Identification of the Reasons That Caused Failure of the Ralph Lauren Brand - Essay Example

Identification of failures of the now discontinued brand Ralph Lauren Rugby and a marketing strategy proposed for the re-launch of that brand Student Number: Degree: Date: Word Count: Abstract This assignment is based on critical analysis of the reasons that resulted into failure of the Ralph Lauren Brand. It is a critical discussion on the areas where the company could have improved in order to achieve a sustainable growth for the future. The assignment even includes a proposed market strategy that would support the re-launch of the brand. The re-launch of the brand is based on modification of the 4Ps, and the various entry strategies that could be adopted by the company to again enter into the highly competitive market. The company uses the product development strategy in order to re-position itself into the market. The company even uses various advertisement campaigns to position the brand in minds of the targeted audience. The store layout is also re-structured. The marketing strategy developed is proposed to Mr. Ralph Lauren in order to persuade him to re-launch the brand. Contents Abstract 2 Introduction 4 Identification of the reasons that caused failure of the Ralph Lauren Brand 4 Marketing strategy for the re-launch Ralph Lauren Rugby 7 Conclusion 10 Proposal of the new marketing strategy to Mr. Ralph Lauren 10 References 15 Introduction The Ralph Lauren Corporation was incorporated in the year 1967 and was a world renowned clothing brand that defined the American lifestyle. Mr. Ralph Lauren started this company by selling ties which was completely different in design to the tradition design of ties used by men in America. His range of colourful ties gave birth to a brand called Polo. In the later years the product range of the brand widened which included footwear, luxury accessories, apparel, and home furnishings. The company comprised of various brands apart from Polo such as Pink Pony, Chaps, Club Monaco, Black Label, RRL and RLX, American Living, Purple Label, and Rugby. The brand Rugby was launched in the year 2004. Despite of the success of the company this Rugby brand failed miserably in the market place and finally the brand was closed in the year 2012. The common reasons for failure of a fashion brand are its incapability to maintain a leading edge or to remain as trendy in order to meet the demand of the customers. In the years when Rugby was launched there exist a lot of competition in the preppy brand market space. The high priced products had made the brand unable to capture the maximum of the market share. Identification of the reasons that caused failure of the Ralph Lauren Brand The preppy style of the brand was very fashionable from the starting years of its launch but somewhere the other offerings of the brand were really absurd even for its target market. The offerings of the brand were such as a pair of sweat pants with English style classic boating blazer or herringbone three-row-two sport jacket. The combinations offered by the brand were no doubt fashionable but at the same time they were not that much appealing to its target customers. The positioning of the brand was not correct as they only targeted those customers who were under 25. The product range they had could easily re-define their positioning by targeting an age group of 20s and even the early 30s. This would have broadened their target market but the brand kept itself enclosed within a narrow market space (Plunkett Research, 2008, pp.117-119). The success of a brand depends on its availability. The consumers should be able to easy access the brand but this was not the situation with Rugby. The convenience for its products was very low; the brand was not seen in all the stores or malls. It was available only in a few numbers of stores. The company needed to grab the opportunity in the market by launching standalone stores of the brand in malls and even in departmental stores. The focus was more on acquiring market share than on easy availability of its products. This indeed was one of the reasons behind the failure of the brand, as its less availability made the brand out of the consumer’s mind (Plunkett, 2005, pp.156-157). The price of the product should be aligned with the target audience but the product of Rugby was of premium price that was not easily affordable for its target customers. Its main market segment was 18-25 years of age and such a high priced product though very fashionable was outside their budget. Another reason for the closure of the brand was not an effective brand communication (Onkvisit and Shaw, 2009, pp.104-105). The wasp advertisement of the Rugby brand was unable to draw attention of its target market. The brand failed to maintain an effective price for the market and at the same time was not being able to promote its product well. There already existed a lot of competition in the preppy segment where the Ruby brand was operating. The major competitors of Rugby brand were Jones New York, Philips Van-Heusen, Tommy Hilfiger, Perry Ellis, and. Liz Claiborne. Amongst all these players the major competitors for Rugby were Philips Van Heusen and Jones New