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MARKETING PLAN
Executive Summary
T
he purpose of this report is to provide
analyse the environment that they’re conducting
Target with valuable information about
their business in.
the current market situation of
children's wear, with the main focus being girl’s
Looking at the current distribution, on an internal
wear. The aim of this is to help guide and assist in
scale, Target is a vertical retailer making it
the creation of a children’s wear range.
beneficial for distribution as it allows them to design, develop and create the right product and
Through analysis of the 2016 Australian Census
deliver to the right stores at the right time.
and 2017 IBIS World Children’s Clothing Report,
Externally, we looked at our competitors again
demographic development has shown that there is
and rated them in terms of store quantity, store
a strong market for low cost children’s wear in
quality and e-commerce presence.
Australia. With the results of our market research jacintapogson.com survey regarding children’s wear, we were able to
This information gives us an insight as to what
develop a better understanding of our target
Target could be doing to improve in these areas.
market being predominantly mothers but also the
Through research of demographic, social/cultural
potential growth in Australia.
behaviour and technology, Target is performing in a constantly developing macro environment.
After reviewing Target’s internal business model and comparing it to selected competitors, we discovered their strength in pricing, also along
From this research, we’ve developed a series of
with their weakness’ in certain promotional
recommendations that include the visual
activity. It would be to Target’s benefit to
appearance and merchandising of Target stores,
modernise their marketing strategies in order to
promotional activity to encourage the purchase of
engage with their consumer.
outfits as opposed to individual items, ease of online purchasing and marketing campaigns that
To provide accurate and relevant
distinguish target as a lifestyle brand, based on
recommendations for Target we have had to
our suggested range ‘Be you’.
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1.0 Introduction
T
his report has been prepared by
2017. A limitation of the research conducted is
G r o u p 4 as a marketing directive
that the sample collected was out of convenience
for the children’s wear range we will
and may not be representative of the entire
be presenting to RMIT program Industry Partners
nation, but more likely, only inner
- Target, October 2017. In the process of collating
city
this report, we have analysed all environments
secondary research may
relevant to a children’s wear range for Target,
also
including Target’s current internal strategies,
compromised due to
those of their competitors, and the state of the
the
apparel industry as a whole, specific to children’s
development of the
wear. These analyses will lead us to a series of
apparel industry, and
recommendations, based on an understanding of
the frequent use of
Target as a brand, and opportunities as a potential
forecasting as a basis for
market leader. Conclusions will be drawn from
analysis.
respondents.
be
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Our
somewhat
rapid
previously conducted primary research, in which 250 potential Target consumers were surveyed1,
In
as well as relevant secondary research. The
acknowledged potential limitations and considerations
analysis being presented is specifically relevant to
of the information we are presenting, in order to give the
Target as a 3-7 year old girl’s wear retailer, in
most valuable marketing plan for Target.
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all
relevant
cases,
we
have
MARKETING PLAN
2.0| Market Analysis 2.1| Market Situation & 2.1.1| Overview of the Market The market being analysed is defined as Australian children’s wear purchasers and end users, with children’s wear referring to the ages of 3-7.
T
he current size of this market can be defined based on number of families, number of children, or amount of disposable income available for children’s wear. Based on the 2016 census, there has been an increase in number of families since 2011, from 5 million to 6 million. On top of
this, the population aged 14 years and under has increased in the last year. This has occurred due to an
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increase in immigration, despite the trend towards falling birth rates in developed countries, such as Australia.
There has been a recent increase in market growth, regarding available income, due to a trend towards having children at a more mature age, therefore creating a market with a higher and more stable disposable income, as well as a general increase in average weekly income according to the 2016 census. In conjunction with this increase in income, due to a multitude of factors, including globalisation and technological advancement, clothing is now the cheapest it has ever been. While this provides a very promising outlook for children’s wear sales, the inexpensive nature of production means that the market is also saturated with competition.
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While all these factors suggest growth in the children’s wear market, it should also be acknowledged that, according to the 2017 IBIS World Children’s Clothing Report, consumer sentiment is expected to fall. Due to volatility in the economic climate, consumers have a decreased willingness to spend. This may manifest itself as a disadvantage for the children’s wear market in general, but a benefit to bargain brands such as Target.
