Introduction
To begin with it is necessary to mention that the launch of a new product presents many challenges to the creators of the product as there are many factors to take into consideration as well as many risks to take. While this is true of any new product, it is especially so with party wear and other luxurious goods. This is so because of the cutthroat competition that exists in the fashion industry.
Competition among luxury apparel manufacturers is evident in many forms but especially in the number of different styles that are developed each year. From 2007 to date, the number of styles that apparel manufacturers have produced has doubled (Hein).
Further complicating the picture for fashion clothes manufacturers is the prediction that this trend is in an indication of the way the future is going to be – a future of “rapid design, multiple seasons, shorter market windows and smaller quantities to lure consumers back into stores more frequently” (Hein). With this scenario in mind therefore, the process of developing a product, from the conception of the idea to bringing it to the market, has to be shorter today than it was in the past if a firm is to have any chance of competing effectively.
Product Concept
The main concept of the product is the party dress for ladies aged from 16 to 25. This product should be created in accordance with the world fashion tendencies on the one hand, and with a specially worked out idea. Originally, local and global demand for evening dresses for ladies is this category is high as is evidenced by the increasing demand for evening dresses all over the world, and in Australia in particular (Swenson, 2007).
In spite of the global financial crisis, exporters in Australia are mentioning vibrant growth in the market for ladies dresses. In these circumstances they expect to enhance their export sales by as much as 30% in 2009 from a recorded figure of over $2.6 billion in 2008, and the production up to 35% (Meagher, 2006). As a global player, Cotton On is in an ideal position to take advantage of this development by coming up with an exciting new product. Not only will it be possible to take advantage of existing markets, Cotton On has the capability to develop markets in the identified new strongholds.
Originally, the main concept of this product is the creation of new lines of the ladies’ evening dresses, which would help to fill the gap in Australian market of womensware. Currently, 80% of the womensware in Australia is imported from Europe (Meagher, 2006). The establishment of the new line will help to fill this gap at least partly, as domestically produced clothes will be cheaper. The short term perspective should be oriented at 38% of the Australian market as a minimum, otherwise, the increased imports will increase this gap.
Product Description
- Colors which are going to be used are black, grey, white, silver
- The theme of the collevction and the whole line in general is close to the 70’s style, as the designers were inspired by the 70’s collection.
- Collection details: one shouldered dress in puffiness, volume shape. Uni- puffy sleeve dress with belt straps and corsets. Simply draped.
- Two types of fabric will be used: cotton and polyester
- A collection with 12 outfits in one-piece dress.
- Price range between $69.95 to $89.95
- Target audience are the girls aged between 16 to 25
- The line will be designed mainly for the parties, and will not be suitable for casual wearing.
It is necessary to mention that cotton, as the natural material is more preferable, as it increases the wearing comfort of the dress. Thus, the popularity of the line will increase due to this factor. Taking into account the matters of hygiene, it should be stated that cotton lets the skin breathe.
Customers
The party dress targets clients for whom fashion and luxury have a definite appeal. Ladies between the ages of 16 and 25 are fashion-conscious people and for whom purchase decisions are made with ultimate care. Decisions on the purchase of fashion items are made based on “psychological and sociological factors” (Michman & Mazze p. 145). People therefore purchase fashion goods that allow them to self-express or those which are considered as reflective of good taste.
The psychological need for fashion and luxury clothing is explained by Dr. Stephen Fox (qtd. in Michman & Mazze p.145) who says that among other things, use of fashion products makes the user feel in control in addition to easing boredom. For consumers of luxury products therefore, the products are no longer luxuries but needs. Michman and Mazze (p. 148) further note that the consumption of luxury goods is no longer the preserve of the superrich as was the case in the past.
On the contrary, the not-so-rich are continuously showing preferences for affluent living and engaging in the purchases of luxury goods, making the use of such goods commonplace (Rasos). This trend towards more and more affluent consumption is shown by the increasing purchases of items such as boats and premium chocolate (Michman & Mazze, p. 148).
The ladies party dress to be developed should be marketed with the consumption patterns identified above in mind. As a party dress, the product immediately brings to mind ideas of luxury, freedom and relaxation. Moreover, the product has a huge customer base as it can be sold to women in all parts of the world. Party dresses, like other fashion clothing, sold in Europe, will find ready markets in America, Australia, Africa and other parts of the world. This product then will have global customers. Party dresses have a lower shelf life for the consumer than other dresses and therefore increased market demand. Blumberg (p. 134) notes that the amount which individuals spend on clothing, which includes luxurious clothing, is as high as 16% of income among US consumers.
