Marketing Plan - Grade: 6 PDF

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BSB 126 MARKETING PLAN Name: Leo

Student number:

Total word count: 1606 1. Situational Analysis 1.1 Company background Uniqlo is a Japanese company that is a wholly owned subsidiary of Fast Retailing. UNIQLO’s goal is to provide quality and casual clothes at affordable prices, which are fashionable and suitable for anyone and anytime (Fast Retailing, 2017). The first Uniqlo store opened in Hiroshima, Japan in 1984. Uniqlo tried to provide consumers with highest quality services and products by satisfying consumers’ needs and providing services that can exceed customers’ expectation. Soon after, Uniqlo became a famous and popular brand. Now it operates globally. The first Australia store of Uniqlo opened in Melbourne in April 2014. Also, two stores opened in Sydney at the end of 2014. Now, there are more than 10 Uniqlo stores in Australia.

1.2 Australian Fast fashion industry Fast fashion retailers combine affordability with fashion trend and quality, and they also have to be innovative to differentiated themselves so as to survive in the fierce competition (Anthony & Taplin, 2017). In Australian fast fashion industry, Uniqlo has several competitors, such as Zara, Topshop and H&M. Appendix A gives a CDSTEP analysis which provides six important macro-environmental forces for fast fashion industry. Appendix B shows a SWOT analysis which is based on internal and external factors of Uniqlo.

1.3 Profitability issue of Uniqlo

Figure 1: Profit and Loss account of Uniqlo (IBISWorld, 2016)

Uniqlo has achieved a significant growth in sales for only three years’ operation. However, Uniqlo may have trouble with it profitability. As Figure 1 indicates, the sales revenue of

Uniqlo significantly increases from $33,213 in 2014 to $175,429 in 2016, but the amounts of net profit are both negative.

2. Marketing Goal Uniqlo aims to earn total revenue of $200,000,000 and to reduce the net loss to $1,500,000 in Australian market by the end of 2018.

3. Marketing Strategy 3.1 Target customers The following will provide key aspects when Uniqlo segments the market. Geographic: Urban area markets should be the focus of Uniqlo, especially those modern cities of Melbourne, Sydney and Brisbane. CBDs of Melbourne and Sydney are densely populated. Dwellers and commuters in the CBD might be frequent customers of Uniqlo. Moreover, there are so many tourists that could also be potential consumers of Uniqlo. Climate differences are another significant point that Uniqlo needs to take into account. Because climates of Melbourne, Sydney and Brisbane are quite different, Uniqlo will offer different products based on evaluation of seasons.

Demographic: In the clothing industry, the target market consists of Generation Y, Generation X and Baby Boomers generation. For Uniqlo, the target customers are Generation Y and X in Australia. This includes individuals 18-40 years old, any gender or ethnicity, and with a senior school education or above. Furthermore, this target market includes international students which are a large number of consumers. According to data from the federal Education Department, 554,179 full-fee paying international students were in Australia in 2016 (Doyle, 2017). Those university students at the age of 18-25 will be target consumers.

Psychographic: A market can be divided based on consumers’ personalities, values and life styles (Grewal et al., 2015). Uniqlo will target people who like outdoor activities and travelling. Additionally, people who are lower-middle or middle income earners will be targeted.

Figure 2 shows a profile of target customers based on analysing geographic, demographic and psychographic factors.

Age generation

Target Market 18-40, Generation Y and X

Gender

Male, Female

Ethnicity/Nationality

Any

Education

Senior school, Undergraduate, above

Location

Urban areas

Income

Lower-middle to middle income

Lifestyle

Outdoor activities, travelling lovers

Figure 2: Profile of target customers

3.2 Value Proposition The value proposition of Uniqlo is comfortable shopping, low price, high quality and function (Huang et al., 2014). In the fast fashion industry, Uniqlo focuses on providing products that are stylish and follow current fashion trends, ensures affordability and quality, and combines high-tech and fashion together. HEATTECH and AIRism are two innovative designs of Uniqlo. HEATTECH clothing is designed to keep you warm in cooler temperatures, and AIRism is to keep your body cool in the summer by using advanced fibre (Dallke, 2014).

3.2.1 Positioning Statement Products of Uniqlo is the best clothing for people of ages between 18 and 40, who are outdoor activities and travelling lovers. Because Clothes of Uniqlo are casual and integrates high-tech, which is suitable for taking exercises, such as playing basketball and baseball. In addition, Uniqlo provides products for consumers at an affordable price. Travellers are interested in clothing that is not expensive and easy to carry.

3.2.2 Positioning Map Figure 3 gives a positioning map for Uniqlo based on the analysis of price and quality. Compared Uniqlo with its competitors, Uniqlo locates in a relatively quality and cheaper position.

