Marketing Conduct of the Superdry Fashion Brand Label of UK - Essay Example

SUPERDRY INTRODUCTION Business environment is changing with every passing day. Consequently, businesses operating in the business environment are facing pressure to deal with the changing dynamics in order to maintain survival and sustain competitive positions. Though the situation is similar in almost every industry, consumer goods in general and more specifically fashion products are facing abrupt changes in trends. According to Kollewe, (2012) fashion cannot continue with the same formula and it behaves like a will-o'-the-wisp. Hence, fashion brands are required to remain abreast with every bit of change in the consumer trends. In a similar fashion, this report has developed the assessment of marketing conduct of the Superdry Fashion brand label of UK. The assessment is developed using macro and micro competitive landscape of the industry. Additionally, a comprehensive review of the marketing activities of the company is developed using theoretical models. Finally, the recommendations for the future strategic priorities are made. OVERVIEW OF THE COMPANY Superdry brand is owned by the Super Group Plc with two brands CULT and Superdry (Super Group, 2014a). The brand started its business in 1985 with inspiration from the Japanese street wear having combination of bright colors and graphical prints. The Japanese style was mixed with the British style and high-quality fashion product that captured the market significantly. The global presence of the business in different parts of the world is as follows (Super Group, 2013): The Super Group also have online store in local languages of the following countries Superdry because of the growth in the online business (2013): The company has expanded from using the Wholesale business format to the retail format with the strategy of expanding revenues and profits. Superdry has the business model of expanding its base in the geographical territory. A review of the five years’ revenue and the business has been as following (Super Group, 2014b): MACRO ENVIRONMENTAL ANALYSIS Assessment of the macro environment is conducted using strategic management model of PESTEL analysis as follows: PESTEL POLITICAL Though the political conditions of the UK are stable, but there are growing concerns in businesses with respect to the general election and along with the probable EU referendum to be held in 2015 (Groom, 2014). Also, the independence of Scotland is to pose a challenge (Huffington Post, 2014a). ECONOMICAL Despite taking steps for the recovery from the economic crunch of 2008 and the inflation standing at 1.5%, the interest rate is maintained at 0.5%, to support the slowing growth (Huffington Post. (2014b). SOCIAL The rising percentage of different religions, slow and huge rise in the young and old age population respectively are the social trends in UK (Slane, 2014). TECHNOLOGICAL Technology is making waves in the UK, and almost every business has an online presence for serving its target customers. ENVIRONMENTAL Growing concerns for the environment had led every business reduce the impact of operations on the environment in the best interest of stakeholders. LEGAL Labor laws with respect to manufacturing, trading laws and tariff influence in the business in the apparel industry. COMPETITIVE ENVIRONMENTAL ANALYSIS Competitive landscape is a critical for the business understanding, survival and winning a competitive edge (Papulova, and Papulova, 2006). Superdry with its global existence has deal with the range of competitive pressures in order to maintain the profitable balance. The leading competitors of Superdry include Primark, H&M, New Look and Rivers Island in addition to other leading fashion brand local and international players in both local and international market of its presence (Bainbridge, 2013). Porters have developed a strategic tool of five forces that collectively reviews the competitive pressures as follows: Bargaining Power of Buyers: Large number of fashion brands offering wide range of products has considerable increased the power of buyers. Bargaining Power of Supplier: is moderate as the company has been consistently increasing its supply base to deal proactively with risk (Super Group, 2013) Threat of New Entrant: growth in the consumers’ confidence in the retailers and apparel sector has increased this threat considerably (Euromonitor, 2014). Operation in a large number of countries also increases the threat. Threat of Substitute: is low as fashion changes with the passage of time; however, there will always prevail any fashion in the industry and will not be substituted. Industry Rivalry: Large number of players in local and international market has increased this pressure to high end. MARKET ANALYSIS The global fashion apparel industry is witnessing growth of around four percent every year from $2,560 trillion (2010) to the $3,180 billion in 2015 mainly accounting the luxury products (Report Linker, 2014). Moreover, global brands such as ZARA, Nike, Next, H&M, American Eagle and other (Mau, 2013). Most of the fashion brands are growing global to expand their