Mimco Marketing Mix free essay sample

The following document will outline potiential new business opportunites for Mimco and also investigate what the objectives are of these opportunites and what stragagies will be implemented to generate sales and revenue growth. 1. 0 Mimco Environmental Analysis 1. 1 External Macro Influences Marketing Environment Category| Specific Trend, Change or Event| Monitoring Information Source| Demography| More women are choosing careers over family, therefore they have more disposable income. The median age for women to get married today is 28, which means there are many young women in Australia with a significant disposable income to spend on them selves. | www. abs. gov. au | Economic Conditions| Consumer spending appears to have turned the corner following the strongest monthly growth in sales in 18 months, according to the latest Commonwealth Bank Business Sales Indicator (BSI). Mimco is considered a shopping good, therefore sales can be influence by interest rates, unemployment rates, rate of the Australia dollar. The stage of the business cycle, the economy is moving from rescission to recovery. We will write a custom essay sample on Mimco Marketing Mix or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Mimco ‘s CEO, Iain Nairn, has previously discussed the importance between balancing cash flow in and out of the business very closely with sales retails figures. In tougher economic climates where sales have been forecasted lower, Narin has managed this by reducing orders and production costs during this period. | Internal reports, Income Statements, Balance Sheets, Profit Loss Statement, Sales data. External sources, Retail Trend Data, Financial Figures, Market Trend Data. www. abs. gov. au| Competition | In fashion, it is all about brand and product; hundreds of billions of dollars are spent each and every year in the fashion industry. Indirect competition from every other firm trying to win the customers purchasing power. Monopolistic competition – many competitors, Mimco’s product is differentiated by quality and brand, predominately has control over the price, easy to enter into the market. | External Share Market reportsInternal Share Market Market Growth metrics| Social Cultural Forces| Being a fashion accessory Mimco leverages off consumers who are happy to spend their income on experiential goods and services such as personal appearance products, and those consumer who live for today rather than prepare for tomorrow. Significant factor to its target market is that well over half of all women are now in the workforce therefore they also have different needs; women working outside of the home have different needs for clothing from those working at home. Impulse buying trends may also have an effect on Mimco’s market as they attract customers with sales promotions through their websites, placing limited time only promotions on to encourage fast purchase decisions. The economy has influenced impulse buying, there appears to be a new trend were it is more socially acceptable to be seen saving money rather than spend it. | External Reports highlighting were consumers are spending their money. Internal Surveys through on line website members| Political Legal Forces| Monetrary and fiscal policies can have a major influence on the spending trends of consumer, particular in the fashion industry as fashion products are generally classed as shopping goods rather and convenience goods. More recently as the Australia dollar increased so did on line shopping for overseas products, this triggered debate as to whether GST should be imposed on line shopping. This would impact Mimco as they have an online shopping presence. | www. ato. gov. au | Technology| The digital economy affects everybody, particularly retail, retailers will need to adapt to the new environment of the rapidly expending trend of on line shopping. In early 2011 about 25% of mobile users are shopping online with their mobile, eBay reported an item is bought from a mobile every 15 seconds. The online economy is booming for some online markets with revenues increasing by up to 40% during 2010. Mimco have established them selves in the digital market, their full product range is available on line. It is evident from the above figures that this is a trend which will continue to grow| Research in to other online retails methods and systemsIT business for advice on best operating systems Online data trend reports| 1. 2 External Micro Environment As any other competitive business, Mimco actively monitors the markets and adjusts the marketing mix to ensure efficiencies are achieved in managing their customers and competitors. Other factors to consider in the micro environment are suppliers and middleman. Mimco has a direct distribution channel from their supplier therefore do not need to consider marketing middleman, however would need to consider maintaining good relationships with business suppliers to ensure suppliers can meet the demand of production. 1. 2 The Internal Environment Equally important to monitoring the external environment, Mimco must manage the internal environment, usually involves managing the relationship between the marketing department and non marketing departments of the organisation. Mimco would have particularly drawn on these relationships at the time of planning to enter the British market 2008. Making a successful move into a new market requires the combined effort of sharing resources and information between internal groups such as marketing, finance, HR, research and development, and certainly many other factors would have been taken into consideration. 2. 