Introduction. 5
Purpose of the report 5
Findings 6
Situational Analysis 6
Strategic and Marketing Opportunities. 9
Financial Opportunities.. 12
Operational Changes.. 12
Strategic Priorities.. 13
Communication Plan and Recommendations 14
Conclusion. 16
References 17
Executive Summary
This paper is carried out for purpose to prepare a full strategy and situational analysis around a new product line created by David and Victoria Beckham for young soccer players called Beckham Sports Star Range. The research draws attention to the fact that in Australia demand for the sports industry products has been caused by changing consumer attitude towards sportswear and the promotion of a healthy lifestyle and increased desire to participate in sport activities. Further investigation reveals that in the country soccer participants has increased almost by two times and reached 843,900 soccer players (“The Future of Australian Sport,” 2013). These factors appear to be a good opportunity for Beckham Ventures Limited to market their new brand of soccer clothing for boys and girls in Australia.
The writing prepares a full strategy around Beckham Sports Star Range launching in Australia. The results of the situational analysis of the Australian apparel market demonstrate the overall attractiveness of this geographical area for the marketing of a new sportswear brand there.
It is recommended:
- That the company develops a customization platform that enables consumers to design customized goods online
- That the company uses a variety of social media platforms for advertising.
- That they cooperate with an Australian junior sports club and soccer teams.
- That they open own-retail stores in several Australian cities and introduce shop-in-shop and point-of-sale concepts.
- That they adapt in-house bank concept.
- That they implement end-to-end planning process.
- That they ensure cost competitiveness through excellence in the production process, efficient color and material selection.
- That they provide industry-leading availability, including excellent logistics service and creation of the cost-efficient supply chain system.
- That they provide and enable later ordering.
- That they modernize the existing infrastructure and operation.
Market Evaluation
Introduction
David Beckham is considered to be a soccer legend and one of the most gifted sportsmen of his generation. He possesses the excellent soccer skills and experience. Moreover, he is a founder of an empire that includes fragrances, fashion clothing and range of merchandise with Victoria Beckham. Their goods are popular on several continents and their company, Beckham Ventures Limited, employs suppliers, service providers and retailers providing various products of the highest quality to the customers worldwide. David Beckham has built their empire by transforming the design and technology of their goods into high fashion, immensely increasing the number of potential customers. Recently, David and Victoria Beckham have created a new line of young soccer sportswear that consists of branded soccer clothing for girls and boys aged 4 to 12. The new product range has been successfully tested in Tasmania (Australia). The current task is to run the test market in Sydney (Australia).
Purpose of the report
This writing critically studies a line of young soccer sportswear created by Beckham couple, evaluating its strategic direction and marketing opportunities. The report examines internal and external environmental factors influencing the business development and the new product line including the financial viability of opportunities and likely contribution to the business. This writing analyses the opportunities for success of Beckham Sports Star Range products and suggests possible marketing strategies for the new brand development.
Findings
Situational Analysis
In Australia the athletic and fitness clothing stores industry has considerably developed over the recent years in spite of difficult trading conditions (“Australia Athletic Apparel,” 2013). According to the latest research data, the sports clothing industry in the country has achieved strong growth and is considered to reach $1.8 billion revenue till 2015 increasing annually by 5,2% (“Australia Athletic Apparel,” 2013). Demand for the sports industry products has been caused by changing consumer attitude towards sportswear and the promotion of a healthy lifestyle and increased desire to participate in sport activities. The trend towards physical recreation is also influenced by the media broadcasting of national and world sport championships and games. In Australia sports apparel industry has grown by 8.3 percent between 2006 and 2012 (“Australia Athletic Apparel,” 2013). Soccer has become especially popular between 2001 and 2010. The overall number of soccer participants has increased almost by two times and reached 843,900 soccer players (“The Future of Australian Sport,” 2013). Among the top 10 sport activities, outdoor soccer occupies the third place after fitness and running. Additionally, the Hyundai A-League (a domestic national soccer competition) has been launched in 2005 by the Football Federation Australia, providing even more soccer popularity in the country (“The Future of Australian Sport,” 2013).