Among the apparel industry, children’s wear has been found as the fastest growing category at 5% growth value, and girl’s wear accounts for the largest proportion of this category at 41% (Euromonitor International, 2017). Due to the importance of girl’s wear, we will be focusing our analyses on this category. This decision has been made with respect to the ABC classification of inventory, in which focus should be put into those products which prove to have the most value.
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2.1.2| Target Market A and B refers to Appendix A and B respectively
A
ccording to the data presented by Target in a consultation in February 2017, their primary children’s wear purchasers are females aged 35-49, usually being mothers or caretakers of children. Based on our previously conducted survey, out of 250 respondents, 198 are
mothersA. This group of mothers are comprised of working, and middle class individuals with a restricted disposable income. The vast majority of those surveyed are located in suburban areas (71.2% of respondents) closely followed by those living in rural regionsB. This is a result of both the convenience of the sample chosen, as well as a reflection of the strategic positioning of Target stores across Australia, with
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stores being far more prevalent in densely populated areas.
PRIMARY MARKET PROFILE To gain a comprehensive understanding of the Target customer we have built a profile based on our findings, let’s call her Jane. Jane is 37 with two young girls, aged 4 and 6, and works part time as an administrative assistant. Jane is considered a “typical” Victorian, according to the 2016 census, owning a 3 bedroom house with a mortgage, and two vehicles. These factors result in Jane living based on a restricted budget, and a focus on saving as opposed to spending. Jane therefore exhibits low brand loyalty as the benefits desired are economically driven. Jane was born in Australia, but is of English and Indian ancestry. Her girls grow out of their clothing quickly, and she likes to be able to pass her eldest girl’s clothes onto her youngest to save money. She chooses to shop at Target for their low prices and good quality, providing value for cost. Her busy schedule means she values the ability to have a one stop shop for all her domestic
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needs, therefore Target is her ideal shopping experience. Jane is also an active social media user and appreciates the speed and convenience of online shopping and brands with a strong social media presence. She follows several toddler bloggers on Instagram and is very enthusiastic about putting her girls in fun, trendy outfit.
SECONDARY MARKET PROFILE Target’s secondary consumers include a myriad of individuals, often related to the primary purchaser, the ‘mother’ or the end user, the ‘child’. These people are comprised of family members such as a husband, aunt, or grandparents. These secondary consumers hold similarities to core consumers through income, working class status and geographic location, meaning marketing tactics do not have to be deeply adapted to address both groups of consumers. Those without children, however, will have a higher disposable jacintapogson.com expenditure, and therefore are more likely to purchase “party” wear, or items at a higher price point, which offers insight to the product range a brand like Target should be offering.
SCOPE OF TARGET’S MARKET The scope of Target’s children’s wear market extends beyond that presented as the “typical” consumer, with divergence based on age, as well as income. Having said this, however, it is more limited than other apparel categories, as a purchaser must have a child to buy for, which cuts out a significant proportion of the Australian population. As mentioned previously, it should be noted that this isolation of Target’s usual children’s wear customer is very much based on current data and needs to be updated as marketing strategies are developed, in order to ensure relevant profiles are structured.
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2.2| Current Product Situation Please refer to Appendix C We have collated a summary of Target’s girl’s wear based on physical, financial, and valuable factors: . As a whole, the range reflects a brand that is bright, commercial, and economically oriented. Supporting imagery has been provided to further the visual understanding of Target’s current product range3 as it is displayed in a Target store. Based on the supporting information outlined above, we have surmised that Target’s girl’s wear range is largely populated with basic items, with a handful of additional fashion pieces. The colour palette is dominated by dark navy, especially as seen in storeC. The pictured range was selected and analysed by our group during July, however there is full price spring/summer stock that has been
jacintapogson.com introduced among full price autumn/winter stock. The potential concern with this style of inventory management will be outlined further in this report.
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FRUITLOOPS MARKETING PLAN
2.3| Competitor Analysis 2.3.1| Primary Competitors Primary and observational research display evidence that the main competitors for Target are Kmart, H&M, Cotton On Kids, Seed Kids and Zara Kids.
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hese children’s wear brands were isolated due to competitive prices, and differences in quality and trendiness, as our research has shown that these are the most relevant decision making factors among children’s wear purchasers. Although among all the listed brands competitive
pricing is occurring to varying degrees, each brand positions themselves differently in the market to give a comparative advantage against other brands, based on selected perceived product benefits, which will be
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further outlined for each competitor.
