UNIQLO’s Marketing Report
Contents
Target market and positioning. 3
Links between marketing plan elements. 9
Introduction
UNIQLO is a Japanese clothing company that is rapidly expanding into other markets. The company has branches in the US, Europe and presently in Singapore (Clifford, 2012). There is a lot of competition in the retail industry with established players continually improving their products to stay ahead of others. UNIQLO deals with casual wear as a designer, manufacturer and retailer. Although the company is ranked behind major competitors like H&M, ZARA, GAP and Cotton On it is steadily growing its market share enhancing its portfolio by curving out a niche as a provider of quality clothing for lower prices. A marketing plan that enhances the company’s strengths and minimizes on its weaknesses is outlined in this paper. Segmenting, targeting and positioning strategies will determine the marketing mix in order to meet the outlined objectives.
Marketing objectives
The objectives of the marketing plan are to increase the customer base of UNIQLO products through the provision of quality products at reasonable prices and through the use of qualified personnel. UNIQLO’s entry into Singapore marked another milestone in the company’s overall global strategy. While the global objectives entail the company being the largest designer and retailer of quality clothes for reasonable prices, this objectives must be translated into the new market (Gentry, 2003). The specific objectives are:
- To increase UNIQLO’s market share to 15% by the end of 2015
- To grow the company’s revenue by 10% by the end of 2014
- To increase product offerings
- To increase the number of physical stores to 50 by the end of 2015
Target market and positioning
UNIQLO has not had a targeted marketing campaign per se. Conversely, the company has availed products that are appreciable to a wide variety of customer groups. The major strategy adopted by the company has been mass targeting where products are availed in the market for the general population. This has led to the underperformance of some specialty brands. In order to ensure that the company remains competitive and that it increases its market share, there is need for market segmentation, targeting and product positioning (Roger et al., 2013).
Segmentation
Segmentation refers to the division of a market into clusters that have unique needs. UNIQLO’s segmentation strategy has entailed all groups of people without paying attention to any specific characteristics. While this strategy has been largely successful, the company needs to venture more into specific clusters in order to boost sales of specialty products. The two segmentation strategies that the company should pursue are behavioral and demographic. Demographic segmentation entails the division of a market according to factors such as occupation, age, education, income, nationality and gender. Already, the company has a variety of clothes targeted for both men and women. There are also products that are created for specific age groups. However, the company has not entirely ventured in the provision of products that reflect the wide array of occupations. Although UNIQLO is famed for the provision of causal wear, it is advisable that it also venture into offering products that are considered as a combination of both office and causal wear. The advent of the modern office where most interactions take place in online platforms has reduced the need for conventional office wear. However, since there still remains the inherent desire to appear serious in the job environment, a blend between causal wear and office wear has been preferred (Greb, 2012). Thus, this new-age working class segment should be what UNIQLO focuses its attention. Behavioral segmentation focuses on “behavior, lifestyle, frequency, usage and desired benefits” (Bruning et al, 2009). This touches on the desires of people like the modern workers who have chosen to redefine traditional office norms and customize them to their own situations and realities.
Targeting
The retail industry is very competitive. Companies like H&M, ZARA, GAP and Cotton On are way ahead of UNIQLO in market share judged by the disparities in revenues. There is thus a major challenge in competing against these established retail giants (Porter & Rivkin, n.d). The main target group for UNIQLO should be the modern worker. Technology has made it easy to disseminate information. People nowadays value simplicity as they have less rigid barriers in dress and work times. Thus, their clothes should reflect this freedom. The advantage of targeting this group is that they are aware of what they want, have the financial capacity to make purchases and are easy to please. They therefore present the company with the opportunity to boost its sales.
Positioning
UNIQLO’s business model just like all others is based on repeat business. The first consideration in positioning is awareness of the specific customer needs that will give the company an advantage by making its products more superior. Consumers today are very particular about what they purchase since they have a lot of information on different products from a wide range of sources especially in Singapore which ranks highly in the use of social media. There are many product positioning strategies that UNIQLO can choose from. However, the choice should be informed by the target market as well as other macro economic factors that have been discussed in the previous paper including the political, environmental, economic, social, technological and legal factors. The product positioning strategy that the company should establish is the use of loyalty programs. The aim of product positioning is availing products in such a way that they create an image in the mind of customers and hence making them attached to it.
