted due to an increasing need to extend the brand. The management of the company decided to focus on more diverse as well as popular extensions, such as, accessories. After a detailed study of various sources and research works on the brand, multiple reasons have been recognized for decline of the Rugby brand from Lauren. These are explained below: The initial and most successful brand from Lauren is Polo, a sports brand. The objective of launching Rugby brand was to involve customers, who have a niche interest in Rugby. It was later found that most of these customers were already purchasers of the Polo brand. This created confusion in the brand identity. It was realized that though demand for Rugby brands had increased, this change was rather due to Polo customers coming to buy Rugby brand line and not owing to external or potential customers. Thus, it can be said that the brand was highly misplaced. At a time when minimalist style was considered classy and suave, the rugby brand was coming up with over-the-top designs and fuller looks. According to many style critics, this was a repulsive idea and resulted in loss of many potential customers. The brand was fundamentally placed as street wear for young boys and girls. Nevertheless, this preppy line started to be perceived as an exaggerated brand extension. Also, majority of the designs and clothing styles were similar to the parent brand, Polo. This amplified the confusion between two brands from the same company. The Rugby brand was hardly known among consumers and most of them confused it with the parent brand. Another factor, attributed for the brand’s ultimate collapse in the market, was choosing the wrong democratic profile. Ralph Lauren started his business by selling formal ties. Subsequently, he entered into the business of formal suits for men and women. Clearly, the target customers for the brand have been executives and business professionals as well as individuals of the age group of 25-40 years, seeking stylish and trendy lifestyle clothing. However, Rugby brand’s major customers were college kids of the age group 16-25 years. The target customer groups have volatile brand preferences, which means that trends and fashion changes very quickly and they cannot remain loyal to a particular style for too long. This created a major issue for the Rugby brand, who had to update its apparel style and designs very frequently. Also, the market is filled with brands offering numerous options for customers of the above age group. Fierce competition among various sports brands also took away large chunks of market share from Ralph Lauren Rugby brand (Vavra, 1992). Presence of more sporty apparel brands, such as, Aubin & Wills, Reebok, Puma and Adidas, rendered Rugby brand slight more outdated, thereby further reducing interests among young consumers. Ralph Lauren brands are, in general, considered as expensive. This pricing strategy conforms to their image, considering the target customers belong to the age group of 24-40 years, which consists of budding professionals, executives and well-established middle-aged working individuals. Nonetheless, when the Rugby brand was launched, prices were perceived as over-the top. The price range was also regarded as inappropriate, according to the volatile economic climate, after series of bubble bursts and economic slowdown. While comparing Rugby brand with its parent brand, Polo, it was noticed that average prices of the former were at least five percent more than the latter, which further lowered the level of interest among young students (Berry, 2000). The high price can be attributed to designs and operations of the brand. In order to maintain its high brand equity, the brand needed to keep the prices high, regardless of declining sales. Even though discounts schemes were implemented, these were very rare and occasional. A situation analysis prepared on the Rugby brand reveals many weaknesses. Firstly, Rugby brand was launched in the year 2004, which is much later than initial establishment of Ralph Lauren. This explains the low level of brand maturity and tendency towards volatile market growth. Secondly, the brand was a late entrant in the market for luxury and lifestyle clothing, which is already dominated by brands such as, Adidas, Puma and Nike. This created a lot of pressure on the newly established brand and the brand made huge investments on advertising and promotion, further increasing overall capital expenditure. Thirdly, target market chosen by the Rugby brand was not established in the society. For instance, the target market was students from wealthy family background. Automatically, the decision making process was influenced by parents of these customers, owing to high prices. The fourth glitch was volatility in the economy, which forced customers to reduce their spending and opt for affordable luxury brands. Another major blow for the Rugby brand was unavailability of merchandise, after various events and fashion shows. Fashion events are frequent in Europe and are the major trend setters. Consequently, people look for the brands ad designs showcased in these shows and events. Nevertheless, lack of operational effectiveness and improper inventory planning had resulted in unavailability, which not only made customers unhappy, but also tarnished the brand image. Industry analysis suggested many threats as well as loopholes, which led to decline of the brand. The sports apparel industry is filled with both big and small brands. Apart from exclusive sports brands, such as, Nike, Adidas and Puma, various other companies such as, Van Heusen, Claiborne and Jones group, offered sports apparel under their brand name. The overall threat of new entrants is weak, considering that any luxury brand can open an exclusive sports section without much difficulty or regulations (Ferrell and Hartline, 2010). In fact, most of the luxury clothing brands include sports apparel, either as a separate section or mixed with the general merchandise. The loyalty among consumers for sports apparels is difficult to estimate. A very niche segment of customers would prefer selective branded sportswear. For others, a good sports brand with high quality materials and trendy designs is preferable (Sheth and Parvatiyar, 1995). Conclusion After spending eight years in the sports business marred with lacklustre profits, the Rugby brand from Ralph Lauren decided to discontinue its line. The management defended its decision by saying that they wanted to focus on the core business as well as launch more profitable lines such as, accessories. However, the management cannot overlook the fact that Ralph Lauren Rugby lost its identity and gleam over the years. Initially, the brand was launched as aesthetic and inspiring Rugby’s heritage. Then again, the successive apparel collections from the brand created confusion among customers. Though the brand was targeted at young women and men, their high prices created much uncertainty among customers regarding the message conveyed by the brand. Ultimately, the brand was unable to secure as well as cultivate a steady customer base and kept on changing its brand focus, thereby resulting in a mixed approach from its customers. The closure of Ralph Lauren Rugby brand can be associated with its inability to establish a solid brand focus, wrong market segmentation as well as entering into a mature market with little opportunity of growth and development. Reference List Berry, L., 2000. Cultivating brand equity. Journal of the Academy of Marketing Science. 28(1), pp. 128-137. Ferrell, O. C., and Hartline, M. D., 2010. Marketing strategy. 5th ed. Connecticut: Cengage Learning. Kotler, P. and Keller, K. L., 2012. Marketing Management: 14E. Boston: Prentice Hall. Marieke, D., 2004. Consumer behaviour and culture: Consequences for global marketing and advertising. Thousand Oaks, CA: Sage Publications New York Daily, 2013. Ralph Lauren axes Rugby line; Luxury good giant shutters college-prep wear to focus on its own brand, accessories. [online] Available at: [Accessed 26 February 2014]. Pettigrew, A. M., Whittington, R. and Thomas, H., 2006. Handbook of strategy and management. California: SAGE. Ralph Lauren, 2014. About us. online] Available at: [Accessed 26 February 2014]. Sheth, J. N. and Parvatiyar, A., 1995. The Evolution of Relationship Marketing. International Business Review, 4 (4), pp. 397-418. The Independent, 2012. Ralph Lauren kicks its preppy look Rugby label into touch. [online] Available at: file:///E:/ralf/Ralph%20Lauren%20kicks%20its%20%27preppy%20look%27%20Rugby%20label%20into%20touch%20-%20News%20-%20Fashion%20-%20The%20Independent.htm [Accessed 26 February 2014]. Vavra, T.G., 1992. After marketing: How to keep customers for life through relationship marketing. Illinois: Business One Irwin. Wood, L., 2000. Brands and brand equity: Definition and management. Management Decision, 38(9), pp. 662-669. Read More