market base. MARKETING SEGMENTATION, MARKETING TARGETING AND MARKETING POSITIONING The market is divided on the basis of the various factors such as age, income, preference for fashions, etc. (Pride, Hughes, and Kapoor, 2012). The market segment for Superdry brand includes the young people mainly of the age segment 15-25 age brackets. Among the people of aforementioned age bracket, men and women who are inclined to buy a branded product with a reasonable price and better quality. Superdry has targeted the customer with the customer with for the affordable products that are offering premium quality clothing and accessories (Super Group, 2013). With a focus on this segment, Superdry has developed a range of the products that has expanded its customer base beyond the core target segment. Positioning refers to the perception of the brand build in the minds of the existing and potential customers (Urde, and Koch, 2013). The positioning of the Superdry clothing among the existing and the potential target customers is based on the psychographics features. The brand is the mixture of three cultures i.e. Americana vintage, Japanese inspirational graphics combined in the British style (Super Group, 2013). RESPONSE OF SUPERDRY TO CHANGING MICRO AND MACRO ENVIRONMENT Superdry has been actively responding to the changing market dynamics. For example, it has evolved its business model from more focus on the wholesale towards the retail section as well as online website based in the languages of respective countries, etc. Moreover, owing the political risk associated with the UK, Super Group is actively working for expand its market on a global level in order to sustain any shocks (Super Group, 2014b). According to Masterson and Pickton (2010), the four Ps does not produce the comprehensive scope to define an element as a result of increasing level of service element in the organization. Therefore, 4Ps of marketing are extended to 7Ps of marketing for defining the product. Using 7Ps, the measures taken by Superdry to deal with micro and macro environmental changes are assessed: Product: Owing to the competitive pressures and changing social factors, Superdry refreshes and innovates its product range maintain the point of differentiation in its own and competitors products. Centrally, the brand works on three which are the windcheater, hoodie and T-shirt. However, among these product categories, Superdry has around 2000 pieces offering a wide range to its customers (Johnson, 2014). Price: The street fashion style has enabled the brand to offer the fashion of its kind that is also offered to the customers at reasonable and affordable price. Place: As the competitors are expanding their footing in the local and international market, Superdry has attended this pressure effectively. In addition to stores, the company is selling its products in 122 countries through website. Of 16 sites that are operating around the world, a group in the year 2013 added ten local languages to the site. Hence, the growing impact of technology and dealing with competition is concretely being addressed. Promotional: Superdry has positioned its products as a fashion product that is a fusion of the American vintage, British Style and the Japanese street fashion. The promotional factor in Superdry’s product is based on the social media as it has been a younger brand as well as brand for young and youth. While at the same time, it has been focusing on the celebrity endorsement like David Beckham wore Superdry’s giving Company a boost. The company not only offers the discounts to its products but also offers vacation trips and other events as a part of the promotion for its products (Groupon, 2014 and Superdry, 2014c). The Moreover, like place promotional activities of Superdry have also expanded to the digital domain and conduct competition that engages the customers. It also has celebrity endorsement by at very limited level and very company’s blogging website appears to report it(Superdry, 2014d). Physical Evidence: With online expansion, the physical space is also constantly added to develop a face to face interaction with customers and attracting potential customers. Superdry increased its physical space by 13.8% to 536,000 sq feet in UK and EU while added 56 net stores on a global level (Super Group, 2013). Company has deep understanding and awareness of the global growth, and it is further focusing on it (Johnson, 2014) People: Brand keeps focus on retaining the critical human resource for the organization. Moreover, the company also attracts the interns and publishes their review about the passion for joining the Superdry. Process: Superdry has developed partnership to comply with the changing regulations of the country of operations. Moreover, In addition to this, supplier is also expanded from 72 in 2012 to 79 in 2013 to overcome the potential supplier threatening power (Super Group, 2013). Hence, assessed with 7Ps of marketing, it has been found that Superdry has is actively and keenly keeping an eye on the changing business environment and is responding to changing dynamics. MARKETING STRATEGIES OF SUPERDRY FOR 2010-2013 The