Uniqlo - Marketing principles PDF

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MARKETING PRINCIPLE ASSIGNMENT REPORT GROUP MEMBERS: Duong Kimlong Miranda Kattleya Anne gabia Lydia Ng Shi Hui

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1. INTRODUCTION: In society nowadays number of company are constantly increasing, which makes competition between firms more challenging. However, to make your company earn more profits, one should strengthen the company’s marketing strategy. The term marketing defines as a tool that is used by companies in order to promote their products or services with the intention of buying and selling (TWIN, 2019). The goal of this report is to create a marketing analysis for the selected organization. This analysis will also be able to identify the size of market environment and value, competitor and how the consumer are subdivided. Last but not least, this report will view the macro analysis, micro analysis (PESTEL), marketing strategy and marketing mix of UNIQLO. 2. COMPANY BACKGROUD: UNIQLO is a company in the fashion and retail industry that was found by Tadashi Yanai in Japan, 1949. UNIQLO was initially a small division of a larger Japanese men’s clothing retailer. Only until 1984 when the Japanese economy started to explode, U NIQLO continued to impress the consumers with their perfect quality, design and technology. UNIQLO is more than a clothing brand. With a different way of thinking, consumers can be unique with their everyday fashion with a reas onable price of product. Today in 2019, UNIQLO has open more than 1000 stores in all parts of the world and the company is still improving their quality and textile since the company origin. 3. MICRO ANALYSIS: In marketing, micro analysis represents different elements that influences business strategies, decision making and performance. It is essential to carry out micro analysis before decisionmaking process to ensure higher success rate for the company’s business strategy. Some factors in the company's micro-environment analysis include suppliers, competitors, customers, employees, shareholders and the media (Farooq, 2018). Table 1: consumer behavior of UNIQLO Culture

UNIQLO's products are suitable for all social classes and religious beliefs

Social

The products are well known to every household at a low price and high quality, and they are gained a higher reputation.

Personal

UNIQLO products are aimed at people of all ages. The new products are mainly for people who like to travel outdoors or climb mountains.

UNIQLO's consumer behavior is cultural, social and personal. However, social behavior is the most common, and UNIQLO has won the praise of consumers with its high quality and low price and gain a high reputation.

3.1 competitor UNIQLO also has many competitors for its new products. Competitors include The North Face, Jack Wolfskin, Columbia and Arc’teryx. For outdoor products, UNIQLO is definitely inferior to several other brands. Because this is the first professional outdoor product launched by UNIQLO. Especially Colombia is deeply loved by outdoor players. However, the advantage of UNIQLO is that its products are of low price and high quality. Although other brands have a higher market share, their prices are much higher than UNIQLO. The second advantage is that this is a very innovative product, and no other brands have this product. And UNIQLO is open to all customers, even if it is not an outdoor player, you can own and enjoy this new product. 3.3 company UNIQLO is one of the valuable brand that made by Japan and it quickly start to distributed their brand and product to other country around the world without affecting to other country culture. The company really popular by there designer innovation and reasonable price with casual wear (Bhasin, 2018). Furthermore, UNIQLO even the company now really successful but it still has it strengths and weakness. Table 2: company strengths and weaknesses strengths weakness l Good quality and low price. Almost l In the European and American all consumers like high-quality markets can not successfully products, but in the same quality penetrate. Although UNIQLO is products, the price advantage of known as a global brand, its products UNIQLO is huge, and many people are mainly popular in the Asian can afford UNIQLO products. market, while markets in other countries are less popular. l In-store experience. UNIQLO has always been committed to ensuring an l Supply chain issues: Although in-store experience that is achieved UNIQLO is eager to become a global through a rigorous tracking of company, the company faces employee interactions with enormous problems in expanding its customers. With quality service, supply chain to expand its global consumers are eager to purchase market. While most global brands UNIQLO again. have increased their influence in the online retail space, UNIQLO's share of e-retail is only 4% of its total business. UNIQLO is very popular in the market for its low price and high quality, and has gained a high reputation in the market, accumulating many loyal consumers. However, defects in the Western market have become a major weakness for UNIQLO to promote new products globally. 4. MACRO ANALYSIS: Marco Analysis is defined as an analytical tool used to describe macro environmental (external marketing environment) factors that have an impact on an organization and can influence the organization’s decision and strategies (professional Academy, n.d). The PESTEL analysis analyses the Political, Economic, Socio-Cultural, Technological and Legal changes in the

