Sportzshoo Company’s Market Segmentation Strategy

Relevant Marketing Information

Industry definition

As a medium-sized fashion player specializing in sports footwear, Sportzshoo plc ventures in a market involving competition from different levels. Two decades of a dealership in sport’s shoes provide the company with a suitable industry footing for future operations. The industry presents a sensitive market with products that many would classify as a luxury category from different socio-cultural perspectives (Rowley 2009, p. 348). Success in the industry depends on the consumption patterns for sports merchandise. From the current UK industry, consumption projections of sports products continue to illustrate potential growth backed by information and market reception. The sports industry in the UK represents a multi-billion pound sector that touches on the national economy as an integral sociocultural player. For instance, principal games in the UK such as rugby, football, and athletics continue to attract monumental investment from across the borders.

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The UK, as a serious contender for major European and global sports events, presents a lucrative opportunity for sports investments. Hosting recent events such as the Olympics and the UEFA Champions League illustrates the global status that the national economy attracts as a sports destination. Tapping from this rare opportunity illustrates impressive growth trajectories for sports companies such as Sportzshoo. Recognition of sports as a national heritage and continued investment by the government in the construction of sports infrastructure back the industry for growth. Equally, information on the significance of sports with regard to personal fitness and national integration support consumption of sports products. Globalization offers a rare platform for converting the world into a single market where marketing and shopping can occur across the planet in real-time.

Sports form a better unification factor for the global population than any other sociocultural or political motivation. Further expansion of sports apparel demand implies that Sportzshoo can venture into this market across Europe and around the world. During the information and communication civilization currently taking place, the importance of sports will continue to make sense to the apparel market (Madsen, Neergaard, and Ulhøi 2003, p. 428). However, with various issues as discussed below, sports product consumption may experience fluctuations due to the luxury tag associated. With such knowledge, operations of sports companies must employ smart strategies to remain profitable. Marketing functions in operations, for instance, must inform production and drive demand for products. Sportzshoo requires a vantage perspective on the industry in determining crucial market drivers to remain competitive.

Contextualizing Footwear in UK Sports Fashion Market

Contextualizing the sports footwear market in the country must highlight the overall apparel market down to the sportswear category for market relevance. One major observation of the overall industry reflects consumer preference as a vital determinant of demand. The fashion industry in the UK and Europe ranks ahead of various distinct global fashion markets. Such a position of consumption rating allows Sportzshoo a wider scope of operations in terms of availability of the market. This implies that the various product categories that the industry takes in terms of demand fall within the UK’s market demand propensity. As illustrated above, sports industry reception provides footwear demand with a broad market opportunity. Customer preference in terms of class, comfort, and convenience must fall within the company’s market presence (Kaiser 1985, p. 32). The UK as a significant European economy shapes fashion demand, which implies that the footwear industry falls within the exploitable opportunity. To expand the sports footwear trajectory, the company needs to provide extensive promotion outside the traditional sense of sportswear. As an illustration, advocacy and promotion of affordable casual wear with a trendy sport touch may propel market presence to the global platform.

Target Market and Expansion

Target market as enjoyed over the company’s lifespan appears to take a narrow coverage than provided by the market. As illustrated above, huge investment flows into the sports industry promise room for expansion of exploitable markets by sports apparel players. The company needs to move up from a middle-level company in order to propel to investment status set by players in the market. Major competitors have a high-level investment status, which enables them to tap from the opportunity provided by the multi-million sports dynasty established across Europe. To achieve such prominence requires expansion of the target market, which calls for investment in product lines and product mix suitable for the market. As an alumnus of the Olympic fraternity, the company’s founder could present an insider’s perspective to what the high-profile sports events demand in terms of footwear.

The prestige and status of winning gold medals in the Olympics can give the company a rare identity with appropriate marketing across several target Olympic sports. Perhaps spending resources and energy in branding an image around Olympic identity holds key to the unlocking of target market expansion. The company may find alternative marketing perspectives in joint ventures, merges, and acquisition if expansion proves difficult at the current balance sheet figures. Equally, the projection of the company into public prominence might repay the risk, through the listing and appropriate initial public offer procedures to acquire capital. Exploiting the available target market to eliminate undervaluation will require an aggressive brand presence backed by a research and development wing. Current market trajectories embrace continued innovation, with clear information dissemination to the target markets.

The product development function must assure the target market that every demand concern informs product design with continued improvement. Taking an illustration of the technology factor in research and development, several industries continue to rely on innovation and information delivery for expansion. Various sports shoes for different sports must form the product lines and product mix for the target markets. Diversification of product lines in the sportswear category might enable the business to identify other strong target markets. For instance, venturing into sports socks, stockings, shin-guards, shoe inner linings, and outer soles could facilitate closer initial diversification. Expansion into other target markets including sports bags, sports sweatshirts, sweat trousers, sports caps, and other apparel lines will eventually fall in line with market objectives.

