Marketing Plan for Korra Dancewear - Term Paper Example

Marketing Plan for Korra Dancewear Table of Contents Executive Summary 4 I. Marketing Challenge 5 III. PEST 8 Political Factors 9 Economic Factors 9 Social Factors 9 Technological Factors 10 IV. Competitor Analysis 10 V. Consumer Analysis 11 VI. Target Market 12 VII. 4 P’s 12 Product and Price 12 Place/ Distribution 13 Promotion 13 VIII. Financial Feasibility 14 IX. Exhibits 15 Exhibit 1 15 Exhibit 2 16 Exhibit 3 17 References 19 Executive Summary Korra is working from several bases of strength in product design, quality and appeal to a serious target market of competitive dancers for its dance wear, even as it is also handicapped by weaknesses in financial capabilities, distribution, and marketing relative to established players in its industry/space. Sales are dependent on the lone channel for marketing and distribution, which is its online presence, and given the limited funds, the options considered in a marketing plan relate to improving distribution and promotion. The recommendations center on leveraging Korra’s product strengths to position itself as a premium brand, to realize higher margins from lower revenues and as a means to differentiate itself from the market. This translates to a sourcing strategy that shuns China as a supplier of products, because of quality issues that are incompatible with its premium and quality proposition. Opportunities in marketing online, via Facebook and Google and other relevant social media platforms, can be pursued, with promotions budgets aligned with sales (Hae, 2014). I. Marketing Challenge The challenge is to provide a comprehensive marketing plan for Korra Dancewear, by way of providing advice and guidance to Karolina Swietoniowska, who is the firm’s owner and primary creative force/designer. Based in Canada, in Ontario, the challenge is finding means to drum up interest in the new collection of dancewear created by the owner, and being solely focused on the online channel, and the goal is to translate improved attention to greater revenues, all while working with constraints in funding. These constraints translate to formidable challenges marketing-wise, and the owner has in mind a strategy that focuses on several key aspects of any marketing plan. Those aspects relate to promotions, extending the product line, and focusing on modes of distribution. Overall, the owner’s goal is to realize monthly sales of between $1, 000 and $2,000 every month by the start of 2014, and the marketing plan is the lynchpin by which Swietoniowska hoped to realize that revenue goal (Hae, 2014). The channel for sales is online, and the selling prices of individual pieces of wear that the owner sold were along the range of between $40 and $70. The product range consisted of seven items broken down into 18 stock keeping units or SKUs, with the sizes options limited to medium and small. Of the seven items, six items each contributed five percent to overall sales, while one item, the Kai Bodysuit, contributed seven dollars out of every ten dollars of revenues. Turnaround time for orders to delivery was three to five days, and the per piece cost for the products in her catalogue of products was between $20 and $25, and this translated to gross margins that potentially was much higher than the 26 percent margins that the industry averaged. Pricing and margins, however, still need to be assessed in the context of crafting an appropriate marketing strategy for Korra. Manufacturing is in Canada, where the emphasis is on high quality for workmanship and materials, the latter being 10 percent lycra and 90 percent polyester. The primary competitors are Bloch, Ainseliewear and Mondor (Hae, 2014). II. Internal Analysis Korra is operating from a number of key strengths. Its quality is high, and the initial perception of its products from those around the owner has been very positive. This is not a trivial strength, because the target of Korra is the group of dancers who dance for competition, and are very serious about dancewear. As such, they vet products for quality and for the way they cater to the needs of dancers. The product aspects of the mix for Korra are therefore a real strength. It helps too that the owner is passionate about dancing and about designing clothing. These are very real product strengths that can translate to success if properly leveraged. Also from a product perspective, these strengths translate to real value propositions that can allow it to slug it out toe to toe with the biggest names in the industry. From a product perspective too, these twin aspects of high quality and the acceptance of a critical audience of competitive dancers all translate to the possibility of positioning Korra as a premium brand, with implications for margins. On the other hand, looking at the weaknesses, the obvious weaknesses translate to marketing, constraints in finances, low turnover, low capabilities in production and in distribution, and the absence of a promotional strategy, In terms of the marketing mix, while the product attributes are strong, the other aspects of the marketing mix are weak or non-existent. There is currently no coherent marketing plan for Korra, and this is a major weakness for the budding dancewear firm (Hae, 2014; MindTools, 2014; QuckMBA, 2014; WebFinance, 2014; Shapiro, 