Shoes Business in Switzerland
Two forms of market segmentation for your shoes, and support your choices. Then, identify two (2) target markets for each segment, and explain those choices
Footwear industry business is becoming more complex and competitive in the global arena. According to Kotler, et.al, (2015), the successful manufacturers are the trendsetter at present, and the retail organizations are putting higher emphasis on the market segmentation to increase their market share. In this case, we will consider the company that produces shoes for both males and females, and trying to market its product in Switzerland. In Switzerland, the company will practice geographical and demographic segmentation to market the new shoe in the market of Switzerland.
The geographical segmentation is based on the geographical locations or it means the selling of the product in a certain geographical regions while demographic segmentation is based on the population characteristics. For the demographic segmentation, we will consider the age to be the determining factor for the market segmentation.
The company plans to sell the leather shoes and sports shoes in the market of Switzerland. As leather shoes are highly preferred by the office going peoples and the peoples preferring formal attire, the sales of these shoes will be high in urban areas where majority of the people are employed in the offices. These people put higher emphasis on the design and quality of leather used. As businessperson’s personality depends upon the kind and quality of shoes, they prefer best shoes. Apart from that, the main customers for the shorts shoes will be the group of the people who are involved in sports or in any kind of physical fitness. People are becoming more aware of their health so many people are being involved in the physical fitness programs to maintain their health. People in the cities are busy with their office and work. People in those cities are also aware of their health and are involved in sporting events as well as physical fitness program. So, these cities can be the city that the company needs to target to make higher sales. Hence, on the geographic basis, the company will be focused on urban and city areas to sell its product.
On the other hand, the company aims to sell its products to the people falling in the age group of 21-54 years because this group constitutes the highest population in Switzerland (Central Intelligence Agency, n.d). The majority of the people in this age group are also the people who are going to office as well as involved in some kind of sports and physical fitness programs, the sales of shoes will be higher. Prior to 21 years of age, most of the people will either be in the university or will no require formal attire frequently. After 21 years of age, these people will have proper full time job where they require formal attire. It is also observed that people of this age group are highly involved in sports and gyms which requires them to have a pair of sports and formal leather shoes.
Give examples of four (4) actionable goals for your business as you embark on your mission to import shoes into your chosen country. Describe why each goal is important to the firm.
The chief mission is to provide the best selection of shoes in both the men and women segment. The company focuses on high customer satisfaction through highest quality product. The company is focused on attracting the range of customers, from premium to middle class, and deliver the best product. For this, following goals or plans are devised
Consistent Product Quality and achieving 15% of market share in 1st year
The company will always remain committed in delivering the product with highest quality consistently. The company will always put its customer’s satisfaction at the heart of the business and provide high-quality standard shoes to satisfy consumer expectation. With this, the company aims to achieve 15% of market share at the end of the 1st year. This is important because it will be very important to provide the direction and some degree of stability to the business.
Reliable Distribution with stores in each cities in 2 years
It is very important to fulfill the orders at a prompt mode. If the company fails to meet the needs of the customer and deliver the product on time, it will create negative impression about the business thereby leading to the fall of the company. So, the company will focus more on establishing reliable distribution by appointing retail distributors at the prime locations of the city. The convenient stores will be opened so that the customers can visit the store to get the shoes they want. This will help the company to reduce and eliminate the number of delayed orders. To achieve this, the supplier chain will be managed efficiently so that the company never falls short of stocks. For this, the company aims to have a store selling its shoes in all the cities of Switzerland in next two years. This will help the company to mark its presence in the market and make the consumer aware of the product. It will also increase the sales of the company.
Customer Satisfaction exceeding 95% all the time.
The business will be driven by customer satisfaction. The customers will be encouraged to provide feedbacks regarding the store, its location, the product as well as about the other aspects of the business. Those feedbacks will be carefully analyzed and implemented to enhance the customer experience.