challenging pace of variation in the business conditions in general and the sectors of fashion in specific has led the Superdry to adopt a market orientation in contrast to the traditional system of marketing orientation. Aziz and Yassin (2010) noted that market orientation that in turn requires business to understand the customers and external environmental factors has a direct impact on the overall performance of the organization. The marketing orientation refers that only marketing department takes the responsibility of understanding the customer and addressing their needs profitably. On the other hand, the market orientation views the business with a more holistic view. It is more of a market orientation on the whole where all the business departments are concerned to generate insight from the intelligence offered by the market information. As a result, core focus of the Superdry group is less on the marketing orientation only. The market orientation of Superdry is assessed using Ansoff four marketing strategies (Freeman, 2010): EXISTING PRODUCTS NEW PRODUCTS EXISTING MARKET MARKET PENETRATION PRODUCT DEVELOPMENT NEW MARKET MARKET DEVELOPMENT DIVERSIFICATION Overall the company has maintained its focus on all four strategies of Ansoff model that are the market penetration, product development, the market development and diversification. According to the marketing director of Superdry Group, Simon Lloyd, Superdry, the brand has never produced any TV or other such medium based add. As the brand is only ten years old, it has already grown with digital media. Therefore, the company has maintained its focus on attracting and understanding its actual and potential customers mainly though social and digital media. Moreover, the company maintains focus on the understanding factors that have an impact on its customer’s base, instead of influencing customers with its marketing strategies (Johnson, 2014). The identification of such factors are done by marketing research departments then product department develop some ideas that incorporate the identified aspects, and those products are then brought to the market. Hence, there is complete market orientation as compared to the traditional marketing orientation approach. Also, this implies the product development which requires improving product for the existing market as the main strategy at work at Superdry (Freeman, 2010). Moreover, the company received the brand endorsement from the footballer David Beckham and a Leonardo DiCaprio who is a celebrity from the films. Understanding the demand of the customer for looking different and incorporation of that different look in the products has been the strategy Superdry in 2010 (Finch, and Wood, 2010). This refers to the strategy of market penetration and market development where existing customers and potential customers are encouraged to use the Superdry products. Also, the consistent expansion of the number of stores implies the market expansions strategy in place (Freeman, 2010). For the year 2011, Superdry employed all four strategies from the Ansoff model. For product development, it expanded to footwear as well as sophisticated women’s wear and a fragrance The addition of fragrance is a diversification strategy while product development is conducted with expanding the range for women. Moreover, the company also implemented the penetration by enhancing the experience of the customers with wooden floorboard in soft-lit outlets to encourage the customers for additional shopping. Also, the market development was implemented for its consistent global expansion (Shannon, 2011). In the year 2012 in addition to the market development with consistent expansion on local and global level, Superdry has implemented a market penetration with a social drive campaign. The company teamed with social platform Facebook and the engaged the customer with its app to win the Superdry clothes for a year for themselves and two friends (Fashion United, 2012). For the year, 2013 expanded the marketing spending in order to deal with challenges evolving from the market. As a matter of fact, the company does not specifically elaborate on its market strategy; its focus throughout has remained on the social media. For the year 2013, the company increased its attention using effective content on the site. The with focus on content strategy, Super Group buys rights to content from artist's conducts the broadcast in time that best suits to the business needs (Johnson, 2014). Further, the company constantly updates its blog sites for the recent content. IMPACT OF MARKETING ACTIVITIES IN ORGANIZATIONAL SUCCESS The success of the marketing strategies of the organization can be measured from the wide number of factors. One the most strategic tools used for the purpose is the assessment is defining the business position in one of the quadrants among the four quadrants. The quadrants are developed in reference to the relative market share and market growth, and each quadrant is allocated name that defines its position in the market as follows (David, 2013): STAR QUESTION MARK CASH COWS DOGS The Superdry brand from the Super Group can be defined