Review the pricing, promotion, and distribution report from your peer as submitted to the 4.3 Discussion(see the attachment).
You will need to do appropriate research on the industry and category so that you understand them in order to make an educated analysis and recommendation for this section of the consultant’s report. It is important to start out with a thorough understanding of the category and industry. You should not rely on the original writer’s research and description of the industry.
You will provide a 250-word review to your peer. Your review must provide a different or alternative perspective, interpretation, conclusion, and/or recommendation for at least one (1) of the six (6) elements noted in the assignment (these should be the 6 titled sections from the Market Analysis Report Template), based on your personal objective analysis of the category using credible sources. You do not need to have an alternative for all six elements of the assignment, but your alternative may involve more than one element since many of them are related.
You will not discuss the original writer’s analysis or recommendation; all of your comments must be focused on your objective interpretation and analysis. You must have a distinctly different perspective and/or recommendation in your alternative response. In other words, you are looking at the same scenario in the same industry and/or category, but you are coming to a different conclusion such that any form of “I agree” in your review is not an option.
You must cite at least two credible sources that were not used by the original writer to support your interpretation and recommendation.
Cite your work per current APA standards
Overall Market Growth analysis of Eco Textiles:
The global eco fiber market size was valued at USD 40.58 billion in 2019 and is expected to grow at a compound annual growth rate (CAGR) of 4.6% from 2020 to 2027. Rising concerns regarding the harmful impacts of using synthetic fibers on the environment are projected to benefit the growth of the market over the forecast period. Eco fibers are gaining popularity in designer apparel and garments. The market in the U.S. is expected to witness significant growth as the textile companies in the country are focused on developing effective work processes, restructuring their businesses, and investing in niche products and markets. This has, in turn, proven to be conducive to the growth of the industry.
Market for recycled clothes is not as competitive as regular Clothing Market. Apparel companies are investing in recycled clothes and putting the market in forefront. Although only 1% of secondhand textile are recycled and turned into new Clothes. The Fabric industry has evolved into 917 Billion euro globally. Every year there are over 80 billion garments produced worldwide. As per study on an average a person buys 60% more items of clothing every year and use it for about half as long as 5 years, it generates huge amount of waste. In EU, approx. 16 Million tons of fabric waste was generated in 2015. The amount of textile waste has doubled over the last decade.
Analysis of Current Product, Pricing, Place and Promotion Models in the Market:
H&M: The range includes everything from designer collaborations to everyday basics and yoga wear. Women wear, shoes, bags, accessories, beauty, ready to wear
• COS: Classics and wardrobe essentials for men, women and children. The brand had designs inspired by art and technology from across the world.
• Monki: On-trend lifestyle collections for young women.
• Weekday: It makes clothing for young and style aware young adults.
The Levi’s jeans offer innovative design considerations like double seams for durability and up to five pockets to add the elements of convenience. The most sought-after product in its marketing mix is the classic blue jeans. These colors include grey, black, green, khaki to name a few. The company has a diversified portfolio of products ranging from jeans, trousers, shorts, skirts, jackets, sweaters, socks, underwear, belts, skirts, dresses, accessories, jumpsuits and a big and tall range. The Jeans come in a variety of fits: Skinny, Slim, Taper, Boot cut, Relaxed, Flare and Big and Tall. What is unique to identifying to identifying a pair of Levi’s Jeans is the three-digit number associated with every pair. Numbers are from the likes of 501s which are available for men and women both to 500 series for men to 300,400, 700 and 800 series for women. Levi’s has a number of sub-brands within its parent brand. These include Dockers, Denizen and Levi’s Strauss and Co.
Zara is one of the leading luxury fashion labels in the world. Zara’s offer products for men, women and children. It offers jeans, trousers, tops, skirts, knitwear, T-shirts, shoes, bags and accessories. It is a one stop solution for everyone whether you want to buy formals or causals. One can choose from different styles Zara has to offer. It launches at least 10,000 new designs in a year. Zara products are a hit with the high-end fashionistas as well as with the masses.
Zara believes in sustainable development and is committed to reduce the production of waste. It recycles its hangers and security tags. Zara gives out their products in paper or biodegradable plastic bags. Zara uses ecological fabrics like organic cotton in the production of some of their items. These products have a unique and distinct label which can be identifies easily.
H&M offers high quality clothes at a premium price.
The major competitors of H&M are GAP and Zara. As compared to both of these brands, H&M products are prices relatively lower as a part of it marketing mix pricing strategy. These is due to lower cost of manufacturing and transportation costs by H&M. As compared to Zara H&M offers more variety of products. On an average H&M product are prices at $25 whereas that of Zara are $45. High quality and considerably lower prices attract the youth and hence leads to increase in sales for the company.
