Cambridge Satchel Company Executive Summary
2013
The Cambridge Satchel Company
BUSINESS PLAN FOR THE CAMBRIDGE SATCHEL
COMPANY PRODUCT EXTENSION STRATEGY
Utilising five SMART objectives this report will cover the initial product extension strategy and release of a new product to increase the current product range at The Cambridge Satchel Company. Word Count - 1650
Contents
Glossary of Terms and Abbreviations ............................................................................................................................... 2
Introduction ...................................................................................................................................................................... 3
Objectives.......................................................................................................................................................................... …show more content…
4
Strategies .......................................................................................................................................................................... 5
Strategy 1.1 ................................................................................................................................................................... 5
Strategy 1.2 ................................................................................................................................................................... 5
Strategy 2.1 ................................................................................................................................................................... 6
Strategy 2.2 ................................................................................................................................................................... 6
Tactics ............................................................................................................................................................................... 7
Tactic 1.1 ....................................................................................................................................................................... 7
Tactic 1.2 ....................................................................................................................................................................... 7
Tactic 2.1 ....................................................................................................................................................................... 8
Tactic 2.2 ....................................................................................................................................................................... 8
Conclusion ................................................................................................................................................................. 8
Action and Control ............................................................................................................................................................ 0
Pert Analysis .................................................................................................................................................................. 0
Appendix ........................................................................................................................................................................... 0
Situational Analysis ....................................................................................................................................................... 0
Mission Statement .................................................................................................................................................... 0
SWOT Analysis........................................................................................................................................................... 1
Ansoff’s Matrix .......................................................................................................................................................... 2
Background Analysis – PESTEL .................................................................................................................................. 3
Competitive Threats – Porter’s 5 Forces................................................................................................................... 4
Boston Matrix............................................................................................................................................................ 5
GE Matrix .................................................................................................................................................................. 5
Objectives...................................................................................................................................................................... 6
References and Bibliography ........................................................................................................................................ 7
Page 1
Glossary of Terms and Abbreviations
Ansoff’s Matrix - A graphical tool designed to assist by offering four alternative marketing strategies, comparing whether the products are new or existing and correlating it alongside if the market is new or existing. There are four sections; Market
Penetration (Lowest Risk) Market Expansion (Medium Risk) Product Expansion (Medium Risk) and Diversification (High Risk)
Borrowed Interest - Borrowed interest is the intentional association of an unrelated theme, event or image with a product, service or subject being presented, to attract attention otherwise not anticipated. In terms of TCSC it refers to how the logo of the bike relates to the City of Cambridge and what is known very well for. Furthermore Cambridge University is recognised as one of the most prestigious learning institutes in the world making the products of TCSC easily recognisable.
Boston Matrix (BCG) – analyses the product portfolio of a brand by segmenting into one of four different areas, based on:
Market Share (low or high market share?) and the Market Growth – are potential (customers increasing?)
GE Matrix – Similar to the BCG, Market Attractiveness replaces market growth and Competitive Strength replaces market share to represent a more accurate analysis of a product portfolio.
Gross Domestic Product - GDP - The market value of all officially recognised final goods and services produced within a country in a given period of time.
Gross National Product - GNP- The market value of all the products and services produced in one year by labour and property supplied by the residents of a country.
PESTEL – First coined by Francis Aguilar in his 1967 book “Scanning the Business Environment” a PESTLE analysis is an audit of an organisation 's environmental influences with the purpose of using this information to guide strategic decision-making.
CIPD
(2013)
PERT Analysis (CPA) - Helps to plan all tasks that must be completed as part of a project, including scheduling and resource planning. They also allow you to monitor project goals and assess where remedial action is needed.
Penetration Pricing - As stated by Riley (2012) Penetration pricing is the pricing technique of setting a relatively low initial entry price, and is often used to support the launch of a new product, to attract new customers.
Premium Pricing - As stated by Magloff (2012) Premium Pricing identifies the demographic that are willing to pay above the norm to feel they are getting a more exclusive product. Premium Pricing is used to maximise profit where there are no substitutes for the product.
Porter’s 5 Forces - This can identify the strength of your current competitive position, and the strength of a position you 're considering moving into alongside identify the competitive threats within the …show more content…
market.
Positioning Map - Illustrates on a graph the comparison between like brands, by marking them according to their price and perceived quality.
PPC - Pay Per Click, a method in making your site more visible online
SEO - Search Engine Optimisation, a method to make your site more visible through search engines
SMART - Specific, Measurable, Achievable, Realistic, Time Bound
SOSTAC - Situational Analysis, Objectives, Strategies, Tactics, Actions, Control
SWOT - A method of analysing a company’s strengths and weaknesses through an internal audit while comparing it to the external factors of opportunities and threats that are present within in the macro environment.
TCSC - The Cambridge Satchel Company
USP - Unique Selling Point
World City - A global city, generally considered to be an important node in the global economic system.
Page 2
Introduction
This report will assess and evaluate the progression and direction ‘The Cambridge Satchel Company’ (TCSC)* plans to take over the business period 2014-2015. This report will summarise the marketing plan and will cover the aspects needed to introduce a purse into the company’s current product portfolio, delivering two recommendations; highly recommended and recommended using a SOSTAC* model.
In a nut shell the presentation covered TCSC’s current market position and identified, through a SWOT analysis how internally TCSC possesses a sound business model with the ability to convert new diverse product ideas into sales. It also identified that the fashion industry is rapidly developing market with a high turnover of trends that need to be capitilised on to give brand longevity. The PESTEL analysis was used to plan for future events and as an overall industry background analysis of how external factors will affect TCSC’s progression. 145
Page 3
Objectives
Highly Recommended - Objective 1
Have the purse as a web exclusive item, available worldwide for a limited six months before assessing its viability for sustained production, in order to identify the product as a future success. The aim is to sell 6000 units globally within the time period.
Recommended – Objective 2
To be top result on Google within a 3 month period for the terms
Cambridge, Purse and Satchel using SEO and PPC in a bid to increase website traffic and therefore sales.
As agreed in the previous meeting the decision to develop two objectives on a basis of highly recommended and recommended will be discussed in this report. The appendix will outline the objectives discussed in the presentation but not progressed in the report. 42
Figure 1. Emma Stone (potential brand ambassador) with her Cambridge Satchel – The Chelsea. Google Images 2013
Page 4
Strategies
Highly Recommended – Strategy 1
Recommended – Strategy 2
1.1 – Utilise Social Media to advertise the web exclusive item, like
Pintrest to TCSC’s website, in a bid to get to 6000 units sold.
1.2 – Gain recognition for the brand by gaining the cover of Vogue magazine. Somebody like Emma Stone will increase brand profile and reinforce the fact it will be online exclusive.
2.1 – Utilise SEO to increase brand presence online and increase circulation of name.
2.2 – Use PPC to Purchase the sponsored links on top of the page again to be the first results potential customers see and to create as a combination the ability to increase sales and traffic to the website.
Strategy 1.1
Topshop recently collaborated with site Pinterest, in November 2013, to encourage shoppers to ‘Pin’ their favourite products to the pinboard in order to show their products in the real world, Benady, D (2013). Unlike other social media sites, Pinterest is as a tool to help facilitate future planning, it has 53 million monthly unique users globally and is establishing an operation in the UK where it had some 2.6m unique users in October 2013, about 1.5 million females (the base of the brands target market) and over a million males, according to Comscore MMX. In comparison Facebook is mainly for posting about what has occurred and Twitter shows what is happening.
