Active Feet Client Brief. Tom Pham

Transcription

1 Active Feet Client Brief Tom Pham Sukhwi chun Ashleigh Cunsolo

2 Table of contents 1. Situation Analysis - page 3 i). Company overview ii). Product and services description iii). Industry analysis iv). Competitor analysis 2. Market Profile - page 6 i). Demographics ii). Psychological & Behavior iii). Geographical & Primary Data 3. Communication Objectives - page 12 i). Creative strategy ii). Advertising executions iii). Media Strategy 4. Core Strategic Approaches - page Budget Allocation - page Evaluation Criteria - page Conclusion - page References - page 17 2

3 SITUATION ANALYSIS: i). Company overview: Active Feet s first store was opened in November 2002 (About Active Feet, 2017) by Podiatrists who are experienced in Sport Medicine. The company is Melbourne based and has a number of four stores in total, which are based in Sandringham, Prahran, Camberwell and Heathmont. ii). Product and services description: - Active Feet was the first store of its kind in offering the Motion analysis service (About Active Feet, 2017). The motion analysis services use technologies like motion capture, high speed video, and foot pressure measurement to give clinicians in the multidisciplinary team a better understanding of how clients are walking (Motion Analysis Services, Alberta Health Services). The shoes that are most suitable for the client s needs will be presented to them after the test. Clients can book their assessments to suit their convenience. - Shoes, accessories and clothing are also offered by Active Feet. However, they are specifically designed for activities such as running, sports and tech walking. - From Active Feet store, customers can choose from a wide range of well-known sports brand. The range consists of: Brooks, Salomon, Asics, Adidas, Nike, Mizuno, New Balance, Ecco, Pearl Izumi, Merrell, Saucony, Orthaheel and Hoka OneOne. - Another service that Active Feet offers is the active feet Shoe Club. It is a reward program in which the active feet customers can join for free. Customers who have become a member of the Club can have access to a variety of benefits that are exclusive to them only. iii). Industry analysis: a. According to the IBISWorld industry report, the footwear retail in Australia is defined as: Industry firms primarily retail footwear. Retailers typically purchase a variety of footwear from wholesalers and manufacturers to onsell to consumers. Generally, retailers will not perform value-add activities or make any alterations to products. Most retailers in the industry sell their products from one or more shopfronts and may also operate an online store. The industry excludes department stores and online-only retailers. (Lauren Magner, IBISWorld Industry report: Footwear Retailing in Australia. 2016). b. Even though the industry has been seeing a decline in sales within the last five years (Lauren Magner, IBISWorld Industry report: Footwear Retailing in Australia. 2016), due to the fact that this industry is highly dependent of the consumers finance and confidence. Online sales, however, have supported the industry somewhat, particularly in 2014, 2015 and 2016, as many traditional footwear retailers moved to develop online platforms c. The industry is now considered a maturing market, with its focus shifting to innovation and style (Journal of Textile and Apparel, Technology and Management, 2015). The Journal also states that there will be many constraints, which complicates forecasting. 3

4 d. Key external drives: - Real Household disposable income: it is expected to increase in Consumer sentiment index: the level of confidence that a customer has on their personal finance and economic conditions. - Demand from online shopping: as online shopping grows, the demand grows as well - Demand from department stores: department stores often offer a larger range of product with lower price leading to higher demand - Trade-weighted index: the appreciation of the Australian dollar can affect whether the price of the product can rise or fall e. Current Performance and outlook: - The Footwear Industry has been struggling within the last five years due to a number of reasons, which includes: the instability of the economic state, the consumer sentiment has been volatile and the competition that the online retailers and department stores present. While footwear is essential, purchasing multiple pairs of shoes is dependent of the consumer confidence and household income. The environment of the industry is currently being shifted to online. - The industry is expected to recover at a slow pace over the next five years due to the improvement of the economic state. This statement from the IBISWorld report (2015) proves true since the footwear and personal accessory retailing rose 0.3% from November to December in 2016 (Australian Bureau of Statistics, 2016), and remained the same from January to February in 2017 (Australian Bureau of Statistics, 2017) 4