York. The products offered by these players were highly competitive and they were finding it easy to capture the market space. At the other hand Rugby was more focused on extending their operations in other places and started opening stores in Tokyo. The high priced products made the sales of Rugby to decline. The targeted group could easily avail the preppy products from the other brand stores which offered them affordable price range and at the same time was easily accessible by the customer base. The SWOT analysis of Rugby Ralph Lauren is that the major strength of the brand was its new technology, the space it offered to its customers to create their fashion statement, and the experienced fashion shows it hosted. The major weakness was that its unavailability after the fashion shows, the high priced products compared to its competitors, the brand was not that matured, and the target market was not a prominent segment of the society. The opportunity that the brand had was targeting the trendy consumer market and implementing the strategy of forecasting online fashion shows (Doole and Lowe, 2008, pp.76-77). Lastly the major threat for the brand was the increase in competition that were targeting the same demographic market segment similar to that of the Rugby brand, and the lower economy caused the downfall of the brand. The PEST analysis of the brand states that the political conditions were favourable for the brand with very less of entry barriers in the regions it operated. The economic conditions was not that favourable as the economy of America was going through a turmoil and the high priced product of the brand that too for the respective demographic segment was not a desirable strategy. The disposable income was low for the target market in order to purchase such premium price product. The social impact was high on this brand, as the market was continuously changing on the fashion trends, and in order to sustain in this market constant innovation of products is essential. The technological support for its operations was favourable but there too constant innovation was mandatory to exceed the expectation of the customers and even maintain a sustainable position in the highly competitive market. Thus the broad aspects linked with the failure of the brand were the loophole in the pricing, promotion and the distribution strategy. Marketing strategy for the re-launch Ralph Lauren Rugby The Ralph Lauren Rugby brand needs a desirable change in its marketing strategy in order to re-launch its operations in the market. According to the STP marketing strategy tool the segmented market for the brand would be the American market. The reason behind the selection of this market segment is that the brand I very much familiar with the likes and dislikes of this market segment, and in such a crisis situation when due to its failures the brand had to shut down it would not be a sensible option to diversify its operations into a totally new market. Hence the American market is the best suited market for the re-launch of the brand. The target market segment would be the people belonging to age group of 20 years to 35 years of age, who have a decent lifestyle and a desire towards fashionable products (Schnaars, 1998, pp.114-115). The targeted audience has the purchasing power as well as the need for purchasing the products of Rugby brand. The re-focusing of the brand on a different target audience belonging to different demographics would benefit the brand in terms of re-positioning itself. The brand needs to position itself according to the target market; it should place itself as an exciting and luxurious product line at an affordable price. This affordable price change would make it appealing to those customers belonging to the age group of 19-22 years who cannot purchase this brand’s products earlier due to its premium price. The brand earlier could not meet the changing taste of the customers as the preppy look was not so much popular in the later years after the launch of the Rugby brand. The brand needs to focus on constantly innovate its product range so as to meet the changing demand of the customers. The fashion look which Rugby gives is also proposed by its competitors but in order to enter into the market with a strong competitive advantage the brand needs to position itself as the one that changes the fashion statement of its consumers every week. This brand re-positioning will help Rugby to occupy a certain space in the minds of its customers. The STP tool for constructing a marketing strategy is just the starting step for any company, the key elements of constructing a reliable marketing strategy is the developing the marketing mix which could comprise of 4Ps or 7Ps depending on the situation. 