0 SWOT Analysis Strengths * High quality product * Established brand equity * Unique distinguishable design * Direct distribution * Online store * Limited direct competitors | Weakness * Selective distribution * May be considered over priced * Rely mostly on PR and On line/In store sales promotion * Minimal approach to advertising| Opportunities * Winter Jeans line * Summer Swimwear line * Expansion into other Europe countries * Expand promotional method to include advertising * Leverage of brand equity * Sponsorship in fashion industry | Threats * Entry of new competitors * Indirect competition for consumers spending money * Economic condition * Maintaining the edge in fashion industry| 3. Ansoff’s Product-Market Growth Matrix Present Products New Products Option 1Marketpenetration| Option 2Product development| Option 3Marketdevelopment| Diversification| Present Market New Market Continued growth is the key to Nairn business strategy, he works on what he calls a â€Å"three horizon† s trategy, simultaneously looking after the core business, developing new initiatives in the  core business, and seeding future investments. The following 3 business opportunities each address one of Nairn â€Å"three horizon† business strategy, market penetration, product development and market development. 1. Expansion of Advertising channels (Market Penetration) 2. Winter Jeans range (Product Development) 3. Expansion into other European markets (Market Development) 3. 1 Expansion of Advertising channels Mimco have not previously invested heavily in advertising as part of their marketing mix, mostly relying on sales promotion through their retails stores and online store. The Mimco website displays an advertising campaign which is launched at the beginning of each season. As money is already being invested in featuring an online advertising campaign, this campaign could easily be translated into print media. The minimalist approach to advertising adds to the uniqueness of Mimco, however exploring options in the right print media could lift their product and brand exposure. Limiting print media to fashion savy magazines such as Vogue would ensure Mimco maintains their sense of individualism and avoid saturation the market with advertising. Engaging in advertising at the launch of each season could be an avenue to generate additional interest and increase sales. To run a single page spread in Vogue costs approx $12K and up to $20k for a double page. Vogue is a national distribution and also has international addition which could be used to drive consumers to the website for on line sales. 3. 2 Winter Jeans Range A jeans range would be an additional product to Mimco’s current product range of bags and accessories. The product would be classed as consumer shopping goods with a product life cycle being as long as the season it is relevant to, winter. The new product would carry the family brand name Mimco and would replicate the same level of high product quality and design as it Mimco bag range. Leveraging off the brand equity, the jeans range would also follow similar pricing goals as its bag range, sales orientated goals and using competition based pricing. Mimco would continue using the current distribution channel through stores and on line stores and perhaps consider introducing advertising to the promotional mix to coincide with the product launch each season. Having achieved success through their bag range it would appear Mimco have identified a successful target market, it would be to their advantage to continue working in the same target market and continue to position themselves by price and quality. Costs to consider would include working through the several steps associated with the new product development process, particularly high costs at the commercialisation stage of a new product. A company would not invest into new product unless there was reasonable belief that the product would generate sales and growth. 3. 3 Expansion into European markets Mimco have successfully expanded into overseas markets including Asia and Britain. Continued expansion into other European countries would further strengthen Mimco’s position as an internationally recognised brand in the wider international market. In very broad terms Mimco could consider replicating existing products, localising existing business systems in to a new market, and using the earlier mentioned marketing mix as a basis. Critical to investigating a new business venture is investing resources into researching to assess business viability in new market. Having previously moved into a new market, Mimco would need to again consider * The external macro and micro environment influences in new market * The internal environment – efficient coordination of resources and information * Cost of research and development Cost of setting up new operations * Capital investment and return on investment goals 3. 4 Comparing the 3 Business Opportunities 1. Expansion of Advertising channels (Market Penetration) 2. Winter Jeans range (Product Development) Foll owing the review of option 1 2, it would be beneficial to consider combining both options as one strategy. In the below table this combined strategy has been labelled on The BCG Matrix in the Question Marks quadrant by a red dot. This quadrant represents high market growth and low market share, however the future expectation of the proposed strategy is to shift from low to high market share and move down into Cash Cows quadrant. Launching a Winter Jeans Range into a fast growing fashion market, whilst also leveraging off Mimco’s strong brand, combining this with new advertising and existing sales promotional activities, there would be potential scope to move into the high end of market share. It would be difficult to achieve the Stars quadrant as this is usually occupied by the market leader. Using a combination of pricing, promotion and advertising should ensure the strategy does not slip into the Dogs quadrant, instead moving into the Cash Cows quadrant. This quadrant is representative of a more mature market and settled market, with the anticipation of the jean’s range being launched as a limited edition, season only items. 