Skechers Trial Exam by Júlia Soares

SKECHERS Trial Exam assignment Marketing Management, Nov 2020

Júlia Soares da Costa IBA – International Business Academy Kolding

Table of Contents Introduction ...................................................................................................................... 2

Brand Values ................................................................................................................................................ 2

Methodology ............................................................................................................................. 2

Segmentation – B2C .......................................................................................................... 2 Target group profile ................................................................................................................... 3

Growth strategy ................................................................................................................ 3 Costumer Journey B2C ....................................................................................................... 3 Competition....................................................................................................................... 4 Marketing-mix .................................................................................................................. 4 Product ...................................................................................................................................... 4

Value map .................................................................................................................................................... 4

Price .......................................................................................................................................... 5 Place .......................................................................................................................................... 6 B2B segmentation...................................................................................................................... 6 B2B Customer Journey ............................................................................................................... 7 Promotion ................................................................................................................................. 7

Online Channels ........................................................................................................................................... 7 Offline Channels ........................................................................................................................................... 8

Financial 2.1 ...................................................................................................................... 8 Financial 2.2 ...................................................................................................................... 8 Financial 2.3 ...................................................................................................................... 8 Financial 2.4 ...................................................................................................................... 9 Financial 2.5 ...................................................................................................................... 9 Discussion of the implementation plan .............................................................................. 9 Bibliography .................................................................................................................... 10

Introduction Skechers is an International sports footwear company and would like to increase sales in the 25-35 years old target group. This report will focus mainly in offering solutions for the attractiveness of the products providing recommendations in relation with the marketing strategy, such as, analyzing the size of the target group, their needs, their preferences and the purchasing power. In addition, how can the company be efficient in communicating with their target. We will provide information about how can Skechers could increase the brand relation in a proper way. The Marketing-Mix that we will propose will give an overview about the tactics and actions that the company can follow to promote its brand, products and services on the market. In addition, the report will offer financial considerations in relation with budget for the posterior year. Brand Values Skechers footwear refects a combination of style, quality and value that appeals to a broad range of consumers. Skechers offers consumers a vast array of fashionable footwear that satisfies their active, casual, dress casual and athletic footwear needs.Their core consumers are style- conscious men and women who are attracted to their youthful brand image and fashion-forward designs athletes and fitness enthusiasts attracted to their performance footwear; and kids who love stepping into the latest innovations from ashing lights to shoes that spin. They want customers to enjoy the complete Skechers experience: from access to the latest trends and innovative technology, to exposure to their dynamic marketing and the growing breadth of their brand.The brand offers progressive quality, styling, comfort and affordability.

Methodology For analyzing the target group, we decided to choose ConZoom considering that the selling activities of the company are to be increased in Denmark. To create the Marketing-Mix we have used the value proposition to analyze the products. For the price we used the pricing strategies and the price objectives. To define the place, we have used the distribution strategy (vertical/horizontal and Exclusive/selective or intensive distribution). Regarding promotion we have used the Logos, Pathos and Ethos tool to create a new campaign for the brand. Also, we found important to use the customer journey when creating the communication strategy.

Segmentation – B2C •

For the segmentation it was used the ConZoom tool o A1 – 4,3% o E2 – 1,9% o A2 – 4,0% o E3 – 4,1% o A4 – 3,2% o F1 – 2,5% o A5 – 5,4% o F2 – 3,9% o B2 – 3,2% o F3 – 0,9% o D1 – 3,2% o D2 – 2,0% = 38,6 % of the Danish population

Women – 409.664

Men – 426.800 (Population in Denmark, 2020) = 836.464 – 38,6% = 322.875 people between 25-35

Target group profile Name: Jonas Hansen Age: 28 Education: recently graduated in Occupational therapist and works with handicapped children Personal: single Family: girlfriend, no kids Lives in the suburb of Aarhus Hobbies: technology, fitness Brands: Nike, Skechers

Growth strategy – Ansoff matrix is market penetration Costumer Journey B2C Awareness

Purchase

Retention

Customer Job

Need of comfort, style and good quality shoes

Buy/no buy

Evaluate with usage

Pains

Not finding something that fulfil all the requirements you’re looking for Having many options of stores and brands

Internet website, Walk-in store, look for recommendation from friends and family You can find some a little bit expensive and different prices in different stores Easy to reach both online and offline with a wide range of products Long – deciding which model and reseller/store to buy

Expending more than you should for sneakers with premium features Ending up with a great quality sneaker

Not matching the needs or the style

Gains

Time

Short – figuring out a need

Touch point

Online research, Going to walk-in store to talk to professionals,

Long – deciding between models, trying it on

Matching the needs

Long – need to be used a few times to see if the comfort changes adapting to your feet Information on online In one of the 23 Giving feedback to webpages, reviews, stores, or 150 friends and family, information given by resellers, or online sharing pictures on salespeople by main website or social medias using resellers websites the products,

advertisements both online and offline Message

“Unseen, untold, unsold” they focus a lot in marketing advertisements to aware their customers about quality and comfort

commenting on reviews websites Everywhere close to you

A brand specialist on sneaker

Good quality, good comfort rate, different models for different occasions and needs