The Organization – Cotton-On Australia
This new product will be produced by Cotton On, Australia. Cotton On Australia was started as a family business in 1991. It has since grown to become one of the leading producers of fashion wear in Australia and has a steadily growing international market. Evidence of the company’s massive growth is seen by its current size. The number of stores that the company operates in Australia and New Zealand is over 200.
In addition to having stores in Australia and New Zealand, the company also has stores in Hong Kong, Singapore and Tasmania. Moreover, the company has over 3,000 employees and its products have customers both locally and overseas. Not only are the products from Cotton On trendy, they are also price competitive and this gives the company an edge over the competition. For the company then, production of a new fashion product should not present any major challenge.
In addition to a great physical presence, Cotton On and its products are easily accessible online. Boasting a following of over 1000 on Twitter, the company is also available on Myspace and Facebook. On these sites, Cotton On advertises its products and in addition carries out competitions which further develop the company’s image and enhances its market position.
Cotton On Australia produces a wide range of products which make it ideal for the production of the party dress. The products include knitwear for girls, rubi shoes, children’s clothing and many household clothing accessories such as bed sheets and pajamas. The company is involved in a number of activities as part of its corporate social responsibility. Leading among these projects is Project Mannya, a fund raising programme that has so far raised $400,000 for projects in Mannya village in Uganda, Africa. These funds have been utilized to build a school and homes for nurses in the village (“About Us”).
In addition, the company has been involved in raising funds for the Geelong hospital’s children’s ward and has been organizing horse races whose intention is to give disadvantaged youth a chance to feel “a sense of ownership” in a bid to increase the youth’s personal confidence. The company’s charitable work is carried on by the Cotton On foundation which was established in 2008 although, says the company, it had been contributing to charity directly prior to the establishment of the foundation (“About Us”).
Competitors Analysis
The Australian fashion market is quite crowded but it still is a huge industry with great opportunities for the well-established companies. Currently, the industry has more than 2000 companies that are involved in the lucrative export business. The industry is worth about $14 billion and some of the biggest players who have strong international links include Supre, Jay Jays and Valleygirl. These Australian creators of fashion are trendsetters who present both an opportunity and a threat for the established manufacturer or product. Because of their presence in the market for longer and the well-known brands that these companies produce, they have a head start over other companies.
On the positive side, however, these companies have established brand Australia in the international market and this should be of assistance to other products from the country. International consumers continue to demand Australian fashionable clothing which is famed to be innovative. This fame is translated into demand for Australian fashion clothing internationally with “France, Japan, the United Kingdom, the United States, the United Arab Emirates and Kuwait” being the top international markets.
The new product will be able to take advantage of the current fashion scene in Australia which makes it possible to market new products to the local and international market with ease. A great opportunity is presented by the various fashion festivals that are hosted in Australia. Every March, the L’Oreal Fashion Festival is held in Melbourne and one of the activities in this festival is the exhibition of new products. Other opportunities for exhibiting the new product would be participation in the Rosemount Australian Fashion Week held in Sydney. These exhibitions provide the company with an opportunity to market for both local and international clients in addition to providing an opportunity for easy media coverage.
While the International market presents a huge opportunity, it must still be borne in mind that business in the world today is much more competitive than it was in the past, owing largely to globalization. The ability for shoppers to obtain information on products from around the world at the touch of a few computer keys also presents both an opportunity and a threat for new products. The opportunity is the ability with which it is now easily possible to offer new products to the international market quickly and inexpensively while the threat is the increased competition that the internet has brought to the fashion and other industries.
In offering the new product, Cotton On has various strengths that it can count on for the successful supply of the product on the international market.. Locally, marketing the new product will be made easy by the large number of stores that the company has. Moreover, the company has a well-known brand name which helps in marketing to new customers as well as cementing the loyalty of the old clients. While the company has a considerable number of strengths on its side, it should also be noted that, locally and internationally, there is fierce competition that is to be expected which could turn out to be a major weakness.
Apart from primary competition from Australian manufacturers, marketing and supply of the product on the international market will have to contend with the production and easy marketing abilities of other players in the international market.
