The Key Marketing Decisions for a New Sportswear Brand - Case Study Example

Ralph Lauren Sportswear Company al Affiliation Ralph Lauren Sportswear Company Background Ralph Lauren is a global businessorganization that ventures in marketing and distribution of lifestyle sports wear products such as apparel, accessories, fragrance collections for men and women, wears for children and home furnishings (Ralph Lauren Corporation, 2014). Its brands such as Ralph Lauren Rugby, Club Monaco and Polo are familiar and have performed fairly in the lifestyle business environment. The essay investigates the possible reasons why Ralph Lauren Rugby sportswear brand was discontinued and the possible strategies that can be used to revive this product and make it a top brand. An evaluation of the market dynamics and the organizational strategies will help in providing viable recommendations that can work for the sportswear company. Market Characteristics and Ralph Laurens Strategy Ralph Lauren is one of the fashion giants in the United States that have launched a sustainable competitive strategy. In February 2013, the company discontinued one of its Brands, Rugby, claiming that the brand was experiencing a deteriorating inflow of customers each day. Instead, the company opted to focus on a strong global strategy to develop its core products in the international market (Ralph Lauren Corporation, 2012). The company closed all its 14 stores that sold its “preppy” Rugby brand and shunned its online presence. The company management stated that the company would strive to satisfy the Rugby customers in their other brands to ensure that they are not lost from the business. Rugby, since its launch in 2004, has been a one stop-shop for fashion clothes and their major market target has been the youths aged between 16 and 30 years. However, the brand has continued to perform poorly as compared to other Ralph Lauren’s brands. Therefore, the company has found it a worthwhile decision to close it and focus on its core products. To devise a re-launch strategy for Rugby brands, it is crucial to examine the reasons why the organization has failed to perform in the fashion industry. Current Market Practices In the recent past, the sportswear fashion industry has become more dynamic than ever in the history of the world. Changes in market factors have led to change in organizational strategies as a way of matching the standards that the market presents. Social cultural changes in Australia have resulted in increase in demand for fashion products in this country. In the recent past, the target market has become a multi-cultural society due to increase in the population of foreigners within every country (Egginton, 2005). The consequence of this is that the traditional societies are quickly dropping their culture and the people are adopting new cultures in this country. As people open up for a new culture, their demand for new types of clothes is growing and most have learnt the beauty of fashion clothes and other utilities (Scott, 2014). Additionally, as more jobs open up in the urban areas, the world is experiencing a massive urban to rural migration in such for employment (Chang & Travaglione, 2012). As more people gain access to town, they get acquainted with fashion and demand for these products. On this note, the fashion industry is growing as more people move to towns where fashion is recognized. Since Ralph Lauren Sportswear company operates in the fashion industry, it is bound to experience these changes both in the short and long-term. On the hand, technology is getting its way into the society in a progressive manner. Although many countries have remained in the dark in terms of technology in the past, global investors have introduced technology use in the global society. Moreover, technology has become more affordable as the prices of mobile and other electronic gadgets become lower and the people’s purchasing power increase. The result of this is that people have a greater access to technology and the can make it part of their life. The penetration of the smart phone technology has led to the growth of the number of people who have access to the internet technology. For instance, the people can access social sites such as Facebook, twitter and Skype and join the global community. This change in the technology has allowed the public to have access to the global fashion trends, hence influencing their demand for fashion products (Willis, Kestell, Grainger & Missingham, 2013). This means that the public have become more sensitive to fashion products. They demand products that fit the international standards rather than national standards. The impact of this is that companies such as Ralph Lauren have to meet global standards if they intend to remain relevant in the sportswear market. One of the factors that have led to the failure of Ralph Lauren Rugby is due to increased competition in the era of preppy boom. The fashion market has become saturated as many market entrants continue to target the youths demand for fashion clothes. For instance, companies such as Michel Kors and Tory Burch have focussed on similar products. Competition in the business market is one of the reasons why organizations fail to perform in the market. When new market entrants venture into a certain market segment, the customers bargaining power increases as the supply continues to grow and the demand remains stagnated. Resultantly, the organizations bargaining power decreases and the customer inflow reduces significantly. As such, the reduction in the number of customers visiting the Rugby stores can be associated with a tough competition from other investors. A reduction in the number of customers over time means low profits for the brand this may lead to eventual closure (Dexie, 2008). Organizations such as Tory Burch are also feeling the force of competition as more organizations continue to venture into Fashion majorly targeting the youths in colleges. On this ground, competition in its operating environment is one of the reasons for the discontinuation of Rugby brand. Secondly, the narrow target market for Rugby underpins its failure to perform in a competitive market. Rugby brand targeted the youth, especially young college students who are fans of the “preppy” fashions to optimize their output (Dexie, 2008). This strategy may have been one of the killer strategies that undermined the organizations performance in this market. When a company targets a narrow market segment, it is likely that the company will face a shortage of customers when competition sets in. By competing with other organizations that have developed products both for the youths as well as adults, Rugby was at the risk of being pushed out the market. The fact that the youths are sensitive to fashion and are