Marketing HW

Introduction

For any business to thrive and grow, it is critical for the business owner to try and find out who the target market is for his business. Identifying the target market will lead to correct decision making during product production and distribution. Identifying the typical customer so that you can be able to tailor your marketing pitch is important in building a solid foundation for the business. It is more important to have a well-defined target market especially in the current state of the economy. It is risky to target everyone, and it will be advantageous for the small business to target a small niche of the market. However, when we talk about the target market, it does not mean that we are excluding some people from buying the products but we are rather directing the marketing dollar and brand to ascertain market that can buy your products more than the other markets (Rust et al., 2004). It is the effective, efficient and affordable way to reach out to many of the potential clients.

In this type of fashion business, it is paramount that we identify the target market where we are going to direct our resources. The industry tends to have different market ranging from gender, age, style, and class. In this fashion industry, we are going to focus more on the production of the teenager products and the people who are between twenty and thirty. The teenagers tend to have the looks that are close to that of the celebrities’ making it easy to identify and prepare. Many of the teenagers will also love the looks that they have come across especially when it was from their favorite celebrity. Many of the teenagers will also look to the adult magazine to get the inspiration from the magazine. According to the times (magazine, 2015), it was discovered that 47% of the teens read the magazines to get the inspiration. It was also indicating that 75% of the white teens read a magazine each day. It was showing that only 66% of the black teens read the magazines while 50% of the Hispanic teens read the magazines. The statistics are important in helping the Company identify the teens that are likely to follow the celebrity trends. It is, therefore, easy to identify what is trending from the celebrity and prepare the products for the teenage target market. The fashion market that deals with teenagers tend to be on the cheaper end as many of the teenagers will not be having much money to buy the expensive luxury wear, but they will spend on the casual and the day wear.

Regarding the target market for the people who are twenty to thirty, they also prefer wearing clothes that are in trends just like the teenagers. However, they have a distinctive style that they prefer, and they also have the money to spend on clothes. Many of the twenty to thirty years will prefer reading the magazines to get inspiration, and the magazine will vary from the low to the high-end trends. They are also the people who have the money to spend. It is the market that is more affluent and the one that I prefer to target. According to the times magazines, (2015), 75% of the people in the age bracket that is between 20-30 years tend to read the fashion magazines to get the inspiration for the kind of trends that they can wear. Many of these people are found in European nations and the United States. It will therefore, be important to target these countries.

The business will also target the high-end premium market whereby the products will be targeting people who have money to purchase expensive products. The high-end market in this case, is referring to the people with higher income and willing to spend. Targeting the high-end market will also enable the Company brand to grow in value. Most people will want to associate with a brand that has the highest value in the industry (Rust et al., 2004).

Type of segmentation strategy

Market segmentation involves the process of dividing the market or the customers into special but different categories that are basing on the distinguished characteristics (Lee et al., 2008). Market segmentation is important as it helps many sellers to identify the type of customers that are capable of purchasing their products.

In this case, we are going to use the differentiated marketing segmentation strategy. Differentiation strategy allows the Fashion Company to create a campaign that is going to appeal to more than two market segments. In this case, our Company is focusing on different market groups from the age to market type. We are going to target both the teenagers, ages between twenty’s and the high-end premium market. The differentiated market is also going to use the different messages but targeting the different segments. When the Company can carry out a differentiated segmentation strategy, it allows an individual to increase the sales, customer base, profits and revenues (Lee et al., 2008). According the (Chron, 2015), it was indicating that 78% of the Companies that use the differentiated strategy tend to win a large market share than the Companies that use the undifferentiated strategy.

The company decided to use this strategy since it allows the business to be able to expand the sales potential. It also enables the Company to operate at full capacity through the addition of a target market even when the Company makes a product that is not running at full capacity.

Distribution channel

The distribution channel refers to the network of organizations and individuals that are responsible for the process of getting the services and products to the customers from the producers. We can also call the distribution channel as the marketing distribution channel or marketing channel. We have two types of distribution channels that involve the direct and indirect distribution channel. In this case of the fashion industry, we prefer to use the direct marketing channel. The direct marketing channel refers to the marketing strategy, whereby the products move directly from the producers to the consumers without involving middlemen (Tsay, 2002). It is one of the simplest and shortest distribution channels that many people are using including our Company. In our Company, we are going to involve the use of face-to-face sales whereby the products of the Company will be sold from different Company shops by our marketing officers who will be acting as the retailers. The marketing officers will be dealing with the customers directly and at the same time addressing their concerns. We shall also have the email or the computer sales, but it will not have any distributor besides the Company itself who is the producer. The email order will involve customers sending in emails to request for a particular product, and the products are delivered to them through our marketing officers. The use of social media will also be in place to help in the targeting of the teenagers who are always on the social media platform.