7Ps of the marketing mix comprises of product, place, promotion, price, people, physical evidence, and the process. There has to be some added features in the product of the Rugby brand. The product line should be more focused on the trendy look rather than the preppy look. The reason behind such a re-positioning of the product is that the market demand is aligned towards a more fresh look in the apparels rather than preppy look which is outdated. The brand should add more of a casual look to its product range and deliver a high quality product range. The Rugby brand can even extend its product range by analyzing the different needs of the target audience and offer different set of product for different customers (Moschis, 1994, pp.96-97). Hence this will increase the options for the customer of getting different kind of fashionable products in align with the ongoing trend under the same brand name. The pricing of the product needs to be re-positioned according to the wants of the customers. The brand needs calculate its operating cost and then add the minimum profit margin in order to follow a cost plus pricing strategy (Mills, 2002, pp.56-57). The brand will offer products of both high prices and affordable price range so as to capture the maximum market share. It can re-position its price range such as - The affordable price range would target those customers who has a desire towards fashionable apparels but ate price sensitive, premium price would be for the customers working and has a decent lifestyle, and luxury priced products would be for the high end customers. The brand had major issues towards availability of the products after the fashion shows (Schindler, 2011, pp.102-103). It needs to focus on retail outlets and internet as their distribution channel. Opening up their own retail outlets would add a physical touch to the brand name; even internet is nowadays the most convenient shopping option for people. By making its products available online the company can reach out to the customers worldwide. Even the brand can open up its boutiques in the departmental stores. The promotional strategy of the brand would be on the basis of integrated marketing communication technique. The social media is the most desirable platform for the promotion of this brand. The promotion should link the flagship store with that the social media (Gelder and Woodcock, 2003, pp.45-46). The ads of the brand can even be publicized on the fashion week magazines as this would help in drawing attention of the targeted younger generation. Fashion shows with celebrities working the ramp will create a good impact on the consumer’s mind for the Rugby brand. The process factor should be considered by having a separate CRM team to effectively handle the queries of the customer. The physical evidence would be through its well structured retail outlets with defined sections for the different age groups within the target audience (Cheverton, 2005, pp.147-148). The culture of the brand would be to deliver the best quality products to their customers and to incorporate the individual’s contribution towards a new fashion outlook. Conclusion The marketing strategy proposed almost overcomes the loopholes that the brand had in the earlier years of its launch. There was a significant change that was necessary to be implemented. The marketing strategy that is proposed highlights the pricing, promotion, and distribution of the product. The brand needs to focus on developing a new product range in order to again re-launch. The brand is recommended to follow a product development strategy as it enters into the existing markets. The weakness of the brand of charging a high price has been effectively removed by following a three tier system in its pricing strategy where different target group members are offered different prices for the product they purchase. Even the accessibility of the product would be increased by offering the customers a wide range of retail outlets and even an option to shop online. Proposal of the new marketing strategy to Mr. Ralph Lauren Rugby Ralph Lauren that was started in the year 2004 had to close down its operations in the year 2012. The major reasons that led to the closure of the Rugby brand was a default in the distribution channel that it had chosen, pricing strategy that the company adopted did not support the target market which they focused on. The brand did not innovate on the product line. The consumers were not being able to associate themselves with the absurd fashion statement that the brand offered. The promotion was strong from the company’s end but in order to build a position in the minds of the consumer the frequency of the promotional activities of Rugby needed a considerable increase. The company faced a lot of strong competition in the market as the same kind of products that was delivered by Rugby was even offered by other brands at that too at a lower cost. The customers shifted towards the affordable products offered by the other brands as a result the sales of the Rugby brand declined. The brand failed to analyze the changing taste of the consumers and continued its operations with the old preppy look of its products. There was a lack of product development or innovation that caused Rugby to fail in the highly competitive market of the lifestyle industry. The brand was not being able to make its products at a convenient reach of their customers. There were only a few stores where the brand was available. The initiative by other brands to open their own retail outlets motivated Rugby to even open their own retail outlets in Tokyo, but since the brand was not getting much of profit margin from its product sales, the operating cost of the firm increased which finally led to the shutdown of the Rugby brand. The proposed marketing strategy for the re-launch of the brand was to overcome the threats that the Rugby brand had faced. Firstly the fashion statement of an individual changes with time and if a brand is operating in this sector it requires constant innovation in its product range so as to meet the rapidly changing taste of the consumer. The brand should re-position itself as “Rugby – brand that initiates a new fashion look every week.’ Or more innovative statement would be “Rugby – your fashion statement.’ This brand positioning would help the customers to associate with the brand and at the same build the confidence level of the target audience on the brand that they are relying on a brand that would deliver them unique and innovative products. The pricing of the product should be on a cost plus strategy so that the company can cover up the operating cost of adopting new technologies for developing unique product line. The prices of the product should be on the basis of its target audience of 19-35 years of age and would be differentiated as affordable price, premium price and luxury price (Smith, 2011, pp.175-176). These three different pricing of its products would help the brand capture maximum of the market share in its targeted demographic market segment. The products of the brand need to be developed in a new way so as to support the changing demand of the consumers. The brand should build a product line of fresh look and casual wears rather than the preppy look. The developed product range of Rugby would somewhat look like – The above designs are proposed for your company in order to add an edge to the preppy look. This kind of product range has a touch of casualness as well as a fresh look. In order to the match the current fashion trend of the consumers these designs would attract the targeted audience. The proposed form of promotion would be through social media, fashion magazines, and even some fashion shows with celebrity ramp work. The social media as a promotional tool should be well aligned with the flagship store. This promotional method is chosen so as to attract the young generation which is the major market shareholder of the target audience of the brand. The store layout of the brand should be such that all of the products are easily located by the customers and the layout should be spacious enough to give the customers a good shopping experience. The entry and exist of the stores would be on opposite ends so as to avoid congestion (Bhalla, 2010, pp.166-167). The geometric store layout is the best for its flagship store. It can be designed as shown in the diagram below - (Madaan, 2009, p.189) The spacious retail outlet would enhance more consumers to enjoy while shopping. These marketing strategy plans would be beneficial for your brand because it incorporates all the weakness that the brand has, the effective pricing would help your company to increase the revenue growth by 3% in the following years. The store has to be located in the prime areas of America so as to attract the market share. Apart from separate retail outlets you can even open up stores in the malls as it is the best way to increase the visibility of the product. Even there is a high growth of e-commerce sites so internet is the effective medium of delivering its products to the customers. The use of internet increases the convenience of shopping for customers and even impacts on the sales growth of the brand. This marketing strategy would help you to re-launch the brand effectively into the market space and at the same time overcome the reasons which led to the failure of the brand in 2012. The trendy new designs of the Rugby brand would help to capture the market segment that are more trend conscious. The effective pricing range and the trendy collection would help the brand to re-position itself into the targeted market. References Bhalla, S. 2010. Visual Merchandising. New Delhi: Tata McGraw-Hill Education. Cheverton, P. 2005. Key Marketing Skills: Strategies, Tools and Techniques for Marketing Success. Great Britain: Kogan Page Publishers. Doole, I., Lowe, R.2008. International Marketing Strategy: Analysis, Development and Implementation. Canada: Cengage Learning EMEA. Gelder, D., Woodcock, P.2003. Marketing and Promotional Strategy. UK: Nelson Thornes. Madaan, V.S. 2009. Fundamentals of Retailing. New Delhi: Tata McGraw-Hill Education. Mills, G. 2002. Retail Pricing Strategies and Market Power. Australia: Melbourne Univ. Publishing. Moschis, G. P. 1994. Marketing Strategies for the Mature Market. USA: Greenwood Publishing Group. Onkvisit, S., Shaw, J. 2009. International Marketing: Strategy and Theory. New York: Routledge. Plunkett Research. 2008. Plunketts Apparel & Textiles Industry. USA: Plunkett Research. Plunkett, J.W. 2005. Plunketts Retail Industry. USA: Plunkett Research. Schindler, R. 2011. Pricing Strategies: A Marketing Approach. UK: SAGE Publications. Schnaars, S.P. 1998. Marketing Strategy. USA: Simon and Schuster. Smith, T. 2011. Pricing Strategy: Setting Price Levels, Managing Price Discounts and Establishing Price Structures. Canada: Cengage Learning. Read More