The Manner in Which Australian Designer Brands Compete with Other International Brand - Research Paper Example

Chapter 1: Introduction 1.1. Introduction This thesis report looks at evaluating the manner in which Australian designer brands compete with other international brands. To be specific the paper looks at evaluating the different marketing elements of product involvement, familiarity, quality, distribution, risk and trust and other factors which will help to analyze the different factors which attract people towards Australian brands. The paper uses different previous research and looks at the future forecast for the retail sector so that Zara the fashion provider in Australia along with other providers can be analyzed and the manner in which the brands compete can be identified. 1.2. Background Information In recent year there has been a strong growth of Australian brands like Zara among other international brands performing in the market (Zehner, Bradley & Sanders, 2011). The pressure on business looking towards providing better quality products through different mediums has increased the demand for different brands. The use of online presence has helped the designers of Australia to compete in a better way (Morrison, 2011). The different international brands with their presence in Australia have also looked toward deeper penetration through the use of internet and store presence has intensified the degree of competition and sustaining business has become difficult (Hipsley, 2011). The degree of competition has extended into fashion industry as well. The presence of domestic brands like Zara along with other international pressure has made it difficult to sustain the business. The different brand providers have to look towards being innovative and keeping in tune with the fashion world. This requires continuous development and changes so that new and better mechanism through which customers can be attracted and retained can be devised. This will help to identify the different variables which brands need to inculcate so that they are able to present them superior as compared to other competitors in the market and develop the required market through which deeper and better penetration becomes possible. 1.3. Research Problem Understanding the impact other international fashion brands is having on the Australian fashion industry and the manner different adjustments are being made to provide necessary services to the customers is an aspect to be analyzed. This will help to understand the different variables and perceptions which impacts customers while looking to purchase fashion brands. As already mentioned the paper looks at evaluating the different marketing elements of product involvement, familiarity, quality, distribution, risk and trust and other factors which will help to analyze the different factors which attract people towards Australian brands. This will thereby help to bring out the different factors which have an impact on customers’ perception while looking to compete with other international brands. This will also provide the Australian brands like Zara to be able to identify the different factors which helps them to compete with the international brands and will chalk the framework through which future decisions can be taken which will help them to be successful over the longer period of time. 1.4. Purpose of the Study The purpose of the study is to evaluate the different factors which have an impact on consumer demand while looking to purchase different fashion brands from the market. The paper also identifies the different factors which has influenced different domestic fashion brands in Australia and the manner in which they are able to compete with other international brands. This will identify the different variables which will improve the overall relevance of different fashion services multiply the effectiveness through which the fashion industry works. 1.5. Research Questions The research looks towards answering the following research questions 1. What aspect and variables of customer purchasing habits influence customer perception towards fashion brands? 2. What aspect of the fashion industry helps to develop familiarity, trust, loyalty and distribution of fashion products? 3. What are the different nature of risks which fashion industry in Australia has to face while looking to compete with other international brands? 4. How does the Australian fashion industry compete with international brands and the major variables that determine the future opportunities of the business 1.6. Significance of the Study The Australian retail industry is bound towards exponential growth as the industry has grown considerably and stands at $210 billion (Harper, 2012). This presents an opportunity where both the domestic and international players have been able to find a place for their brands. Online auctions, department stores, fashion, cosmetics and variety stores made up 47 per cent of online sales in 2011 (Harper, 2012). With the sale of the retail industry is expected to grow by 20 percent it present an opportunity through which business can grow future. This makes it important to identify the different attitude, perception and factors which have a role in determining and shaping the manner through which different brands compete with one another. The overall importance of the study increases as the Australian brands like Zara needs to evaluate the different marketing elements of product involvement, familiarity, quality, distribution, risk and trust and other factors which will help to analyze the different factors which attract people towards Australian brands. This will thereby help to work on the four marketing elements which will determine the different variables which have an impact on customer purchasing decisions while looking to choose a particular fashion brand. The overall phenomenon will thereby carve a path for Australian fashion brands which they need to follow so that more and more people can be attracted towards the domestic brand. 