Levi’s has a policy of maintain standard fixed prices all throughout the globe.
Price of a pair of Levi’s jeans is mainly influenced by a number of factors. These include cost of the product, affordability for the target customer, demand of the product and uniqueness and innovative features that it offers. In USA for example, the price of a pair of Levi’s jeans varies from about $40 for the price sensitive customer to as high as 250 for a customer looking for luxurious style.
Zara provides latest fashion at much lower prices in all its international stores as compared to other competing international brands. Zara follows low pricing strategy. It can afford to do that as it doesn’t spend enormous amount of money on advertisements and raw material. It has an overall low-cost structure compared to its competitors. Zara’s prices are country specific. Zara sets market-based pricing strategy which sets the target price consumer is willing to pay. The budget for production according to the target price. This in turn fixes the profit margin they earn on every item. This gives an insight on the marketing mix pricing strategy of Zara.
H&M sells its products through its exclusive stores located in major cities across the globe (4135 stores). In some countries due to regulatory norms, H&M offers its products through franchising partners. It also offers its products through online stores from where the customer can choose from the list of available products and purchase them through online payment. Cheap Monday is sold through selected retailers worldwide and through standalone stores.
The products are manufactured in countries where cheap labor is available in order to reduce costs. The clothes are designed by H&M and its other brands according to segment they are targeting. H&M has developed an excellent supply chain over the years. The delivery time is instant, and the transportation costs are kept at a minimum.
Levi’s Strauss and Company is operated out of three main geographic divisions: Levis Strauss Americas (LSA), Levi’s Strauss Europe and Levi’s Strauss Asia Pacific. The Asia Pacific division also handles operations for Middle East Asian nations including Qatar, Kuwait, Oman and United Arab Emirates. The main headquarters of the company are located in San Francisco. The brand manages efficient and effective supply chain and delivery through its well qualifies staff, distribution channel and a unique franchise model. A pair of jeans from Levi’s can be brought from a number of different distribution channels. These include factory owned showrooms and retail outlets which are franchise owned.
Zara has enormous reach with stores in 88 countries, with over 6500 outlets. Zara also sells through its online store. All these cover the marketing mix place & distribution strategy of the brand. It is a vertically integrated company. Zara’s supply chain is what provides them a competitive advantage. It uses its unique business model to bring new products and fashion to the market in shortest time possible. Store managers send orders to the headquarters twice a week based on the sales data of the store and the shoppers’ preferences. The commercial team compiles the order then sends it to the manufacturing hub. Most of the Zara stores are owned by the company and are not a franchise. The stores are located in posh locations and are spacious and modern in look with walled mirrors and excellent lightings.
Since H&M group has a wide range of product portfolio catering to different segments, it uses multi-channel promotional strategy in its marketing mix.
• TV advertisements: H&M comes with creative ads which focus on its latest innovative designs. Each brand handles its own marketing decisions. The ads are telecasted at regular intervals and on channels mainly watched by youth, to increase its awareness.
• YouTube: H&M has its own YouTube channel where it comes up with unique ad campaigns to engage with the customers.
• Digital Marketing: It indulges in excessive search engine marketing and social media marketing to convert the potential buyers into consumers.
• Promo codes and discounts: Promo codes and discounts are offered during the end of season sale. The discounts are offered on both online and retail stores.
• Sponsorships: H&M signed deal with The Weekend, sponsors Caitlyn Jenner, sponsors Musee Des Arts Decoratifs, Creative collaborations with high end designers and style icons, Collaborations with pop stars and sport stars
• CSR: Water, Planet, Education, Equality
Levi’s has always established upon the uniqueness and individuality aspects of the young generation while trying to market itself to the youth. The company’s “Be Yourself” campaign gained immense popularity. The company has also promoted itself majorly in Europe through public exhibitions organized by the company to trace the development of the brand from close to 150 years back. A few years back, Levi’s also introduced a “smart jacket”. A new waterless technology was also launched as part of promotional efforts for the brand. These products in the signature ranges used significantly less water while cleaning and hence were projected to be more environment friendly. Levi’s works in association with the Red Tab Foundation which works to provide financial safety to company employees, retired employees and their respective families. The promotions include television ads, newspaper print ads, hoardings and banners, internet, newspapers and billboards along with displays in magazines. Hence this completes the marketing mix of Levi’s.
Zara barely spends any money on advertising. It is famous for being press shy. Even its owner never gives any press interviews. Unlike its competitors, Zara doesn’t engage in any flashy campaigns. This is the reason why Zara’s advertisements are not visible on television. Zara’s unique selling proposition is its short processing time, a large variety of styles and affordable pricing. It relies on word of mouth promotion and social media rather than expensive marketing tools. Zara’s social media reach is quite exceptional. It has 2.5 million followers on Facebook and 15 million followers on Instagram. It is interesting to note that Zara doesn’t put its logo on their products.
