Strategy Document for J. Crew Elise Falcon 1
2 Situation Analysis..3 Brand Description..3 Marketing Problem......4 Marketing Objectives. 5 Competition 6 Target Segmentation and Justification 8 Positioning..9 Marketing Communication Strategies and Implementation...10 Evaluation of Effectiveness. 13 Works Cited 14
3 Situation Analysis Brand Description This strategy document looks to form a marketing plan that will open the J. Crew brand to the affluent Hispanic female consumer through various media outlets that will be the most effective in driving sales. The J. Crew brand is an accessories and apparel company that caters to both men and women. This company was founded in 1947 and has continued to thrive since its inception. J. Crew is well known for their high standard of style, craftsmanship, quality and customer service (Seeking Alpha). J. Crew is a widely recognized brand that is especially known for their exquisite catalogs, which are also their primary source of advertising and sales. J. Crew also has various retail and factory stores across the nation, many of which are located in populated cities with a large Hispanic market. This marketing strategy will focus on the sales of women s apparel and accessories that can be considered business attire for the Hispanic workingwoman. As a brand, J. Crew has much strength. This brand is extremely well known in the affluent community. J. Crews customers are usually very loyal to the brand and tend to be repeat buyers. J. Crew is known for having high quality clothing that will last for long periods of time. They have developed very distinct consumers, which allows them to successfully and easily market to the people that will make purchases. J. Crew takes pride in advertising heavily through consistent creative messages in [their] catalog and through [their] Internet website, our store environments and our superior customer service (Seeking Alpha). Consumers have come to know J. Crew for their exquisite advertising and rely on it for purchasing. While J. Crew is considered an extremely elite brand, they face weaknesses, as do many other companies. As mentioned earlier, the composition of J. Crew s market is made up
4 primarily of Caucasians (about 73%) with about 38% of them having an income over $150k (Quantcast). Because affluent Caucasian women primarily purchase J. Crew, this brand is missing out on the large and constantly growing Hispanic marketplace. J. Crew is comprised of only 6% Hispanics, an extremely small number compared to the size of the Hispanic population in the United States (Quantcast). For J. Crew to continue as a competitive brand, it is important that they tap into the Hispanic marketplace. Many of J. Crew s main competitors, such as United Colors of Benetton and Ann Taylor, have already increased their sales in the Hispanic marketplace reaching a composition of 12% and 9% consecutively (Quantcast). This marketing strategy plans to utilize media outlets that Hispanic consumers respond to, to ensure that J. Crew stays successful. Marketing Problem Since its beginning J. Crew has been considered a brand for affluent white women living predominantly in the Northeast of the United States. Hispanics are not directly targeted in most of J. Crew s advertising campaigns and in recent years this has become a problem. As the Hispanic population steadily increases every year, it is important for J. Crew to become aware of this increase. J. Crew must expand its marketing strategies to focus on affluent Hispanic women in order to continue success. By ignoring this large chunk of the population, J. Crew has been missing out on a new consumer that can boost J. Crew s sales tremendously. Marketing Objectives There will be four main marketing objectives that J. Crew will focus on to run a successful campaign. First, this campaign will increase awareness that J. Crew is a brand for
5 Hispanic women in the work force. Second, the campaign will increase awareness to the point that J. Crew will be the first brand that comes to mind to an affluent Hispanic working woman. The point is to ensure that she will think of J. Crew before any other brand when purchasing new business attire. Third, the campaign will change the purchase behavior of affluent Hispanic women so that they will not only think of J. Crew as an option for business clothes, but will actually purchase their attire above all other brands. And finally, J. Crew will increase their sales in the Hispanic marketplace through the implementation of this campaign.