1.7. Expected Outcomes The completion of the research will help to receive the following outcomes as has been identified An improved understanding of the different services offered by different brands which includes both domestic and international brands An increased understanding of the different marketing elements of product involvement, familiarity, quality, distribution, risk and trust and other factors which will help to analyze the different factors which attract people towards Australian brands To find out the factors which influences Australian brand and has helped them strengthen their working style so that they are able to compete with other brands To provide recommendations for further studies in the future 1.8. Structure of the Thesis The dissertation looks at following the below stated structure Chapter 1: will be introduction which will highlight the research problem, the purpose of the research, the research question, the rationale of the study and the expected outcome which will be received after completing the thesis Chapter 2: will be the literature review which will look towards past studies and work on the four marketing elements so hat a framework which has an influence on different fashion brands can be understood Chapter 3: will highlight the methodology which has been used along with the different ethical considerations which has been considered while looking to carry out the research Chapter 4: will look towards analyzing the data and highlighting the manner in which the different variables have a role in determining the manner in which Australian brands compete with other international brands Chapter 5: will conclude with the conclusion, recommendations and the limitations of the study so that the users are able to identify the different factors which influences the overall process of decision making. Chapter 2: Literature Review 2.1. Introduction This chapter will look towards carrying out a literature review so that the different factors which have an influence on customer decision to choose a particular fashion brand can be identified. This section will also look to back the different findings with previous research and will provide a framework through which the overall relevance of the study can be improved. 2.2. The Brand Building Process American Marketing Association (2011) has defined brand as “a name, term, design, symbol, or any other feature that identifies one seller's good or service as distinct from those of other sellers.” The period of 1980’s witnessed a change as organizations looked towards stressing importance on the concept of brand equity which helps to determine the financial value of the organization (Kapferer, 2008). Brand equity has been further defined by different literature in a different way (Gill & Dawra, 2010) but most research agrees to the fact that brand equity helps to add value to the brand element which contributes towards the marketing strategies which will be used to differentiate their products from others (Keler, 1998). The fashion industry is often considered as a cultural industry and the growing importance being given to cultural industries has given increased attention to it. These industries have witnessed exponential growth and have further become competitive due to increase in competition from international players (Hauge, 2007). Since the industry is highly based on culture and the fashion industry has grown considerably it makes it imperative that the difference between cultures which the fashion industry presents in looked at while looking to develop the marketing strategies that will be followed. A topic which is highly discussed in the fashion industry is whether consumer demand is becoming more homogenous or not? Many have put forward the notion that the development of market place across borders aided with mobility of labours, technology and other factors have made the demand for fashion industry to be homogenous (Merz, et.al. 2008). This has created an opportunity where the international players are able to compete with the domestic players and has intensified the level of competition at all levels. There are still other proponents who say that the presence of local culture in the fashion industry makes it difficult for the international players to have the same presence as the local players and thereby limits the degree of competition which is present in the market (Levitt, 1983). The fact that international brands have become successful is the fact that the international brands instead of standardizing their approach has taken an adaptive approach which has helped them to make changes in the products and designs so that it suits the needs and requirements of the local market and consumers. This thereby makes customers heterogeneous and divergent which makes it difficult for the international players to compete in all markets (Merz, et.al. 2008). The fact that the international players have taken an adaptive approach has ensured that there products suit the local requirements and the products are developed based on taste and preference of local customers (Papavassiliou & Stathakopoulos, 1997). Using the process of adaptive approach has brought about a change in the manner international players work in the market and provides an opportunity to compete with local players (Sousa & Lengler, 2009). International fashion players who haven’t been able to work according to the local needs fail as the customers attitude towards the product is different and results in a decrease in the demand for products and services (Douglas & Wind, 2007). The degree of competition is thereby shaped by different factors which need to be identified and worked on so that Australian fashion players are able to identify the different fundamentals which will help them to compete with other international players. 2.3. Models of Brand Building Process The conceptual framework will look at analyzing the manner in which brand building process has been carried out by domestic and international fashion brands. The brand building process needs to work on different areas like product attributes, brand identity, positioning, marketing communication and distribution which has been used by different players to establish their brand in the market. The process followed during the brand building process looks at creating brand equity so that more and more people can be attracted and looks at the following The above chart shows the different dimensions which has been worked by different fashion players to create a market and differentiate their products from others. 