3. Expansion into other European markets (Market Development) Choosing this option, again the business would most likely be positioned in the Questions mark quadrant, with the future view to move into the Cash cow market. Moving into a new market there is an initial period were the business will not be generating profits immediately and are usually running at a loss to commence with, low market share is usually a trait at this time. As discussed earlier, the fashion market has a strong growth rate therefore making it an attractive market to work in to gain market share. Based on Mimco’s success in current markets and their successful move into Asian and British market, Mimco has the previous knowledge and experience in understanding what is required to successfully enter a new market. It would be predicted following a certain period of time Mimco would move into the Cash cow quadrant which reflects a stable market; the Cash cow quadrant is where Mimco is presently positioned in their present market The BCG Matrix Relative Market Share of SBU (Ratio) High Low Stars| ? ? ? Question Marks| Cash Cows| Dogs| High Market Growth Rate (% pa) Low 4. 0 The Proposal Implementing Winter Jeans Range New Advertising Channels 4. 1 Strategy The general strategy of the Jeans range would be to successfully replicate that sense of uniqueness and individualism that other Mimco products carry. The Jeans will carry the family brand name to ensure the jeans prompt brand recognition through quality and style which Mimco represents. The key would be to leverage off Mimco’s existing market share and continue to work in the current target market. 4. 2 Product The Mimco Jeans range would reflect the characteristics of the current Mimco bag range, the jeans would be * A stylish fashion item, the design would reflect the winter trends in for the season * Made from quality denim fabric * The Jeans would be identifiable by ‘the button’ on the back pockets of the jeans; this would replicate ‘the button’ which is identifiable on Mimco’s bag. 4. 3 Product Life Cycle The jeans would have a short product life cycle and would only be available throughout the winter season. Each winter a new style/design/range of jeans will be released, no old season product will be carried over to next winter season, planned obsolescence strategy. The motive for implementing limited availability of the product is to create a sense of ‘uniqueness’ to those consumers who purchase them and they will also know that there jeans will not be replicated in the future. 4. 4 Pricing The jeans would be priced to reflect the products * Good quality * Stylishness * Value of the Mimco brand The higher end of Mimco’s bag range start from $300 to $500 dollar per bag. Other brand jeans in the market who carry good quality brand names also sell in this dollar range. Mimco jeans would be priced in this range also. Profit orientated pricing goal would be used to achieve a target return on sales and to maximise profits in the short term. The reason for this strategy is due to the seasonal release of the product, Mimco would be seeking to make a return on investment in that particular season. Alternatively Mimco could initially implement Sale Orientated pricing goal until the product is well established, then change to profit driven pricing, however this would mean earning less than maximum profits under sales orientated pricing. 4. 5 Distribution Mimco presently had an optimal distribution channel, with it being virtually direct to their retails stores or to their online shoppers. This efficient distribution channel certainly assists in getting their product into the consumer hands as soon as possible; there are no middlemen or intermediaries Present distribution channels * Mimco stores * David Jones * Westfields * Online Store It is recommended they maintain the above channels to ensure do not saturate the market which could affect the image of their ‘unique’ brand. 4. 6 Promotional Mix * Personal Selling Mimco does not have a high demand for personal selling due to the selective distribution channel, most of their stock is carried by their own retail stores. For the small number of other retailer who do carry Mimco product such as DJ’s Westfields, there would be an initial introduction of the product to these stores through a sales representative. The sales rep should negotiation and reach agreement with the retailers regarding the details of how the jeans should be displayed, how much space and exposure should be given to the jeans to ensure maximum exposure of the product in store. The rep may also have advertising material to use in store which would material relating to the product launch campaign. * Advertising – Presently Mimco only launch their new season products through an online campaign on the website. With the anticipated launch of the new jeans range, Mimco could further invest in creating hype around the new product launch through their website and through their Facebook page. It is recommend Mimco introduce print media to their advertising channel, however keep it restricted to mediums which truly reflect the value of their brand for example, high end fashion magazine Australia Vogue. Vogue’s target audience is described as smart, stylish, females; 25 – 54 with high disposable incomes, this segment aligns with Mimco target market, and would be real opportunity to reach our target through the magazine. Print ads should be run to coincide with the launch of the new product. Mimco could consider placing images from the campaign launch on shop front windows; placing coordinated marketing material in store which blends with the current decor style of the store. The presence of the advertising in store should be keep to a minimal to ensure it keeps in line with its present ‘unintentional’ retail marketing technique * Sale Promotion – During the introduction phase of the new product it would not be recommended to offer sales promotion directly relating to the jeans as we do not want to ‘cheapen’ the image of the new product. If sales promotions are used, they could be implemented though the online channel where members who purchase a pair of jeans either on line or in store received a 10% discount on another Mimco product. Sale promotion could be used as a tool further into the season if jeans sales are not reaching sales targets or alternatively at the end of the season to ensure all stock of jeans are sold out. There should be no in store sales promotion on the jeans. * Publicity and PR – Following the launch of the jeans perhaps a feature article could be run along side and advertisement in Vogue mag azine, a double page feature. Mimco could develop a relationship with the charity organisation, Jeans for Jeans day and consider being a major sponsor of the day. 5. 