As identified in the presentation brands like Topshop can be recognised as both a competitive rival and a threat of substitution, when undertaking a Porter’s 5 forces analysis*. Topshop can offer a similar product at a lower price and has a larger reach due to it being a high street brand. Furthermore when dissecting what social class the brand attracts it ranges from A to D where TCSC is attracting more the A to B demographic. When looking at the positioning map* the high quality product of TCSC is encroaching into the territory of Radley, Burberry and other premium fashion accessory brands. As result it would be wise for TCSC to capitalise on a proven model such as social media marketing to drive traffic to the website. 238
Strategy 1.2
Emma Stone has been widely photographed carrying TCSC products and has been documented in today’s entertainment culture she has become a globally recognised superstar, as stated by Crotty (2013) she has been on three magazine covers this month, including Vogue. As of current she is not endorsed by any brands, if possible it would be an ideal situation to recruit Emma Stone to TCSC and have her become a brand ambassador to be seen with the new purse. This would encompass the theory of borrowed interest as fans of her would go on to research
TCSC and hopefully continue to purchase the new purse, alongside targeting a wide demographic of consumers that is not necessarily tapped into by competing brands. When you look at the positioning map* TCSC is in a unique position where it can balance being a quality product, with a premium price whilst being accessible to a diverse target market by releasing a purse that will be more affordable that its other products. 166
Page 5
Strategy 2.1
SEO is best increased through the integration and promotion of core content within the current website. By making the consumer’s interaction with the site seamless, there are fewer steps to find contact details, register, or to complete a sale which can relate to a higher success rate. By encouraging reviews it directs the traffic to the website and can cause a buzz on blogs and increases presence on social media; however it is vital to maintain a balance to allow customers to use whichever medium they are comfortable with. Furthermore social media increases the number of places your customers can leave reviews on and it will be exposed more organic views, resulting in referrals. 114
Strategy 2.2
PPC is a viable strategy as it requires a small initial investment as it is as it sounds, you pay per click, this is a benefit as it allows you to adapt your budget to your sales goals. Due to the nature of PPC ads, if TCSC was to pay the higher fee then top placement is won instantly, resulting in faster results than with organic SEO methods. There is also the ability to track the progress of PPC to maintain that it is as effective and efficient as possible by tracking keyword and phrase successes to identify what causes the most traffic and more importantly the conversion of advertisement to sales in a bid to ensure the PPC method is operating at maximum levels. Furthermore like SEO you can guarantee national exposure and with an already known brand like TCSC, which shot to fame in the Google Chrome advertisement, can reach the vast majority of Internet users. In truth there are a vast amount of benefits to how PPC can be applied, and the method in which TCSC can achieve this will be conveyed in Tactic 2.2. 188
Figure 2. The current search results on Google when
“The Cambridge Satchel Company” is searched.
Page 6
Tactics
Highly Recommended – Tactic 1
Recommended – Tactic 2
1.1 – Encourage followers to share pictures of them with their products with an incentive for the most likes and shares, meaning the brand name will be circulated more.
1.2 – Have Emma Stone share a talk about her own TCSC products what she likes about them and push customers to the website.
2.1 – Embed the wording into the brands website and use consistently on all linked social media in order for the brand to benefit from SEO?
2.2 – Identify if PPC is sustainable and to what capacity it is effective at achieving the objective.
Tactic 1.1
A tactic to implement strategy 1.1 could be the method of penetration into the new market, by using Ansoff’s Matrix to analyse the risk, expanding into a new market is considered as a medium risk and to increase the chances of success a promotion would be best advised. Godwin (2013) states “85% of consumers are tempted by buy-one-getone-free offers and similar promotions” while this applied to items within a supermarket retail environment they can be disguised as lost-leaders* however this method of promotion is not possible with TCSC,
By looping back to social media, a competition could be created for people who purchased the new product. For the chance to win any product within the TCSC product portfolio the consumer would post a photo of themselves with the new purse on a social media platform and whoever gets the most shares and likes wins the prize. This is effectively free marketing by viral advertisement and word of mouth all for the cost of one product. 165
Tactic 1.2
To get a cover of a prestigious magazine you need an iconic ambassador, as mentioned previously Emma stone is just that in the making. In order to utilise Emma Stone effectively she needs to be seen regularly in magazines using her
TCSC purse, although not necessarily on the cover of industry leading publications such as Vogue. However to increase the brand profile, for her to go on record with a publication such as Vogue and discuss TCSC product portfolio would be beneficial to the brand. To justify a premium pricing strategy you only have to look at what Magloff, L (2013) states, “in an attempt to skim the cream of the market” for example TCSC would use their USP, how the product is handmade and the factor of British design alongside the power of being endorsed by a global celebrity. By being involved with quality publications such as
Vogue this is reinforced. 173
Figure 3. Emma Stone (potential brand ambassador) on the cover of
(left to right) Vogue, Summer and Teen Vogue. Fashionista (2013)
Page 7
Tactic 2.1
The reasoning behind SEO is to build a reputation among customers; it is through this channel that the brand name becomes more visible on search engines such as Google and Bing. The objective for TCSC is within three months to become the most relevant returned result for the words Cambridge, Purse and Satchel. In agreement with Hibu
(2013) what this does is broaden awareness in new market sectors or new geographical areas, which is highly relevant in the case of launching a new product such as the purse. Furthermore it leads to increased public awareness of product features and benefits; coincidently within the fashion market allows the brand to react to the rapidly adapting macro environment. When you look at the GE Matrix*, which depicts the need for investment by comparing market attractiveness to unit strength. In terms of TCSC the matrix can be applied to a relevant product within the portfolio to identify if it needs an injection of investment or not to increase sales. 161
Tactic 2.2
Converting traffic into a transaction is the measure of a successful PPC campaign Opentracker (2013). By achieving
‘Quality’ traffic refers to the return of consumers that are looking for what you are advertising and then proceed to enter the site, browse and ultimately complete a transaction. It is at this point that e-crm becomes a requirement, in order to ensure repeat business and potentially recommend the brand or the purse, especially through social media.
Using Clickstream analysis, you can identify what clients do on your site once the page loads, this information is necessary to manage your advertising, and determine the best ways to maintain the level of quality traffic, of which are converted and ultimately increased revenue. 118
Conclusion
Did having the purse as a web exclusive item create the desired attraction? Was Emma Stone a suitable and relevant ambassador that resulted in sales? These are the questions that would determine if the objective was successful.
Furthermore did TCSC reach the desired 6000 unit sales of the new purse within 6 months? Of course over the 6 month period there would have been a weekly recollection of sales to identify if the objective was proceeding as expected and if it was not, by doing weekly reports it allows TCSC to review the objective and modify it if necessary.
In summary this report, by ‘Tiger-Eye’ marketing consultancy, has implemented an achievable marketing plan that has encompassed specific elements with measurable features that will result in a successful launch of the new purse by providing both a highly recommended and a recommended solution, that are defined by a realistic time scale and realistic ideologies. The appendix does include the Situational Analysis that was presented along with detailed illustrations of models mentioned throughout the report. 173
Page 8
Action and Control
In order to fulfil the objective of launching the purse as an online exclusive for 6 months TCSC must have an appropriate infrastructure to handle the increased traffic to the web site and systems in place to be able to comprehend with orders and ensure the delivery of the product is seamless. Relationships must be made with both buyers and suppliers so both have equal power to ensure the supply chain is reliable. Below is a
Pert Analysis Diagram which will represent the Action and Control element of SOSTAC, for both the highly recommended and recommended objective.