more likely to explore means that they are less likely to be loyal to a particular customer at any moment. In addition, the youth fashion market is attractive and is likely to saturate easily in the long run. Therefore, targeting this market was a weakness of the brand that led to its susceptibility to competition in this business environment. Another reason for the failure of the Rugby brand was its inability to adapt to the market dynamics that exist in the fashion industry. To start with, the tastes and preferences of the youth vary constantly and organizations must seek to satisfy them. In a period of preppy boom in the US market, the customer tastes vary rapidly and those organizations that do not shift their design strategies are likely to lose customers. The loss of customer loyalty by Rugby brand can be attributed to its inability to match the customer tastes. Secondly, the price-based competition in this market frustrated the Rugby brand. In the onset of competition, many organizations apply price-based strategies to gain a strong position in the market. At the time of its discontinuation, Rugby offered some of the most expensive products for the youths. Since most youths are college students, the price factor determines their purchasing power. Since there were more companies offering cheaper products, Rugby brand was bound to lose customers and hence its profitability (Trefis, 2012). Overall, the failure of this brand may be associated with lack of proper positioning strategy within a competitive business environment. Key strategic and tactical marketing areas for competitive advantage From the analysis of the market changes that underpins the sportswear industry, there is need for the company to identify key areas for improvement to ensure that the company achieves a competitive advantage in the market. To do this, there is need for the company to conduct a market research to ensure that it can acquire lessons from other international sportswear companies such as Nike that have faced the same challenges in the competitive fashion market. One of the key competence areas that Lauren needs to take advantage of is the dynamic change in the fashion industry (Carr, 2013). The company needs to find practical approaches on how it can shift its current status adopt a more trendy approach. This may be in terms of the clothes that they provide and the quality they offer customers. As the demand for trendy fashion is growing, this is the area for the company to head. Like other companies, the company needs to identify new opening markets where the potential for fashionable sportswear exists. This is a big lesson that the company can learn from Nike, one of the globally know sportswear company. Nike took advantage of the opportunities emerging in developing markets. For instance, India is one of the fastest growing industries and the citizens are gaining the power to purchase fashion products such as shoes and clothes. Apart from this, the company has the opportunity of focusing on manufacturing other fashion products such as jewellery as alternative products. This will help to diversify their products and satisfy the demands of the fashion industry. Among the major threats of the Ralph Lauren business is the increased price competition within the fashion market (Ambardar, 2013). Reebok is one of the competitors of Lauren who is gaining popularity in the market today. Since their prices are much lower compared to those that the company offers, it is clear that the company is a big threat. Therefore, price competition should a key area that the company should pay attention if it has to survive in the ever changing fashion market. Next, the company needs to focus on internationalization as one way of expanding its business in the global market. As competition builds in the domestic market, companies are left with the challenge of reaching out for new markets to increase their customers and to identify new market where they can channel their products. While internationalization is a double edge knife, it is becoming a worthwhile strategy at a time of market saturation. As technology becomes a global reality, the fashion market tastes are unified and the world is more open for all investors. Therefore, Ralph Lauren needs to identify growing markets and strategies on the best approaches to reach these markets. For instance, the African countries are becoming more interested in the global international games due to easy access that technology has created (Ambardar, 2013). The market entry in the global market can as well be an online market. As the web platform presents an opportunity for companies to sell online, it becomes an area of interest. However, it is advisable for the company to consider all its decisions well before taking advantage of every opportunity. On this note, it would be crucial for the company to choose the best markets for their products as they internationalize their business. Marketing Recommendations As a marketing manager tasked with the role of launching a new sportswear brand, it would be crucial to design to a marketing strategy that addresses the weaknesses that led to the failure of Ralph Lauren Rugby brand. First, it would be crucial to change the brand image of Rugby from its former “preppy” image to a more dynamic and trendy structure. While the preppy brand seems a bit limited to only those who prefer this kind of fashion, a trendier brand would focus all a broader scope of the fashion tastes. The impact of this is that it would attract more customers into the brand and hence more profits for the company. Trendy would imply producing products that suit the diverse tastes and preferences of the youth aged between 16 and 26 years. Since the youths have dynamic tastes and preferences, it would be crucial to understand their market tastes and define trendy fashions that will much their needs at any time and the way they need it. Like the Ralph Lauren Corporation has done, Rugby should allow the youths to customize the company products and provide new designs that they consider superior in this market (Kotler and Keller, 2012). This would guarantee a high inflow as well as customer loyalty that are crucial while gaining a strong position in the market. Since Rugby is a brand that is focuses on young males and females, it should use a different marketing strategy to reach its target customers. The youths are more likely to have an online identity and their ways of life bind them together as groups. This customer characteristic would be crucial in marketing Rugby’s products within the market. A strong online strategy should be established to ensure that Rugby effectively meets its clients. A part from the use of a customized web platform, it would be crucial to venture in social media services where youths visit