0 Launching the Winter Jeans Range The launch of the jeans will be implemented through a coordinated marketing campaign using * Mimco Website – on line campaign * Print Media – Australian Vogue magazine * In store advertising The campaign would carry the same theme throughout all channels. The theme would carry the slogan * ‘Leg it to Mimco’, ‘Don’t run bare this winter’ * The tag lines would be placed on a picture of a woman’s bare legs running, in the back drop of a field or something that represents a ‘soul’ feeling, which would keep in sync with Mimco’s overall theme. The campaign would run in the month leading up to beginning of winter * At the commencement of winter the picture of the woman’s bare legs would change to her wearing the new Mimco jeans, clearly showin g the identifiable ‘button’ on the back pocket of the jeans. * The tag line would then change to ‘Leg it to Mimco’ ‘Be the first to try them’ 5. 1 Measuring Results Mimco could implement a number of metrics to measure the success of launching the jeans line and the value of investing into the advertising. Mimco would need to consider setting sales targets and profit targets based on achieving a return on investment. It would be essential to understand all the costs associated with the development and production on the new product and costs associated with launching the product. One method to measuring the ratio of Advertising expenses to Sales ratio, this is calculated by using the following formula. Advertising Spend ($) Advertising expense to sales ratio = ______________________ x 100 Total Sales ($) This measurement could be implemented at the end of the winter season; these figures could then be compared against the next season figures. In store sales can be measured using the below formula, this calculation can be used to measure stores individually and also all stores on a national level and include on line sales. Actual Sales ($ or units) Performance to target = _____________________________ x 100 Target Sales ($ or units) Gross profit on Sales Gross Profit Margin achieved = _________________________ x 100 Targeted gross profit ($) As the above formulas suggest Mimco could measure in either dollar value or in the number of jeans sold. Measuring in either dollars or sold number of units would still require an understanding of all cost associated with the product. Mimco’s Website supports online sales and have all their current products range on line available for purchase, the jeans would also be available for purchase on line. Monitoring the on line campaign launch can be measured through a number of methods including; * Validation – has the number of people who visited the website increased * Length of stay – average time spent on website Purchase rate of jeans – the proportion of visitors who click through to the campaign and subsequently make a purchase * Response rate – Mimco have a number of bloggers on site and also a Facebook page who generates discussion about Mimco products and re cent activities – monitor discussion relating to the launch of the campaign. * Presentation of discount coupons in store which are available to on line members only All the above measure are not exhaustive measure and cannot be 100% accurate however they can still be implemented as used as a informative tool for measuring and comparing activity from period to period. 6. 0 Conclusion In conclusion, restricting the launch and distribution of the jeans range in the winter season only could be a good way to test the real markets response to the jeans. If they are launched under the banner of ‘winter only’ product and the success of the jean are not as predicted, the exit strategy from the product would be quite simple and could be done with minimal damage to the brand. However when considering Mimco’s present brand equity in the fashion market and their target market, double with a solid marketing mix and well planned out and coordinated product launch campaign, it should be an achievable goal to reach success with the jeans range. 7. 0 References 7. 1 Rix, P. 2011. Marketing a Practical Approach, McGraw-Hill Australia Pty, Ltd 7. 2 Smart Company http://www. smartcompany. com. au/retail/witchery-and-mimco-push-ahead. html (accessed 17 March 2011) 7. 3 Digital Outlook http://www. digitaloutlook. com. au/article/mimco (accessed 17 March 2011) 7. 4 Taboo http://www. taboo. com. u/taboo_campaigns_mimco_ss10. html (accessed 19 March 2011) 7. 5 The Report http://www. theprreport. com. au/2010/11/taboo-group-use-blogg ers-to-help-launch-fashion-brand-mimco/ (accessed 19 March 2011) 7. 6 NAB http://www. nab. com. au/wps/wcm/connect/nab/nab/home/about_us/8/5/32 (accessed 20 March 2011) 7. 7 CBA http://www. commbank. com. au/about-us/news/media-releases/2011/180311-business-sales-indicator. aspx (accessed 20 March 2011) 7. 8 Budde http://www. budde. com. au/Research/Australia-Digital-Economy-E-commerce-Trends-and-Statistics. html. (Accessed 20 March 2011) 7. 9 MIMCO website http://www. mimco. com. au (accessed 20 March 2011)