The Effectiveness of Internet Advertising of Lorna Jane - Case Study Example

Executive summary Lorna Jane is a retail store dealing of fitness inspired cloths and accessories. The company have exploited online advertising before and consequently the company’s sales increased and the have expanded their stores across Australia and in 2012 established stores in the US and South Africa. The company’s target population for their products are women who love style and do not comprise style at work out. The company would be using the internet marketing to increase the company’s sales and improve its image globally. The would adapt internet marketing strategies which include Search Engine Marketing (SEM), Online Advertising, Affiliate Marketing, Viral Marketing, WebPR, Email Marketing. Furthermore the business would employ a number of positioning strategise which include pricing, direct sales, among others. The effectiveness of internet advertising would be measured by the number of sales, web statistical data, number of new leads. Table of Contents Executive summary 1 1.0 Introduction 3 1.1 Mission Statement 3 1.2Purpose 3 1.3Goals 4 2.0 Situation analysis 4 2.1 Company description 4 2.2 Product description 4 2.3 External factors affecting the business 5 2.4 SWOT analysis 6 2.4.1 Strengths 6 2.4.2 Weaknesses of the LJ Brand 7 2.4.3 Opportunities for the LJ brand 7 2.4.4 Threats to LJ and Parent Brand 8 3.0 E-marketing strategic planning 8 3.1Segmentation and Target market 8 3.2 Product differentiation 9 3.3 Positioning strategies 10 3.3.1 Search Engine Marketing (SEM): 10 3.3.2 Online Advertising: 11 3.3.3 Affiliate Marketing: 11 3.3.4 Viral Marketing: 11 3.3.5 WebPR: 11 3.3.6 Email Marketing: 12 3.3.7Conversion Optimization: 12 3.3.8 Social Media: 12 3.3.9 Online Reputation Management (ORM): 12 4.0 Objectives 13 5.0 E-marketing strategies 14 5.1 Public relations & sponsorship 14 5.2 Personal selling 14 5.3 Sales promotion 15 5.4 Product Distribution 15 5.5 Packaging 16 5.6 Channel of distributions 16 5.7Pricing strategy 16 6.0 Budget 17 7. Evaluation plan 18 References 20 1.0 Introduction This market plan is for Lorna Jane Company for use as a guide for planning and carrying out its internet marketing campaigns to promote its products and business image. The market plan outlines the purpose and objectives of the market plan, customer research, competitor analysis, market entry strategies to be applied by Lorna Jane and finally an evaluation strategy for evaluating the effectiveness of the various applied internet marketing methods. 1.1 Mission Statement With the widespread usage of internet, businesses have shifted from the traditional advertising such as media, print and broadcast marketing to internet marketing which is convenient and have the ability to deliver a customized advertisement directly to the customer. Lorna Jane Company endeavor to expand its online promotion and consequently revenue from its products and service. 1.2 Purpose The purpose of this marketing plan is to set the direction for Lorna Jane would take in promoting its products, build a customer base and determining any opportunities to increase profit (Mohammed, Fisher, Jaworski, &Paddison, 2003). . The plan would analysis the business’s position in the market, identify competitors explore the various internet marketing strategies and define the action plan for the company to execute in order to meet its goals. 1.3 Goals The business’s goals are to: 1. Increase sales by over 10% each year 2. Expand its stores to major cities in the world 3. Expand the online trading on the business products by 5 percent 4. Make Lorna Jane a household name in the apparel industry 2.0 Situation analysis 2.1 Company description Lorna Jane Clarkson the founder of Lorna Jane company has established an industry where stylish women do not have to concession on fashion when they work out. It is her innovative and creative spirit that has seen Lorna Jane, the brand, become a multi-million dollar business in just over two decades (Dotti.com.au, 2011). Since the establishment of the first store in 1993 the company has expanded since then tenfold. Lorna Jane’s fitness-inspired brand has grown to include gym and sportswear, yoga and lifestyle clothing as well as intimates and accessories. Today, Lorna Jane has become a household name synonymous with active living. The company has established stores all over Australia and in 2012 the company expanded to international markets and has established 4 stores in US and South Africa. 2.2 Product description Lorna Jane Pty Ltd. provides sports apparel for women. It offers active wear, accessories, essentials, footwear, intimates, girls’ garments, casual and leisure wear, and gift vouchers. The company provides its products through its stores in Australia and internationally. The company is dedicated in offering its customer with a quality product by investing in Hi-Tech fabrications technologies. The company’s fitness-inspired brand has grown to include gym and sportswear, yoga and lifestyle clothing as well as intimates and accessories. The the are categorized as tights, sports Bras, pants, shorts, tanks and inspiration tanks. These cloths come with a variety of colors and sizes. To ensure all the women are accommodated in the stylish fitness-inspired company’s brands. According to a financial report by Wegner (2012), Lorna Jane stood at an average $100 million dollars per year and is expanding its stores worldwide. The company’s unique branding slogan – Move, Nourish, and Believe –entails practices that support a living through exercising. 