There are two approaches that can be taken in the creation of loyalty programs; either in isolation or as part of customer relationship management. Both of these approaches require that the company maintains customer purchase data so that it is used in loyalty and reward programs. In other countries UNIQLO gives customers a 10% cash back guarantee from the purchase of a predetermined number of items. Other modes can include offering discounts and other free items after crossing a purchase threshold. Retail stores, restaurants and gas stations have been found to be the most effective in the use of these types of reward programs. With advances in technology, customers interact with the products on a regular basis using a number of platforms (Cavusgil et al., 2012). UNIQLO should develop a mobile app where consumers can track unique company products and also have access to savings and special discounts. These reward systems could create an awareness for the company’s offering in addition to the creation of a network which increases market exposure and in turn prompt repeat purchases and thereby customer loyalty.
Marketing mix
Price
Price is a very important part of the marketing mix. UNIQLO has been known for offering quality products for low prices compared to the competitors (Johnson, 2000). This is a major advantage that the company should exploit. The company has to consider other factors before settling on the favorable prices for the Singaporean market. Since the company is just setting up in this market, other factors of production have not yet been established. Thus, most of the product offerings are being imported from other countries. This mans that the prices of UNIQLO products will be inclusive of distribution costs and the taxes payable in operating in the new market in addition to the normal costs of product manufacturing. Prices are however never fixed for long periods (Trunick, 2003). Thus, the company must constantly review its prices to ensure that they reflect the current economic realities of the company and the customer.
Product
UNIQLO is already an established retailer, designer and manufacturer of quality clothing for a fair price. In order for the company to ensure that it is providing the right products, it is important that it analyze the situation from the perspective of the customers. Here, the use of marketing consultants is invaluable as they give insight into the dynamics of the markets that they have experience in serving. These resources should be used after careful and extensive research has been done into the buying habits, fashion trends, customer activities prior to purchase and after purchase and also into the present and future needs (Kolodko, 2003). Nowadays, there are very knowledgeable customers who have divergent needs that must be met if a company is to remain competitive. By constantly appraising the product offerings, UNIQLO can improve its outlook by phasing out non-performing products and stocking those that perform well. This can partly be informed by weather patterns.
Place
Place in marketing mix refers to the location where products are offered. It is important that this location be visible and accessible. This should be in addition to positioning in an area where there is a steady flow of traffic primarily comprising the company’s target market. Technology has eased the process of looking for suitable locations as people can now buy most of their products in online stores. However, this new frontier does not discredit the presence of traditional stores. On the contrary, people still find it pleasurable to spend sometime in physical stores trying on the different merchandise for size. The sizes of requisite stores, the facilities required therein including parking and building specifications are all contained in the location’s local authority codes. Therefore, when UNIQLO seeks to expand its range of stores, mostly located in the densely populated areas, the above considerations must be met. The better the location of a store, the less the company will use in advertising.
UNIQLO should expand its reach in Singapore if it is to compete with the other established retailers. This will require the company diversify its locations by availing their merchandise in trade shows, fashion shows and other competitions. The customer today is well aware of associating the best quality products with successful showings. For example, if items of clothing are featured in a fashion show, then, quality is insinuated.
Promotion
Promotion simply encompasses the strategies and methods of delivery that a company chooses to avail information regarding product offerings to customers. The overall picture is the development of an image for the company. This can be achieved through copywriting and advertisements. The two strategies that will be simultaneously used will be target marketing and mass marketing. The general company offerings that bear its logo will be mass marketed whereas specialty products will be marketed to targeted groups. Young people are especially fashion conscious. Therefore, new products will be targeted towards this segment of the population.
While mass media will be effective for marketing of the major product offerings for the company, there will be need for more differentiated media. Use of social media in creation of product fan pages will be a key strategy. In the former, television advertisements, newspapers, newspapers and the internet will be used. In the latter, features in select entertainment and fashion magazines, branded websites and segment-specific activities will be used.
