Despite of the fact that the products of Icebreakers has a number of unique selling propositions, which are extremely authentic, highly differentiated, very much comfortable and unique, the demand of the apparels throughout the world is not too impressive. This is mainly because the company has not focused on its core value propositions – that is, it has always charged premium prices for all its products based on the idea that the products are highly differentiated. As the company uses merino wool clothing (that have various benefits over the normal wool clothing), which are light, comfortable (with breathable pores, remarkable wadding, and non- itching surface), and possess awesome odour resistant power, it has always tried to offer high prices (thirty to thirty five percent price premium than any other relative products). It is important for the company to appreciate that focusing on lower and competitive prices is the key to focus on core value proposition of the company. In other words, the business would only be able to utilise the full capacity and run in economies of scale when it would uphold the core value proposition by being a “price leader“. Therefore, when it comes to think about value proposition, the foremost recommendation should include the idea of offering competitive prices. The table below outlines this strategic recommendation and assesses its usefulness:
Apart from trying to develop the core value propositions of the company by concentrating on the idea of offering competitive prices, it is also important for the firm to enhance the value propositions by expending more on advertising campaigns. The table below shows this strategic recommendation and measures its effectiveness:
In order to expand the market and involve more and more customers, it is essential for Icebreakers to make it more different and desirable to the customers by trying to make the brand further popular by undertaking several advertising methods to increase the appeal of the products and to differentiate it greatly from the competitors. Apart from undertaking marketing campaigns to make it more desirable, Icebreakers should newly position its business by focusing on the following factors.
Icebreakers should appreciate that the role of brand is fundamental and the potency of the brand itself should become a powerful marketing tool; so, the critical point of the brand is creating its own identity which begins with name, symbol, motto, colours, quality, wrapping, and other natures; these are very imperative aspect for branding successfully; so, the brand should be:
- Pleasant: The brand should have strong aesthetics, function, and designation – and all of these three factors should settle after long enduring research from the R&D teams of the firm
- Flexible: This signifies the fact that the uniqueness of the brand should be strong enough to illustrate clearly all the true qualities and features of the products in order to ensure that the customers are not disappointed when they purchase the product, as it was not matching with the advertisements. Most importantly, the name of the brand should be enough universal and memorable, which could provide a versatile brand for the firm’s products of that particular category – in other words, the brand name should have multi-facet uses; the flexibility of the trade name would mean that the customer would be encouraged towards them.
- Adaptable: The branding should be adaptable and compliant with not only the particular product Icebreakers specialises in, but the firm should also keep in mind that when it will have to launch new product lines for different purposes, the brand name suit with them.
- Defendable: These are not indicating towards the lawful features of trademarks, but the tangible likelihood that a brand of Icebreakers becomes identical for the goods/services offered; for example, the name Coca-Cola has used to indicate colas, and the preface in general terminology of the word “to Google” in the place of “to browse”; in other words, this means that the brand name should be good enough if it turns out to be generic
- Neat & clear: The business’s symbol must be enough neat and clearly visible so that anyone can easily distinguish it even when the screen of the advertisements are not so clear, or even it is black and white; the symbol has to be identifiable for the reason of the outline and structure of the symbol and not for the colours
- Resizable: The symbol must be efficient and understandable when it has resized or inverted; moreover, the firm must be able to reshape the symbol easily, for instance for issuing these on the firm’s cards; in addition, the symbol must be identifiable if its shape has mirrored somewhere
According to the Lassiter & Heath (13), business expansion is one of the most important factors to increase profit margins where distribution of the products can play vital role in case of business expansion of international market, for instance, the giant US market. However, they further pointed out that the company had fared well in Europe by working through distributors, where brand was stocked in more than 200 stores and Moon also contacted with local distributors to recruit them to stock its products, which brings success for the company in European zone. However, the following figure shows the distribution channel of the company –
As Icebreaker grow in distribution reach, it should target middle class, and upper class customers who would like to purchase product from design led companies. In addition, Moon argued that design led companies offer comparative lower price than the competitors’ offer and focus on the customer choice (Lassiter & Heath 5), thus, Icebreaker should concentrate on higher class as well as middle class customers for its merino wool products, but the target customers must be educated and have knowledge about the merino wool.
This strategy was not effective in the US market at initial stage as the first distributor in the US market foray was not happy with the offer of Icebreaker; however, Moon had signed a deal with a third-party distributor, which failed to meet the target of the business and the sales of the company in this market were likely to be only $250 thousands for the fall 2003 season (Lassiter & Heath 2). In this context, Icebreaker should require more effective value chain across the global market; however, Icebreaker changed supply chain management system in 2002 and revenue grew about $9 million, most importantly, international demand had eclipsed New Zealand demand for the first time. According to the case of Lassiter & Heath (7), only 50 stores in the US market had agreed to carry its products though the risk of the business were very low; therefore, Mood made a fundamental decision to position Icebreaker as a technical apparel company, selling through outdoor and snow sports retailers and no company launched in both channels at once. According to the case, Moon adopt few features to increase sales, such as –
- outdoor customers considered the key features like durability, breathe ability and insulation;
- however, the competition was sophisticated as existing brands were technical enough for hard core outdoors people
- its retail price more competitive than in the fashion market
Corporate governance of Icebreaker:
Effective corporate governance system is the most important factors as many large companies have collapsed due to mismanagement or unethical conduct of the top-management; therefore, it should need to decide who holds the real power of Icebreaker and why should they hold the power. This report argues that Jeremy Moon should have ultimate power to control the global market by taking important decision and implementing strategies as according to the Lassiter & Heath (2), he graduated with masters degree in marketing from Otago University in 1992, and he had worked in a market research company. On the other hand, Brain Brakenridge should have power to communicate with the major suppliers and maintain supply chain management system, and Sir Peter Blake should have managed promotional segment of the business and Central Otago should hold power to control quality of fiber.
Key Recommendations
According to the case, implementation of the effective strategies, experience of the management and best quality of the products of the company were the key success factors. However, the competition is increasing day-by-day due to development of advance technology along with change of customer behaviour and the competitors are maximizing profits by expanding business in global markets. As a result, this report would suggest Moon to gain a competitive advantage over the competitors by applying few common strategies –
- The marketer of the company should drive to arrange more IMC Campaign in order to aware target customers about the quality of the products;
- However, Icebreaker should joint venture with potential competitors those are already well-established in the country can easily utilise this opportunity to gain competitive advantage
- Icebreaker should follow multimedia marketing strategy in order to reduce the advertising and promotional costs. That means Moon should consider social networking tools for its advertisement or IMC projects as Facebook and Twitter facilitate to influence the customer by developing relationship;
- Successful introduction of lean production method can help the Icebreaker to gain competitive advantage;
- However, it should require to develop online purchasing system to gather more customers who rely on internet services;
- The company should offer relatively cheaper prices that the competitors’ offerings as it can be key success factor for the company;
- On the other hand, it should require producing video to upload in Youtube to aware people that the company’s clothing line was made from 100% pure New Zealand merino wool.
Work Cited
Lassiter, Joseph. & Heath Dan. Icebreaker: The US Entry Decision. Boston: Harvard Business School Publishing, 2006. Print.