Marketing Attractiveness of Products from R.M. Williams Company - Case Study Example

Running Header: Individual Written Report: Market Attractiveness Report Executive summary This report is going to explore marketing attractiveness of women jeans wear product from R.M. Williams Company. The product of interest will be Lovedale Jeans women’s pair of trousers. This report will also evaluate market segmentation of this product. Market targets for this product will also be analysed to determine the targeted consumers. The paper will also analysis market attractive for this product in terms of key economic, geographic, demographic and political issues. Overseas countries potential destination for this product, likely challenges and means of market entry are also cover in this report. Contents Executive summary 1 Introduction 3 Indentified product 4 Market segmentation 5 Target Markets 5 Market Attractive for this Product in Terms of Economic, Geographic, Demographic, and Political 6 Overseas Countries as Potential Destinations for the Product 7 Three challenges that would be Faced in Introducing the Product 7 Strategy to Enter the Market 8 Recommendations 8 Conclusion 9 References 10 R.M Williams, 2011, R.M Williams, Retrieved November 30, 2011 from 10 Introduction Marketing attractiveness is a very vital in marketing since it elaborates the available possibilities of profit in a certain industry or market. Mostly utilized analysis is a market attractiveness analysis, carried out to assess whether if moving into a certain industry or market might be viable and what the business could possibly leap. There exist several factors that might affect attractiveness of a given market. One of such factors is the market size that can affect the number of customer availability and number of competitors. For instance, the shoes market is very wide and hence has capacity of accommodating operations of competitors with ease. To evaluate this analysis in real life situation, the R.M. Williams company is going to be evaluated on how it can launch one of it several products in to a given a given market. This company was established and founded in 1932 by a renowned legend in Australia by the name Murray Reginald (R.M Williams, 2011). R.M. Williams was created on the values of authenticity, durability and quality, ideals which are still alive in all its operations up-to-date. The company has still be a leading in Australian style and is globally well known Australian shoes and handcrafted boots, clothing and accessories. R.M Williams products are seasonal ranges for women and men. This company is entirely owned by Australian and attracted international movie celebrities, global leaders, media moguls and world sporting stars. This report is going to analyse how the company will enter into market with its new product of Lovedale Jeans. Indentified product Figure 1. Lovedale Jeans for women Note: From R.M. Williams, 2011. Lovedale Jeans product is women’s pair of trousers. Considering that world has a huge and competitive fashion sector, this product will be expected to have an upper hand on market attractiveness. In Australian alone, it is established that apparel retail sector was worth 16.3 Billion AUD in 2007 alone, an improvement of 4.5% from the previous year. In the same country, clothing for women is approximated to take 48% of the sum retail share, followed by clothing for men with 24%, girl’s clothing 6%, infant’s clothing 9%, boy’s clothing 4% (New Zealand Trade and Enterprise, 2009). This is the trend that is replicated in the rest of the world. This implies that venturing into business targeting women’s clothing means high probability of business profitability. Additionally, the effect of the fashion system on the advertising pattern is more pronounced and more visible in markets of women’s clothing than in those for men. Fact from US indicates that women influence decision on 80% of purchasers and are highly influential in most of purchase decisions including products for men. It is also highly evident that industry of fashion is heavily focused on ladies. Though products and brands are influenced on various factors, there exist a way in which women view fashion products. Firstly, a lot of ladies are influenced by current fashions and also ladies of various ages need clothing that make them have modern look and good figure. Pair of Lovedale Jeans trouser from R.M. Williams company meet all attributes that attracts women in fashion industry. Market segmentation Segmentation of market is the division of the market into various groups of consumers with clearly similar needs and service/product requirements (Ries & Trout, 2006). The main aim of market segmentation is to leverage limited resources to make sure that the elements marketing mix, products, distribution, price and promotion are developed to attain certain specific wants of various customer groups. The market segmentation for this product will be on demographic basis. The population will be divided into gender, age, family lifecycle, and income among others. In terms of gender segmentation will be applied since the product is designed specifically for ladies. In terms of age, the product is also meant to attract young and middle aged women who are the major driving force of fashion industry. In order to harness high potential pose by large number of middle income earner, this product will be focus to attract this portion of population. Target Markets The target audience of this product are young and middle-aged ladies approximately 20-50 years of age. These are consumers who are searching for fashionable design and comfort at reasonable prices. The reason to target women is that it has been confirmed that women are the major consumers in fashion industry. Ladies are more sensitive in terms of fashion trends. Additionally, the product is meant to target women who are middle income earners. This vital since it determines the number of will consumers who will be able to afford the product. Taking into consideration that middle class earners make the huge portion of any population, market for this product will be broad and huge. Also, it is a fact that Australians spend less on clothing than other people in western world due to their moderate climate and casual lifestyle (Verity Partners LLC, 2007). Market Attractive for this Product in Terms of Economic, Geographic, Demographic, and Political In terms of geographic factor, Australia position near Asia has allowed companies to cost-effectively access China huge production capacity. This is important since it will be