5 - Predicted industry revenue until 2023: iv). Competitor analysis: a. The increasing Competition: - With the larger players and brands such as Nike, Adidas or Puma solidifying their operations, the smaller, independent retail store will be in tough competition - The growing online stores such as The Iconic will change the landscape of the industry, leading to even more retail stores online b. Major Players: - RCG Corporation Limited 17.7% of the Market share (IBISWorld Report, 2016): this corporation consists of major brands such as: Vans, Shubar, Hype, Sperry, Stance, Podium, Saucony, The Athlete s Foot, CAT, MerrellM, Palladium, Dr. Martens, Platypus, Skechers and Timberlands (rcpcorp, 2017) - Super Retail Group Limited 8.5% (IBISWorld Report, 2016) consists of Rebel and Amart Sports - Betts Group Pty Ltd 5.9% (IBISWorld Report, 2016): Betts, Betts Kids and Airflex - Fusion Retail Brands Pty Ltd 5.7% (IBISWorld Report, 2016): Diana Ferrari, Williams, Mathers and Colorado - Others 62.2% (IBISWorld Report, 2016): this is the category where Active Feet falls under. 5

6 2. Market Profile As mentioned by Gharkanlu.GZ et al. (2014), Identifying the target market helps in crafting message which will appeal specifically to them and there are much higher chances of it being effective and appealing to that audience as opposed to a random crowd. Furthermore identifying the specific target market assists the business develop effective marketing communication strategies, where the target markets are individuals sharing similar characteristics, needs and desire. Identifying the target markets can be divided into different types of segmentations such as demographic, psychographic, geographic, consumer s behavior and information from primary researches. a. Demographics Firstly, the demographic segment consists of various different categories such as consumer s gender, age, income level, occupation, and marital status, etc. Businesses may segment their products by gender where one gender may represent a significant amount of share of the businesses target market. According to IBIS (2016), Nearly half of footwear retail revenue is accounted for by women, where women will purchase a larger quantity of shoes than men. Figure 1. This may be because women tend to have larger options when purchasing footwear such as flats, high-heels, mid-heels, boots, etc, and in addition, with these much broader ranges of products it can be can be categorized to casual footwear, sports footwear, and formal wear. 'The major market for footwear industries in Australia are households' (IBIS, 2016), where household market segment can be divided into different type of age categories such as consumers aged 15 to 34, 35 to 54 and consumers aged 55 over. The 15 to 34 age group consumers are the most fashion conscious and trend conscious consumers where this group contains various different status of consumers such as students, part-time & full time workers, and new parents. Their spending is mainly based on current fashion trends which allow them to make impulsive spending on clothes and shoes. Consumers aged between 35 and 54 tend to make less impulsive spending, where in this category the status of the consumers may be parents or just normal employees which allows 6

7 them to acknowledge their current financial flows depending on whether they have a family to take care of and also their individual status. This category varies depending on their average income and number of child they have in the households. Where the amount of potential kids play in family purchase decision is significantly high (Szybillo & Sosanie 1977), and the main reasons may be the size of child & teenage markets growing rapidly (Berey & Pollay 1968). The last group of consumers aged 55 and over aren't conscious of the current trends and fashion, but they are mainly driven by the comfort of the product. This ageing market tends to seek for the best price but with the best comfort and function of the product. Active Feet's current target market and their products are significantly focused on sportswear where even Active Feet themselves mentioned their company as 'the market leader in using podiatric science when fitting sports and active footwear' (Active Feet, 2002). Their main product and the services are mainly focused on assisting consumers in purchasing the suitable product for their running phase and medical history. From the statistics above (statistic 1), Active Feet tend to be targeting the middle age to late age group consumers where rather than following the current fashion trend, Active Feet significantly focus on comfort and functions. Higher age group consumers are more likely to seek Active Feet s' treadmill and in-store service to acknowledge their best suitable and satisfying product. Furthermore, consumers aged 35 to 44 years, 45 to 54 and 55 and over have the highest rate in 'walking for exercise' percentage out of ten different types of exercises, where males in aged 35 to 44 have 20% and females with 27%. Males aged 45 to 54 age group have 44% and females with 62%. Male Consumers aged 55 and over have 48% and females with 58% in 'walking for exercise'. This shows that there is significantly higher rate in exercising as the age group rises. Figure 2.1 7

