RALPH LAUREN
Product launch
RALPH LAUREN
CONTENTS Introduction: In order to successfully launch the PoloTech, research has been undertaken in the form of marketing models in relation to the consumer.
Executive Summary....... p2 Marketing mix................. p3 SWOT ...........p7 PESTEL........ p11 Porter’s five forces............. p13 Communication platforms............. p15 Conclusion.... p17 Bibliography..p18
EXECUTIVE SUMMARY The following report goes through
the effectiveness of launching the PoloTech in the UK, in relation to marketing models. Although wearable technology is in a niche market, there appears to be a growing interest as sports participation has increased. The PoloTech allows consumers to have an insight into their fitness during daily work-outs as well as potential to increase this, through the personal trainer like Application. As Ralph Lauren is a luxury brand, the PoloTech lives up to the status and quality of the other product ranges offered.
MARKETING MIX The first model that has been compiled is the marketing mix-“the combination of stages or elements necessary to the planning and execution of the total marketing operation.” (Jefkins and Yadin, 2000).
PRODUCT •Core product: A t-shirt that can measure statistics •Potential product: A t-shirt that makes a statement • A ‘fad’
PLACE •Ralph Lauren stores on/offline •Department stores •Mr Porter
PRICE •Price skimming •Price is equated with quality
PROMOTION •Blogs •Product launch event •Sport sponsorship •Endorsement •Direct mailing
It has been said, “wearable technology will only work if it looks good and the latest designs will need to combine style with technology” (Mintel,2015) and this can be presented through the core and potential features of the PoloTech. The core product is a polo shirt that can measure heart rate, calories burned, steps taken, activity level and breathing depth and balance (Anon, 2015). The supporting Application that can be viewed on an iPhone, would be highly accessible by the target customer as, 92% of 16-25 year old’s own a smartphone (Mintel, 2015). The potential product is a polo shirt that makes a statement, as the top is black with either a contrast of yellow or red detail, making it current within every season. Ralph Lauren stands out as one of the most desirable luxury brands for clothing, which is due to high demand from young male consumers (Mintel, 2015), also the targeted consumer is likely to buy designer brands to stand out from the crowd (Mintel, 2015). Also, the top offers an insight into body statistics, with the personal trainer like Application that works with these statistics, which can help increase fitness. PoloTech’s lifecycle is a ‘fad’ because the user could become bored of the product as the training programme offered may stay the same, so the user may be demotivated within a month. However, the Application could have regular updates, which would mean that the workouts would change, in order to keep the user interested.
The top could also be viewed as occasion wear as it can only be worn when exercising (non-contact sports) (Anon, 2016), so it is unlikely that the user would wear the product other than this time. The next factor to consider is price. This is an important indicator of the positioning of a product for potential customers who sometimes have too little experience of the product (Dillon, 2014), especially as it’s the first time a designer label is incorporating wearable technology and launching into the UK market. The t-shirt costs £190, which reflects it’s high end positioning. The selling price of a normal Ralph Lauren polo shirt is £75 (Anon, 2016), so with the technology it can be seen as added value. Price is often equated with quality (Woolton and Home, 2010), therefore the consumer would need to believe that the top is of exceptional quality. This can be presented through the fact that the top has a designer label ‘Ralph Lauren’-a luxury lifestyle brand that uses innovative technology. Moreover, the pricing strategy that appears to be the most appropriate is price skimming- setting a high price in relation to the competition, by ‘skimming’ off the profits early after product launch (Ferrell and Hartline, 2012). This is because the take-up in sports is highest among managerial and intermediate social groups, who would have a high disposable income that would allow them to purchase the PoloTech (Mintel, 2015).