The sportswear industry benefits greatly from marketing orientation. Sportswear producers and distributors build their marketing strategies in accordance with the fact that a wider selection of sportswear is available to men; women and children have a less sportswear variety to choose from. However, in the recent years women’s and children’s participation rates in sport have considerably increased (“Australia Athletic Apparel,” 2013). Men’s sportswear is the largest segment of Australia sports clothing industry. In 2012 this segment held approximately 70 percent of the whole market, while women’s and children’s sportswear accounted 20 and 5 percent correspondingly (“Sporting Goods in Australia,” 2012) (Figure 1).
Figure 1. Australian Sports Apparel Market Segmentation by Gender (2012)
As for the major distribution channels, in 2011 general clothing stores and specialty sports stores accounted around 40 and 50 percent respectively, while online sales were negligible and contributed around 10 percent of the total sportswear market sales (“Sporting Goods in Australia,” 2012) (Figure 2).
Figure 2. Distribution Channels of Sportswear in Australia
In fact, the international sportswear firms are less presented in Australia than in other western markets mainly because Australian apparel market is well-serviced by local companies and goods imported from China due to their low costs.
There are several key players in the Australian sportswear market: Rebel Sports and Amart All Sports are the major competitors in specialty sports store segment; KMART and Target compete to be leaders in general clothing store segment and online sports shops are headed by Amart All Sports (“Australia Athletic Apparel,” 2013).
Companies are under pressure to attract more young potential customers by introducing new products at reasonable prices and facing severe competition. The most prominent entry barrier is the high initial entrance costs. Both new and mature retailers spend much money on marketing and advertising strategies to communicate the advantages of their products. New products must be of the highest quality and at low prices to be demanded by consumers in Australia.
Although the Australian sports apparel industry fell down in 2010 and 2011, it is expected to grow in the nearest years by 6.8 percent till 2017 (“Australia Athletic Apparel,” 2013). The further development of the athletic sportswear industry will be enhanced by the increased interest in healthy lifestyle and to sport coming from women and children. Moreover, online sales of sportswear will become even greater offering consumers a great variety of sports apparel at reasonable prices.
The overall macroeconomic conditions can be described as follows (“Sporting Goods,” 2012):
- Most local and global indicators demonstrate the global recovery process
- Consumer and business sentiment in Australia sits close to its historical average
- Labor market conditions are stable in spite of increased unemployment level (up to 5.75 percent from 5.2 percent) (“Sporting Goods,” 2012)
- Forecasted growth in the Australian retail segment is from 3 to 4.5 percent (“Sporting Goods,” 2012)
- Improved global economic conditions
- The increased Australian dollar rate
Strategic and Marketing Opportunities
Since Beckham Ventures Limited is a consumer goods company, consumer spending may influence brand success and sales rates. Macroeconomic factors, initially discussed, may also have a positive impact on corporate profitability and sales. Increased desire to participate in sport activities among women and children enhances consumption and consumer spending power. In addition, open trade barriers and legislative changes can positively influence company’s financial results and profitability (“The Future of Australian Sport,” 2013).
It is expected that child’s participation in sports will increase over time owing to benefits sport provides (“The Future of Australian Sport,” 2013). Moreover, a well-known soccer star, David Beckham, and branded soccer training clothing will be especially popular among young admirers of soccer and Beckham’s fans.
Given the diverse tastes and limited financial possibilities of the Australian consumer market, there exist a limited number of those, whom Beckham’s brand can appeal to. The company should utilize strengths to win the greatest possible market share and to cover and satisfy more customers, their preferences and price expectations.
The Australian apparel market provides lots of opportunities that can positively influence the financial goals and other business objectives of Beckham Ventures Limited. Maximization of business opportunities should become particularly relevant from an apparel industry perspective.
In order to manage possible opportunities in an effective way, it is crucial to evaluate and prioritize them:
- Digital Communication
Modern digital advances in communication channels provide significant opportunities for the efficient marketing strategy development, for the deeper engagement with potential consumers and enhancement long-lasting relationships, brand awareness and popularity (“Pushing Boundaries,” 2012).
In the recent years, the emergence of social networks and media has considerably influenced company’s marketing and advertising strategies, helping them to reach their consumers and increase brand popularity. First of all, there exists an excellent opportunity to present a new line of soccer sportswear through a variety of social media platforms (Twitter, YouTube and Facebook) (“Pushing Boundaries,” 2012). Investing considerable resources to present new brands will increase the number of fans and viewers, who will be eager to purchase something. The main advantage of this tool is the direct dialogue between consumers and the brand itself. The latest technological developments offer significant opportunities for sportswear companies and may help while advertising of Beckham Sports Star Range.