8 Figure 2.2 Source: AGSA, Empirica Research, 2012 This shows that consumers that are in middle age group or higher may tend to seek more of comfortable and functional product rather than following fashion trends unlike younger consumers that are significantly conscious of their fashion and the current trends which are mainly based on style than comfort and functional product. b. Psychographics & Behavior Psychographic segmentation categorizes your consumers by their personality, lifestyle, interests, and social class. This allows the market to be more niche in the marketing strategies; significantly increasing exposure to key segments. Every consumer has different lifestyle patterns and their desires and needs change based on their lifestyle and personalities and it s significantly important to promote the product and services as solution to their wants and needs. These may include interest in politics, environment, sporting, recreational activities and arts and cultural issues and the opinion consumers hold for these factors play a significant role in their purchasing behaviors. Furthermore, every consumers fall in different types of social classes which varies depending on their purchasing power and their income as well as their purchasing & spending habits such as purchasing products from high-class premium brand such as Gucci, Channel,etc. The consumer decision making process theory clearly represents the steps consumers follow when purchasing products which consists of need recognition, which consumer realized a need or a problem, then to information search and evaluation of alternative where the consumer 8

9 starts to seek information about the specific product they desire or need and for the alternative of the product. Then finally consumer goes through the purchase decision and postpurchase behavior where the consumer decides whether they will purchase the product or not, and then evaluates the product they have purchased either with satisfaction or not satisfied. As for Active Feet their psychographic segmentation mainly consists with focusing on consumer that has very active lifestyle and hobbies such as sports and recreational activities, where it s product and services are significantly focused on sporting equipments. Furthermore, it may be a significant asset for Active Feet to acknowledge the consumer s decision making behavior where focusing on consumer s evaluation of alternative may allow the business to be more exposed to public. For example, a consumer requires a runner for their sporting purposes but desires to purchase a product similar to a specific brand s product but with much lower price. c. Geographical & Primary Data Geographic segmentation divides the market based on the factors of geography such as location, languages and other elements which differentiates consumer s geography from another. Also as mentioned early on, consumer s different values, attitudes and lifestyle may be included as a geographical segmentation. This will be significantly important for Active Feet to consider, where the business may find information of consumer s requirements and desires depending on their geographical segments, attitudes and their lifestyles. As for the primary data, a survey was conducted with twenty participants in Melbourne. They were asked for simple personal demographic questions such as age, sex, and their occupation, furthermore with brand Active Feet acknowledgement and how they purchase their footwear products. 9

10 Figure 3.1 Figure 3.2 Figure 3.3 Figure3.4 As indicated in Figure 3.1, The Male respondents were 60% and female respondents were 40%, and as expected, there was significantly higher percentage of no brand acknowledgement where only 26.32% had knowledge of the brand and 73.68% of people did not know about the brand Active Feet as indicated in Figure 3.2. In Figure 3.3 participant s age groups were segmented, and where people aged had the highest rate which may significantly assist interpreting the Figure 3.4, where the factors participants seek for when purchasing their footwear was style and fashion. This is may be because there were lower age group participants who are conscious of the current trends and style. On the other hand, participants at a higher age category had responses that were much different to the younger age participants. They tend to be employed as full-time and married ( Figure 3.5 ) conscious about impulsive spending and the financial flows in their households, this may be because due to having families in the household to take care of thus; these respondents tend to seek for comfort and features when they were purchasing their footwear. 10