The table to the right identifies the tasks to be undertaken throughout the
SOSTAC while the CPA diagram below will graphically display the chosen route. 122
Pert Analysis
A
1 Week
B
C
3 Weeks
Sequence
D
E
13 Weeks
F
G
5 Weeks
Parallel
H
I
2 Weeks
J
K
1 Week
Critical Path = 26 Weeks
L
M
N
1 Week
Earliest Start
Length
Type
Dependent on Week 1
1 week
Sequence
A
Week 1
1 Week
Sequence
A
Week 2
3 weeks
Parallel
B
Week 3
4 Weeks
Sequence
B
Week 3
4 Weeks
Parallel
B
Week 5
3 Weeks
Parallel
C
Week 6
2 Weeks
Sequence
D
Week 8
2 Weeks
Parallel
C&F
Week 10
1 Week
Sequence
B
J- Has Emma Stone benefited the brand?
Week 14
2 Weeks
Parallel
H
K- Calculate sales so far
Week 20
1 Week
Parallel
All
Week 21
2 Weeks
Sequence
K
Week 25
1 Week
Sequence
L
Week 26
1 Week
Sequence
M
Task
A– Start, Identify two sustainable objectives B– Define Objectives and Identify objective to highly recommend
C– Correspond with proposed ambassadors representatives
D– Utilise Social Media to advertise the web exclusive item
E– Start incorporating SEO into all media interfaces and initiate PPC
F– Discuss gaining the cover of Vogue magazine for TCSC and Emma Stone
G– Encourage followers to share pictures and increase Social Media Interaction
H– Have Emma Stone share a talk about her own TCSC products
I- Has SEO increased traffic to website, does PPC complement this.
L- Does having a web exclusive product take sales from the stores?
M- Have we sold 6000 units over six months to justify full product release
N- Feedback and review to project manager and reassess situation
This CPA maps out the marketing plan for TCSC. As the plan is undertaken it maps out what actions have been undertaken when and allows us to assess the plan at any stage to ensure it is delivering the desired effect. Like in any plan there is a review at the end of the six months to asses if the objectives achieved their goals.
Appendix
Situational Analysis
The presentation delivered on behalf of ‘Tiger-Eye’ marketing consultancy team concentrated on the Situational
Analysis of ‘The Cambridge Satchel Company’ and its current market position whilst outlining the objectives for an oncoming marketing campaign. The Situational Analysis serves as the foundations in which you can tailor your objectives and complete an effect marketing planning model (SOSTAC).
TCSC specialise in producing traditional handmade leather bags. Founded in 2008 with a £600 budget, has now progressed to an estimated annual turnover of £12million. Originally they made 3 Satchels per week 2008 and now make 15,000 per week. As a brand they have 51919 Facebook ‘Likes’ and amassed 21831 Twitter followers. In terms of their target market they aim to recruit social class C1, B & A with 88% of that clientele being women. Furthermore
Woman ages 25-34 are most likely to save up to buy one handbag they really want (Mintel 2012) According to telegraph.co.uk – “The beauty of it is it can be worn by anyone – any age with any style," Deane says. "It is evocative of the traditional satchel and brings back fond memories for many of our customers.”
In terms of identifying suitable retailers, the ideal collaborators would include developed brands such as John Lewis,
Asos and Selfridges. Events such as London Fashion Week can produce collaborations with high end designers such as Chris Benz and Vivienne Westwood, which can increase the brands profile. As a market the handbags sector increased by 104% between 2007 and 2012, with the Fashion industry as a whole worth £21bn to Britain 's economy.
A survey by Mintel(2012) dictated how 6/10 people who have purchased accessories in the past 12 months state that they would rather invest in a high quality products which will last with the accessories market set to be looking to increase by 9% in 2013.
Mission Statement
As a brand TCSC is committed to UK Manufacturing, creating new jobs in UK factories, so people can purchase the bags knowing that they are supporting business trade and manufacturing. The brand is to stay as a home grown, family run business with designs that stay true to the values of English heritage designs. Even though the brand is looking to diversify and cement its market position as a luxury fashion accessory brand it will not compromise the quality of the leather or the handmade product to increase production.
SWOT Analysis
Strengths
The Cambridge Satchel Company has many assets, for example there is a portfolio of celebrities, both male and female, that own a TCSC bag or accessory and is regularly seen wearing them due to their practicality. This has vastly enhanced the brands recognition, fashion icons such as Alexa Cheung, Fern Cotton, Elle Fanning and Rita Ora are all fans of the brand. Prominent fashion bloggers praise the products and company showing potential to high end fashion magazines – keeping bloggers interested in the product as they have become very influential. Furthermore the product is handmade in the UK using high quality leather giving the brand a noticeable standpoint and marketable feature.
Weaknesses
Unfortunately as with all businesses there are some weaknesses, which are yet to be converted into strengths. There is a limited range of products, which could limit the potential of repeat buyers. However it is for this reason we are proposing the extension strategy with the new purse.
As a result each customer is only likely to purchase one item from the Company therefore they need to be aware of who they can target within the future. Furthermore as stated in the report, the Fashion Industry is a very competitive market therefore customers have so much choice of other alternatives should they be put off due to factors such as price and hence why we are now creating a purse as it can be entered at a low price point.
Opportunities
The brand is already marketed and sold worldwide, in high end department stores and via their own website. It could be an option to expand operations abroad and set up pop-up shops in developing markets such as China,
Japan and India. Furthermore there is always the option to increase distribution to more high streets as well, without cheapening the brand, for example in the UK utilising the network of John Lewis and Debenhams. The technology market, like the fashion industry is a very fast paced environment, with products experiencing a short life-cycle, this could become an opportunity to reveal a luxury leather ‘techwear’ line that match the existing product ranges. All of this must be achieved by not alienating the male demographic, and as a result there is the potential to
release wallets, laptop cases and man-bags of similar classic design, the current range is already popular with the members of One Direction.
Threats
Due to a pricing structure ranging between £100 and £150 (asos.com 2012?) it targets a set demographic limiting the clientele to those with a disposable income to afford the product. This makes it vulnerable to high street fashion brands like Topshop and River Island who make like products but with a more effective pricing structure, and yet maintaining a desirable brand name. It is these threats that must be turned into affective opportunities. Is it possible to create a lookalike product in a cheaper material? Even if it was, there is the risk that this can cheapen the brand and take away the brand’s current USP.
Page 1
Ansoff’s Matrix
Existing Products
New Products
Market Penetration
Providing a loyalty scheme to encourage repeat customers.
Introduce a special offer to customers including new and old.
Existing Markets
Product Development
all
Provide free delivery on their website for UK customers.
Extend distributers to other high end high street retail stores to allow reputation to remain high but reach a wider geographical market.
Expand on male demographics advertising. CSC are planning on launching a men’s range in Winter 2013
‘Anniversary’ collection of bags to be introduced in collaboration with
Vivienne Westwood.
Market Development
New Markets
Taking on a bigger distribution property to allow flexibility in producing more products.
Introduce new products which can still be related to the core products. Such as introducing men’s laptop cases, similar accessories. Expand the range of personalisation, added embroidery, new colours, individual logos
Expand on different types of satchels suitable for nights out. E.g. Clutch bags, rather than aiming at universities and daytime.
Collaboration with designed Chris Benz to create limited edition satchels.