2.3 External factors affecting the business Lack of Government incentives is making production to be expensive, thus making the company's products relatively expansive. Due to economic recession the country has not fully recovered thus relatively leading to low income for the customers thus reducing their ability to purchase stylish products. Australia is made of a large population of elderly population who do not value the sense of style and beauty. Australia being a vast country with and most of the population living in the rural remote areas of Australia where access to communication facilities are a challenge. Thus the Internet advertising might not reach them. 2.4 SWOT analysis 2.4.1 Strengths The highly experience and motivated personnel lead by the founder and creative director Lorna Jane Clarkson’s with an innovative spirit that has driven the company to producing stylish and high quality fitness-inspired clothing and accessories. The company has quality management for its staff, goods and services. The prices of their goods are affordable to many customers because it prices are low enough for the customers to afford and low enough to be profitable for the company. There is reliable productivity and creativity for every new season due to high demand of the products in the market. Lorna Jane has over 120 stores in Australia for distribution of its products. Not only does the company have physical stores but have also established itself as the highest online sport wear in Australia. It offers variety of affordable high quality clothing for all women who would love style, thus enhancing the productivity and development of the company because it has a wide range of products which are on high demand in market. The quality of the products has attracted many customers as it is the best as compared to others from different companies. Due to high profit making the company has managed to come up with huge quantity of products. The company also has highly qualified staff that conducts market research, research on new and cheaper technologies for manufacturing quality and cheap products in the market. Trust in the parent brand already established with core consumers Strong partnership with other retailers who deal on the company’s products 2.4.2 Weaknesses of the LJ Brand Low brand cognizance against the well-established multinational brands Since the company is a privately owned company with limited capital to expand its trade the business growth rate has been slow paced compared with other multibillion companies dealing on sportswear. Lorna Jane has been perceived as female centric, it is necessary for LJ to establish an independent masculine identity that men can 'own' Reduced sales opportunities due to lifestyle and reluctance to purchase at traditional retail outlets for male target market Low desire for product unless communicated effectively 2.4.3 Opportunities for the LJ brand Largely unexploited market segment within the men sportswear market, competitive advantage there for taking no brand past of LJ, can start with clean page and be by early adopters. The company can leverage on the women love for shopping and the love of style. Thus encourage the shoppers in a relationship to do shopping in the company’s stores. Leverage on the increasing online community to promote its product and established online stores which provide convenience to the customers As per Lorna Jane strategy, positive brand cross-promotion within lifestyle sector an available vehicle for LJ in raising profile Brand sensory qualities ignored by competition, for example scent, touch, sound. Either could be considered and owned by a new brand, for example ascent infused on clothing and print media. 2.4.4 Threats to LJ and Parent Brand The entry of many players in the market creating a stiff competition for the company Theft of ideas by other companies: other companies dealing on the same products have been stealing the company’s designs and coming up with cheap low quality products in the name of the selling Lorna Jane products. High government tax which make the cost of raw materials to increase and consequently making the products expansive and reduces profits. Lack of proper online payment systems in some countries have hindered the company’s expansion goals. 3.0 E-marketing strategic planning Devising an online marketing strategy is essential for any company. Technology is dynamic, the business environment is also dynamic and more so human behavior is dynamic and this is becoming more and more expensive and more and more difficult to reach target customers through the old-style channels. 