- Customization and Personalization
Another marketing opportunity is customer participation in brand campaigns or in the creation of a new product. This tool generates an excellent brand awareness and experience. Since modern consumers are searching for choice and variety of goods proposed by retailers, well-known brands, like Adidas and Reebok, provide various customization platforms that enable consumers to design customized goods online (“Pushing Boundaries,” 2012). This option is particularly relevant to the kids’ category. Market for personalized sportswear will increase and support sales growth of sports apparel retailers.
- Strategic partnership
Successful companies search for opportunities to cooperate with various organizations and sport clubs. This partnership may generate additional profit and revenues, and enhance brand growth and popularity. For instance, Beckham Sports Star Range can cooperate with an Australian junior sports club and soccer teams because sponsorship campaigns create the best experience and attract more consumers and admirers.
Relying on Beckham’s popularity, the brand may become very popular in Australia, generate sales and bring significant profit.
- Sports-inspired lifestyle.
As sport becomes an integral part of people’s lives, they want to train in fashionable clothing. At the same time, soccer becomes very popular in Australia, especially among children. The successful expansion of the Beckham’s sportswear brand can lead to sales development and profit increase.
- New sportswear category
Changes in lifestyle and people’s tastes and preferences result in new consumer needs and emergency of new clothing categories. Beckham Ventures Limited proposes a new category that will satisfy needs of Australian consumers.
- Controlled space
The sportswear retail industry and the environment are constantly changing. Young people and children want to get involved with new sport brands. Therefore, Beckham Sports Star Range has to adapt their distribution strategy to the changing customer needs. First of all, the company should open own-retail stores in several Australian cities (especially in those, where the climate is warm and outdoor soccer is popular; for instance, in Brisbane and Sydney). Secondly, they should introduce shop-in-shop and point-of-sale concepts. This step may help while involving consumers with new products and bringing goods to potential retail partners. Additionally, the company should establish e-commerce to drive sales and profit growth.
Consequently, appropriate analysis and application of marketing opportunities may generate brand popularity and equity in Australia.
Financial Opportunities
Interest rate changes can positively influence brand financial results. Thus, Beckham Venture Limited should monitor financial markets to identify possible opportunities, minimize financial expenses and to ensure sufficient liquidity reserves. For instance, Beckham brand of soccer sportswear may take on board financial plan developed by the Adidas Group (“Pushing Boundaries,” 2012). They have adapted in-house bank concept, according to which fund surplus of individual group company should cover the financial needs of other group members, thus cutting external financial requirements and modifying interest costs. Another option is intercompany transactions, which reduce costs for external bank transactions and charges (“Pushing Boundaries,” 2012).
Financial viability is the foundational component of any start-up and mature business. It depends on general economic factors, level of demand for the goods, maturity of the relevant industry and capacity of business to supply. General economic factors in Australia demonstrate a good recovery process, demand for children’s sportswear is gradually increasing, sportswear industry is well-developed in the country especially men’s sector. Consequently, the conditions for financial viability of Beckham Venture Limited in Australia are sufficiently favorable.
Operational Changes
Company that launches its business in other countries has to improve its operational capabilities or change their current operations in accordance with the local needs and requirements. These changes should be implemented to elevate consumer awareness, improve efficiency and increase revenues and profits.
Since Beckham Ventures Limited has no manufacturing outlets in Australia, the company should search for the ways to improve the efficiency of their supply chain and make it demand-driven. The company needs to implement end-to-end planning process (accurate forecasting, improved warehouse management, inventory optimization) (“Pushing Boundaries,” 2012). Additionally, the company should improve its supply chain, reduce lead time, and enhance decision support. Furthermore, it is necessary to upgrade distribution centers that provide additional revenue growth. The potential influence of operational improvements is significant. Consequently, it is crucial to implement numerous initiatives, which bring substantial benefits like creativity, speed, innovation and cost saving.
Strategic Priorities
Clearly defined priorities are crucial for successful brand marketing and advertising. As for the Beckham sportswear brand, they are the following:
- Ensuring cost competitiveness. To ensure cost competitiveness, the company should focus primarily on product and supply chain reduction. Since the Australian sportswear market is well-serviced by goods produced domestically and imported from China and have low prices, it is crucial to provide high-quality brand sportswear at reasonable prices. To achieve this important step, the company should increase productivity through excellence in the production process, efficient color and material selection (“Pushing Boundaries,” 2012). These improvements are expected to ensure that the company provides the best value to the consumers abroad.