Collaboration with Viviane Westwood
Diversification
Create a sister company for clothing?
Come away from USP of using leather to make a more affordable product
Move into the Asian market, not just for online sales.
Market Penetration – Low Risk as it is taking an existing product into an already existing market so it is noted that the clientele and demand is already there. This would be taking a current TCSC satchel into the market but using an aggressive pricing strategy to undercut the rivals.
Market Development – This is Medium Risk as it is taking an existing product into a market that has not experienced it before. For example, even though TCSC is sold abroad via online, it does not have a physic presence in Asia. A brand launch in a city like Tokyo, Beijing or Mumbai would be subject to a pilot test.
Product Development – This is Medium Risk as there is a chance of alienating devoted and loyal fans of the brand. It encompasses operating in the same market but varying the product, may it be targeting a new demographic or creating a new image.
Diversification – The Highest Risk stage, this encompasses going away from the brand’s tradition values and mission. This can include radical plans to alter the structure of the company or to alter the brands USP. In TCSC’s case using none leather to yield products to make it more affordable.
Page 2
Background Analysis – PESTEL
First coined by Francis Aguilar in his 1967 book “Scanning the Business Environment” a PESTLE analysis is an audit of an organisation 's environmental influences with the purpose of using this information to guide strategic decision-making. CIPD
(2013) A PESTEL analysis takes into account the factors within the MACRO business environment and questions how
this will affect the brand.
Political
- Future sourcing of leather
- Maintaining all manufacturing and resources are available in the UK to retain employment within the UK
- Ensuring that it is ethically sourced possibility of offsetting the price of leather by providing a sort after replacement Environmental
- PETA – pressure from organisations intent on maintaining ethical and responsible methods of harvesting leather. - The production of leather is impacting on the environment, does TCSC have a corporate social responsibility agenda to give back to the environment
Social
- Demographic – inelastic pricing therefore demographics do not affect the pricing of products produced by
The Cambridge Satchel Company.
- The target market that TCSC is aiming to recruit, is it a constant market? Do the changing economic situations alter the structure of the demographic TCSC is tailored to reach.
- Is there a way of reaching a broader spectrum of the countries female and male demographics without compromising the brand
Technological
- E-Commerce - The Cambridge Satchel Company is unlikely to pass savings onto consumers.
- Is there a way to update factory machinery as products are handmade?
- Will there be a time that heritage must be sacrificed to increase efficiency of product.
- In aspect to the technology industry, looking at other leather goods brands such as Osprey, Radley, and
Burberry, who are branching into the fast changing techwear industry. Is this an avenue TCSC should be perusing. Economical
- Inflation – the product is high end and reliant on leather, due to inelastic pricing this is unlikely to influence products sold, however TCSC will need to ensure they have good supplier relationships to provide material through extranet SharePoint 's.
Legal
-
-
Trading standards – ensuring there is a responsible refunding policy to ensure customers with a ‘bad experience’ do not bad mouth the company and will be likely to repurchase with The Cambridge Satchel
Company
BSI and ISO standards, does the product conform to trading standards
Page 3
Competitive Threats – Porter’s 5 Forces
Supplier Power
-
As TCSC offer good quality leather, they are able to inflate their prices if their suppliers increase their costs.
Should the leather industry become an Oligopoly it can lead to hyper-competition and an increase in pricing.
Suppliers know TCSC is reliant on leather meaning if TCSC are naive not to have an array of vendors it can lead to them being priced out of contention.
Buyer Power
-
Several large brands are retailing satchels giving them more choice selection. However there is only one
TCSC
By developing a strong supply chain with multiple vendors it gives TCSC more control should one supplier choose to increase the price of leather
In a bid to assure the quality of leather is always 100% TCSC buy in such quantities their suppliers cannot afford to make mistakes and compromise on quality.
Competitive Rivalry
-
High street brands such as Topshop are undercutting TCSC by making replicas.
This may make them lose some clients to some competitors in cost over quality
Other brands like zatchels.co.uk are offering similar products but do not offer the perceived quality of TCSC, it is the borrowed interest of Cambridge that despite the company being founded only in 2008 allows the company to own a certain heritage.
Threat of Substitution
-
Fake /cheaper leather can be used to create similar style bags where cost can attract some customers that may have purchased from TCSC
In an economic climate where luxury goods are being alienated from social classes under A-B it can lead to competitors benefiting from TCSC’s inelastic pricing structure and reliance on their brand mission to prevent them from tailoring their product portfolio to the wider market.
Threat of New entry
-
Rival and up and coming companies may jump on the back of how successful TCSC is. This could lead to hyper-competition TCSC was shot to fame via the Google Chrome television advert, broadcast on television, online and radio.
This could happen to a multitude of brands leaving TCSC at risk if they do not develop their own marketing campaign or product succession strategy as laid out in this report.
Page 4
Boston Matrix
Question Marks: Products with low market share operating in high growth markets. For example the ‘for him’ range of TCSC ha potential but needs investment to increase the market share. Dogs: Products with a low market share in low-growth markets. These items generate enough cash to breakeven, but are not worth investment. Like the trunk they are left to simmer in order not to alienate any clientele or are closed as soon as they make a loss.
Cash Cows: These are mature and successful low-growth products with a high market share. They need to be managed for continued profit but do not need investment.
Stars: These high growth products compete in markets with good competition. They need heavy investment to sustain growth. Eventually growth will reach decline in the product life cycle. If they maintain their market share,
Stars will become Cash Cows.
GE Matrix
Similar to the BCG, the GE matrix assesses the product portfolio of a brand and help allocate investment. However
Market
Attractiveness replaces market growth and
Competitive Strength replaces market share to represent a more accurate analysis of a product portfolio. According to the GE Matrix to the left items with high market attractiveness are worth investing in. In terms of TCSC this would include; ‘The Chelsea’ range, men’s products and leather accessories.
Page 5
Objectives
As a team the ‘Tiger-Eye’ marketing consultancy team fashioned five objectives that could have been used to promote and develop the new product we proposed for TCSC. As you have seen in the body of this report the author has chosen to generate a detailed marketing plan for two objectives in particular. Below are the remaining objectives mentioned in the presentation, should they be viable to undertake in the future.
1. Complete a pilot test to Increase Unit Sales in Asia within a 3 month test, using the new purse as the motive behind a full brand launch. Despite TCSC having a global market due to its E-Commerce and shipping capabilities, there is no specific retail structure within the Asian continent. As a result one objective was to increase unit sales within Asia, initially with a research investment of £200000 into the established World
City* of Tokyo. The first quandary was identifying the correct city to invest in first, due to the concentration of eligible developing cities within the Asian continent like Mumbai, Shanghai and Beijing. The objective takes into account the launch of the overall brand and not just the new product, being the purse. However this does not limit the brand as by going into a new market it allows them to tailor their image to be accepted in Asian culture.
2. To increase upselling on the e-commerce site by having suggested products when you select a product to purchase. Although the current website does make suggestions these are just too unspecific ranges on the website. The revamped upselling will strategically place the suggested items next to the item being viewed.
This will also look to increase the price of the sale
3. Research the business over the next 6 months to identify the key items in the product portfolio, can we identify a true star and are there any items that can be cut to streamline the business. Can we reduce the product portfolio by ceasing production on items not returning large profits to concentrate on new products such as the purse.