After the product is introduced, more people may become interested due to, for example, word of mouth and news coverage because the product is innovative. So, this would create curiosity from those who have a grown interest but are still uncertain, so the decrease of pricing may make the consumer interested in purchasing the product, because of the lower price and they may be more aware. The next factor to consider is promotion: “any form of communication aside from advertising that creates attention to a product and value added services” (Dillon, 2014). One method is through blogs, because those interested will actively look at reviews of the product before purchasing. This has already been done in America, on the One Dapper Street blog. Another online form would be direct mailing, the consumer may already be a Ralph Lauren customer and so would receive product information through an online mailing list (Ralph Lauren website), which may interest them. Next, a product launch event could be held at a place, where consumers would be of interest, like a gym. Also, sport sponsorship would be beneficial, as the garment is focussed on sporting activities, for example a marathon would attract those interested in running.
The last factor that has been analysed is place. It is recommended that the top is sold online through the Ralph Lauren website (already offered on the American website) as the online buying of luxury items is growing. Research has shown that 50% of shoppers have bought designer clothing online, from either the official brand website or another website (Mintel, 2015). Another website to be considered is Mr Porter, who have a sportswear page that stocks over 25 performance focussed brands (Mintel, 2015). In addition to this, there should also be in-store sales at Ralph Lauren stores, as the product is new, so consumers would be curious to see what the product would look like in real life as well as the functions and quality of the top. Another option would be to sell the product in department stores, such as John Lewis and Harrods, where there are labels of similar brand positioning and have consumers with a high disposable income. Also, Harrods stocked the Glofaster jacket- ‘makes you run faster’ for six weeks in 2015 (Mintel, 2015).
Marcus Giron wearing the PoloTech at the US open.
SWOT model The next model that the product has been ana-
lysed against is the SWOT (strengths, weaknesses, opportunities and threats) analysis-which covers the internal and external environments of the company (Ferrell and Hartline, 2012). One strength of the PoloTech is that the supporting Application offers personalised workouts, which means that the product is effective for the user directly, as it is tailor made based on their breathing rate etc. Also the fact that the product is Apple brand associated increases the reliability of the PoloTech as they are a market leader (Chowdhry, 2016). Moreover, the product fits in the growing sport market where there is an increase in athletics - uptake has gone up by 6.9% since last year (Mintel, 2015). Also, there is potential interest in the product due to the technology as 20% of men aged 16-35 are willing to pay more for a special clothing item (Mintel, 2015). However, there are weaknesses such as high pricing- which means only those with a high disposable income can afford the product, when the consumer is likely to be young, aged between 16 and 34. Along with this, the tight fitting may mean that those with a certain physique will want to wear the product, but this ensures high effectiveness of the technology in the top. Also, currently the product is for males only, due to the product working on flat surfaces, thus limits the consumer when females are likely to have the same amount of interest as Nike recently opened it’s first women only store in Europe (Mintel, 2015), but this could be fixed with further technological advancements. Although there is growing interest, the product is still in a niche market-a small amount of consumers are interested in wearable technology, i.e. 17% of men aged 16-34 (Mintel, 2015).
S • Personalised workouts • Looks like a ‘normal garment’ • Ralph Lauren branding • Apple brand associated • Fitness Applications are popular • Sports market
• Product showcasing • Growing interest observation
O
But, there are opportunities such as showcasing how the product works through an event, where there can be participants, as well as time to observe the growing interest in wearable technology, such as sales of the Apple watch.
W • Males only • Smartphone users only • Niche market • High price • Tight fitting
•Other devices that have the same function and are cheaper. • Other werarable technology garments
T
However, there are threats such as other devices that have the same function, like Fitbit a cheaper bracelet like device as well as other high-end technological devices, such as Glofaster smart running jacket (for men and women) and Victoria’s Secret sports bra which can measure heart rate (Mintel, 2015).