2.3.1. Product Attributes Product attributes is the tangible value which the customer receives while looking towards purchasing a product. The different tangible value which a customer gets comes from labelling, logo, symbols and colour (Melin, 1999). Kapferer (2008) states that the product attributes help to provide unique representation of the brand and add value through which branding strategy is developed. Further, physical features of the brand helps it easy to remember and recall the brand which people normally experiences with the senses (Upshaw, 1995). Product adaption refers to the process of making changes in the product so that it matches the needs and requirements of different international markets. This thereby results in additional cost for the business as changes need to be made with regard to labelling, colour and logo (Cavusgil, et.al. 1993). The risk for such a decision is that it results in reducing some of the product features and might not thereby find a perfect fit for any market resulting in increasing the overall risk. Jackson & Shaw (2009) has further identified that there are significant differences between countries which is represented in the fashion industry due to colour, trend and style which cannot be easily transferred from one region to another. It is seen that Mediterranean regions have a preference for bright strong colours while Northern Europe has a preference for some other trend. This requires that the fashion market predicts the different needs correctly so that products and services can be supplied accordingly. In addition to it the difference in weather conditions also makes it difficult to deal with local competition as when there is summers in Australia, Europe has winter (Granger & Sterling, 2007) which makes it difficult for the international brands and providers to be able to provide the customers will all the different needs and requirements. 2.3.2. Brand Identity The fashion industry requires that proper brand building is carried out so that it will help them to differentiate their products and services from others (Fernie, et.al. 1997). Identity is something which makes the brand unique and generally refers to the intangible attributes which helps to add customer value in an emotional sense (Melin, 1999). A set of brand association helps to create brand identity as it helps to determine the manner in which firms want to make the customer perceive the different brands (Aaker, 2011). The brand name acts as a cushion in the fashion industry as it is an important element in determining the brand identity and ensures distinction between association and feelings that the customers perceives in their mind (Melin, 1999). This is an aspect which has been considered by international fashion brands while looking to decide the strategy they will use while working in Australia. Global fashion brands have thereby developed their own identity which differ them from others in the market. It is seen that fashion houses like Armani & Zara have developed their own brand appeal based on universal appeal (Aaker & Joachimsthaler, 2000). This makes it easier for them to develop a single brand identity across different international markets instead of developing multiple identities which will confuse the customers. 2.3.3. Positioning Positioning is a process of creating a place in the consumer mind and is based on the core values that the product or service provides (Kotler, et.al. 2008). The core attributes are the product attributes and brand identity which helps to pass on the core value that the product has and determines the different benefit which the customer will get through using the different products or services (Melin, 1999). Positioning is interconnected with segmentation which can be based on demographics, purchasing behaviour, geography and psycho-graphics. In the fashion industry an important factor influencing segmentation is demographics which include age and gender along with the level of education and occupation. This helps to determine the purchasing habits and the manner different physical needs of the people are satisfied. In addition to it the personality and life style of customers also influence the purchasing habits and determine the manner in which the fashion industry is being shaped (Jackson & Shaw, 2009). Different global brands have developed a standard brand positioning strategy so that they provide some similarity to the manner different customer demands in the fashion industry (Aaker & Joachimsthaler, 2000). The different brands have identified a proposition which will help them to attract people from different areas towards the fashion industry. The fashion industry is highly fragmented and developing the correct positioning strategy along with segmentation policy has helped to create differences among the services and thereby resulted in intensifying the level of competition. 2.3.4 Marketing Communication It is imperative that the brand message is properly communicated to the target audience so that correct information can be passed (Holm, 2006). Since, marketing is aimed at creating value so the marketing communication should look towards influencing the perception of the customers (Holm, 2006). Marketing communication helps to create brand loyalty and acts as a process through which brand identity is developed which thereby helps to develop a brand strategy for the different products and services. Marketing communication helps in a long way to create unique brand and ensures distinction so that the competitive advantage can be gained. The different fashion brands which includes both the domestic and the international brands have focused on developing the marketing communication channel which has helped them to sustain competition. The different verbal, thematic, visual and audio elements have helped the fashion world to take and adopt different marketing strategies which has helped them to distinguish their brands and thereby created different perception of the people. The fashion industry has looked at adopting a standardized model through which they have developed marketing communication process in a manner through better effectiveness will be gained. This has helped to ensure that both and domestic and international players look towards identifying the different mechanism through which they will be able to provide different products and services to the local people so that they can be attracted and retained. 2.3.5. Distribution Distribution by the development of intermediaries is another important aspect which determines the manner in which the business is able to reach different parts of the world (Mallen, 1996). Intermediaries are available on different levels like distributors, agents and retailers (Kotler, et.al. 2008). Using the correct channel helps to ensure particular aspect which will strengthen the fashion industry is being looked at and will thereby help to build a strong brand. Fashionable goods have looked towards using the different channels which have a high unit value and uses selective channels so that a style element is provided through which maximum customer satisfaction and wants can be met. The high fashion industry looks at standardizing the location of their shops stating that they look for similar settings and space so that customers visiting the different stores and provided with the same enjoyment and pleasure of shopping (Moore & Leroy, 1995). The store environment is another important aspect which has a role in the fashion industry as having a sound environment helps to ensure better and maximum penetration through which different customers can be attracted and helps to reduce the overall level of competition. This provides an opportunity where the international fashion brands is able to deal with domestic fashion demand in different countries like Australia. 