Page 6
References and Bibliography
Benady, D (2013) How marketers use Pinterest and Instagram to win customers
Available: http://www.theguardian.com/technology/2013/dec/04/how-marketers-use-pinterest-and-instagram-towin-customers
Last accessed: 4th December 2013
CIPD (2013) PESTEL http://www.cipd.co.uk/hr-resources/factsheets/pestle-analysis.aspx Last accessed: 14th November 2013
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Page 7
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Page 8
The Cambridge Satchel Company
BUSINESS PLAN FOR THE CAMBRIDGE SATCHEL
COMPANY PRODUCT EXTENSION STRATEGY
Utilising five SMART objectives this report will cover the initial product extension strategy and release of a new product to increase the current product range at The Cambridge Satchel Company. Word Count - 1650
Contents
Glossary of Terms and Abbreviations ............................................................................................................................... 2
Introduction ...................................................................................................................................................................... 3
Objectives.......................................................................................................................................................................... …show more content…
4
Strategies .......................................................................................................................................................................... 5
Strategy 1.1 ................................................................................................................................................................... 5
Strategy 1.2 ................................................................................................................................................................... 5
Strategy 2.1 ................................................................................................................................................................... 6
Strategy 2.2 ................................................................................................................................................................... 6
Tactics ............................................................................................................................................................................... 7
Tactic 1.1 ....................................................................................................................................................................... 7
Tactic 1.2 ....................................................................................................................................................................... 7
Tactic 2.1 ....................................................................................................................................................................... 8
Tactic 2.2 ....................................................................................................................................................................... 8
Conclusion ................................................................................................................................................................. 8
Action and Control ............................................................................................................................................................ 0
Pert Analysis .................................................................................................................................................................. 0
Appendix ........................................................................................................................................................................... 0
Situational Analysis ....................................................................................................................................................... 0
Mission Statement .................................................................................................................................................... 0
SWOT Analysis........................................................................................................................................................... 1
Ansoff’s Matrix .......................................................................................................................................................... 2
Background Analysis – PESTEL .................................................................................................................................. 3
Competitive Threats – Porter’s 5 Forces................................................................................................................... 4
Boston Matrix............................................................................................................................................................ 5
GE Matrix .................................................................................................................................................................. 5
Objectives...................................................................................................................................................................... 6
References and Bibliography ........................................................................................................................................ 7
Page 1
Glossary of Terms and Abbreviations
Ansoff’s Matrix - A graphical tool designed to assist by offering four alternative marketing strategies, comparing whether the products are new or existing and correlating it alongside if the market is new or existing. There are four sections; Market
Penetration (Lowest Risk) Market Expansion (Medium Risk) Product Expansion (Medium Risk) and Diversification (High Risk)
Borrowed Interest - Borrowed interest is the intentional association of an unrelated theme, event or image with a product, service or subject being presented, to attract attention otherwise not anticipated. In terms of TCSC it refers to how the logo of the bike relates to the City of Cambridge and what is known very well for. Furthermore Cambridge University is recognised as one of the most prestigious learning institutes in the world making the products of TCSC easily recognisable.
Boston Matrix (BCG) – analyses the product portfolio of a brand by segmenting into one of four different areas, based on:
Market Share (low or high market share?) and the Market Growth – are potential (customers increasing?)
GE Matrix – Similar to the BCG, Market Attractiveness replaces market growth and Competitive Strength replaces market share to represent a more accurate analysis of a product portfolio.
Gross Domestic Product - GDP - The market value of all officially recognised final goods and services produced within a country in a given period of time.
Gross National Product - GNP- The market value of all the products and services produced in one year by labour and property supplied by the residents of a country.
PESTEL – First coined by Francis Aguilar in his 1967 book “Scanning the Business Environment” a PESTLE analysis is an audit of an organisation 's environmental influences with the purpose of using this information to guide strategic decision-making.
CIPD
(2013)
PERT Analysis (CPA) - Helps to plan all tasks that must be completed as part of a project, including scheduling and resource planning. They also allow you to monitor project goals and assess where remedial action is needed.
Penetration Pricing - As stated by Riley (2012) Penetration pricing is the pricing technique of setting a relatively low initial entry price, and is often used to support the launch of a new product, to attract new customers.
Premium Pricing - As stated by Magloff (2012) Premium Pricing identifies the demographic that are willing to pay above the norm to feel they are getting a more exclusive product. Premium Pricing is used to maximise profit where there are no substitutes for the product.
Porter’s 5 Forces - This can identify the strength of your current competitive position, and the strength of a position you 're considering moving into alongside identify the competitive threats within the …show more content…
market.
Positioning Map - Illustrates on a graph the comparison between like brands, by marking them according to their price and perceived quality.
PPC - Pay Per Click, a method in making your site more visible online
SEO - Search Engine Optimisation, a method to make your site more visible through search engines
SMART - Specific, Measurable, Achievable, Realistic, Time Bound
SOSTAC - Situational Analysis, Objectives, Strategies, Tactics, Actions, Control
SWOT - A method of analysing a company’s strengths and weaknesses through an internal audit while comparing it to the external factors of opportunities and threats that are present within in the macro environment.
TCSC - The Cambridge Satchel Company
USP - Unique Selling Point
World City - A global city, generally considered to be an important node in the global economic system.
Page 2
Introduction
This report will assess and evaluate the progression and direction ‘The Cambridge Satchel Company’ (TCSC)* plans to take over the business period 2014-2015. This report will summarise the marketing plan and will cover the aspects needed to introduce a purse into the company’s current product portfolio, delivering two recommendations; highly recommended and recommended using a SOSTAC* model.
In a nut shell the presentation covered TCSC’s current market position and identified, through a SWOT analysis how internally TCSC possesses a sound business model with the ability to convert new diverse product ideas into sales. It also identified that the fashion industry is rapidly developing market with a high turnover of trends that need to be capitilised on to give brand longevity. The PESTEL analysis was used to plan for future events and as an overall industry background analysis of how external factors will affect TCSC’s progression. 145
Page 3
Objectives
Highly Recommended - Objective 1
Have the purse as a web exclusive item, available worldwide for a limited six months before assessing its viability for sustained production, in order to identify the product as a future success. The aim is to sell 6000 units globally within the time period.
Recommended – Objective 2
To be top result on Google within a 3 month period for the terms
Cambridge, Purse and Satchel using SEO and PPC in a bid to increase website traffic and therefore sales.
As agreed in the previous meeting the decision to develop two objectives on a basis of highly recommended and recommended will be discussed in this report. The appendix will outline the objectives discussed in the presentation but not progressed in the report. 42
Figure 1. Emma Stone (potential brand ambassador) with her Cambridge Satchel – The Chelsea. Google Images 2013
Page 4
Strategies
Highly Recommended – Strategy 1
Recommended – Strategy 2
1.1 – Utilise Social Media to advertise the web exclusive item, like
Pintrest to TCSC’s website, in a bid to get to 6000 units sold.
1.2 – Gain recognition for the brand by gaining the cover of Vogue magazine. Somebody like Emma Stone will increase brand profile and reinforce the fact it will be online exclusive.
2.1 – Utilise SEO to increase brand presence online and increase circulation of name.
2.2 – Use PPC to Purchase the sponsored links on top of the page again to be the first results potential customers see and to create as a combination the ability to increase sales and traffic to the website.
Strategy 1.1
Topshop recently collaborated with site Pinterest, in November 2013, to encourage shoppers to ‘Pin’ their favourite products to the pinboard in order to show their products in the real world, Benady, D (2013). Unlike other social media sites, Pinterest is as a tool to help facilitate future planning, it has 53 million monthly unique users globally and is establishing an operation in the UK where it had some 2.6m unique users in October 2013, about 1.5 million females (the base of the brands target market) and over a million males, according to Comscore MMX. In comparison Facebook is mainly for posting about what has occurred and Twitter shows what is happening.