Increase the use of digital and traditional marketing tools by 10% of the total sales
Switzerland is one of the developed countries of the world and majority of its people visit shopping malls where they will look for branded and quality products. So, in the context of Switzerland, the global marketing plan for the shoe brand shall involve the opening of exclusive and franchise stores in the malls. The company should be involved in CSR activities and prove themselves that they are not only earning money, but also spending it for the community. Opening the stores in the shopping malls and being involved in CSR will be very helpful because people in Switzerland are highly brand conscious and believe that products in the shopping malls, exclusive and franchise stores are of highest quality. These people also believe that the company that is engaged in the social activities must remain in the society and hence they buy the products of such companies. Since the company will be selling leather shoes, the voice might come against this, but the company can neutralize this by involving themselves in the nature conservation. Apart from this, the company must use digital marketing platform because the business these days has transferred from brick-and-mortar store to online stores.
Choose the global pricing policy that will best suit your firm and selected country. Support your decision for choosing such a system.
Pricing strategy is very important decision for the company. Since, the company is new to the Switzerland market, for the short period, penetration pricing will be used. The main purpose of this pricing is to reach the maximum part of the market segment with a price that is generally low. This is a pulling strategy where the company will pull the customers to buy the products by setting the price lower than the normal level. According to Spann, et.al, (2014), this approach is allied to a promotion intention by increasing market share in which the competitor's product will have a small share. This strategy might result in fewer profits at the beginning but once the larger market share is captured, the price can be revised to increase the revenue. In the longer horizon, the company will benefit more by larger market share. This strategy will also be helpful in competing with the existing competitors like Bata, as this strategy will be helpful in attracting price conscious customers.
Choose the marketing channel alternative that will best suit your firm and selected country. Describe the function of each channel member.
Since, the company does not know many things about the Switzerland market, it is preferable to use the existing marketers in the country. The company can provide franchise rights to open the exclusive store. Later when the business grows, then the company can itself mark its presence in the market through exclusive stores. The company can open its exclusive stores and sell its product. No matter what, the company must focus on the mix of direct and indirect marketing. It can hire third party dealers to expand its marketing channel and increase its market reach. Opening of exclusive stores will help company to maintain its brand image while the indirect marketing will be beneficial to reach suburbs and understand the customer and market through the channel participants (Buzzell & Ortmeyer, 1995).
Describe the sales promotions that will be used entice both consumers and trade channel partners.
Sales promotion is very important to generate the sales. The company can use several sales promotion tools to induce the sales in the new market. To motivate the dealers to make higher sales, the company can provide commissions to the dealers. The commission will be based on the sales made. This will motivate dealers and retailers to make higher sales. Apart from this, the company can provide discounts to the customers. Frequent discount programs can attract more customers. The company can also provide a pair of shoes for free if a customer buys five pair of shoes at once. Apart from this, the company can take the old shoes back from the customers and provide some higher percent of discount in the sales. This will induce customers to return their old shoes and buy new shoes for cheaper price.
Determine whether the firm will use salespeople or sales agents to promote and sell your products in the chosen country.
Sales agents are very important to generate higher sales. But, in the case of shoes, salespersons are not very useful because people often visit the stores to buy the shoes. People buy shoes based on design, quality and comfort. There will not be many features to explain to the customers. The customers can chose the shoes that is most appealing to them. So, the company does not need to have sales agents to promote the sales.
References
Buzzell, R. D., & Ortmeyer, G. (1995). Channel partnerships streamline distribution. Sloan Management Review, 36(3), 85.
Cental Intelligence Agency, (n.d). The World Factbook. Retrieved at: https://www.cia.gov/library/publications/the-world-factbook/geos/ha.html
Kotler, P., Burton, S., Deans, K., Brown, L., & Armstrong, G. (2015). Marketing. Pearson Higher Education AU.
O'guinn, T., Allen, C., Semenik, R. J., & Scheinbaum, A. C. (2014). Advertising and integrated brand promotion. Nelson Education.
Spann, M., Fischer, M., & Tellis, G. J. (2014). Skimming or Penetration? Strategic dynamic pricing for new products. Marketing Science, 34(2), 235-249.