2.4. Summary The branding process which is adopted in the fashion industry is quite distinctive and looks at differentiating their services and products from others in the market. The overall phenomenon is developed based on strengthening the presence in the international markets by looking into aspect like positioning, product attributes, brand identity, segmentation, distribution along with product involvement, familiarity, quality, distribution, risk and trust and other factors which determine the long term success of the brand. The fashion industry is highly concentrated y the different elements of marketing and the players which is able to identify those and develop their services accordingly are able to attract and retain customers thereby providing an opportunity to sustain competition and ensure better and long term productivity. Chapter 3: Methodology 3.1. Introduction This chapter looks to present a complete description of the methodology which has been used for data collection, the research design, the sampling method, the research question and the different ethical issues which have been considered. This will thereby help to provide conclusive evidence based on which the data has been collected and will look at maximizing the overall effectiveness and determine the factors which have a role in fashion industry in Australia and the manner the fashion industry is able to deal with other international players. 3.2. Research Design The major objective of the research is to find out the manner in which Australian fashion industry has been able to compete against other international players. This will highlight the different marketing elements of product involvement, familiarity, quality, distribution, risk and trust and other factors which have attracted people towards Australian players like Zara. Along with it the different variables which impact customers perception and attitude towards is being analyzed so that the manner in which the fashion industry is being shaped in Australia will be determined. A qualitative approach is being used for the research design so that it helps to provide comprehensive and in depth understanding of the feelings, thoughts and experiences which provides the customers through the different brands. Qualitative research has been stated by Patton (2002) as a process which looks at focusing on smaller samples even single cases so that the purpose of the research can be easily achieved. The focus of qualitative research is not on the number of observation or participants but largely depends on interpretations, descriptions and other visual portrays through which correct interpretation can be made (Zikmund, Ward, Lowe, & Winzar, 2007). The study looks towards understanding the thoughts, opinions and behaviour of the respondents so that results can be comprehended in an logical manner which will thereby help to improve the overall relevance of the research. 3.3. Data Collection The purpose of the research is to find out the manner in which Australian fashion industry has been able to compete against other international players. This will highlight the different marketing elements of product involvement, familiarity, quality, distribution, risk and trust and other factors which have attracted people towards Australian players like Zara. Along with it the different variables which impact customers’ perception and attitude towards is being analyzed so that the manner in which the fashion industry is being shaped in Australia will be determined. To analyze the result the research will concentrate on a single company named Zara so that it gives the opportunity to explore the manner in which different factors can be investigated so that the manner Zara has been able to deal with competition that the international brands provides can be understood. 3.4. Research Questions The research looks towards answering the following research questions 1. What aspect and variables of customer purchasing habits influence customer perception towards fashion brands? 2. What aspect of the fashion industry helps to develop familiarity, trust, loyalty and distribution of fashion products? 3. What are the different nature of risks which fashion industry in Australia has to face while looking to compete with other international brands? 4. How does the Australian fashion industry compete with international brands and the major variables that determine the future opportunities of the business 3.5 Sampling The sampling method which has been used is non probability where a single company named Zara so that it gives the opportunity to explore the manner in which different factors can be investigated so that the manner Zara has been able to deal with competition that the international brands provides can be understood. The process of sampling further looks towards ensuring that a mechanism of case study approach is used which will help to understand the manner in which different variables has helped Zara to deal with the increasing competition presented by other international brands. This will thereby look towards ensuring that the process provides complete and better information through which the different variables which impacts customers perception for different products and services can be examined. 3.6. Data Analysis The data analysis procedures looks towards analyzing the qualitative data which has been gathered and analyzed based on different marketing elements of product involvement, familiarity, quality, distribution, risk and trust. This will be matched by the analysis of data which will look towards analyzing the data based on the different marketing elements so that the overall framework through which decisions are taken will be improved. The overall analysis will be further based in identifying the manner in which different variables and objects have an impact on the consumer demand for fashion products and will help to understand the manner in which fashion industry competes with other international brands in Australia. This will thereby help to improve the validity and reliability of the research and the process which has been used to interpret the data. 3.7. Validity of the Research 3.8. Reliability of the Research 3.9. Ethical Issues 3.10. Summary Read More