As identified in the presentation brands like Topshop can be recognised as both a competitive rival and a threat of substitution, when undertaking a Porter’s 5 forces analysis*. Topshop can offer a similar product at a lower price and has a larger reach due to it being a high street brand. Furthermore when dissecting what social class the brand attracts it ranges from A to D where TCSC is attracting more the A to B demographic. When looking at the positioning map* the high quality product of TCSC is encroaching into the territory of Radley, Burberry and other premium fashion accessory brands. As result it would be wise for TCSC to capitalise on a proven model such as social media marketing to drive traffic to the website. 238
Strategy 1.2
Emma Stone has been widely photographed carrying TCSC products and has been documented in today’s entertainment culture she has become a globally recognised superstar, as stated by Crotty (2013) she has been on three magazine covers this month, including Vogue. As of current she is not endorsed by any brands, if possible it would be an ideal situation to recruit Emma Stone to TCSC and have her become a brand ambassador to be seen with the new purse. This would encompass the theory of borrowed interest as fans of her would go on to research
TCSC and hopefully continue to purchase the new purse, alongside targeting a wide demographic of consumers that is not necessarily tapped into by competing brands. When you look at the positioning map* TCSC is in a unique position where it can balance being a quality product, with a premium price whilst being accessible to a diverse target market by releasing a purse that will be more affordable that its other products. 166
Page 5
Strategy 2.1
SEO is best increased through the integration and promotion of core content within the current website. By making the consumer’s interaction with the site seamless, there are fewer steps to find contact details, register, or to complete a sale which can relate to a higher success rate. By encouraging reviews it directs the traffic to the website and can cause a buzz on blogs and increases presence on social media; however it is vital to maintain a balance to allow customers to use whichever medium they are comfortable with. Furthermore social media increases the number of places your customers can leave reviews on and it will be exposed more organic views, resulting in referrals. 114
Strategy 2.2
PPC is a viable strategy as it requires a small initial investment as it is as it sounds, you pay per click, this is a benefit as it allows you to adapt your budget to your sales goals. Due to the nature of PPC ads, if TCSC was to pay the higher fee then top placement is won instantly, resulting in faster results than with organic SEO methods. There is also the ability to track the progress of PPC to maintain that it is as effective and efficient as possible by tracking keyword and phrase successes to identify what causes the most traffic and more importantly the conversion of advertisement to sales in a bid to ensure the PPC method is operating at maximum levels. Furthermore like SEO you can guarantee national exposure and with an already known brand like TCSC, which shot to fame in the Google Chrome advertisement, can reach the vast majority of Internet users. In truth there are a vast amount of benefits to how PPC can be applied, and the method in which TCSC can achieve this will be conveyed in Tactic 2.2. 188
Figure 2. The current search results on Google when
“The Cambridge Satchel Company” is searched.
Page 6
Tactics
Highly Recommended – Tactic 1
Recommended – Tactic 2
1.1 – Encourage followers to share pictures of them with their products with an incentive for the most likes and shares, meaning the brand name will be circulated more.
1.2 – Have Emma Stone share a talk about her own TCSC products what she likes about them and push customers to the website.
2.1 – Embed the wording into the brands website and use consistently on all linked social media in order for the brand to benefit from SEO?
2.2 – Identify if PPC is sustainable and to what capacity it is effective at achieving the objective.
Tactic 1.1
A tactic to implement strategy 1.1 could be the method of penetration into the new market, by using Ansoff’s Matrix to analyse the risk, expanding into a new market is considered as a medium risk and to increase the chances of success a promotion would be best advised. Godwin (2013) states “85% of consumers are tempted by buy-one-getone-free offers and similar promotions” while this applied to items within a supermarket retail environment they can be disguised as lost-leaders* however this method of promotion is not possible with TCSC,
By looping back to social media, a competition could be created for people who purchased the new product. For the chance to win any product within the TCSC product portfolio the consumer would post a photo of themselves with the new purse on a social media platform and whoever gets the most shares and likes wins the prize. This is effectively free marketing by viral advertisement and word of mouth all for the cost of one product. 165
Tactic 1.2
To get a cover of a prestigious magazine you need an iconic ambassador, as mentioned previously Emma stone is just that in the making. In order to utilise Emma Stone effectively she needs to be seen regularly in magazines using her
TCSC purse, although not necessarily on the cover of industry leading publications such as Vogue. However to increase the brand profile, for her to go on record with a publication such as Vogue and discuss TCSC product portfolio would be beneficial to the brand. To justify a premium pricing strategy you only have to look at what Magloff, L (2013) states, “in an attempt to skim the cream of the market” for example TCSC would use their USP, how the product is handmade and the factor of British design alongside the power of being endorsed by a global celebrity. By being involved with quality publications such as
Vogue this is reinforced. 173
Figure 3. Emma Stone (potential brand ambassador) on the cover of
(left to right) Vogue, Summer and Teen Vogue. Fashionista (2013)
Page 7
Tactic 2.1
The reasoning behind SEO is to build a reputation among customers; it is through this channel that the brand name becomes more visible on search engines such as Google and Bing. The objective for TCSC is within three months to become the most relevant returned result for the words Cambridge, Purse and Satchel. In agreement with Hibu
(2013) what this does is broaden awareness in new market sectors or new geographical areas, which is highly relevant in the case of launching a new product such as the purse. Furthermore it leads to increased public awareness of product features and benefits; coincidently within the fashion market allows the brand to react to the rapidly adapting macro environment. When you look at the GE Matrix*, which depicts the need for investment by comparing market attractiveness to unit strength. In terms of TCSC the matrix can be applied to a relevant product within the portfolio to identify if it needs an injection of investment or not to increase sales. 161
Tactic 2.2
Converting traffic into a transaction is the measure of a successful PPC campaign Opentracker (2013). By achieving
‘Quality’ traffic refers to the return of consumers that are looking for what you are advertising and then proceed to enter the site, browse and ultimately complete a transaction. It is at this point that e-crm becomes a requirement, in order to ensure repeat business and potentially recommend the brand or the purse, especially through social media.
Using Clickstream analysis, you can identify what clients do on your site once the page loads, this information is necessary to manage your advertising, and determine the best ways to maintain the level of quality traffic, of which are converted and ultimately increased revenue. 118
Conclusion
Did having the purse as a web exclusive item create the desired attraction? Was Emma Stone a suitable and relevant ambassador that resulted in sales? These are the questions that would determine if the objective was successful.
Furthermore did TCSC reach the desired 6000 unit sales of the new purse within 6 months? Of course over the 6 month period there would have been a weekly recollection of sales to identify if the objective was proceeding as expected and if it was not, by doing weekly reports it allows TCSC to review the objective and modify it if necessary.
In summary this report, by ‘Tiger-Eye’ marketing consultancy, has implemented an achievable marketing plan that has encompassed specific elements with measurable features that will result in a successful launch of the new purse by providing both a highly recommended and a recommended solution, that are defined by a realistic time scale and realistic ideologies. The appendix does include the Situational Analysis that was presented along with detailed illustrations of models mentioned throughout the report. 173
Page 8
Action and Control
In order to fulfil the objective of launching the purse as an online exclusive for 6 months TCSC must have an appropriate infrastructure to handle the increased traffic to the web site and systems in place to be able to comprehend with orders and ensure the delivery of the product is seamless. Relationships must be made with both buyers and suppliers so both have equal power to ensure the supply chain is reliable. Below is a
Pert Analysis Diagram which will represent the Action and Control element of SOSTAC, for both the highly recommended and recommended objective.