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Market Issues Current and in Future

Current marketing issues in the country, Europe, and around the world explain the need for smarter operations to support sustainable market presence. Marketing depends on other production factors such as unit costing figures, which ultimately affect pricing strategies. Using market data to streamline operations within affordable costs will inform operations decisions. Within the current issues in Europe and market anxiety generated by sluggish economic growth, local production faces several hurdles. Overseas production might offer an option to Sportzshoo, with minimal investment optimism to support the above marketing ideas. Future marketing projections must continue to consider global markets in order to achieve integration of risk management alternatives. With contagion economic risks proving inevitable from the current Eurozone debt crisis, investment advantage from relatively safe overseas economies must determine the distribution of operation plants. The beauty of globalization in marketing enables the reduction of production costs and tapping of the lucrative market space. Sportzshoo must consider making overseas takeovers and joint ventures for production, for instance, emerging markets for impressive costing outcomes. Transporting of products across different global markets will facilitate overcoming economic issues.

Summary

Information collection for the above marketing perspectives will involve primary market research. In terms of this approach, Sportzshoo’s choice will take direct involvement in making observations and assessing the feasibility of various recommendations. For instance, commissioning market research in terms of brand presence and enhancement will require direct market surveys. Equally, secondary sources of information such as reading about success approaches by relevant industry players will assist in determining the appropriate choice of action. Integration of various information findings into a comprehensive marketing plan for every recommendation will inform executive decisions in marketing (Abrams 2003, p. 43). Prioritizing actions within achievable timelines must allow the company to implement the recommendations from short-term projects and simple tasks onwards.

Evaluation of market value and recommendation of enhancing the brand image will assist in the determination of the course of action. Quantification of demands on each recommendation against feasibility projections will facilitate the formulation of marketing strategies. The most effective approach will target the realignment of the current company operations to accommodate proposed changes. As Kaplan (2007, p. 13) observes, the management team will introduce change management focus, in order to support marketing projections. Promotion strategies will equally require realignment for the accommodation of a broader market presence. Reducing advertising costs by relying on information technology will prove to support smart steps towards national and global prominence. The creation of a competitive edge must not always cross lines with apparel giants such as Under Armour, Nike, and Adidas. With the blue ocean strategy, Sportzshoo will avoid competition through the establishment of niche markets and differentiation into newer solutions.

Understanding Market Segmentation

With a substantially huge fashion market for the UK, potential sub-markets identification will offer a sharper focus on marketing than currently handled at Sportzshoo. Ambition to expand across Europe and on the global platform implies even a broader marketing scope for the fashion sensitive market. Broad scope for any task makes goals unachievable, if not unrealistic for many businesses. The following report generates the business interpretation of the magnitude of the market, which might push marketing targets out of reach for Sportzshoo. With a clear reflection of the business strategy of market segmentation, the report captures Sportzshoo’s situation on a customized industry concept. Additionally, the report provides clear segmentation scenarios for the local and global markets as envisioned in the expansion ambitions of the company. Seemingly, the report introduces the concept of market segmentation within the context of the current and projected market for clear marketing projections. This facilitates the formulation of the recommended model of sub-markets identification and characterization. Finally, current marketing status conclusions and projected market segmentation strategy illustrate the need for clearer target markets.

Background Information

As mentioned above, an enormous market may confuse marketing projects due to the lack of specificity of target groups. Market segmentation involves the isolation of different target groups with respect to similarities in consumption needs. Various factors of diversity among populations make markets heterogeneous and difficult to satisfy with a single product. Isolation of different target groups known as market segments facilitates the business to realize higher marketing results. Different factors that make target groups identifiable and distinct from each other include preferences, quantities afforded, time, and location among many other factors. In terms of these differentiation references, four main segment bases determine the target market identification, namely on psychographic reasons, behaviors, demography and geography. From these principal segment bases, several factors that inform marketing approaches emerge (Riley 2010).

Market Segmentation

Under the psychographic base, market segments facilitate product design and marketing to different lifestyles, classes, personalities, and attitudes. Perceptions and images associated with a product by the given group determine marketing strategy and presentation of the product. Under this category, finishing features and pricing may compel the market to react in a given response. High-end markets occupied by class and prestige attachment appear different from middle and lower-end markets. Quality perceptions generated in marketing facilitate the development of the relevant segment. From behavioral base sprouts categories of customers who attach loyalty to the product, readily available customers, and those who benefit most from the products. Predicting behavioral reactions of customers assists in designing marketing strategies as Rabolt and Solomon (2009, p. 114) observe.

The other category of segments involves demographics represented by factors such as gender, age, and socioeconomic attributes. Product design must target the actual group in order for the product to achieve admissible reception for successful marketing. Geographical categories gain meaning from location and timing of product delivery, which affect marketing outcomes. Other bases may influence marketing in geographical factors, for instance in rural-urban socio-economic and demographic distribution. Marketing research must find out who wants which product at a given location and time in order to make delivery highlighting all specificity factors. Product design must bring out a product mix composed of appropriate production proportions directed by each segment demand. Quantity demanded per product as determined through efficient market research can guide product mix specification for various segments.