possible to reduce cost of product and hence considerate price of the product. The geography has effectively placed Australia 6 months behind the leading edge of global trends. Hence, the fast stylistic innovation cycles characteristic of European rapid fashion are less replicated in context of Australia. Politically, Australia liberalised its trade policies and opened its markets to imported clothing in the late 1980 and early 1990 (New Zealand Trade and Enterprise, 2009). This has resulted unfavourable development of firms. In term of economic perspective, the local garment and clothing related sector production industries have continued to reduce with production reducing by 8% between 2001-02 and 2004-05. However, the sector still contributed for 5 Billion $ AuD of GDP in 2004-05, adding $ 1532 million of added value to the economy. This means that though there is experienced reduction in production, the economic contribution to the economy is significant making. Therefore geographic, economic and political factors will make a market attractive for this product. Overseas Countries as Potential Destinations for the Product France, Paris fashion industry contributes hugely to the economy of this country. Paris is well known with fashion and various fashion houses have their showrooms and outlets located in the city. This implies that the product will have a well established structure to reach to its consumers. Additionally, huge portion of population living in Paris is conscious of fashion. Another preferable destination for the product would be Italy, Milan. This destination is robust with capacity of employing over 80,000 workers and distributors surpassing 30,000 in number. Also the population is highly conscious of fashion trends. Unfortunately, this market is highly flooded with competitors that would make penetration of this product more difficult to penetrate the market. Also, taking into consideration the dismal performance of this industry in the year 2008, it would not be advisable to consider this as a potential destination. The highly preferred destination to lunch this product would be Japan. This is because the fashion industry in Japan is mainly driven by the demand of its youth culture and affluent population. Japan is one of the huge markets for foreign luxury fashion products (The Global Fashion Industry, 2009). The country is making efforts to promote fashion houses and targeting young population. This is the justification of make this as the highly preferred out of three destinations evaluated. Three challenges that would be Faced in Introducing the Product The industry of fashion is constantly evolving. New trends and styles are joining the market continuously from almost anywhere in the globe. This is a major challenge to the product since it will be required to continuously change with the trend to avoid being edged out of the market. The apparel market in Japan is the globe’s 2nd biggest after the United States with a total retail apparel market value of 63 Billion pounds in 2003 (The Global Fashion Industry, 2009). Japan is one of the most sophisticated and largest clothing markets. Being a lucrative venture, this means that it will attract stiff competition. One of the major challenges that will be of concerned in this market will be current crippling household debt being experienced and low-priced Chinese imports increasingly will take over the Japanese fashion market. With household incomes remaining constant and the threat of escalating rate, people will readjust their spending habits. Clothing industry will encounter the full effect of a consumer slow-down in spending. Strategy to Enter the Market The entry strategy that will be used to enter this market will be a joint venture where this will include local investor and a foreign investor. Hence, there will be shared control and ownership of property operation and rights. The main advantage of this type of strategy is that there will be shred risk and local partner will be having in-depth understanding of Japan fashion market. Additionally, this is offer a joint financial strength. Joint ventures permit one to join with already operating enterprise to share the opportunities and risks in the new market. Considering high risk associated with fast changing trends and sophistication of fashion market, this will be the best market entry strategy to enter Japan market. Recommendations It will be vital for R.M Williams to carry out a deep market research to avoid any blind entry. This will help to have a clear understanding of the retail outlets that should be targeted, the labels they currently stock and other general impressions of market as well as pricing. It would also be important to weigh other strategies of entering this market to ensure that the strategy chosen is best suited. Proper market segmentation will allow the company to have leverage on scarce resource. Additionally, other potential markets should be exploredfor future entry. Conclusion Marketing attractiveness offers available possibilities of profit in a given market. Every company, including R.M William Company, should utilize market attractiveness analysis to evaluate the suitability of new markets. The indentified product to have an edge on market attractiveness is Lovedale Women Jeans. Women make a huge percentage of clothing consumers. Market segmentation will be based on demographic factor, largely on gender and age. Target consumers will be young to middle aged women since they are highly conscious about fashion trends. Australian market is strategically position to access cheap textile materials and also its fashion market is not as volatile as the compared to fashion trends in Europe. Japan will be the most preferred destination for this product considering that it is one of the largest markets for foreign luxury fashion product. The main problem associated with fashion sector is constant change of its trend. There will be challenge of competitors and constantly looming financial crisis that cripple purchasing power of many consumers. References New Zealand Trade and Enterprise (2009), Designer Fashion in the Australian Market, Market structures 1(1), 1-14. Ries, A., & Trout, J. (2006), Positioning: The Battle for your Mind, London: McGraw-Hill Professional. R.M Williams, 2011, R.M Williams, Retrieved November 30, 2011 from http://www.rmwilliams.com.au/springsummer2012/index.html The Global Fashion Industry, (2009), Growth in Emerging Markets, 1-22. Verity Partners LLC, (2007), Responding to New Challenges in the Branded Apparel Industry, 1-13. Read More