The table to the right identifies the tasks to be undertaken throughout the
SOSTAC while the CPA diagram below will graphically display the chosen route. 122
Pert Analysis
A
1 Week
B
C
3 Weeks
Sequence
D
E
13 Weeks
F
G
5 Weeks
Parallel
H
I
2 Weeks
J
K
1 Week
Critical Path = 26 Weeks
L
M
N
1 Week
Earliest Start
Length
Type
Dependent on Week 1
1 week
Sequence
A
Week 1
1 Week
Sequence
A
Week 2
3 weeks
Parallel
B
Week 3
4 Weeks
Sequence
B
Week 3
4 Weeks
Parallel
B
Week 5
3 Weeks
Parallel
C
Week 6
2 Weeks
Sequence
D
Week 8
2 Weeks
Parallel
C&F
Week 10
1 Week
Sequence
B
J- Has Emma Stone benefited the brand?
Week 14
2 Weeks
Parallel
H
K- Calculate sales so far
Week 20
1 Week
Parallel
All
Week 21
2 Weeks
Sequence
K
Week 25
1 Week
Sequence
L
Week 26
1 Week
Sequence
M
Task
A– Start, Identify two sustainable objectives B– Define Objectives and Identify objective to highly recommend
C– Correspond with proposed ambassadors representatives
D– Utilise Social Media to advertise the web exclusive item
E– Start incorporating SEO into all media interfaces and initiate PPC
F– Discuss gaining the cover of Vogue magazine for TCSC and Emma Stone
G– Encourage followers to share pictures and increase Social Media Interaction
H– Have Emma Stone share a talk about her own TCSC products
I- Has SEO increased traffic to website, does PPC complement this.
L- Does having a web exclusive product take sales from the stores?
M- Have we sold 6000 units over six months to justify full product release
N- Feedback and review to project manager and reassess situation
This CPA maps out the marketing plan for TCSC. As the plan is undertaken it maps out what actions have been undertaken when and allows us to assess the plan at any stage to ensure it is delivering the desired effect. Like in any plan there is a review at the end of the six months to asses if the objectives achieved their goals.
Appendix
Situational Analysis
The presentation delivered on behalf of ‘Tiger-Eye’ marketing consultancy team concentrated on the Situational
Analysis of ‘The Cambridge Satchel Company’ and its current market position whilst outlining the objectives for an oncoming marketing campaign. The Situational Analysis serves as the foundations in which you can tailor your objectives and complete an effect marketing planning model (SOSTAC).
TCSC specialise in producing traditional handmade leather bags. Founded in 2008 with a £600 budget, has now progressed to an estimated annual turnover of £12million. Originally they made 3 Satchels per week 2008 and now make 15,000 per week. As a brand they have 51919 Facebook ‘Likes’ and amassed 21831 Twitter followers. In terms of their target market they aim to recruit social class C1, B & A with 88% of that clientele being women. Furthermore
Woman ages 25-34 are most likely to save up to buy one handbag they really want (Mintel 2012) According to telegraph.co.uk – “The beauty of it is it can be worn by anyone – any age with any style," Deane says. "It is evocative of the traditional satchel and brings back fond memories for many of our customers.”
In terms of identifying suitable retailers, the ideal collaborators would include developed brands such as John Lewis,
Asos and Selfridges. Events such as London Fashion Week can produce collaborations with high end designers such as Chris Benz and Vivienne Westwood, which can increase the brands profile. As a market the handbags sector increased by 104% between 2007 and 2012, with the Fashion industry as a whole worth £21bn to Britain 's economy.
A survey by Mintel(2012) dictated how 6/10 people who have purchased accessories in the past 12 months state that they would rather invest in a high quality products which will last with the accessories market set to be looking to increase by 9% in 2013.
Mission Statement
As a brand TCSC is committed to UK Manufacturing, creating new jobs in UK factories, so people can purchase the bags knowing that they are supporting business trade and manufacturing. The brand is to stay as a home grown, family run business with designs that stay true to the values of English heritage designs. Even though the brand is looking to diversify and cement its market position as a luxury fashion accessory brand it will not compromise the quality of the leather or the handmade product to increase production.
SWOT Analysis
Strengths
The Cambridge Satchel Company has many assets, for example there is a portfolio of celebrities, both male and female, that own a TCSC bag or accessory and is regularly seen wearing them due to their practicality. This has vastly enhanced the brands recognition, fashion icons such as Alexa Cheung, Fern Cotton, Elle Fanning and Rita Ora are all fans of the brand. Prominent fashion bloggers praise the products and company showing potential to high end fashion magazines – keeping bloggers interested in the product as they have become very influential. Furthermore the product is handmade in the UK using high quality leather giving the brand a noticeable standpoint and marketable feature.
Weaknesses
Unfortunately as with all businesses there are some weaknesses, which are yet to be converted into strengths. There is a limited range of products, which could limit the potential of repeat buyers. However it is for this reason we are proposing the extension strategy with the new purse.
As a result each customer is only likely to purchase one item from the Company therefore they need to be aware of who they can target within the future. Furthermore as stated in the report, the Fashion Industry is a very competitive market therefore customers have so much choice of other alternatives should they be put off due to factors such as price and hence why we are now creating a purse as it can be entered at a low price point.
Opportunities
The brand is already marketed and sold worldwide, in high end department stores and via their own website. It could be an option to expand operations abroad and set up pop-up shops in developing markets such as China,
Japan and India. Furthermore there is always the option to increase distribution to more high streets as well, without cheapening the brand, for example in the UK utilising the network of John Lewis and Debenhams. The technology market, like the fashion industry is a very fast paced environment, with products experiencing a short life-cycle, this could become an opportunity to reveal a luxury leather ‘techwear’ line that match the existing product ranges. All of this must be achieved by not alienating the male demographic, and as a result there is the potential to
release wallets, laptop cases and man-bags of similar classic design, the current range is already popular with the members of One Direction.
Threats
Due to a pricing structure ranging between £100 and £150 (asos.com 2012?) it targets a set demographic limiting the clientele to those with a disposable income to afford the product. This makes it vulnerable to high street fashion brands like Topshop and River Island who make like products but with a more effective pricing structure, and yet maintaining a desirable brand name. It is these threats that must be turned into affective opportunities. Is it possible to create a lookalike product in a cheaper material? Even if it was, there is the risk that this can cheapen the brand and take away the brand’s current USP.
Page 1
Ansoff’s Matrix
Existing Products
New Products
Market Penetration
Providing a loyalty scheme to encourage repeat customers.
Introduce a special offer to customers including new and old.
Existing Markets
Product Development
all
Provide free delivery on their website for UK customers.
Extend distributers to other high end high street retail stores to allow reputation to remain high but reach a wider geographical market.
Expand on male demographics advertising. CSC are planning on launching a men’s range in Winter 2013
‘Anniversary’ collection of bags to be introduced in collaboration with
Vivienne Westwood.
Market Development
New Markets
Taking on a bigger distribution property to allow flexibility in producing more products.
Introduce new products which can still be related to the core products. Such as introducing men’s laptop cases, similar accessories. Expand the range of personalisation, added embroidery, new colours, individual logos
Expand on different types of satchels suitable for nights out. E.g. Clutch bags, rather than aiming at universities and daytime.