The use of the face-to-face sale will help the Company prevent the exploitation by the middlemen. The Company will also focus in setting up the retail shops in EU countries where the statistics by the Times magazine is showing that teens spend approximately 67% of the earning in the purchase of clothes. It will be better for the Company to take advantage of these statistics.

I will have to alter the current distribution channels that are involving the middlemen who tend to take longer hours to supply the products to the market. I will replace them by placing different distribution shops all over the country so that products could go straight to the shops where the customers could buy. It will also help to reduce the prices that the middlemen tend to increase on the commodities when selling them.

My strategic reasoning for selecting this channel of distribution is because, when we have a web based selling, it tend to have a low overhead, and it will go a long way in giving the products the global reach. The other reason is that of the lack of the middlemen; the Company is likely to make a lot of profits when you compare it to the indirect channel of distribution (Tsay, 2002). We also intend to make the direct channel via the internet so that the customers could be able to reach the Company on a twenty-four-hour basis. It will also be an opportunity for the customers to give the profits directly to the producers of the products.

Positioning Plan

Being a start-up venture, many people especially the target market are really happy about the idea that the Company is targeting the teenagers and the people who are in the twenties. Most of them are also happy that they will be able to buy good directly from the producers so they will not have to pay more for the products that they want to purchase. Most of the customers were also delighted concerning the issue of web-based selling whereby they shall have the opportunity to do business any time they feel. The high-end premium customers are also delighted that the Company will be operating their shops all over, and they will have the opportunity to purchase their products from wherever they are. The people who work were also delighted that they will not have to worry about finding the shops closed, and they will be able to purchase their products even during the night (Rust et al., 2004). Many of the teenagers tend to use online services and to provide the platform for them to be able to purchase their products is something that they were really happy about it. According to (Rust et al., 2004), 76% of the teens spent most of their free time on social media, a clear indication that the purchasing for the teens and the high-end premium.

Regarding positioning the products, we are going to position our products in a manner that it put into consideration the issues of the environment. We are going to produce organic products that will give us an edge over the competitors. The Company will also be able to develop a unique selling proposition that will help the Company to identify and communicate its compelling offer that will benefit in the way it answers the questions from the customer. The Company through the USP will be able to tell the customers that it offers the on-time delivery that happens to be better than what the competitors are offering. In other words, there are five simple steps that the Company will use to position the products. The first step will involve understanding the target market through an understanding of their buying criteria (Tsay, 2002). The second step will involve understanding the competition through carrying out of proper primary and secondary research. The third step will involve map buying criteria that will be against the competitive positioning. The fourth step will involve the assessment of the strength of the products against the buying criteria. The last step will involve the process of analyzing the gap.

The Pricing Plan

Pricing refers to the setting of a certain product or service as the producer. The price that the Company sets will go a long way to determining the kind of profit that the Company will make. In our Company, we are going to have what we call the quantity discount. Whenever a customer purchases goods that reach a certain amount of money, they will receive a discount on the products. It will mainly be affecting the teenagers since they are the ones that are price sensitive. Since our Company is still new in the market, it will try to use the penetration pricing whereby the price of the products is set artificially low to be able to attract customers. When the market share increases, we shall also have price skimming for the products that we know we have a competitive advantage and when we bring new products to the market. Although it will not be used for long term as it will attract the new competitors. The psychological pricing targets the consumers to respond emotionally instead of a rational response to the products (Yang, 2004). For example, our setting of prices will not be exact but it will have some cents lower than the competitors. For example, instead of selling a shirt at $ 70 we shall sell at $69.99. It is psychological to attract customers. The psychological pricing will only be targeting the teenagers and not the high end premium market.

The basis for the Company’s pricing is mainly competition based. Setting the prices will mainly be focusing on what the competitors are offering so that I can be able to attract new customers and help the Company get the large market share.

In conclusion, each distribution channel will have different prices depending on the cost of delivery. The major challenge will occur in the web-based marketing whereby the marketing officers will have to be online all through the day to meet the customers demand. It, will, therefore, mean that we are paying people extra time. The price for the people who purchase online will be 5% more than what we sell in the shops. The ones who order directly through email will also be charged 3% higher for the transportation cost. The lowest price will be for people who reach to the shops so that they can purchase directly from the sellers.

References

Lee, C. F., Chang, C. C., & Wang, K. H. (2008).An improvement of EMD embedding method for large payloads by pixel segmentation strategy. Image and Vision Computing, 26(12), 1670-1676.

Hanson, R. E. (2015). Mass communication: Living in a media world. Sage Publications.

Rust, R. T., Lemon, K. N., & Zeithaml, V. A. (2004). Return on marketing: Using customer equity to focus marketing strategy. Journal of marketing, 68(1), 109-127.

Tsay, A. A. (2002). Risk sensitivity in distribution channel partnerships: implications for manufacturer return policies. Journal of Retailing, 78(2), 147-160.

Yang, P. C. (2004).Pricing strategy for deteriorating items using quantity discount when demand is price sensitive. European Journal of Operational Research, 157(2), 389-397.