PESTEL analysis Furthermore, a PESTEL model has been
created and it can be found that the Government promotes healthy lifestyles, through government-funded places such as parks and gyms, where the product can be used. In relation to the economy, it has been understood that the pound is at it’s lowest level (Blitz, 2015), so it would cost more to import the tops from America. This is because share prices have gone down due to low confidence as there is a possibility of the UK leaving the EU (Blitz, 2015). So, this may restrict the amount of stock the retailer purchases, however it is unlikely that the top would be bought in a bulk because it is new to the market. Economic factors are important because “In developing a marketing plan, the fashion marketer must be aware of issues like changes in exchange rates affecting prices, as well as the impact of the economic cycle on consumer spending.” (Hines and Bruce, 2004). Fashion is a social process, which is highly responsive to social change (Hines and Bruce, 2004) therefore we must consider the social aspects the product could relate to. For example, sports participation has increased specifically within athletics; risen to 2.2 million people in the last year, up by 6.9% (Mintel, 2015). Based on observation, celebrity lifestyles are highly publicised in the media with a focus on body image, this may influence individuals to copy this lifestyle, so Ralph Lauren may want to look at celebrity endorsement for the PoloTech. Also, Marathons have hundreds of participants who train to achieve their targets, the PoloTech can help with this due to tailor made workouts, which can increase the user’s fitness. Consequently, Ralph Lauren could look into becoming a sponsor for marathons to increase the public’s awareness. In relation to the environment, as the PoloTech is made out of synthetic fabrics- 70% polyester, 21% nylon and 9% spandex (Anon,2015), the top is not biodegradable, so it’s harder to dispose
Political
Econ
•Government
•Pou lowe
promotes healthy lifestyles
Social •Sports participation has increased •Celebrity lifest -yles
PEST
ANAL Y
Environmental
• Synthetic fabric • Air transport re duction
nomy
of compared to natural fabrics. The ‘Closing the loop’ (Anon, 2015) programme is an alternative to rubbish waste it looks at re-using fabrics. Also, Ralph Lauren use air transport reduction, shifting volume to other modes of transport, such as ocean and rail, so the emissions resulting from movement of product significantly decrease (Anon, 2015).
und is at it’s est level
TEL
Furthermore there are legal considerations, as any organisation that needs to store personal information, must apply to register with the information commissioner (Evans et al, 2004). Therefore the PoloTech needs to tackle privacy issues. The Application must be clear with users of how their personal data will be used, as serious breaches of data protection can attract fines (Tozer, 2015). Also, health and safety regulations must be met; there is a PoloTech manual, which refers to the care of the product and length of warranty.
Technological
YSIS
cs e-
•Supporting personal trainer Application
Legal •Data Protection Act •Health and Safety
PORTER’S FIVE FORCES
Threat of new entrants
The next model is Porter’s 5
forces, which helps to “analyse competitors in the industry environment to identify opportunities and threats” (Hill and Jones, 20o7). Firstly, there is a threat of new entrants- technological advancements happen quickly so this is difficult to keep up with. This may mean that the accompanying Application would have a series of updates in order to compete with others. There is also a threat of substitutes, the USP of the t-shirt is it’s high end branding,
Threat of substitutes
Rivalry amongst existing competitors
Bargaining power of suppliers
there may be other t-shirts that have the same purpose, but only one of them has the Ralph Lauren signature look. Next, there is rivalry amongst existing competitors as the PoloTech creates a sporty yet smart look, so they may face competition from brands that also capture this look. Another factor is bargaining power of consumers. There is a lot of competition from other fitness related wearable technology which appears to be cheaper, therefore reducing the potential sales of the PoloTech.
In addition to this, there is a lot of bargaining power of suppliers - Apple and OMSignal - as they provide the sources of the product, so they can charge high prices for the components, therefore the price of producing the t-shirt could increase.
Bargaining power of consumers
COMMUNICATION PLATFORMS One communication platform Ralph Lauren should consider for their new product is online public relations, which has an aim to create awareness through a variety of media such as social networks, blogs and twitter (Fill, 2008). Blogs can be seen to be effective for Ralph Lauren as this has been done by an American blogger (One Dapper street), who directly targets the consumer - the young man interested in fitness and fashion.
The potential customers will actively seek products, which is time and cost effective from a company’s point of view (Fill, 2008). Blogs also enable people to discuss and share the product with friends on virtual networks (Fill, 2008), which may increase interest of purchasing the top if others have been seen to like it. 2008), which may increase interest of purchasing the top if others have been seen to like it. In relation to the customer, expert opinion
for the 18-35 year old group is targeted at peergroup recommendations rather than opinion formers (Fill, 2008) as they can usually relate to the author.