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Current Scenario

In the current marketing outlook at Sportzshoo, production handles only three product lines with respect to sports disciplines. The three product lines have lawn tennis, field track athletics, and football boots producing between 20,000 and 100,000 units. Most of the units find their way into the market through retail distribution channels with a good presence in the south. Two product lines target only adult customers, with football boots having three different sizes for different age targets. Lack of a clear gender distinction exposes the female market segment to uncertain encounters with the company. Segmentation for the tennis “Sureshot” brand for instance should provide detail of female and male units produced.

Additionally, the male and female sub-markets must possess further segments in terms of age categories, with at least two units targeting different foot sizes. Marketing to the target group at the current operation scale surpasses retail projections, with cases of reduced capacity attributed to the economic crisis. Localized distribution by retail projections must pave the way for retail and wholesale distribution, with wide geographical coverage. Apparently, expansion data for different categories of target segments guide the level of investment in new projects. However, expansion must always follow a marketing blueprint for a brand image that can sustain expanded capacity.

Proposed Segmentation Model

The proposed model will follow a few design steps, with a clear focus on preliminary market findings on consumption. As explained below, a few product additions proposed for introduction into the segment consider this model. Assuming that expansion procedures do not face obstacles from capital acquisition, Sportzshoo will engage in the appropriate production and distribution infrastructure expansion. Production facilitation includes setting different lines to produce unique segment features in all products, for instance, different size lines. Whereas gender modification requirements may not require significant production line alteration, new size and new product addition must cause massive plant changes. It implies that segmentation will incur capital costs for Sportzshoo, prompting funding procedures, herein assumed as a constant factor.

Equally, market segmentation requires significant resource deployment to carry out research and feasibility testing. For a segment to form part of the product mix, it must convince cost accountants that the company will recover the cost and make profits. The groundwork for the plan requires the securing of a distribution blueprint with at least national coverage. Having set out the distribution framework, preferably a joint venture with major retail and wholesale outlets, expansion and segment coverage will carry out market segmenting implementation. Firstly, key consumer segments in terms of numbers must assist to tap market share. Team sports as quantity consumers inspire this consideration, with a basket, football, and hockey already considered.

Additionally, scaling down to a smaller group targets will assist segmentation. Prominent considerations include sports demographics and clear needs backed by market research. Psychographic determinants may assist differentiation of armature categories and superstar sports personalities, who attract class identity. Pricing strategies must attract luxury and prestige in high-end psychographic segments for different sports. Equally, finishing strategies will need realignment to project base features such as the ability to pay, size of the sportsperson and introduce missing gender features.

Additional Segments

The aim of the segmentation function targets various Olympics sports to utilize the medallist identity associated with the founder. Immediate additions will involve basketball, hockey, boxing, and wrestling shoes with research detail corresponding with international Olympic specifications. Marketing details must highlight the standard features in advertising, and bring out missing gender identity. Pricing for three main class segments must provide for high-end, middle, and lower-end markets by quoting prices within estimated dispensable incomes. Using segment information, production units across the seven product lines will shape the product mix for the new marketing model.

Future segmentation needs across additional product lines will follow the segmentation design, except for products with single segments such as equipment. Constant research assessing the market presence outcomes and brand acceptance must always inform further segmentation into the future. Continued expansion projects such as inner and outer soles, socks and stockings, and product diversification will depend on market research. With a customer-driven market facilitated by the internet, market research will emerge relatively cheap, yet offering a vital marketing component (Rowley 2009, p. 350).

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Conclusions

Segmenting the target groups as discussed above facilitates the formulation of a focused marketing plan for Sportzshoo. Specified production directives introduce cutting down on costs by directing resources where profits lie. Equally, producing for preference groups assists in building superior brand names to scenarios when products reach non-target groups. Cutting down on operation costs can increase research and development projects for improved market experiences. Innovation and brand value within the projected global presence will facilitate launching a competitive advantage over already established apparel giants such as Adidas. Market segmentation holds key to unlocking marketing projections beyond the current scope. Aggressive marketing campaigns, for instance with joint ventures for distribution will facilitate rolling out market presence into the country. Extrapolating success currently recorded in customer relations across the distribution framework will facilitate a strong brand image and customer loyalty.

Assumptions

  • Current market presence restricted within the UK
  • Absence of online marketing
  • Current production targets a few sports
  • Production plants only located in the UK
  • Market research data available for respective decisions made
  • The capital acquisition not inhibitory

References

Abrams, R 2003, Successful business plan: secrets and strategies, The Planning Shop, Palo Alto, CA.

Kaiser, S 1985, The social psychology of clothing and personal adornment, McMillan Publishers, London, UK.

Kaplan, S 2007, ‘Business strategy, people strategy and total rewards’, Benefits & Compensation Digest, vol. 44, no. 9, pp. 12-19.

Madsen, H, Neergaard, H, & Ulhøi, J 2003, ‘Knowledge intensive entrepreneurship and human capital,’ Journal of Small Business and Enterprise Development, vol. 10, no. 4, pp. 426-434.

Rabolt, N & Solomon, M 2009, Consumer behavior in fashion, 2nd and, Prentice Hall, New Jersey.

Riley, J 2010, What is market segmentation?, Web.

Rowley, J 2009, ‘Online branding strategies of UK fashion retailers’, Internet Research, vol. 19, no. 3, pp. 348-369.

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