SWOT
Pricing and distribution
This party dress price should not exceed $90. In spite of the fact this price is lower than the average price of a trendy party dress, nevertheless, it is the company’s policy, which can not be violated.
The need to develop proper distribution channels is underlined by knowledge of the fact that “an ordinary product with good distribution channels may experience excellent sales, whereas a superior product that is not well distributed would likely fade into oblivion”. One area that is widely utilized in the distribution of products is the use of supermarkets and other retail chains but this can also turn out to be very expensive for the manufacturer.
Retail chain owners are wary of new products because such products could end up taking much space without any guarantee of generating quick sales. As a consequence, the charges for space in retail chains can be quite high for new products. Initial distribution should be carried out using the company’s own chain of stores. With more than two hundred stores already, it will be easy to distribute the new product without having to incur huge expenses. The existence of these stores is a huge advantage for the new product and provides an edge over a similar product, even a higher quality product, from competitors with a less formidable presence.
Beginning with a hundred dresses per store, the quantity should be increased in response to demand. Distribution via the stores guarantees that the dress will be available both locally and internationally through the stores in Singapore and Hong Kong. By use of Twitter and other internet channels, global customers should be made aware of the introduction of the product and how they could obtain it. This could include making the product available on E-bay and Amazon.
Marketing Strategy
Short term strategy
To introduce the product in the market, the company should use the marketing channels already in existence as they are likely to lead to major cost savings. One such tool is the company’s website. Through this website, the company should announce the arrival and availability of the new product. In addition, the company should provide the information via its other web marketing tools such as Twitter and Facebook.
These marketing strategies have the potential of reaching a wide and global clientele while costing the company nothing. From these initial marketing activities, it will be possible to gauge the performance of the product and to make a decision on the long term marketing strategy to be adopted.
As for the innovative strategy, which may be attainable for the company, it should be stated that additionally to marketing on the internet, the company can achieve much marketing mileage by displaying the new product in all of its 200 stores. This too is a cost effective way of announcing the arrival of the product and provides a basis for making longer term decisions. A combined use of the internet and the company’s own stores provides the most logical and financially viable marketing tools for the short term. These are two powerful tools which cost the company very little, if anything at all.
Long term marketing plan
The company could market the product through the print and electronic media after some time. In addition, the company could create promotional events around the product. Prizes could include free dinners in trendy restaurants, bottles of wine or holidays. In addition, the company should participate in the various trade fairs and exhibitions that take place in Australia and other fashion cities of the world.
Such marketing methods are very expensive but they also have the ability of reaching wider audiences and creating larger markets. As part of the long term marketing strategy, the company will be able to make a decision on improvements necessary in the short term marketing tools that were used. This could include the creation of a blog spot on its website to obtain customer comments on the product or a change in the display of products in the company’s stores.
The fiscal analysis and the estimation of the costs would be the valuable support of the marketing research, nevertheless, these analyses are not represented in the free access
Financial strategy
Moving from the concept to the finished product has financial implications for the company. For Cotton On, however, a considerable number of functions can be performed without any additional financial consequences.
This is possible because of the infrastructure that the company already has in place. Whereas a new company would need to establish a website to announce the new product, Cotton On already has a website that it uses to market its products. In addition, the company has taken advantage of free internet marketing by maintaining a presence on Twitter and Facebook. For initial distribution and marketing, the company also needs not incur any expenses as it will be able to use its chain of stores, both in Australia and the rest of the world, to market it products.
Marketing through the media is quite expensive with a full page ad carried in a city newspaper costing as much as $8,000 (“Marketing media comparison”). Other traditional forms of marketing, such as the use of radio and TV are also expensive and have much more limited return when compared to internet marketing. While the traditional forms of advertising still have a lead in terms of marketing revenues, internet market in Australia today is growing at a phenomenal rate and is currently a $1.5 billion industry (“Marketing media comparison”). Cotton On’s widespread use of the internet to market its services is a step in the right direction and one that will save the company much money that would have been spent on marketing.
References
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Meagher K. Cross-Border Trade and the Parallel Currency Market: Trade and Finance in the Context of Structural Adjustment: A Case Study from Kano, Nigeria. Uppsala: Nordic African Institute, 2006.
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Michman, R D & Mazze, E M 2006, The Affluent Consumer, Greenwood Publishing Group, New York.
Swenson, Chester A. Selling to a Segmented Market: The Lifestyle Approach. New York: Quorum Books, 2007.