Collaboration with designed Chris Benz to create limited edition satchels.
Collaboration with Viviane Westwood
Diversification
Create a sister company for clothing?
Come away from USP of using leather to make a more affordable product
Move into the Asian market, not just for online sales.
Market Penetration – Low Risk as it is taking an existing product into an already existing market so it is noted that the clientele and demand is already there. This would be taking a current TCSC satchel into the market but using an aggressive pricing strategy to undercut the rivals.
Market Development – This is Medium Risk as it is taking an existing product into a market that has not experienced it before. For example, even though TCSC is sold abroad via online, it does not have a physic presence in Asia. A brand launch in a city like Tokyo, Beijing or Mumbai would be subject to a pilot test.
Product Development – This is Medium Risk as there is a chance of alienating devoted and loyal fans of the brand. It encompasses operating in the same market but varying the product, may it be targeting a new demographic or creating a new image.
Diversification – The Highest Risk stage, this encompasses going away from the brand’s tradition values and mission. This can include radical plans to alter the structure of the company or to alter the brands USP. In TCSC’s case using none leather to yield products to make it more affordable.
Page 2
Background Analysis – PESTEL
First coined by Francis Aguilar in his 1967 book “Scanning the Business Environment” a PESTLE analysis is an audit of an organisation 's environmental influences with the purpose of using this information to guide strategic decision-making. CIPD
(2013) A PESTEL analysis takes into account the factors within the MACRO business environment and questions how
this will affect the brand.
Political
- Future sourcing of leather
- Maintaining all manufacturing and resources are available in the UK to retain employment within the UK
- Ensuring that it is ethically sourced possibility of offsetting the price of leather by providing a sort after replacement Environmental
- PETA – pressure from organisations intent on maintaining ethical and responsible methods of harvesting leather. - The production of leather is impacting on the environment, does TCSC have a corporate social responsibility agenda to give back to the environment
Social
- Demographic – inelastic pricing therefore demographics do not affect the pricing of products produced by
The Cambridge Satchel Company.
- The target market that TCSC is aiming to recruit, is it a constant market? Do the changing economic situations alter the structure of the demographic TCSC is tailored to reach.
- Is there a way of reaching a broader spectrum of the countries female and male demographics without compromising the brand
Technological
- E-Commerce - The Cambridge Satchel Company is unlikely to pass savings onto consumers.
- Is there a way to update factory machinery as products are handmade?
- Will there be a time that heritage must be sacrificed to increase efficiency of product.
- In aspect to the technology industry, looking at other leather goods brands such as Osprey, Radley, and
Burberry, who are branching into the fast changing techwear industry. Is this an avenue TCSC should be perusing. Economical
- Inflation – the product is high end and reliant on leather, due to inelastic pricing this is unlikely to influence products sold, however TCSC will need to ensure they have good supplier relationships to provide material through extranet SharePoint 's.
Legal
-
-
Trading standards – ensuring there is a responsible refunding policy to ensure customers with a ‘bad experience’ do not bad mouth the company and will be likely to repurchase with The Cambridge Satchel
Company
BSI and ISO standards, does the product conform to trading standards
Page 3
Competitive Threats – Porter’s 5 Forces
Supplier Power
-
As TCSC offer good quality leather, they are able to inflate their prices if their suppliers increase their costs.
Should the leather industry become an Oligopoly it can lead to hyper-competition and an increase in pricing.
Suppliers know TCSC is reliant on leather meaning if TCSC are naive not to have an array of vendors it can lead to them being priced out of contention.
Buyer Power
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Several large brands are retailing satchels giving them more choice selection. However there is only one
TCSC
By developing a strong supply chain with multiple vendors it gives TCSC more control should one supplier choose to increase the price of leather
In a bid to assure the quality of leather is always 100% TCSC buy in such quantities their suppliers cannot afford to make mistakes and compromise on quality.
Competitive Rivalry
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High street brands such as Topshop are undercutting TCSC by making replicas.
This may make them lose some clients to some competitors in cost over quality
Other brands like zatchels.co.uk are offering similar products but do not offer the perceived quality of TCSC, it is the borrowed interest of Cambridge that despite the company being founded only in 2008 allows the company to own a certain heritage.
Threat of Substitution
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Fake /cheaper leather can be used to create similar style bags where cost can attract some customers that may have purchased from TCSC
In an economic climate where luxury goods are being alienated from social classes under A-B it can lead to competitors benefiting from TCSC’s inelastic pricing structure and reliance on their brand mission to prevent them from tailoring their product portfolio to the wider market.
Threat of New entry
-
Rival and up and coming companies may jump on the back of how successful TCSC is. This could lead to hyper-competition TCSC was shot to fame via the Google Chrome television advert, broadcast on television, online and radio.
This could happen to a multitude of brands leaving TCSC at risk if they do not develop their own marketing campaign or product succession strategy as laid out in this report.
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Boston Matrix
Question Marks: Products with low market share operating in high growth markets. For example the ‘for him’ range of TCSC ha potential but needs investment to increase the market share. Dogs: Products with a low market share in low-growth markets. These items generate enough cash to breakeven, but are not worth investment. Like the trunk they are left to simmer in order not to alienate any clientele or are closed as soon as they make a loss.
Cash Cows: These are mature and successful low-growth products with a high market share. They need to be managed for continued profit but do not need investment.
Stars: These high growth products compete in markets with good competition. They need heavy investment to sustain growth. Eventually growth will reach decline in the product life cycle. If they maintain their market share,
Stars will become Cash Cows.
GE Matrix
Similar to the BCG, the GE matrix assesses the product portfolio of a brand and help allocate investment. However
Market
Attractiveness replaces market growth and
Competitive Strength replaces market share to represent a more accurate analysis of a product portfolio. According to the GE Matrix to the left items with high market attractiveness are worth investing in. In terms of TCSC this would include; ‘The Chelsea’ range, men’s products and leather accessories.
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Objectives
As a team the ‘Tiger-Eye’ marketing consultancy team fashioned five objectives that could have been used to promote and develop the new product we proposed for TCSC. As you have seen in the body of this report the author has chosen to generate a detailed marketing plan for two objectives in particular. Below are the remaining objectives mentioned in the presentation, should they be viable to undertake in the future.
1. Complete a pilot test to Increase Unit Sales in Asia within a 3 month test, using the new purse as the motive behind a full brand launch. Despite TCSC having a global market due to its E-Commerce and shipping capabilities, there is no specific retail structure within the Asian continent. As a result one objective was to increase unit sales within Asia, initially with a research investment of £200000 into the established World
City* of Tokyo. The first quandary was identifying the correct city to invest in first, due to the concentration of eligible developing cities within the Asian continent like Mumbai, Shanghai and Beijing. The objective takes into account the launch of the overall brand and not just the new product, being the purse. However this does not limit the brand as by going into a new market it allows them to tailor their image to be accepted in Asian culture.
2. To increase upselling on the e-commerce site by having suggested products when you select a product to purchase. Although the current website does make suggestions these are just too unspecific ranges on the website. The revamped upselling will strategically place the suggested items next to the item being viewed.
This will also look to increase the price of the sale
3. Research the business over the next 6 months to identify the key items in the product portfolio, can we identify a true star and are there any items that can be cut to streamline the business. Can we reduce the product portfolio by ceasing production on items not returning large profits to concentrate on new products such as the purse.
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