High price

4. ZARA TOPSHOP H&M Low quality

High quality

PULL&BEAR UNIQLO COTTON ON FOREVER 21

Low price

Figure 3: Positioning Map

Marketing Tactics 4.1 Product Uniqlo is currently offering a variety of products, such as jackets, pants, socks, T-shits and underwear. Uniqlo combines a wide range of colours so as to differentiate itself and survive in the fast fashion industry. For example, socks provided by Uniqlo have 50 different colours. Moreover, Uniqlo has a great after-sales system. Any sold clothing can be returned within 28 days after purchase if there are some defects. The brand awareness of Uniqlo has been increased because of Uniqlo’s excellent products and services. A suggested development could be to improve Uniqlo’s online shopping experience. As digitization is spreading globally, more and more people tend to buy good online because it

is convenient (Gillespie et al., 2015). Even though Uniqlo has launched online stores, customers do not have a perfect online shopping experience. Not all of Uniqlo’s clothes are available online, which limits consumers’ choices. This may lose some potential customers. In order to give customers a seamless shopping experience, Uniqlo should continually improve its online stores.

4.2 Price 4.2.1 Company Objective The objective of Uniqlo is to integrate affordability with high quality, stylishness and hightech (Woo & Jin, 2014). Keeping the price affordable can constantly attract new customers and increase the loyalty of customers. However, Uniqlo needs to consider its profitability in Australian market based on several years’ operation. The performance of the whole fast fashion industry is not positive as it is indicated in Figure 4. The industry revenue is dramatically growing but the profit margins have fallen over the past five years (IBISWorld, 2017). In order to ensure the profitability, Uniqlo will gradually increase prices but this increase should be reasonable and acceptable.

Figure 4: Performance of Fast Fashion Industry (IBISWorld, 2017)

4.2.2 Customers Customers may expect Uniqlo’s products to be more fashion and combine with technologies. If Uniqlo can supply more innovative products than other competitors and develop new functions of clothes, customers could be willing to pay a higher price. At the moment, Uniqlo has developed HEATECH and AIRism, which are two innovative designs of Uniqlo. However, it is still not enough to satisfy the increasing market demands. In order to make customers accept a higher price, Uniqlo should put more innovations and designs into market.

4.2.3 Cost Uniqlo secures a stable, high-volume supply of high-quality materials at a relatively lower cost by negotiating directly with material suppliers (Fast Retailing, 2016). This is a significant reason why Uniqlo can provide clothing made by luxury materials at affordable price. In addition to cost of materials, the other costs include employees training programs, insurances, rent and new product innovation.

4.2.4 Competitions In the fast fashion market, there is a fierce competition environment. Uniqlo has many competitors in Australian. Major competitors include Zara, Topshop and H&M. As Figure 3, the positioning map, indicates the position of Uniqlo in the market, Uniqlo will offer a lower price than major competitors.

4.2.5 Channel Members Uniqlo’s channel members are material manufacturers and delivery companies. As mentioned above, Uniqlo has stable material supply partners that provide materials at a lower price. However, if material and delivering costs increase, Uniqlo will consider increasing the price of products.

4.3 Distribution Uniqlo operates a one-level marketing channel system, which means products are delivered directly from manufacturers to Uniqlo’s flagship stores. The network of Uniqlo’s manufacturing partners is in China and Southeast Asian. The relatively close distance from

Asian manufacturers is an advantage of Uniqlo’s Australian market, which results in a lower shipping cost. Also, higher margins could be earned. Figure 5 indicates a detailed supply chain of fast fashion industry in Australia, which involves more factors.

Figure 5: The supply chain of fast fashion industry (IBISWorld, 2017)

Uniqlo can establish manufactories in Australia because it will significantly decrease shipping costs. This will lead to greater profit in the long-term operation.

4.4 Promotion Figure 6 illustrates a promotion budget allocation. Advertising is an IMC tool that Uniqlo will use (Changsorn, 2016). As Uniqlo is a brand from Japan, advertising on TVs and billboards can help Australian realise this Japanese brand. Advertising on social media enables casual clothing lovers to gain information about Uniqlo, which can increase the number of consumers. If the number of consumers increases, sales and profits may increase.

Figure 6: Advertisement allocation

Objectives

Task

Budget

Increase local

Make more Australian to

TV: $19,000

awareness

know this company

25 times of 15-second commercial at a rate of

through:

$750 per time (Wagner, 2017)

1. TV

Billboards: $9,000

2. Billboards

Two billboards for 1.25 years (Billboards Australia,

Send company’s

2017) $22,000

of products to public

four colour, full page advertising on two fashion

through:

magazines (Bauer Media, 2017)

1. Magazines

Social media:

2. Social media

Facebook: $6,500

(Facebook, Instagram)

1,300 days advertising at a rate of $5 (Facebook,

Increase the sales by 15% over a one year period

2017) Instagram: $5,500 1,100 click times, $5 per click (Tate, 2017)