Previous to the recession, sponsorship was one of the fastest growing forms of marketing (Cunningham et al, 2009). But this should still be considered, as there are events such as marathons that can be linked to the PoloTech. Sponsorship is highly advantageous due to the following; suggest to the target audience that there is an association between the sponsored and the sponsor, which may be of interest, allow members of the target audience and gain exposure to an audience that each event attracts to convey awareness of brand based messages and allows the audience to notice the sponsor indirectly through a third party, and so removes any negative effects linked with direct persuasion through traditional mass media like advertising (Fill, 2008). Moreover, as the PoloTech is a new product, people may be keen to see the product in real life, so they can observe functions and the quality of the top. To draw attention to the product, Point of Purchase promotion; “includes any promotional display set up at the retailer’s location to advertise the product and impulse purchasing� (Lamb, 2008), can be used such as in store media (Fill, 2008) that showcases factual information as well as reviews of the product that may interest the customer. Alongside this, there would be high customer service, so customers are able to ask questions and have all the information they need. This is especially important as almost a quarter of young men (16-24) would be encouraged to purchase high end fashion due to the high level of customer service (Mintel, 2015).
CONCLUSION After completing research into the wearable technology and associated markets, there are suggestions in order for the PoloTech to be launched in the UK successfully, which have been summarised.
For example; Application updates, price skimming, recommended communication platforms and extend the consumer to females, which would open up a bigger market.
BIBLIOGRAPHY Anon (2016) http://www.ralphlauren.com/home/index.jsp?direct [Accessed on 28th January 2016] Anon (2016) http://www.ralphlauren.com/product/index.jsp?productId=69917696 [Accessed on 28th January 2016] Blitz (2016) https://next.ft.com/content/fa749d1e-b556-11e5-8358-9a82b43f6b2f [Accessed on 28th January 2016] Chowdhry (2016) http://www.forbes.com/sites/amitchowdhry/2015/03/04/apple-passes-samsung/#312e6eeb350e [Accessed on 11th February 2016] Dhillon, S. (2011) The Fundamentals of Fashion Management edition.1st edition. UK, AVA publishing. Evans, M et al. (2014) Exploring Direct and Customer Relationship Marketing. 2nd edition. Cengage Learning EMA. Ferrell, O and Hartline, M (2012) Marketing Strategy. 6th edition. South Western Education Learning. Fill, C. (2015) Marketing Communications: Brands, Experiences and Participation. 6th edition. UK, Pearson. Hill and Jones (2007) Strategic Management: An Integrated Approach. 8th edition. South Western College. Hines, T. and Bruce, M. (2004) Fashion marketing: contemporary issues. 2nd edition. Butterworth-Heinemann. Jefkins, F. and Yadin, D. (2000)Advertising (Frameworks series). 4th edition. Financial Times/Prentice Hall. Lamb, C. et al (2010) Essentials of Marketing. 7th edition. South-Western. Lauren, C. (2015) Ralph Lauren Citizenship Report Fiscal Year 2015. [online] http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MzE2OTczfENoaWxkSUQ9LTF8VHlwZT0z&t=1&cb=635858918688005400 (Accessed 6th January 2016) Mintel (2014) Making wearable technology fashionable. UK, Mintel publications [online] http://academic.mintel.com/display/702283/ (Accessed 4th January 2016) Mintel (2015) Designer fashion. UK, Mintel publications [online] http://academic.mintel.com/display/716169/ (Accessed 4th January 2016) Mintel (2015) Sports fashion. UK, Mintel publications [online] http://academic.mintel.com/display/741114/ (Accessed 4th January 2016) Tozer (2015) Legal: The laws and regulations of wearable devices. Wearabletechnology-news, http://www.wearabletechnology-news.com/news/2015/ sep/10/where-law-stands-wearable-devices/ [Accessed on 10th January 2016] Western, S. and Home, T. (2010) Strategic Thinking: A Step-by-step Approach to Strategy and Leadership. 3rd edition. Kogan Page.