a brand that is moving from low market share towards increasing its share in the market. It has high market share growth while its market share is low is also accepted by the company itself. For example, company recognized its relatively low market share in the UK as one of the leading opportunities present to the brand. However, the company is consistently expanding its customer base with consistently introducing innovative ideas. The brand has recently rejuvenated its women's range for being more advanced. This growth was also responded by the investors of the company in stock market (Grut, 2013). EVALUATION OF CURRENT MARKETING STRATEGIES OF SUPERDRY – FUTURE STRATEGIC PRIORITIES In accordance with the Ansoff model, the current marketing strategy of the Superdry is also based on the market penetration, market development and product development. The company increased its retail space, online existence with increased option of the local language as well as attention towards the customers. As a result, the company will enhance the brand experience of the customers. This also sets the future strategic priorities of the company.  BRAND EXPERIENCE According to Davis (2006), brand experience is the basis of consumer dialogue with the brand including the reaction at any given contact point. Also, is a real and tangible showcase of the brand and is expressed through dozens of individual opportunities. Superdry brand is concerned with expanding and enriching the brand experience of the customers. According to the Simon Lloyd, Superdry’s group marketing director, the company does not intend to focus on the TV adds. Instead its attention will remain on the digital media. This has and will expand the market with penetration and market development while enriching the brand experience of customers. For example, the company has noticed that customers are disengaging from the facebook and are joining Instagram (Johnson, 2014). Therefore, the future strategy of the company will maintain its focus on improving the brand experience of the customers as the market is considerably saturated with extensive competition. As long as the brand will remain successful in sustaining the brand experience of the customer, it will maintain its customer base increasing in local and international level (Super Group, 2013). For improving its brand experience, Superdry is focusing on the improving and innovating its collection. Also, the company has a strong view on providing an effective connection to the customers at retail space. The company intends to provide an immersive experience to the customers with eh combination of mcommerce and the physical retails experience. Also, the global brand building is another strategic priority of Superdry with improvement in its overall business system and product range (Super Group 2014b). RECOMMENDATIONS TO THE SUPERDRY BRAND STRATEGIES: With the strategic priorities set forth for the expansion of the business in global market and improvement in the business processes to support the business expansion, Superdry must adopt a holistic approach. The strategic approach to be implemented in case will require the entire business to adapt with the greater market orientation in respective disciplines. Moreover, owing to the competition and the market saturation it is recommended that a comprehensive set of branding strategies to be implemented. Some of which are discussed as under (Llopis, 2014): i. Focus on the factors of Consumer Engagements: As a matter fact, the Superdry noted that customers are more engaging with Instagram, nowadays. Despite this fact, Superdry did not launch any campaign to exploit the opportunity identified. Such measures are critical in the fashion industry where taste and preferences of the customers change abruptly. Also, it is important to refresh the brand experience with customers. Hence, in addition to the innovation in the product, the overall experience with the product must be enhanced. ii. Sustaining the Relatable identity with Lifestyle Platform: Superdry has managed to establish its identity as a fashion brand that has a fusion. However, it of immense importance that during consistent innovation and attempt to expand the market the brand ensures not to complicate the product. Moreover, as a brand is expanding its product range, it must ensure that each product compliments the other and offers a complete lifestyle store to the customers. iii. Continuous Innovation with Flawless Timing and Execution: Fashion keeps on changing and so products offered need to change. Not only the product but also the entire branding experience requires innovation as the fashion does not remain same. Time factor is also very critical in winning the customer as has been experienced the Superdry in the past. Hence, a comprehensive response strategy is critical for business success. REFERENCES Aziz, N. A., & Yasin, N. M. (2010). How will market orientation and external environment influence the performance among SMEs in the agri-food sector in Malaysia?. International Business Research, vol.3, no. 3,pp. P154. Bainbridge, J. (2013). 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