Zara prefers spending their percentage of revenue in opening new stores. The brand spends money on expensive real estate for its stores and on its décor. Zara believes that its show windows are suffice for advertisements and they do not need anything else to sell their products. This concludes the marketing mix of Zara.
Recommended Strategies for JGJ, Inc.
JGJ Inc. will offer a variety of products in premium segment fashion and lifestyle. They provide style, quality, and value to the buyers and focus on the classic American designs by adding a youthful twist. The various product categories in its marketing mix offered to include:
• Denims, Clothing, Shoes, Handbags, Lifestyle and Home décor
The core product line of JGJ will offers designs across different categories and is targeted at 25-40 years old customers. JGJ will introduce products for the kids’ section. JGJ brand is targeted at a younger customer section of 18-30 years old and has more edgy and casual designs.
Product Development Team: A team comprises of highly innovative people will be hired for product development. Their duties will be to study current market trends and demands.
When a company introduces a new product or enters a new market, customers may not be willing to pay a higher price as the product is new and they are not aware of its uses or features, or performance. Pricing can influence the perception, in the consumer’s minds, regarding the product as well. Low-priced products may create an impression of inferior products. On the flip side, the high-priced products may develop a perception of being overpriced. In such a scenario, while setting the price, JGJ will research the competitor’s pricing and similar/alternative products.
Value Pricing Strategy
The value pricing strategy sits somewhere between the budget and luxury segments. The key to value pricing is to strike a balance between cost and quality. Value shoppers are unwilling to sacrifice quality for low prices, but they are also reluctant to pay more than apparel is worth simply for a famous brand logo.
JGJ is a high-end Eco-fashion brand, and it will charge a premium on its products, but as compared to its competitors, its prices come in the lower segment. The company will follow a discount-based pricing model in its marketing mix and sell products in major off-seasons. The JGJ collection is priced in the higher part as it can charge a premium based on its value, quality. This price is low enough to ensure rapid growth in the market yet still provide a very healthy profit,
While deciding on the place, the company needs to position and make available the product at locations easily accessible to the intended end-users.
There are three essential stages involved in the distribution and sale of eco fiber, i.e., raw material producer/distributors, textile/fabric manufacturers, and apparel manufacturers. Producers or farmers play an essential role in the production of raw material. In recent years, the high prices of raw materials have made it competitive and popular. Farmers generally retain 12 to 15 percent of their production for crop and price advantage. Organic cotton producers generally keep a hefty profit margin due to the high demand for the material; however, the other raw material producers may not maintain a high-profit margin. The wholesalers procure the raw materials from farmers through commission agents and distribute them to the product manufacturers. In contrast, some farmers prefer to sell their crop directly to the product manufacturers to avoid the third part commission.
JGJ Inc will be a global brand, and therefore it must have a global presence through its chain of retail stores and online shopping websites. The company will have its stores as well as a franchise-based model for retail. The products are also available online on the company’s website, as well as other eCommerce portals.
Since JGJ Inc is a US-based company, they will procure raw material from local wholesalers, and buyback offers at their retail stores.
JGJ will distribute the product through trucks in different locations in the USA and Central America. To save costs and reduce the risk of uninterrupted distribution, JGJ will use its distribution channels as most distribution will be in local markets, i.e. the USA.
JGJ Inc will follow an aggressive marketing strategy using different channels to reach out to its customers and to have very high brand visibility. JGJ will use magazine ads, newspaper ads, and billboards for promotions. It also uses celebrities as brand ambassadors. Sales promotion will be done by offering around 10-15% discounts across the product lines during the off-season or special occasions. It also uses point of sale promotions by making their store layout in line with the preppy fashion they offer. JGJ stores will be designed in such a way that they reflect the classic cool of American style. For online promotions, it gives special offers on its website. It also sends emails to its members showcasing the latest arrivals.
With the world going digital, it would be advisable to involve social media tools for defining the promotion mix.
The JGJ website will be available in different languages to attract a global customer.
Other Promotions will include:
· Drop off location for used cloths works best to create awareness and market
· Sales promotion and special campaign design
· Take back scheme or award offers to customers
· The module on sustainability should be taught in each textile education
· Interdisciplinary in nature research should be encouraged
· Add reuse and recycle of textile in sustainability agenda
· Free samples distribution
· Participation in popular trade fairs
· Government sponsor small and medium-size firms
· Websites to reach out to customers and information link
· Apps to cater to niche customers
· Membership and discounts offer to regular customers
· Awareness messages about sustainability through celebrity endorsing