11 Figure

12 3. Communication Objectives Communication objectives within a company s marketplace should be specific, measurable and achievable because are very important and play a crucial role in the sales of a company/organisation.these include the branding, education, call to action and urgency. Because these ultimately while in decision making process communication objectives play an important role for example developing a campaign and allocation a budget. The success and failure are relative to the objectives that are defined; good objectives are those, which are measurable. Active feet, is a shoe shop which supplies running shoes for elite sports person to the average walker. With well-trained staff to cater to your every need, they use a treadmill to gauge your style and foot mechanics before choosing the correct shoe for you, which is properly fitted. They ultimately failed to successfully brand there there business to a broadly-targeted market, through use of newspaper, social media etc. Next downfall would be the education by not introducing the service that is provided followed with information, and incorporating the branding of logos and colours. Call to action, means incorporating a slogan, song, catchphrase to ensure you are remembered by the consumers this is also another thing that Active Feet failed to ensure was displayed, which follows with urgency! Promotions, sales advertised everywhere to make sure Active Feet is well known and stands out in the industry. Creating awareness, imparting knowledge, projecting an image, shaping attitudes, stimulating a want and desire and effecting a sale. Active Feet, use the communication objective of word-of-mouth with their advertising, which reduced sales dramatically due to there being no other means of advertising displayed, no media outlets, the media outlets that need to be considered are interactive media outlets that provide new advertising opportunities such as websites, online advertising, social media sites and blogs, advertisers need to be willing to take risks with online advertising, as the industry is still very new, setting clear objectives and evaluating the campaign will enable advertisers to learn what works in online channels, and understanding how consumers use these media is very important to ensure that advertising dollars are not wasted. The main problem with communication objectives is that you cannot measure in quantitative terms that how much the customers are in the phase of knowledge, liking, preferences as there is no formula to provide such information, in this case with Active Feet the way they measured the effectiveness with the sales increase/decrease as the warning to change their communication objectives. 12

13 Targeting an audience of athletes, seniors - for extra support, individuals with feet issues/problems, and more importantly expanding to teenagers and general consumers. Effective marketing communications is the result of coordinated operation between the functions of an company and its chosen strategy of marketing communication as in Active Feet s situation, completely revamping the marketing strategies used, for the better, will further result in both strategic goals and business strategy of Active Feet, These correlations conclude that the development of marketing communication objectives and coordination with firm business strategy can lead to a consistent and workable strategy of marketing communication. (Jerman, D, & Završnik, B 2011) 13

14 4. Core Strategic Approaches 1. Creative strategy: - With Active Feet not being well-known and recognisable. The main objective of the advertising campaign should be raising the customers awareness of the brand. Therefore, out of the six advertising objectives: Perception, persuasion, cognition, affection, association and behaviour. (Sandra Moriarty, 2014), perception and cognition will be focused on. - Messages that drive perception: the message needs to grab the attention of the audience and build brand awareness from there. With the target audience being athletes, seniors, as well as teenagers (as mentioned before), the campaign should concentrate on the motion analysis service but also appeals to their interests in fashion and trends. - What sets Active Feet apart from the other footwear retailers is their Motion Analysis Services. However, not many people know of this particular service. Therefore, the messages should also drive cognition. In other words, creative strategies that would encourage the consumers to learn more about the service. 2. Advertising Executions: - Humour: humour can be a powerful tool to grab the audience s attention, which is the main goal of the campaign as mentioned above. However, humour is hard because even though most of the audience might love it, some may hate it. - Spokesperson: using a celebrity to endorse the product would be a great idea, specially if this person is a major footy athlete. This is due to the fact that Australia is a sport-obsessed country and the brand s target audience is athletes. 3. Media Strategy: - With the media concentration approach, the amount of categories of media is fewer. The money is expended on only a few media types. This approach is commonly used for those companies such as Active Feet because they are not very confident and have to share the place with the other competitors. Not wanting anyone to get confused with their brand name so this is the safest approach as the message reaches the target consumers. - In the media dispersion approach, there are more number of categories of media used to advertise. This approach is considered and practiced by only those people who know that a single or two types of media will not reach their target. They place their product ads in many categories like TV, radio, internet, distributing pamphlets, sending messages to mobiles, etc - Reach - % of target audience exposed to message at least once - Frequency average number of times a person is exposed - Exposure opportunities to see, impact / impressions - Cost efficiency costs to reach audience, across media 14