3.1Segmentation and Target market The company target women who love style and active life as the business products are stylish and are fitness inspired. It allows women to exercise and look good when doing work outs. The company’s products do not but a limit to the age, size and color of coloring thus providing a variety of choices for women all over the universe. For this marketing strategy the company aims to reach women from all over the world who visit the web. The company’s products are not restricted to geographical constrains since the company has an online portal for ecommerce where customers can purchase items online and pay using web money. The company particular aim to target customers from countries where they have set up stores. This include majorly Australia, US, New Zealand and south Africa. The company’s goals are to establish a footing in one region before moving to other regions. 3.2 Product differentiation Lorna Jane is at the forefront of product innovation. It is dedicated to creating and investing in new hi-tech fabrications and exploring unique construction methods. The brand is not afraid to push boundaries with bold prints, bright hues and daring designs. Staying a step ahead of the active pack, Lorna Jane releases up to 100 new active styles each month in capsule collections inspired by global runway trends(Strauss, Frost, El-Ansary, &Ei-Ansary, 2009). . It continues to design industry-leading active wear using only the highest quality fabrics including its own LJ Excel - a trademarked hi-tech fabric available exclusively to Lorna Jane which is shrink and fade resistant, wicks moisture and is anti-pilling, quick drying and breathable. Each garment has benefited from over 20 years design expertise, is road-tested by a dedicated team to ensure it withstands the knocks and spills of the most adventurous work-out, all whilst offering an exceptional design and fit every time(Strauss, Frost, El-Ansary, & Ei-Ansary, 2009). .Lorna Jane designs, manufactures and retails its own product; and aims to do whatever it can to ensure it is the best available on the market. Lorna Jane prides itself on the quality of its garments, which speaks for itself wear after wear, year after year, work-out after work-out. 3.3 Positioning strategies Internet advertising has proven to be a targeted approach to reaching your customer base, and is easily the most cost effective and measurable method of obtaining new customers. It's an ideal way to reach potential customers with a solution that's cost effective, offers precise targeting and easy to understand tracking tools. Online search advertising reaches over 94.5% of Australian internet users who use search engines to find products or services online (Strauss, Frost, El-Ansary, & Ei-Ansary, 2009). The company explored internet advertising before and it received an overwhelming successes. Stepping its feet in a road clouded by few of its kind Lorna Jane was able to gain a sizable number of customers online. The company would be using the following internet marketing strategies to position the business in a better place than its competitors who rely on traditional methods of advertising. 3.3.1 Search Engine Marketing (SEM): The online advertising depends on the ability of the users find the company online. Attract search engine to the website. This can be achieve by: a) Search Engine Optimization (SEO): SEO is the process of getting a website to achieve top rankings for its chosen key phrases on the search engines without paying for these rankings. With daily search volumes in the hundreds of millions, and searchers in "goal mode", this is a tactic that cannot be ignored. b) Pay Per Click (PPC): Buying sponsored adverts on search engine results pages and content pages while only paying for those ads on a performance basis, i.e. when they are clicked on, has proven to be an exceptionally cost-effective online marketing strategy because you only pay when it works! 3.3.2 Online Advertising: Its broad impact is unmatched and with a completely measurable ROI, the sales value can not be disregarded. 3.3.3 Affiliate Marketing: Is like a combination of PPC and Online Advertising. In simple terms, it involves getting affiliated websites to display your adverts, with payment based only on performance (usually a commission on sales generated). 3.3.4 Viral Marketing: Word of mouth in an electronic context. Using the connectedness of the Internet to build brand awareness and grow subscriber lists. 3.3.5 WebPR: Allows online PR tactics to reach their full potential because the brand gets to travel to so many places, continuously linking back to your site. 3.3.6 Email Marketing: Allows you to build relationships with your target market as well as those who don't convert. This way you can communicate with them over time rather than losing them all togethers(Trocchia, &Janda, 2003).. 3.3.7Conversion Optimization: Fundamental internet Marketing, such as site development, SEO, emailing, PPC and WebPR effectively maintain your presence online. Our Conversion Optimization service adds to and enhances these tactics through the process of traffic analysis and optimization to turn more visitors into consumers (Trocchia, & Janda, 2003)..  3.3.8 Social Media: In an age of Consumer Generated Media, Social Media has a powerful role to play when it comes to marketing your brand online. The company would set up a Facebook page, twitter account, Google plus and the other entire popular social website. 3.3.9 Online Reputation Management (ORM): A vital component to maintaining and growing any brand online, ORM empowers you to know exactly what is being said about your brand on the Internet so you can engage and protect your reputation. ORM is an essential ingredient in any PR campaign. 