6 Competition J. Crew has various competitors around the United States; their main ones include Ann Taylor and United Colors of Benetton. As discussed earlier, both of these brands have a higher Hispanic composition than J. Crew, Ann Taylor has reached a 9% composition while the United Colors of Benetton has 12% (Quantcast). Here, the competition will be discussed based on what they provide for the Hispanic market and how J. Crew can utilize this to better their company. J. Crew currently operates 226 retail stores, including five crewcuts, one Men s store, one Women s Collection store, and 10 Madewell stores; and 74 factory stores, including one crewcuts factory store, throughout the United States (Seeking Alpha). In comparison to this, Ann Taylor operates 953 retail stores in 46 states, the District of Columbia and Puerto Rico, comprised of 280 Ann Taylor stores, 500 LOFT stores, 99 Ann Taylor Factory stores, and 74 LOFT Outlet stores (Bloomsberg). One key component to Ann Taylor s success in the Hispanic marketplace is the creation of stores in Puerto Rico. While, Puerto Rico is not considered part of the United States, the fact that this store exists puts Ann Taylor in the minds of Hispanics consumers across the nation. Another factor that aids in the success of Ann Taylor is the amount of retail stores and their locations, many of which are located in areas with high Hispanic populations such as the District of Columbia, New York, and South Florida. In order for J. Crew to increase their Hispanic consumers, it would benefit them to open more retail stores in areas with High Hispanic populations. In regards to United Colors of Benetton, their location is of extreme importance as well. United Colors of Benetton is a well-known international store. They have locations all across Latin and South America and have a high following there. Because they are an expensive store, they attract the type of Hispanic consumer that J. Crew should be targeting. This benefits them
7 greatly for many reasons. First, Benetton has already established marketing strategies that work for the Hispanic consumer because they have locations outside of the United States. Secondly and most importantly, the fact that they own stores in Latin and South America means they have long lasting relationships with Hispanic consumers. When these consumers move to the United States, travel to the country, or even speak to family members who live in the U.S. they will be likely to advise them to shop at United Colors of Benetton. As stated in Hispanic Marketing Connecting with the Latino Consumer, word of mouth is an extremely important form of advertising for many large companies (Korzenny). Hispanics rely heavily on their friends and family for purchasing decisions, and because of this it allows United Colors of Benetton to get free advertising for their brand that attracts many consumers. One advantage that J. Crew has over this company is the use of an online store. United Colors of Benetton does not currently offer an online store for their American consumers. In an age where people rely on technology for most aspects of their lives, this is a huge hindrance on the company. If J. Crew can market the convenience of their online store to the type of Hispanics that currently shop at United Colors of Benetton, it will allow them to snag many of their consumers. If J. Crew can take advantage of these opportunities that their competitors have already done, then their brand will expand into the Hispanic marketplace, rapidly.
8 Target Segmentation and Justification This campaign will focus on a very specific segment of the Hispanic marketplace for J. Crew. Because this brand is regarded as high quality and expensive, the target audience will be affluent Hispanic businesswomen. This target makes sense for various reasons. First, most of J. Crew s consumers make above $150k per year, which means that they tend to be on the affluent side. When translating this over to the Hispanic consumer, it only makes sense that J. Crew will still want to target affluent consumers because they have the extra spending money to spare on the higher priced clothing (Quantcast). Second, J. Crew will focus on business women, not only because many of J. Crew s clothing is business attire, but because the business woman will have more expendable income to purchase high quality clothing. Third, J. Crew will focus on the Hispanic consumer because it is essential for their company to tap into this market. The Hispanic population is rapidly growing, The Bureau of Census estimates that there are now about 50,000,000 Hispanics in the US and as more young Hispanics enter the workforce, they are the ones making most purchases (Korzenny). They will have extra income to spend on clothing that is of higher quality, which means they will be searching for brands that fit this mold. By focusing on this small segment of the Hispanic population it allows J. Crew to create advertising that is very specific and will successfully attract them to their business.
9 Positioning J. Crew must position itself in a way that sets it apart from its closest competitors by not only accentuating the qualities that it already markets, but also finding new qualities that Hispanics believe are important to emphasize. J. Crew must position themselves as a brand that appeals to the wants and needs of an affluent female consumer. Research has found that there are important factors that Hispanics look for when making purchasing decisions. 70% of Hispanic consumers believe that comfort is the most important quality that clothing must possess; this is also of higher importance to females, about 74% (Insight Tr3s). J. Crew must position themselves as a company that offers clothing that is comfortable enough to wear while working long business days. This positioning allows them to focus in on the segment of the Hispanic population that is the workingwoman. Because J. Crew is relatively expensive, the key to attracting the Hispanic consumer is finding qualities that make them loyal to the brand. Research suggests, For relatively expensive items, they shop at different stores to make certain they re getting the best price. 57% of Hispanics 18-29 shops around for a deal on pricier items and an even higher proportion of those born in the US (60%). US-born F18-29 are most likely to engage in this practice (68%) (Insight Tr3s). Since Hispanic consumers are not likely to become brand loyal to an expensive brand, it is important for J. Crew to focus on the durability of their clothing to keep these consumers coming back. About 68% of adult Hispanic Millennials agree that getting lasting use out of their clothing is key (Insight Tr3s). If J. Crew can convince the Hispanic consumer that their clothes are comfortable and durable, then these consumers are likely to repeat their purchase.