15 5. Budget Allocation Budget: $2.5 Million Objective-task Method, looks at the objectives for each activity and determines the cost of accomplishing each objective. The objective task method is a system in which a company allocates a certain amount of money to its marketing budget based on specific objectives, rather than choosing an arbitrary amount or basing its marketing budget on sales revenues or projections alone. The objective task method of budgeting typically has three steps: Setting objectives - Active Feet may set an objective of increasing sales by 10% over the course of the next business quarter, Identifying tasks - Active Feet would want to increase sales by 10% over a three-month period, then it might determine that it needs to run weekly ads in several local newspapers in order to boost its visibility, and Estimating costs - Active Feet determines that it needs to run an ad each week in four different newspapers at a cost of $200 per ad, and it needs to repeat those ads every week for 12 weeks, then we needs $9,600 in its marketing budget. Media sources Price Explanation Social Media - Facebook - Instagram - Youtube - Twitter $5,000 - Per month x 1 Year = $60,000 Page setup and administrative structure Custom profile photo Advertising strategy Profile (biography, mission, etc.) SEO optimization URL tracking strategy for posts/link in bio Initial outreach/following/followers Billboards Market Rate: $13,000 - $40,000 pm Installation: $ $1300 approx Campaign: The most common size for the spectacular site being a massive 18.99m x 4.55m and 19m x 4.57m Print Production: less than $2000 = $40,000 TV Ads / Radio Tv Ads = 9-11AM - $1,000 - $2,000 Per Week = $101,000 5:30PM - $3,000 = 156,000 Radio = FOX FM - $5,000 per week = $260,000 Channel 7, 9 & 10 - TV Fox fm & AM channels - Radio Celebrity Endorsements $500,000 EXAMPLE: Tiger Woods - $500,000 to endorse Nike in the PGA Golf Tour in

16 6. Evaluation Criteria With the objectives being brand recognition as well as generating more sales, three evaluation tests will be focused on are memory tests, persuasion tests and digital research a. Memory Tests: - These can test the effectiveness of the humour advertising execution to see whether the advertisement have made a lasting impression on the audience as intended. - Many types of questions and surveys can be done. b. Persuasion tests: - The main goal of these tests are to see if the customer s attitude towards the brand have changed after seeing the advertisement c. Digital Research: - With technology so advanced nowadays, Active Feet can keep track of the number of views, clicks, duration of visits, most-browsed brand and service. This type of research will help the brand to further customise their webpage as well as to see if they should invest more in online advertising. 16

17 Conclusion: In conclusion, Active Feet dramatically improved their branding, their image and ultimately their sales by incorporating new strategies and services to further benefit their company against relevant competitors. Through the use of a survey, that was completed by 20 random individuals helped pinpoint weak and strong areas in the already branded market, and helped demonstrate where Active Feet stood in comparison to others such as Nike and Adidas. This is clearly evident through the use of the evaluation of the industry analysis section which displays an overall comparison of the shoe industry, followed by the marketing strategies of their competitors, what needed to be done to gage attention. Also Active Feet have widened their target audience as well as targeting all demographics, to increase the number of sales and profit. Core strategic approached were carefully thought out and presented in order to execute the advertising section successfully. The budget was compromised, and dramatically reduced in order to focus solely on the promotion of the service provided by Active Feet, as well as the cheapest prices for the best service and value. The communication Objectives assisted in setting tasks in order to successfully communicate to the audience in a way to persuade a sale and actively remember the branding. 17

18 Reference list Jerman, D, & Završnik, B 2011, 'MODEL OF MARKETING COMMUNICATIONS EFFECTIVENESS IN THE BUSINESS-TO-BUSINESS MARKETS', Proceedings of the International Scientific Conference, Juraj Dobrila University of Pula, Department of Economics & Tourism 'Dr. Mijo Mirkovic', pp Journal of Textile and Apparel, Technology and Management, Volume 9, Issue 2, 2015, page 1-4 Alberta Health Services, Retrieved 31/04/ Australian Bureau of Statistics, December 2016, retrieved 31/04/2017, 03CA2580D80012D987?opendocument Australian Bureau of Statistics, February 2017, retrieved 31/04/2017, Active Feet, Retrieved 31/04/2017, RCG Corporations, Retrieved 31/04/2017, Magner, Lauren (2016), IBISWorld Industry Report G4252, Footwear Retailing in Australia. Lewis A. Berey and Richard W. Pollay (1968), The influencing role of the child in family decision making, in Journal of Marketing Research, Vol. 5, No. 1, pg George J. Szybillo and Arlene Sosanie (1977),"Family Decision Making: Husband, Wife and Children", in NA - Advances in Consumer Research Volume 04, eds. William D. Perreault, Jr., Atlanta, GA : Association for Consumer Research, Pg: _research-final_version_27_march_2012.pdf 18

19 Moriarty, S. E., Mitchell, N., Wells, W., Crawford, R., Brendan, L., (2014), Advertising Principles and Practice, 3rd Edition, Published by Pearson, pg

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