organization environment. This helps us to pinpoint the changes that have been exposed and take the opportunities that are shown as advantages for your organization. Table 3: PESTEL Analysis of Japan Political Economic Socio-Cultural • The new clean • Japan economy is • Japan has over 127 government party million Japanese strong as it is the 3rd largest economies in (komeito) residents (Frue,2016). the world • Liberal democratic • Patriarchal system, at (Bajpai,2019). party (LDP) least one man who • Focuses on education can continue and • Good and Services systems and inheritance the tax (GST) 8% developing technical family’s worth and • Arguments between education which properties china and Taiwan cause the • In religion wise, over senkaku island development of the japan is open minded because of marine country. but many are and natural resources • Decrease of gross Christians and a few (adamkasi,2016). domestic products in are into different • Japan is a member of the first quarter religion such as Asia Pacific Sikhism • Government Economic Coincreased spending on • Elementary and operation and has a good relations with infrastructure projects secondary education and R&D in japan is ASEAN compulsory • The economy • Japan is their main exchange rate is language but English 1SGD=81.19201 JPY is also taught in school Technological Eco-environment Legal • Japan has a big • Natural disasters • All of the employees number of people are eligible to • Eco-friendly material using smartphones employment rights usage and benefits such as • Wifi has already been • High humidity and holidays, additional widely used in all broad area of latitude hours and maternity stores and different climates leave. Employees • Robotic technology is • Efficient lighting and need to pay well known in japan LED light to save mandatory pension and found in different energy and cost insurance and health industries • Japan is clean and insurance (Rahman, • Japan is one of the environmentally n.d). country that has responsible nation • Tax free for foreign technological passport holders advanced countries in the world

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Debit or credit usage high

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•

•

Smoking is allow for certain restaurants and cafes The legal age for drinking is 20 years old Under the trademark law, only registered trademark is allow to establish a trademark right and examination procedures is compulsory to registered

From the table shown above, I have chosen 3 points that could impact our new product. These are the 3 points that I have chosen, they are eco-environment, technological and Economic. Firstly for eco-environment, UNIQLO products are made of art materials so that people can stay comfortable and keep warm or cool and this makes our product environmentally friendly in which they will reduce using air conditioning and heating. (Fast Retailing, 2013). As for technological, Uniqlo is known for its high-tech method of fashion. There are a few of their innovative designs such as AIRsim Line, Heattech Line, Dry stretch pants, waterproof, flexibility and withstand any damage. Lastly we have economic, japan economy drop in October till December due to weak export and bad consumption, forcing japan to go back to recession. Such as their competitors, UNIQLO is competing to attract more customers as it faces with high price competitions from high brand label fashion such as H&M and Zara. 5. MARKETING STRATEGY: Marketing Strategy is generally the foundation of the business’s overall plan for reaching targeted group of people and persuading them into customer’s of the product or service that the business provides. A good Marketing Strategy is when the organization conducts thorough market research, focusing on how to spread the brand awareness and have unique advantages to pitch better than the organization’s competitors. Marketing Strategy has 4 parts to it: Segmentation, Targeting, Differentiation and Positioning. Segmentation comprises of dividing people into groups of consumers with the characteristic, needs, wants and behavior (Marketing insider, 2015). There are 4 segmentation bases: Geographic, Demographic, Psychographic and Behavioral. Targeting in market strategy is made up of many groups of people who plan to bring out their marketing strategies to the firms (Chron, 2011). Differentiation consists of differentiating the company to create a different way of a customer benefits for a market to promote their firm (Marketing insider, 2015). Lastly, the definition of positioning is arranging a marketplace to engage with a clear and unique way to make a brand stand out and compete with other brands in the consumer mind (Economic times).