frequently. Facebook and Twitter is one of the best ways to meet youths who are the majority in these sites. First, social media is accessed through the internet and since internet is not globally limited, an online strategy would assist to meet more potential customers. Secondly, the social media platforms such as Facebook have been optimized for business marketing. For instance, Facebook allows organizations to set up pages where youths can comment and share for the friend to see. Lastly, the proliferation of the smartphone technology among youths makes the social sites a good place to meet potential customers (Kotler and Keller, 2012). Through a modest marketing approach, the organization can attract more customers for the Rugby brand. In addition, I would focus on an integrated communication strategy to appeal to the customer loyalty. Integrated communication approach requires conversational leadership where leaders allow all the stakeholders, including the customers and employees, to contribute to the design of organizational strategies. The youths have unique tastes and preferences that pose a great challenge to satisfy. The best way to satisfy them would be to engage them in designing the products in a way that satisfies their tastes (The Independent, 2014). On this ground, it would be crucial to open effective communication channels through which customers can respond to the organizational products. For instance, the organization should allow customers to participate in the design stage before product launch. Working closely with the youths will help Rugby to keep up with the fashion trends and to remain competitive within the market. Since customers are loyal to organizations that satisfy their demand, engaging the youths in product design will foster loyalty. At the same time, it would be crucial remain observant and to take note of the changing tastes to satisfy the demand of the target group. Promotional strategies would go long in facilitating customer satisfaction in the fashion industry (Kramer, 2004). Since the youths are active and energetic, road-show promotions would be one way to reach out to the target customers. For instance, Rugby can organize road shows to visit major colleges and to issue some free sample cloths to the public. This will create more awareness and attract the young women and men into the brand. Another way to promote the products is by offering discounts on group purchases. For instance, giving a 5% discount offer on any group of youths who come together to buy the same products. Since youth identify themselves in groups, it would be crucial to appeal to their social structure. In addition, this would reduce customer loss to other organizations. These discounts would provide the youths with the opportunity to benefit from the social structures (HypeBeast, 2012). For Rugby, this would mean more purchase of their goods and higher profits in the long run. These promotion strategies should be rolled out through online media and any other social networks. In addition, pre-school promotions would go long way to support the organization business strategy. Lastly, it would be crucial to evaluate the price model to remain competitive in this market. One of the reasons why the Ralph Lauren Rugby Brand failed is because they failed to apply efficient price-based competitive strategies. One of the reasons why an efficient price model would be crucial in developing Rugby is because of the competition that exists within the fashion market. As companies for their target market, they seek to provide the best prices to win customer loyalty (Kotler and Keller, 2012). Secondly, since most of the young males and females exist within the bracket of medium level income earners, they are willing to spend as little as possible on modest fashion. On this note, considering the prices of products would be crucial for them in this competitive market. One way of reducing the cost of products would be to identify alternative distribution channels. Use of distribution channels would reduce the cost of starting big stores and allow the organization to reduce its expenses. By reducing the production cost, it would be possible to maximise profit at reduced selling prices. Also, it would be crucial to streamline the supply chain of their products to ensure that Rugby reduces its expenses and that it is in a capacity to offer the best prices in the market. Conclusion In conclusion, launching Ralph Lauren Rugby sportswear product would be a process aimed at overcoming the challenges that exists within the market. The sportswear company targets the millennial that are price sensitive and more fashion conscious. These market characteristics make it a challenge for the company to satisfy customer preferences. Moreover, the market characteristics are changing rapidly and the company is bound to experience the same pressure that companies such as Nike has experienced before. Therefore, it would be crucial for the company to understand the market to be able to take advantage of the opportunities that exist in the sportswear fashion market. To ensure success, it would be crucial for Rugby to shift from a “preppy” approach to “trendy” approach that seeks to satisfy the diverse demand of fashion among young males and females. It would also be crucial to apply new marketing approach such as social sites to reach out for the youths and to use price based models to ensure that the products are affordable among this target population. Proper positioning of Rugby in the market would win the brand a top position and help it to compete fairly with existing companies. Bibliography Ambardar, R 2013, Indian millenials--global or local?, World and I, 10, Opposing Viewpoints in Context, EBSCOhost, viewed 16 January 2015. Carr, A, 2013, Death to Core Competency: Lessons from Nike, Apple, Netflix. Retrieved:< http://www.fastcompany.com/3005850/core-competency-dead-lessons-nike-apple-netflix> Dexie, 2008, Ralph Lauren Rugby Shirtdress, Style Tots, 2 May, News Bank, EBSCOhost, Viewed 24 March 2014. Gianatasio, D 2014, These guys know how to mobilize millions of millenials for politicians and social causes, ADWEEK, 36, p. 20, Business Insights: Essentials, EBSCOhost, viewed 16 January 2015. HypeBeast, 2012, Matters of Taste: Rugby Ralphy Lauren- A Eulogy. Available at: < http://hypebeast.com/2012/11/matters-of-taste-rugby-ralph-lauren-a-eulogy> Kotler, P. and Keller, K. L., 2012, Marketing Management: 14E. Boston: Prentice Hall. Kramer, L 2004, Polo Ralph Lauren planning to field new Rugby brand, Crains New York Business, 20, 22, p. 4, Regional Business News, EBSCOhost, viewed 24 March 2014. Ralph Lauren Corporation, 2012, Annual Report. Available at: Ralph Lauren Corporation, 2014, About Rugby. 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