- Providing industry-leading availability. This priority includes excellent logistics service and creation of the cost-efficient supply chain system. The roll-out of this system should focus on the development of flexible production models, planning and managing risks in the supply chain (“Pushing Boundaries,” 2012). This will allow increasing customer satisfaction and building customer loyalty.
- Providing and enabling later ordering. To attract more loyal customers, it is crucial to provide them not only with the high-quality products and reasonable prices, but to ensure that customers will get the excellent service. This service should include, first of all, reduction of lead time and possibility to order necessary goods closer to the point of sales (“Pushing Boundaries,” 2012). This initiative provides faster replenishment of the products and better responsiveness of the company.
- Modernizing the existing infrastructure and operation. This priority should build the necessary operational basis for the successful implementation of the marketing strategy and should include consolidated distribution structure and facilities (“Pushing Boundaries,” 2012). The stores located in Australia should be supplied from a distribution center of Beckham Ventures Limited located nearest to the country.
Communication Plan and Recommendations
After the analysis of internal and external environmental factors influencing the business development and Beckham Sports Star Range marketing in Australia, a number of recommendations can be made:
- Australian market provides lots of opportunities for the development of sportswear retail. High demand for the sports industry products caused by changing consumer attitude towards a healthy lifestyle and increased desire to participate in sport activities creates the supportive environment for the promotion of new Beckham’s soccer sportswear for young girls and boys (“Australia Athletic Apparel,” 2013). Consequently, Australian market provides lots of opportunities for success of Beckham Sports Star Range.
- Australian apparel industry and market lack international brand presence, and thus, Beckham Sports Star Range will be very popular. Moreover, Beckham’s popularity may play an important role in sales and profit enhancement.
- Develop a customization platform that enables consumers to design customized goods online.
- Widely use a variety of social media platforms for advertising.
- Cooperate with an Australian junior sports club and soccer teams.
- Open own-retail stores in several Australian cities and introduce shop-in-shop and point-of-sale concepts.
- Adapt in-house bank concept, according to which fund surplus of individual Beckham’s group company should cover the financial needs of other group members.
- Implement end-to-end planning process (accurate forecasting, improved warehouse management, inventory optimization).
- Ensure cost competitiveness through excellence in the production process, efficient color and material selection.
- Provide industry-leading availability, including excellent logistics service and creation of the cost-efficient supply chain system.
- Provide and enable later ordering.
- Modernize the existing infrastructure and operation.
(These recommendations may serve as the communication plan to stakeholders because they describe the major steps that should be undertaken while Beckham Sports Star Range marketing and distributing).
Conclusion
In Australia the athletic clothing industry has considerably developed over the recent years. Demand for the sports industry products has been caused by changing consumer attitude towards sportswear and the promotion of a healthy lifestyle and increased desire to participate in sport activities (“Australia Athletic Apparel,” 2013). As the result, the situational analysis demonstrates the general attractiveness of the Australian apparel market for the launching of Beckham Sports Star Range. The investigation of possible marketing opportunities reveals several steps that should be implemented to generate benefits like creativity, speed, innovation and cost saving, and namely: customization and personalization, controlled space, strategic partnership, digital communication use, operational changes, etc. Each component plays a crucial role for the successful launching of a new sports apparel brand in Australia. Of course, there exist risk factors which can influence the success of this strategy (for instance, bad economic conditions, bad brand attractiveness and awareness). However, since Beckham’s name is well-known all over the world, the company has an excellent chance to succeed.
References
Australia Athletic Apparel and Footwear Industry Outlook to 2017. (2013). Ken Research. Retrieved 08 October 2014 at http://www.slideshare.net/
Pushing Boundaries. (2012). Retrieved 08 October 2014 at http://www.adidas-group.com/
Sporting Goods in Australia: An Industry Snapshot. (2012). Retrieved 08 October 2014 at http://www.asga.com.au/
The Apparel Industry in Australia. (2009). Retrieved 08 October 2014 at http://www.apparel.ca/
The Future of Australian Sport. (2013). Retrieved 08 October 2014 at http://www.csiro.au/