3.3.10 Blogs and RSS Feeds A blog is basically an interactive website that permits persons to rapidly post ideas and comments. The biggest advantage of blogs is that, the search engines are notified each time new content is posted on the blog. Consequently, blogs that are regularly updated result in a high level of search engine optimization. Lorna Jane Company can use the blogs and socializing the blog with other similar blog this would attract a sizable traffic into the company’s blogs. 3.3.11 Podcasting and Online Videos The trend in internet world is the podcast and videos which involves creating audio and video files and sharing it in the internet through the RSS. Lorna Jane can leverage on this strategy by creating audio and video files of various beauty contest, workout dress and other catchy contents that promote the company’s products. 3.3.12 Mobile Websites With enhance mobile functionality and increased internet bandwidth use of mobile or hand held devices to access the internet have been on the increase. The company would design a mobile compatible website to enable mobile users visit the company’s website using their mobile devices. With the launch of the online store more customers would wish to browse through the company’s products before buying. Such a website will be a perfect avenue of platform for such a purpose. 4.0 Objectives The objectives of this marketing plan are to: i. study the target market to establish the current prevailing conditions and potentials ii. Find out who the business competitors’ are and their marketing strategies iii. Identify the target audience and Segment the market Develop effective market entry strategy 5.0 E-marketing strategies 5.1 Public relations & sponsorship Public relation as a means of building the company’s image would involve managing the company’s relation with the customers, suppliers, local communities among other parties interacting with the company directly or indirectly. This would involve setting up a public relation department who would be task with ensuring the customers are attended to accordingly and any issue arising is sorted immediately(Trocchia, &Janda, 2003). The main objective of the this strategy is to achieve favorable publicity, build the company’s image and its product reputation especially amongst the potential customers and establish an effective correspondence with the customers and other stakeholders(Strauss, Frost, El-Ansary, &Ei-Ansary, 2009).  The company would also participate in sponsoring events such as sports and other charity this would help build the brand awareness and make customers own up the product thus creating customer loyalty. 5.2 Personal selling The company would place sales persons in all the major stores who would be in a position to persuade the customers to buy the product. Internet chats and direct telephone calls could be done to selected customers informing them of the latest fashion (Strauss, Frost, El-Ansary, &Ei-Ansary, 2009).  5.3 Sales promotion This is a short term promotional strategy to attract customers to buy the company’s products. Several strategies would be used to promote the sales of the products at the begin(Morris, &Avorn, 2003). a) Money off coupons: coupons would be placed in the national newspapers and magazine. Customers would be required to cut the coupons and come with them to the store and they would purchase the company’s products at a discounted price. b) Competition: when a customer purchases the company’s product he/she is allowed to take part in a given competition that give him/her a chance to win a prize c) Free gifts: gift free gifts to customers who purchase the company’s product d) Loyalty cards: the customer would be provided with the loyalty cards that earn them more points every time they purchase the company’s product which later can redeem the points for cash or a product. 5.4 Product Distribution Since transport can be a major challenge, Lorna Jane will launch its operations in major and at later stages Lorna Jane would establish a partnership with other retail shops to supply them with the company’s products. This product would be distributed by the use of the railway as the railway line is evenly distributed in the country. Products with special orders would be ferried by the airplane from any part of the world where Lorna Jane has established stores. For international market the product will be shipped to its destination. From the port the products would be distribute via the railway connecting the stores location. Trucks would be used to distribute the products to the various distribution centers 5.5 Packaging The company’s products would be imported in bulk to the selected cities. Once in the city the products are packaged in bundles which would then be supplied to various outlet stores who would package the products in small Lorna Jane branded boxes. 