5. References Anthony, A. K., & Taplin, I. (2017). Sustaining the retail pilgrimage: Developments of fast fashion and authentic identities. Fashion, Style & Popular Culture, 4(1), 33-50

Billboards Australia. (2017). Billboard Advertising and Outdoor Advertising Australia wide. Retrieved from http://www.billboardsaustralia.com.au

Bauer Media. (2017). AD RATES & SPECS. Retrieved from http://www.bauermedia.com.au/advertising/print-ad-specs-rates/

Changsorn, P. (2016). UNIQLO to widen its reach with online store. The Nation. Retrieved from http://gateway.library.qut.edu.au/login?url=https://search-proquestcom.ezp01.library.qut.edu.au/docview/1806253551?accountid=13380

Dallke, J. (2014). Get a Look at How Uniqlo Uses Technology to Innovate Fashion. Retrieved from https://www.americaninno.com/chicago/get-a-look-at-how-uniqlo-usestechnology-to-innovate-fashion/ Doyle, J. (2017). International students studying in Australia reach record number, Education Department figures show. Retrieved from http://www.abc.net.au/news/2017-0222/record-number-of-international-students-in-australia-in-2016/8291284 Facebook. (2017). How much it costs to advertise on Facebook. Retrieved from https://engb.facebook.com/business/help/201828586525529 Fast Retailing. (2016). The UNIQLO Business. Retrieved from http://www.fastretailing.com/eng/ir/library/pdf/ar2016_en_07.pdf

Fast Retailing. (2017). About UNIQLO. Retrieved October 1, 2017 from https://www.fastretailing.com/employment/en/uniqlo/about.html Grewal, D., Levy, M., Mathews, S., Harrigan, S., & Bucic, T. (2015). McGraw Hill Education. Gillespie, P., Daigler, J., & Revang, M. (2015). Market Guide for Digital Personalization Engines. Retrieved from https://www.gartner.com/document/3023717? ref=solrAll&refval=191635020&qid=67f58ffbb3726a9c036e0e9108690edf

Huang, P., Kobayashi, S., & Isomura, K. (2014). How UNIQLO evolves its value proposition and brand image: Imitation, trial and error and innovation. Strategic Direction, 30(7), 4245. doi:10.1108/SD-04-2014-0058 IBISWorld. (2016). Uniqlo Australia Pty Ltd. Retrieved from http://clients1.ibisworld.com.au.ezp01.library.qut.edu.au/reports/au/enterprisefull/ financials.aspx?entid=428584

IBISWorld. (2017). Fast Fashion in Australia. Retrieved from http://clients1.ibisworld.com.au.ezp01.library.qut.edu.au/reports/au/industry/defaul t.aspx?entid=4172 Tate, A. (2017). Instagram Ads Cost: The Complete Resource for 2017. Retrieved from https://adespresso.com/blog/instagram-ads-cost/ Woo, H., & Jin, B. (2014). Asian apparel brands’ internationalization: The application of theories to the cases of Giordano and Uniqlo. Fashion and Textiles, 1(1), 1-14. doi:10.1186/s40691-014-0004-7 Webster, K. (2013). Global shift: Australian fashion’s coming of age. Retrieved from http://theconversation.com/global-shift-australian-fashions-coming-of-age-19237 Wagner, N. (2017). How Much Does Television Advertising Really Cost? Retrieved from http://smallbusiness.chron.com/much-television-advertising-really-cost-58718.html

6. Appendices

Appendix A: CDSETP Analysis

Weakness: Strengths: Uniqlo is a market leader in clothing market in Japan. There is inconsistency in advertisement and market communications. Uniqlo has limited suppliers. Uniqlo provides high quality products at affordable prices. Macroenvironmental Factors Analysis Not all clothes can be bought on the website. Uniqlo caters all kinds of age groups. Uniqlo operates in more and than worldwide is an immigration country, Culture it 10 is acountries multicultural country. Australian fashion wearing culture evolved internationally and predominan Uniqlo tries to be environmentally friendly in the manufacturing process.

Demographic People of generation Y and X could be the optimal target consumers for fashion clothing industry.

Opportunities: Threats: Uniqlo can promote its brand by advertising and social media. There is Increasing competition in Australian market. Uniqlo can maintainSocial and expand operations. trend globalCausal clothing is acceptable in the campuses and anyin public place.market. The profitability is questionable Australian Uniqlo needs to keep innovative on designing. There is low brand loyalty.

Technology HEATTECH clothing is designed to keep you warm in cooler temperatures, and AIRism technology can keep your body cool in the s

Economics

Fast fashion clothing such as Zara and Uniqlo is at an affordable price.

Fast fashion industry isPolitical/legal subject to standard retail regulations, which includes restriction on trading hours and employment condit

Appendix B: Swot Analysis...