Competition Market size – DKK 5.1 billion (current value CAGR) with forecast to grow 5% in the next 5 years to reach DKK 6.5 billion • • •

Nike – 13,7% Adidas – 13,7% Hummel – 8,9% The 3 brands together represent 36,3% of the market in sportswear. Being all 3, great competition for Skechers that so far represents only 1,3%. But taking in consideration growth, Skechers was able to grow 120% in the last 4 years (20152019) compared to its competitors Nike and Adidas that grew only 10% and Hummel that presented a decrease in its share of 3% having both sports footwear and sports apparel. Relating this numbers to forecast previsions of growth in volume percentages in sports footwear of 14.3% its assumable that Skechers has still a great path to grow in Denmark.

Marketing-mix Product Value map Costumer profile Costumer job • • • •

Have the need of being comfortable Looking for light shoes Want to be a part of a group, belonging to the community that wears Skechers Look for options and reviews

Gains • •

Affordable prices High quality material

• •

Options with no shoelaces High quality performance

Pains • • •

Not so much known brand between young people Competition with more varieties Having some product lines more expensive

Value proposition Products and services • •

Skechers shoes are very comfortable with foam soles, making it even lighter It has over 3.000 different models

Gains creators • • • •

Skechers offer quality for an affordable price Winner of more than 100 awards, the “Skechers Performance collection” offers elite athletes and enthusiasts groundbreaking technologies for running, training, walking and golfing Sketchers has different models with or without shoelaces, with Velcro, or with elastic The shoes can easily be washed in the machine if not containing leather in the composition

Pain relievers •

• •

The brand is investing in advertisement through a 360-marketing approach and follows the moto “Unseen, untold, unsold” where to generate sales it needs to be seen and talked about, showing that they tend to put a lot of investment in promotion Over 3.000 models and over 30 product lines Approved and recommended by podiatrists

Price Price objective: increase market share in the target group 25-35 Danish households in the year of 2017 had a consumption expenditure of 4.1% of their household income yearly. (DENMARK: REACHING THE CONSUMER, 2020) Taking this in consideration with the average yearly income in a household of 984.000kr, (The average Dane, 2020) around 42.000,00kr could be spend per year in clothes and shoes by a person. “Nike and Adidas use a value-based pricing strategy, considering the consumer’s perception of the value of its products. In the context of the marketing mix, this value is used to determine the maximum prices that consumers are willing to pay for the company’s products.” (Gregory, 2020) • The prices then are set higher than Skechers prices. In which Skechers approaches with a value pricing, in price method showing that you can get more (quality, comfort) for less.

External price setting approaches: Competition-based price • price covers costs (cost of raw materials and the cost of operating the business) and is comparable to the competitor’s price. • seek larger market share through price • Skechers sneakers prices can vary according to the version of product lines. • They are considered as priced with the introduction price for brands like Nike and Adidas. You can easily find a premium Skechers with the same price as a simple version of Nike. Their affordability makes them much more appealing and leads the consumer to buy the shoe more willingly. • The main objective of the case company is to provide solutions to the customer with excellent quality and comfort, combined with style at a just price.

Place Skechers hold a differentiation - selective distribution strategy due to distributing only to their own shops or partners resellers in a weighted way, where products are placed in partners shops only dedicated to sportswear or fashion. The company utilizes both horizontal (reseller) and vertical (own stores and website), having 23 Skechers stores, 177 physical resellers in Denmark and a total of 1.800 dealers in whole Scandinavia, both online and offline. • The first flagship store for Scandinavia is located in Esbjerg Logistics • “European Distribution Center is located in Liege, Belgium with 1.06 million square feet • Shipped approximately 33 million pairs in 2019.” (Skechers, 2020)

B2B segmentation Lead Prospect Matrix: Lead – leverage Customer Sports24 Intersport Zalando ASOS

Type of Business Sportswear Sportswear Online retailer Online retailer

Relation ship 8 9 9

Objectiv es 9 8 10

Audienc e 9 7 10

Geograp hy 7 10 10

Comfort

Size

Total

8 7 9

8 9 10

49 50 58

After doing the Costumer Compatibility Matrix it was clear to see that all dealers have almost same level on quality to resell the Skechers products. But in order to present the best option, it was decided to Pick one from the online channel and one from the offline channel. Zalando and Intersport respectively, due to Zalando being the most used shopping channel in Denmark in 2019 in all categories of products. Zalando boast 300 million visits per month, 29 million consumers, 450 thousand product choices and a precense across 17 European markets. (Culpin, 2020)

For what concerns the offline channel, even though Sports24 have been growing, Instersport is still a bigger company, with 60 points of sales all around Denmark being easier to reach by the costumers. •

•

Zalando can be contacted through their Marketing Services website: https://zms.zalando.com/contact/ or Dagmar Gómez Olmedo (https://www.linkedin.com/in/dagmargomezolmedo), the Team Lead Buying Footwear at Zalando Lounge for over 4 years. Intersport can be contacted through Maja Jensen linkedin.com/in/maja-stihøjjensen-49316541, the Responsible buyer for over 4 years.