1985; Gerdeman, 2011; Trinity Web Works, 2014; Community Tool Box, 2014). III. PEST Political Factors The Canadian political system is strong, mature and stable, and in comparison to the rest of the world, arguably is conducive to the long-term growth of businesses of all kinds. The stability that the political system provides is a strong base for a business undertaking such as the one contemplated by Korra and its owners. In the long term too, the political system promises to maintain that stability, and its strong position relative to the rest of the world too, and versus potential supplier countries such as China, means that Korra is on sure footing in the Canadian home soil (Hae, 2014). Economic Factors As the case notes, economic recovery in Canada promises to put more disposable monies in the hands of the general population, and certainly this bodes well for the prospects of Korra among its potential and current target markets. The strong and improving economy too means that businesses in Canada can expect to enjoy a strong bargaining position, in terms of greater purchasing power, versus supplier countries such as China. This bodes well for any plans on the part of Korra to source products from China. The strong Canadian economy can facilitate business dealings with China in small and big ways, not only in terms of the purchasing power of the Canadian currency, but in other aspects as well, including in logistics and aspects relating to getting supplies and finished products from potential suppliers in China unto Canada (Hae, 2014). Social Factors As the case notes, there is a growing interest in dance in Canada, and this growing interest has seeped into the popular culture and the mindset of mainstream society. This translates to higher sales for products and services related to dance, and a favorable attitude towards products and services in this sector of the economy. This social acceptance of dance bodes well for Korra finding mainstream acceptance and favorable reception for its products (Hae, 2014). Technological Factors Progress in areas related to Internet technologies, telecommunications, and logistics technologies means that Korra can succeed against bigger players if it is able to leverage that technological progress. This can work in terms of being able to harness social media technologies to reach potential customers optimally and to fulfill orders in the most cost-efficient manner possible, with implications for being able to generate high margins from lower operating, distribution, sourcing, and marketing costs, among others, and being able to match or surpass the capabilities of competitors with bigger budgets and higher scale economies (Hae, 2014). IV. Competitor Analysis The three top competitors in the space where Korra hopes to compete are all established players with scale economies, superior distribution and presence in brick and mortar channels, superior revenues and marketing capabilities, and more established brand presence and better brand management capabilities than Korra. The case states too, that the competition thrives on marketing mixes that cover different differentiation positions, from low price to premium quality. Ainsliewear, which has a quality proposition and a made in Canada proposition similar to Korra, has the same pricing range as Korra but has a vastly superior reach, revenue base, global footprint, and brand management capabilities. Mondor similarly has a premium proposition, and has superior distribution, finances, and reach. Bloch is positioned as a value brand, but again has superior revenues, an established brand, and better financials. The scale economies that these competitors have dwarf Korra (Hae, 2014). V. Consumer Analysis Consumers vary in interest in dancewear, from competitive dancers, who are the core markets for dance wear, to casual dancers, who keep an eye on value for money and price, to children, for whom the real decision makers are the parents, to the general market, who may not be keen purchasers of dancewear, and may opt for regular clothing. Korra has good traction among its customer base of competitive dancers, but its revenues in this space are small. There is an opportunity for Korra to branch out into children’s wear, with children constituting a separate consumer base from competitive dancers (Hae, 2014). VI. Target Market There are opportunities to branch out from the traditional target market of Korra, which has been teenaged women and young adults, to include children. The original target market remains promising, but there may be opportunities to improve revenues and margins from marketing to children as a separate target market. This target market, as the case notes, will have a cost base per clothing that is lower than the traditional target market of Korra, about half of the cost for Korra’s traditional offerings. On the other hand, this target market has the parents as the real decision makers, even if children themselves are influenced too by peers and by proxy, other parents in their preferences and buying decisions (Hae, 2014). VII. 4 P’s Product and Price Overall, there is value in pursuing a premium product strategy for Korra, given its traditional strengths in design and in premium materials and build quality. This means too, that Korra can pursue premium pricing in