People
It is important to consider who inside or outside of the company makes every aspect of marketing successful. UNIQLO has a very comprehensive plan on availing product information and products to the targeted customers. While this is commendable, it must be supported by identification of the right personnel. Thus, guaranteeing successful marketing will require the selection, recruitment, hiring and retaining people with the right combination of job-specific skills and abilities. Experts posit that it is best to get the right people into a team and get the wrong ones of before embarking in allocating specific tasks for the identified team members. It is prudent to remember that however well crafted a marketing strategy is, it will result to naught if the right people are not identified to implement it.
Process
Process encompasses all activities that take place between the manufacture of a product and its availability in the market. This entails all administrative and technical functions and all the decisions therein that affect the speed with which products are available in the market. Presently, UNIQLO lags behind in delivery of its latest designer trends. This negatively affects the company’s efforts as ultimately, the customers will be inconvenienced and consequently dissatisfied which will translate to lost business. Processes must be seamless and the delivery of finished products must be prompt to ensure maximum capitalization. The company can achieve this by partnering with established distributors who have good reputations in the market.
Physical evidence
Physical evidence entails how products are being perceived in the market. This largely deals with branding of the company products. A comprehensive integration of the previous 6 Ps of the marketing mix will ensure that UNIQLO establishes a formidable customer base in the Singaporean market. Thus, the company should ensure that it builds on the positive image created in order to continue growing.
Links between marketing plan elements
The sole purpose of having a marketing plan is to ensure that products reach the target market in the right conditions and at the pristine time. There are different endeavors that a company like UNIQLO must focus on in order to achieve this objective. Market research must be done to identify the different segments of the market that offer the most promise for the company’s products. The company decides which segments have the most promise and focuses on meeting their needs through the development of strategies that appeal to that group. While targeting, the company must ensure that it positions its products in such a manner that they are accessible to customers at convenient times and in convenient ways. In this case, the modern working class will be the target market and will be reached through online platforms in programs that enhance their value to the company. The company will then avail customized products for this target market in online stores and also in physical stores, at reasonable prices, using the internet and mobile apps as the basic promotional tools. In addition to this, UNIQLO will ensure that its processes are streamlined to guarantee efficiency and through the use of qualified and motivated personnel.
Conclusion
UNIQLO’s overall aim is to make profit. All endeavors of the company must therefore be geared towards this singular goal. The company has had unprecedented success in the markets that it has ventured into so far. This has largely been due to the wide range of products that are offered ensuring a large customer base. With increased use of technology in the design, manufacture, sale and promotion of products, the company has been forced to develop new plans. The company has developed segmentation, targeting and positioning strategies that will help it differentiate its products for specific market segments. These strategies will ensure that the company maximizes its efforts on individual segments as a means of growing overall market share and revenue. This will be achieved by having an expanded product range, having competitive pricing, availing products in convenient locations, advertising through segment-specific media, having qualified and motivated teams for the job, streamlining company processes and building on the brand. These endeavors will ensure that UNIQLO products receive high visibility in the market and thus boost sales, enhancing the company’s position.
References
Bruning, E. R., Hu, M. Y., & Hao, W. (2009). Cross-national segmentation. European Journal of Marketing, 43 (11/12), 1498-1522.
Cavusgil, S. T et al. (2012). International Business: The New Realities. Australia: Pearson Education.
Clifford, S. (2012, May 23). As U.S. Retailers Retreat, a Japanese Chain Sees an Opening. The New York Times, B1
Gentry, C. (2003). Continental divides. Chain Store Age, 79(9), 70.
Greb, R. (2012). The Future Of Fashion Retailing- Uniqlo, Forbes.com. Retrieved March 14, 2014 from http://www.forbes.com/sites/gregpetro/2012/10/23/the-future-of-fashion-retailing-part-1-uniqlo/
Johnson, J. (2000). The power broker. Discount Merchandiser, 40(4), 31-38.
Kolodko, G.W. (2003). Emerging Market Economies: Globalization and Development. Aldershot: Ashgate Publishing Limited
Porter, M.E & Rivkin, J.W. (n.d). Looming Challenge to US Competitiveness. Harvard Business Review
Roger, A.K. et al. (2013). Marketing In Asia. (2nded). Columbus, OH: McGraw-Hill Education.
Trunick, P. (2003). Flex Your Global Supply Chain. Transportation & Distribution, 44(6), 16, 18-19
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