B2B Customer Journey In appendix PDF

Promotion For the promotion part, it’s clear that Skechers invest great amount of money in their marketing and communication channels, but that in a way is not giving the expected result. In order to increase the market share within the target group of 25-35 years this strategy should be reconsidered. The aged target group in Denmark is very much driven by emotions and is a very well updated target within new trends. Taking this in consideration, Skechers should focus on creating a moto that the public could identify with, because “Unseen, untold, unsold” seems a very cold motto from a brand that only cares about its profits. When in other hand Skechers is a consumer-based company, that puts their customers in priority, offering comfort, quality and style for affordable prices. The launch of the campaign “light and flow” could be a start for the connection with a new motto like “that’s the feeling” in which several different campaigns could easily be associated, where all sneakers are part of the costumer’s life in a different feeling. •

Action plan in appendix Excel

Online Channels • Paid Ads • Videos sponsored on YouTube • Email marketing for the customers subscribed in the newsletters • SoMe o Sponsored Ads on Facebook, Instagram Stories • Partnership with social influencers and athletes: o Mathilde Gøehler - Fashion, family, reality show o Emily Sindlev – Fashion, dance with the stars o Charlotte Caroline – Fashion, lifestyle o Mads Damind - fashion, stylist, sportswear o Michael Knudsen – handball, lifestyle o Nicklas Bendtner – soccer, lifestyle, reality show o Philine Pi Roepstorff – sports, fashion, model, reality show

Offline Channels • Fashion magazines advertisings • Outdoor posters • PR o Partnership with stylists and designers’ brands can create value to a specific line of products, and also integrate the customers of both brands, being benefic for both sides.

“Have you ever thought about when you’re enjoying a moment and all around you feels light and the moments pass fast?” - Skechers, that’s the feeling

Financial 2.1 In appendix Excel

Financial 2.2 In appendix Excel

Financial 2.3 In a short term the investment is good due to they will have the started investment and will not have to pay in the old deadline of 30 days, they will now have 60 days so they will be able to spend more of this money in a short period since the parcels will be smaller when paid in double of time. But also, in the payment side it will be a negative point since the interest rate will be bigger in the end of the payment, making the total final liquidity increase.

Financial 2.4 In Appendix Excel

Financial 2.5 In a pro side, the budget allows you to see how much you can grow your company, how much you’ll need in order to pay all your fixed costs, expected variable costs. With the budget you’re able to see a perspective way of what you can, and you can’t do financially speaking with your company’s money. But also, a con is that if you calculate it wrong you can increase your liabilities and lead your company to bankruptcy.

Discussion of the implementation plan The opening of a big flagship store in a crisis period, as now the Corona pandemic will affect in great proportions the numbers no matter where the store is positioned. The choice of location in Esbjerg was not the best option, being away from the biggest cities and the borders to other countries. Skechers invest great amount of money in their marketing and advertisements, but in a way that does not connect with the customer, and a change in this strategy can increase the adherence by the secondary target group of 25-35 years.

Bibliography Dst.dk. 2020. Population In Denmark. [online] Available at: <https://www.dst.dk/en/Statistik/emner/befolkning-og-valg/befolkning-og befolkningsfremskrivning/folketal> [Accessed 12 November 2020]. Skechers, 2020. About Us | Skechers Corporate (SKX). [online] About.skechers.com. Available at: <https://about.skechers.com/about/> [Accessed 12 November 2020]. Gregory, L., 2020. Nike Inc.’S Marketing Mix (4Ps/Product, Place, Promotion, Price) - An Analysis - Panmore Institute. [online] Panmore Institute. Available at: <http://panmore.com/nike-inc-marketing-mix-4ps-product-place-promotion-price-analysis> [Accessed 12 November 2020]. Santander Trade Markets. 2020. DENMARK: REACHING THE CONSUMER. [online] Available at: <https://santandertrade.com/en/portal/analyse-markets/denmark/reaching-theconsumers> [Accessed 12 November 2020]. Dst.dk. 2020. The Average Dane. [online] Available at: <https://www.dst.dk/en/Statistik/Publikationer/gennemsnitsdanskeren> [Accessed 12 November 2020]. Culpin, B., 2020. Denmark Ecommerce 2020 - Consumer Statistics And Channel Recommendations. [online] Wakeupdata.com. Available at: <https://www.wakeupdata.com/blog/e-commerce-guide-to-denmark-consumer-statisticsand-channel-recommendations> [Accessed 13 November 2020].