Market Plan for the establishment of All round Fashion Company
Company Background
The company to be formulated will be referred to as All-round fashions, which will be providing apparel and accessories to several consumers in USA and foreign markets. All-round fashion will position itself to the location, residential and social activities of its target market. The company will be a partnership with Mc Coy fashions to enable the business ‘expand’ from already existing customers. The merchandise will be purchased according to customer focus and the company’s mission of outfitting all consumers according to their demands.
The company intends to have 2000 employees in USA and additional 1000 employees to be posted in its stores intended for China, though all operations will be directed from Houston, USA. The starting capital is $29 million excluding assets already owned by Mc Coy fashions. Evaluations indicate great potential for the clothing industry since the world population is steadily increasing, and this sector has remained underexploited, hence the need for a bigger company. Funds have already been accumulated for commencing the business, which is not only expected to operate in USA but aims to open new stores in China to target the high population.
Company’s strategic mission statement
All round fashions have the mission of offering quality both in style and size to accommodate consumers varying demands. This will ensure it satisfies consumers’ needs by exceeding customer’s quality expectations through regular improvements.
Determination of a foreign market and market plan for the company
All round Fashion Company will try to learn about the demography of the foreign market (China). Before opening a mega store in China, the company will have to understand the population characteristics like age, income and population brackets to assist in decision making. Incase china comprises of a high income population, pricier merchandise would be preferable, and if there are more infants, baby clothes would be preferable. Most importantly, the company must appeal to a relatively high population to be able to obtain a high number of customers. In this foreign market, the firm should ensure it maximizes on pricing and low production costs in addition, to taking into account the requirements of Chinese buyers (Centre, 2011, p. 2). By taking advantage of trade preferences and market proximity, the company should make it self-competitive and be able to meet buyer’s priorities that would include quality, social accountability, transport costs, delivery time, product design, capacity and after-sales services.
The marketing plan should involve the company identifying its customers by name and specifically, major spenders who make big orders. The extra attention will make customers feel special and keep them coming back. A good location would also be crucial to ensure high walk-in traffic, as well as advertising on magazines, local media and through the internet. The company will have an open mind policy and be receptive of customer suggestions through it’s a Facebook fan page, which will determine the selection of merchandise to be sold (Smook, 2005, p. 143). The working class, retired people, youths, and low-income earners will all be given attention. In addition, the company will ensure it maintains quality in its merchandise mix by attending trade shows and keeping up with fashion trends. The merchandise mix will ensure the company can still perform in case a specific line is not selling as expected.
Potential audience for the market plan and their needs
The market plan is aimed at reaching a large portion of the Chinese population, youths, working class, expectant mothers, athletes and low-income earners, mostly in urban areas. Slightly above 50% of the 1.3 billion Chinese populations are rural residents, most of them fall within the lower to middle income group though income level has been greatly improved in the recent past (Centre, 2011, p. 7). Youths mostly demand casual clothing like jeans and t-shirts, while the working population demands official clothing and suits. Low income earners demand clothing that is more durable and price friendly.
Urban consumers play a dominant role in the apparel market growth, although rural income is expected to increase in the near future, this will stimulate rural consumption and unleash a huge market potential. This population is observant of the current fashion trends and demand merchandise that matches the current fashion trends, mostly due to the fact that China has a developed economy (Centre, 2011, p. 27). On the other hand, their increasing income could lead to growth in purchasing power, therefore, more expenditure on clothing, especially on fashion goods. A considerable proportion of rural residents are becoming urban residence meaning the potential audience is bound to increase. Urban living standards and lifestyle will overwhelmingly impact on their fashion attitudes, and this could promote demand.
Identification of the marketing segment and its rationale
China comprises distinct characteristic of regional diversity. Economic status differs in different cities. This regional diversity has significant implications for the company that will be entering the Chinese market because it will mean identifying the marketing segment (Centre, 2011, p. 34). Geographic segmentation will involve observing customer concentration, and location in the urban areas. Specifically, identifying the areas that have a high number of customers and where these customers are located and devising a marketing strategy (Sakarya, 2007, p. 211).
The company will also use income, gender, age and education for demographic segmentation. People of a particular age demand certain type of clothing, for example, old people cannot prefer jeans and t-shirts, and most females like shopping and, therefore, gender will dictate the marketing strategy. In terms of education, the company will look at graduates and high schoolers and categorize them differently to determine each groups demand (Smook, 2005, p. 149). Customer’s attitudes, lifestyles, and interests will determine psychographic segmentation, where the company will target people with different interests and opinion. In this segmentation, religious beliefs will be given more consideration since certain religions do not allow certain clothes. Those with same interests and opinions will be approached differently. A considerable population of people living in major cities like Shanghai, Guangzhou and Beijing follow lifestyle by ‘paying attention’ to fashion information, such people mostly demand high quality and fashionable products (Centre, 2011, p. 50).
As most communities become more diverse, the company cannot offer the same marketing mix to different consumers. The rationale of market segmentation is to enable the company customize some of its elements for the specific target market (Sakarya, 2007, p. 225). This will enable the company satisfy customers different needs, more effectively compared to its competitors. In market segmentation, the firm will break down a wide market into a homogeneous and identifiable group of consumers who have similar characteristics, needs and wants.
Discussion of the target market and its rationale
A high percentage of the target market considers themselves as having their own styles and not just following trends. This means the company should put more importance in brand positioning and product differentiation to enhance customer loyalty and brand identity. Consumers demands have diversified and consumers exhibit various consumption behaviors (Smook, 2005, p. 158). The luxury market is also growing due to increased income, attracting big brands like Armani and Louis Vuitton. This is crucial in ensuring All-round fashion puts more importance on quality, style and brand image. Price influences the buying behavior of low income consumers while brand apparel appeals to mid-end consumers. Most consumers are aware of fashionable lifestyle since they are observant of current trends.
SWOT Analysis of the company
Market position of the product and its rationale
There is increasing purchasing power in China, promising high-demand for clothing. In addition, the percentage of people living in urban areas is increasing meaning more people will want to change their lifestyles through consumption of fashion goods. Due to the emergence of affluent people, differentiation of consumers is becoming clear, with demand for luxury fashion increasing; this means the company should put emphasis on quality and style (Sakarya, 2007, p. 218). Majority of the Chinese population is observant of the fashion trends and the company needs to keep its merchandise updated to meet the higher demands for comfort and quality.
Marketing framework and the positioning of products
The company will ensure it uses the 5c’s of marketing, by determining which clients’ needs it is satisfying, determining if the company can meet those needs by doing a SWOT analysis, establishing those who compete with the company in meeting customer’s needs, and determine if there are any collaborators or outside sources who can help the company, like suppliers or distributors. The company will have to describe the fine details of its products and services to set it apart from competitors by using the traditional 4 P’s. The company will define its product and how it differs from competitors and if there are any extras like guarantees or ongoing support, emphasis will also be put in pricing, promotion and place. Most importantly, the company will identify all segments for its products and determine the specific target. The company will ensure it consistently produces high quality products and ensuring its products meet quality standards.
References
Centre, I. T. (2011). The Chinese Market for Clothing. 2-76.
Sakarya, S. (2007). Market selection for international expansion Assessing opportunities in emerging markets. International Marketing review, 209-230.
Smook, L. (2005). Competitiveness of the Chinese Textile Apparel Manufacturing Industry: An Assessment of Attaining and Sustaining Global Competitiveness. Beijing: Swanstone Wynot.