5.6 Channel of distributions The company will have its own distribution units or franchises in some cities and consider venture partnerships with local representative firms and distributors in order to access areas which cannot be accessed at the start of the market entry. The company is considering partnering with the major supermarkets in the country and other major stores and boutiques selling products directly to the customers. Nonetheless, any contract should include terms that allow for local production and distribution whether through a new plant, acquisition or joint venture (Trocchia, &Janda, 2003). In addition, Lorna Jane is expanding online sales by presenting custom-made product line through the Internet, thus differentiating Internet offerings and specialty ship offerings. Regardless of its expansion plans, Lorna Jane intends to monitor and maintain strong relationships with distribution channel members 5.7Pricing strategy In order to achieve a sizeable market share in the introductory stage, Lorna Jane needs to adopt the strategy of keeping prices lower than the competitors. According to (Sujan&Bettman, 1989), such a move will often result in an instant acceptance of the company’s products from customers of competitive products and the firm will be able to penetrate the price conscious segment of the market immediately. The company would use the penetration pricing strategy in the initial phase as this would encourage more customers to consume the product. This would involve reducing the cost of the products lower than normal market price until the objective of reaching more customers is achieved (Smith, 2011). Once the objective is achieved the company can increase the price and adopt the various pricing strategies which may include cost based pricing; the cost of products are set taking into consideration the gross cost of the product, or competitor based pricing which involves setting prices based on the competitor prices (Angehrn, 1997). Price discounts strategies would be administered such as trade discounts to the retailers who purchase in large quantities, seasonal discounts, cash discounts, and promotional discount (Kalafatis, Tsogas, &Blankson, 2000). 6.0 Budget Since the company already has a website in place, the existing website would be upgrade to be more interactive. Particulars Cost Website upgrade 1000 Subscription for viral advertisement 1500 Pay per click 2000 Affiliate programs 1500 Total 6000 7. Evaluation plan The effectiveness of the internet marketing strategies would be evaluated by use of the following methods. It is important to evaluate the effectiveness of a marketing strategy to avoid loss of money on unviable strategy. a) Amount of new leads  This step in the evaluation process simply requires you to gather how many new prospects a specific marketing piece brought in. How you measure this depends upon the call to action in your marketing piece – phone calls received, replied emails, newsletter sign-ups, etc (Trocchia&Janda, 2003).. b) Total cost per lead Having determined the number of the new leads in above strategy. By dividing with the total cost will give a picture of the cost per lead. If the cost is reasonable then the advertisement was effective (Trocchia&Janda, 2003). c) Network traffic statistics By comparing the number of traffic before and after the advertisement. If traffic increased after the advertisement then the internet advertising was effective e.g in Facebook the number of likes. Conclusion Global competition is becoming striver with the advent of new advertising technologies. Companies who can leverage on the opportunities offered by this new technology would emerge top in the competition. Internet marketing afford large companies to be innovative, responsive and fast, small companies would also be able to operate in the field with the large business. Technology is dynamic and company’s must monitor the information technology changes to enable them cope with the changes. To survive in the current unpredictable business environment business have to adopt internet advertising. References Mohammed, R., Fisher, R. J., Jaworski, B. J., &Paddison, G. (2003). Internet marketing: Building advantage in a networked economy. McGraw-Hill, Inc.. Morris, C. A., &Avorn, J. (2003).Internet marketing of herbal products. JAMA: the journal of t he American Medical Association, 290(11), 1505-1509. Trocchia, P. J., &Janda, S. (2003). How do consumers evaluate internet retail service quality?. Journal of Services Marketing, 17(3), 243-253. Dholakia, U. M., &Rego, L. L. (1998). What makes commercial Web pages popular?: An empirical investigation of Web page effectiveness. European Journal of Marketing, 32(7/8), 724-736. Strauss, J., Frost, R., El-Ansary, A., &Ei-Ansary, A. (2009). E-marketing.Pearson Prentice Hall. Chaffey, D., Ellis-Chadwick, F., Mayer, R., & Johnston, K. (2009). Internet marketing: strategy, implementation and practice. prentice Hall. Roberts, M. L., &Zahay, D. L. (2003). Internet marketing: integrating online and offline strategies. McGraw-Hill/Irwin. Angehrn, A. (1997). Designing mature Internet business strategies: the ICDT model. European Management Journal, 15(4), 361-369. Kalafatis, S. P., Tsogas, M. H., &Blankson, C. (2000).Positioning strategies in business markets. Journal of Business & Industrial Marketing, 15(6), 416-437. Sujan, M., &Bettman, J. R. (1989). The effects of brand positioning strategies on consumers' brand and category perceptions: some insights from schema research. Journal of Marketing Research, 454-467. Read More