order to be viable financially, rather than compete with established players on price. The smaller scale of the operations too means that Korra can keep an eye on product quality and realize profits from higher margins and lower sales relative to competitors. This translates to a product sourcing strategy that relies on Canadian production rather than outsourcing production to China. Maintaining production means having higher product costs, but this can be offset by higher pricing stemming from pursuing a premium strategy. This Canadian sourcing strategy is consistent with maintaining high quality as an aspect of the premium product strategy for Korra (Hae, 2014) Place/ Distribution Given the weaknesses in financing capabilities and distribution capabilities, fulfillment is problematic in online distribution as well as in the distribution of its products through placement in established stores. A hybrid distribution strategy that leverages both store placement and the fulfillment of online orders can work, and is recommended (Hae, 2014). Promotion The case notes that Facebook and Google ads are viable options, and both must be pursued to maximize the online presence and boost sales in the long run. Facebook is especially useful for targeting children as a target market, because of the way that market responds to word of mouth. Moreover, given the limited finances of Korra, online promotions via Facebook promise the greatest returns on advertising budgets. Facebook advertising does require an upfront investment of $,1500, but later spending can be scaled up or down depending on revenues. Ad spend will be a function of sales (Hae, 2014). VIII. Financial Feasibility Maintaining a premium pricing position, margins for Korra products can be retained at current levels. For its current target market of competitive dancers, margins are anywhere from 100 to 350 percent, where costs are around $25 and retail prices can reach $70. For children, profit margins can be tailored along the same lines as for competitive dancers. Even with the modest revenue goals of Korra, the margins will be able to cover advertising expenses easily (Hae, 2014). IX. Exhibits Exhibit 1 Competitor Comparison (Source: Hae, 2014) Firm Size Target Market Strategic Differentiation Pricing/Margins Ainsliewear 59 Canadian stores, 105 retail presences in the US, 16 overseas locations Men and women, children Wide variety of product categories, premium positioning $35.99-$78.99, premium = above average margins Mondor Presence in hundreds of worldwide stores Men, women, children of all ages, in dancing, gymnastics, and skating Premium positioning, high quality Parity with competitors, above average margins Bloch International presence Men and women, children, dance apparel High quality and functionality, lower price Lower prices compared to competition, assumed lower gross margins, on higher sales Exhibit 2 Korra Product Mix and Contribution to Revenues (Source: Hae, 2014) Product Line Share of Total Revenues Kai Bodysuit 70 percent 6 Other Product Lines 30 percent (5 percent per product line) Exhibit 3 Korra Strategic Options (Source: Hae, 2014) Product Mix Element Strategic Options Best Alternative Product Premium positioning, mass market, high quality and low cost Premium positioning allows Korra to realize profits from low revenues, focus on quality , design, and passion strengths Price Parity pricing with competition, low price, premium pricing Premium pricing makes the positioning consistent for Korra, and moves away from price competition with other players, which Korra cannot win Place/Distribution Sourcing production in Canada over China, online vs brick and mortar, mix of online and bricks and mortar Sourcing production in China makes sure that quality remains high, bricks and mortar expensive and beyond present capabilities, focus on online channel Promotion Social media, search engine placement, mix of both Prudent use of funds to invest in social media and Google advertising yields most bang for the buck, cost effective way to undertake promotions, given emphasis on online channel for sales References Community Tool Box (2014). Section 14. SWOT Analysis: Strengths, Weaknesses, Opportunities, and Threats. KU.edu. Retrieved from http://ctb.ku.edu/en/table-of-contents/assessment/assessing-community-needs-and-resources/swot-analysis/main Hae, R. (2014). Korra Dancewear. Richard Ivey School of Business Foundation. Gerdeman, D. (2011). Getting the Marketing Mix Right. Harvard Business School. Retrieved from http://hbswk.hbs.edu/item/6828.html Mind Tools (2014). SWOT Analysis. MindTools.com. Retrieved from http://www.mindtools.com/pages/article/newTMC_05.htm QuickMBA (2014). SWOT Analysis. QuickMBA.com. Retrieved from http://www.quickmba.com/strategy/swot/ Shapiro, B. (1985). Rejuvenating the Marketing Mix. Harvard Business Review. Retrieved from https://hbr.org/1985/09/rejuvenating-the-marketing-mix Trinity Web Works (2014). Internal Analysis: Your Competitive Advantage. Marketing Strategy Insights. Retrieved from http://trinitywebworks.com/blog/internal-analysis-your-competitive-advantage.html WebFinance (2014). Using SWOT Analysis to Develop a Marketing Strategy. Business Dictionary. Retrieved from http://www.businessdictionary.com/article/632/using-swot-analysis-to-develop-a-marketing-strategy/ Read More