10 Marketing Communication Strategies and Implementation There will be several marketing and media strategies that will be implemented in order to have a successful campaign for J. Crew that will increase awareness and purchase behavior of affluent female Hispanic consumers. The entire campaign will focus on the idea that J. Crew offers comfortable, durable, and beautiful clothing that appeals to Hispanic women who are in the work force. The basic idea that the consumer should take away from this campaign will center around the concept that J. Crew s clothing is for the hard working business woman who still wants to feel beautiful. The tagline for the campaign is as follows: Wear Beautiful. Feel Beautiful. This tagline is simple, yet with the help of the content in the various media outlets, will convey the idea that J. Crew s clothing can make a woman feel pretty but will still last comfortably through the long work day as is explained later. Television will be the first media outlet that J. Crew will focus on. The commercial will be aired on various Hispanic television channels as well English ones such as Univison, Telemundo ABC, Fox, etc. The commercials will run on both English channels and Spanish channels because Hispanics have more exposure to Spanish-language TV but that they also spend a substantial amount of time with English programming (Korzenny). These television spots will run at prime time, because logically that is when most consumers are tuned into television channels. In regards to the content of the commercials, they will take the approach that was discussed above. The commercial will focus on Hispanic women in the work place. It will feature women going through the mundane tasks of the day with extremely dull visuals and colors of the office place. Then, the women will look down at their bright colored, high quality, business attire, smile and look at each other approvingly, realizing that although the workday may make them feel bad, their clothing will always make them feel beautiful. Multiple Hispanic
11 women will be used in the ads because Hispanic Millennials say it s important to look attractive to others, and when the women look at each other and smile it is because they realize they all look beautiful in their clothing (Insight Tr3s). Television will be a very large component of the campaign because it is important for J. Crew to present their clothes visually, and commercials allow them to show their product in the most appealing way possible. Secondly, J. Crew will focus on improving their online site and catalog. While J. Crew takes pride in the imagery of their catalogs, they lack the aspects that will bring in the Hispanic consumer. Once Hispanics are directed to these catalogs and their online store, it is important that they are relatable. J. Crew must include Hispanic models in their catalogs and online sites so that these women will feel like the brand is for them as well. Thirdly, J. Crew s Internet presence is of extreme importance to their success in the Hispanic marketplace. J. Crew will place banner ads across various Spanish, online news sources such as El Nuevo Herald, El Diario La Prensa, Hoy, and El Sentinel. These banner ads will feature Hispanic women in the bright J. Crew clothing with the tagline Vistete elegante. Sientente elegante. The reasoning behind placing banner ads on Spanish news sites has to do with the consumers that J. Crew is targeting. These are businesswomen who most likely visit news sites in their free time because they are educated and involved in the activities of the country. These banner ads will be located on the sides of the newspaper sites and will be extremely colorful to attract attention, especially since most news sites are written in mostly black and white. These simple yet powerful phrases will make the consumer think that if she purchases J. Crew apparel, she will feel beautiful. This campaign will set J. Crew apart from other brands because not only will it focus on the comfort of the clothing, but it will also focus
12 on how the clothing will make the person look to others, something very important to young Hispanics. Lastly, J. Crew will open various retail stores across the country to compete with companies such as Ann Taylor and United Colors of Benetton who have many more stores. It is necessary for J. Crew to make themselves available in large cities so that the consumers who are influenced by the campaign have the ability to go to the store and purchase the product. Ultimately if J. Crew follows this campaign thoroughly, then the company will reach their ultimate goal of increasing sales and changing purchase behavior of the affluent female Hispanic businesswoman.
13 Evaluation of Effectiveness Evaluating the effectiveness of this campaign involves combining all the marketing objectives. The four marketing objectives for this campaign all lead into one another; therefore, the success of the campaign depends on each prior objective being achieved. The first and second marketing objectives focus on increasing awareness of the J. Crew brand to the specific segment of the Hispanic market that has been planned out. In order to measure this, two things will have to be looked at. First, the television commercial effectiveness can be measured through the use of Nielsen ratings that will show J. Crew how many people tuned into the program that the commercial aired on. Second, J. Crew will measure the number of click-throughs that occur on their banner ads. If J. Crew receives a large amount of clickthroughs when the campaign has ended, then it will be apparent that the ads have been successful. The third and fourth marketing objectives involve increasing sales by changing the purchase behavior of the market. J. Crew can easily measure the success of this part of the campaign by looking at their profits during and after the campaign. Finally, after the campaign has run and J. Crew has improved their catalogs and online stores to accommodate Hispanics, they can send out a survey to households that include questions about ethnicity, brand loyalty, purchase behavior, and brand perception of J. Crew. This will be an effective way to measure if Hispanics have actually changed their attitudes about J. Crew and will repeat purchase in the future. If J. Crew implements all these measurements, then the campaign can easily be tested for success or failure.
14 Works Cited Seeking Alpha. (2012). J. Crew Group Inc. Retrieved from http://seekingalpha.com/symbol/jcg/description Funding Universe. (2000). J. Crew Group, Inc. History. Retrieved from http://www.fundinguniverse.com/company-histories/j-crew-group-inc-history Insight Tr3s. (n.d.). Hispanic millennials and clothing: How they decide what to buy. Retrieved from http://www.insidetr3s.com/insight-tr3s/hispanic-millennials-and-clothing-how-they-decidewhat-to-buy/ Korzenny, F., & Korzenny, B. A. (2012). Hispanic marketing connecting with the new latino consumer. (2nd ed.). New York: Routledge. Bloomberg. (2012). ANN INC (ANN: New York). Retrieved from http://www.businessweek.com/ Quantcast. (2012). Jcrew.com. Retrieved from http://www.quantcast.com/jcrew.com