TARGET Target has been an Australian family favourite for decades, known for respectable quality basic items at an “everyday low price”, selling everything from toys, to furniture, to electronics (Target.com.au, 2017). Target have 183 stores and 125 Target Country stores, under ownership of the Wesfarmers Group. Since the rise in fast fashion brands, Target has acknowledged a need to address the growing consumer desire for trend driven garments at a low price, while maintaining their respect for quality product.
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KMART Kmart is a discount department store retailer, selling a range of home and entertainment products, toys, women's and men's wear, sports items and gifts. Since their ‘revamp’ under the leadership of Guy Russo, Kmart has become a household cult favourite, known for offering trendy items at a low price, albeit accepted as sub par manufactured quality compared to most other retailers (Reynolds, 2017). Kmart, as well as Target, is owned by Wesfarmers Group, and operate 214 stores in Australia and now 19 stores in New Zealand, exhibiting
jacintapogson.com success in the Australian market, and a desire and ability to grow.
H&M H&M originated in Sweden, and is considered one of the fashion industry’s ‘fastest’ brands, offering extremely trendy garments, at a low price, with a very large width and depth of garments. H&M hold men's and women's wear, children's wear as well as homewares, but do not offer the range of products appropriate to be considered a department store. Regarding children’s wear, they are distinguishable by their bold designs and prints on children’s wear. There are over 4,000 H&M stores around the world and 41 online markets. H&M has
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4.0| Issues Analysis and Objectives The following set of issues have been isolated based on their importance and relevance to Target, and are met with a corresponding set of objectives for Target to implement to combat the listed issues. Further detailed recommendations will be explored in item 5.0
4.2 Marketing Issues and Objectives Issue 1
Objective 1
How can Target encourage higher units per
On new season items Target will provide a monthly
transaction to gain more revenue from their
promotional offer for multiple “outfitted” purchases,
“everyday low prices” scheme?
advertised through e-mail and social media e.g. a tshirt and pair of leggings for $15
jacintapogson.com Issue 2 How can Target make their customer’s in store
Objective 2 Target will install self-service check outs throughout
experience more efficient and current?
stores which will be integrated with the price check points
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Issue 3
Objective 3
How can Target change the perception of their brand
Target is to post 2-3 times a week to their social
to be more engaging, competitive, and cohesive?
media channels to obtain more of an online presence, engage with social media ‘influencers’, and update the visual presentation of their catalogue
Issue 4
Objective 4
How can Target make its store experience more
Target
impressionable for their customers?
merchandising team
will
utilize
the
time
of
their
visual
to develop their in-store
appearance by isolating product into “stories” and themes, and develop displays for main categories
jacintapogson.com Objective 5
Issue 5
What can Target do to cater to their online audience
Target will team up with AfterPay, and offer
and enhance the experience of their website?
customers a more personalized shopping experience through user generated content
4.2 Financial Objective Refer to supplied purchase plan
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5.0| Marketing Strategies The following marketing strategies are based on the issues and objectives outlined in section 4.2, and supported by the research that featured in the first half of this report. Each recommendation has been categorized by the 4 P’s, into price, promotion, place, and product.
5.1 Price These recommendations are being presented in an attempt to encourage customers to spend through several different price based techniques, as opposed to simply relying on Target’s current pricing strategy of “everyday low prices”.
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OUTFITTING The Fruit Loops propose that Target take advantage of merchandising as a means to encourage multiple garment purchases. This should be done by presenting garments with appropriate complimentary items, such as front facing basic hoodies above directional denim, with an accessory rack at the end of the aisle. Due to the breadth of Target’s range, there is still the opportunity for choice, but it offers an easy shopping experience, and may increase sales from just buying one item, to buying two or three. This recommendation also aligns with our prior research that indicates that families are having less children, and therefore are more likely to be buying outfits as opposed to multiples of one item for their many children. Along with this outfitting recommendation, we suggest a promotion would provide further incentive for the consumer to purchase an outfit, for example “hoodie and jeans for $25”. These promotions would be advertised in store, as well as social media, and e-mail on a monthly basis.
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