5.1 SEGMENTATION: Segmentation is to aggregate prospective customers into groups with similar needs and who will respond similarly to a marketing action. Marketing Segmentation will allow companies to target different categories of consumers who perceive the full value of certain products and services differently from one another (Investopedia, 2019). Segmentation can be branched out to 4 different types: geographic, demographic, psychographic and behavioral. Table 3: Market Segmentation of UNIQLO UNIQLO uses Psychographic and Demographic segmentation as part of the marketing strategy. They are a common basis for UNIQLO to identify the needs, wants and preference of consumers. Psychographic Segmentation Social Class

UNIQLO’s goal is to aim at consumers ranging from the lower middle to middle working adults, and prices its products to be in line with the spending power of them. For example, a shirt with designs usually cost less than $12, which is a comfortable range for most who are finding one for casual events and not wanting to spend a fortune on a branded T-Shirt

Lifestyle

UNIQLO caters to the casual wear, however they do have smart casual and formal wear as well for different occasions. There are many brands catered to this lifestyle, such as Forever 21, Cotton On, H&M and Abercrombie & Fitch. However, the first 3 mentioned are more accommodated towards the female gender and A&F clothing products are priced slightly higher than the average income range. UNIQLO has successfully found a middle ground where it keeps the price of its products at a lucrative range and have stores around town where most lower to middle income shoppers shop, making it very accessible to buy the products.

Motivation & Needs

UNIQLO marketing is aimed at younger individuals who tend to be more prone to dress like fashion trends and looking for alternate way to dress well while not spending too much. UNIQLO omits the trademark on its products as they understand that even though loyal consumers like their products, its brand value of being lower middle to middle income earners might not reflect well on them. Therefore, the only brand logo with the size would be on the collar of the product, instead of being printed onto the clothing. This shows that UNIQLO truly wants their consumers to dress well, keep in trend but not spend too much on it.

Demographic Segmentation Age, Gender

UNIQLO generally offers a wide range of clothing for consumers aged from 15-40. This means that students in college are able to afford the clothing products, young working adults are able to find suitable work wear. UNIQLO gender segmentation is also equally distributed in all their stores, clothing and accessories for male and female are separated on different sections and floors.

Ethnicity, Race, Nationality

UNIQLO caters to everyone from all ethnicity, race and nationality. They have different variety of clothes ranging from casual t shirts to blazers and suits for formal-wear. They have collaborated with companies to produce products like HEATTECH, AIRism, to accommodate consumers who are wanting to dress warm or cool for their targeted destination. For example, a tourist from the Iceland comes to Singapore to escape winter, however does not have any clothing to keep cool from the humid weather. UNIQLO would be the perfect place to get products that would help.

5.2 TARGETING: Targeting strategy is that it usually involves dividing the market into different segments and then concentrate on usually less than 3 key segments. These segments would consist of the consumers needs and desires which most closely match the product or service the company is providing. Targeting strategy is important as it helps the company to focus the marketing efforts in the most cost effective way possible (Chron,2019). For UNIQLO, we have targeted the market segmentation of psychographic and demographic. Psychographic Segmentation shows that UNIQLO targets consumers of both male and female, ranging from 15-40 and are looking for affordable and high-quality clothing that fits their lifestyles. Demographic Segmentation shows that UNIQLO targets consumers of all walks of life from any country, making it a one stop for clothing products near to wherever they are. This strategy has widened the target market as all consumers are looking for high-quality clothes which are both affordable and comfortable, which what UNIQLO targets for all its clothing products. 5.3 DIFFERENTIATION: Differentiation Strategy is a marketing process of differentiating a product or service from what is already offered in the market to make it more appealing to the target consumers. Usually companies would explain the product or service unique benefits it provides to the market to stand out from competitors. For UNIQLO, it stands out as the company took up an initiative called ‘All Product Recycling ‘where the customers are encouraged to recycle the worn out clothes and use them for textile industry materials. This may appeal to potential consumers who are trying to reduce harmful environment effects during clothing manufacture. Another way UNIQLO differentiate from other clothing stores is that the brand focuses on minimalism as its strongest point. As consumers in this age and day look for something that is both positive and not fussy to

wear, UNIQLO focuses on helping people express through emotion by wearing their clothes and considers it to be an art. Lastly, UNIQLO focuses on the unique benefits by focusing on the design and innovation of the apparel. UNIQLO differentiates itself from its competitors with its signature innovations like HEATTECH, Lifewear, AIRism and has many collaborations with famous designers like Alexander Wang, Hana Tajima, JW Anderson. 5.4 POSITIONING: Positioning Strategy is when a company considers the strengths and weaknesses of the product, the needs of the consumers and market and the position of competitors. Companies usually only focus on one or two areas to excel in, in order to out-profit their competitors. In UNIQLO case, UNIQLO has positioned itself as a Modern Japanese Company which aims to inspire their consumers to dress casually and look good. The brand positioned itself to be a place for everyone of all age, size, gender and ethnicity to shop in, selling apparels that are essential, simple and helps consumers find their individualistic styles. They aim to be the first store that pops on people’s mind when looking for a store to find trending, good quality and affordable apparels. Diagram1: Positioning Map of UNIQLO

The purpose of a positioning map is to illustrate to the customer the different types of stores which are similar to UNIQLO, but segregated based on price and quality fares with the other competitors. A positioning map not only define the consumer needs, but it also develops a market scope for the market analysis. Base on the diagram above, companies can see how they are fairing with their competitors. In this scenario, UNIQLO has an average pricing on their apparels, however it has one of the best quality clothing when comparing with other similar stores. Although this diagram does not show the benefits each company will provide with their consumers without further research, this diagram is

evident that UNIQLO is indeed on the right track on spreading their influence in the evergrowing apparels industry.

6. MARKETING MIX: The intention of using marketing mix is to help putting the right product in the right place. Marketing mix are comprising of product, place, price and promotion it is one of the most importance factor for organization that can help how the goods and service can be attempt and how to plan the strong successful product offering (Martin, 2014). 6.1 PRODUCT: further of marketing mix, product is tangible it is related to the service and goods all the product is offer for sale to the client and consumer. UNIQLO always get feedback from costumer to improve the quality of product every year and stratifies customer lifestyle and comfortable to wear in daily life. TYPE OF PRODUCT: Diagram 2: Type of consumer product

Retrieve from: The Different Types of Products (2015) Base on the diagram above, UNIQLO flexi-dura pants is staying on shopping product because the pants is creating with many special function such as waterproof, anti stain, impossible to rip or tear, padded knees for extra protection and flexible. In other point of view, the price might be slightly higher if compare to other competitor but the quality is much different from other since this is the first edition for UNIQLO to produce this kind of pants so not many customers are known about it. However, many consumers and customer will make really hard decision before they buy since this is the first edition of UNIQLO.

LEVEL OF PRODUCT: Diagram 3: Level product of UNIQLO

Retrieve from: UNIQLO business model, (2019). The intention level product of UNIQLO is always innovation their product to get more attractive by customer and let them have new choice for daily wearing lifestyle. However, every new design that release have really attract many customer and consumer because UNIQLO is one of the company that have strong brand name in the fashion industry their always keep on good quality with reasonable price that lower class, middle class and high class can all afford for it.

PRODUCT LIFE CYCLE: Diagram 4: product of life cycle

Retrieve from: product of life cycle UNIQLO as in Malaysia Base on the diagram 4 above, UNIQLO flexi-dura pants is in the stage of introduction even thought company has been work in this fashion industry for long but it is their first time and first edition that they produce this kind of pants as a distribution and to introduce a special and different type of product to the market. 6.2 ...