Uniqlo Marketing Plan

I. SITUATION ANALYSIS Uniqlo is a modern Japanese clothing apparel company that produces affordable and quality casual wear for everyone. The company has undergone rapid growth in the past decade and became the biggest Asian fast fashion brand. Under Uniqlo’s aggressive expansion model, it has recently opened its 13th Australian store at Chermside Westfield. The fast fashion industry has experienced strong growth over the past few years. According to IBISWorld (2017), the industry revenue is expected to surge at an annual rate of 21.5%, reaching $1.8 billion by 2017. The major drivers include the promotion of global trade, technological advancements, increasing purchasing power and intense spending patterns of Australian consumers. In particular, the high penetration rate of digital media has provided massive opportunities for Uniqlo to distribute products through online platforms and utilise new media tools to increase brand awareness and sales. The fast fashion industry is extremely competitive with unpredictable and constantly changing consumer trends. Uniqlo is unique in its dedication to provide high-quality product at a reasonable price. The company prides itself on exceptional customer service and outstanding innovative products. In 2017, it captures 12.9% of the industry market share (Appendix C) however remained relatively low brand awareness in Australia compared to global fashion giant such as H&M and Cotton On (IBISWorld, 2017). This phenomenon is probably due to the limited number of stores and low level of marketing and advertising activities, which give rise to opportunities for Uniqlo to strengthen its marketing strategies. A SWOT analysis and CDSTEP analysis are included in appendices for further understanding of the internal and external environment. II. MARKETING GOAL Achieve 30% increase in national sales volume within 6 months through market development. III. MARKETING STRATEGY Target Customers Uniqlo has a wide range of products catering to all ages and genders. To be specific, the company has three target consumer segments – Young Optimism, Look At Me and Traditional Family (Roy Morgan, 2017). These three segments share some common characteristics – they are consumers who live in Australia and are looking to purchase affordable yet quality clothes that suit different occasions. In particular, Young Optimism, the major target segment, is a group of consumers who aged 18 to 30. As young adults, they are conscious of the image they projected and are sensitive and passionate to fashion. Meanwhile, they are looking to purchase quality casual apparel of good value. To add, they are digital natives and are born to use social media and mobile phones. Geographic Demographic Behavioral Psychographi c Young Optimism Look At Me Conventional Family (Target Market)  People who live in major cities in Australia who have access to physical and online Uniqlo stores  Teenagers aged 13  Aged 25 to 45;  Young adults aged to 25 have kids and 18 to 30  Financially financially  University students dependent on capable to or business their parents purchase clothes professionals  Financially independent  Purchase quality  Always purchase  Purchase clothes clothes of good stylish and for different value for families affordable clothing occasions at regular and kids to express their basis styles and personal  Looking for clothing value of good value  Aware of and will make purchase at Uniqlo Table 1. Target Customer Analysis. Value Proposition The value proposition of Uniqlo is its fashionable, high quality yet affordable and broad apparel offerings. The company seeks to bring innovation to produce unique apparels to meet customer needs in new and creative way (Uniqlo, 2017). The product design is basic and consumers could choose from a wide array of colours. Uniqlo is a better bargain than its competitors in the market as its products are differentiated with a better quality and lower price. Choi (2011) highlighted that fashion, quality and cost are often sacrificed one for another, but Uniqlo has embraced these essences to produce attractive and inexpensive products, which successfully captured Young Optimism’s needs. As stated above, Young Optimism is well-known as teach-savvies who actively participated in online apparel shopping. With 96% of Australian accessing the Internet every day (Sensis, 2017), Uniqlo’s e-commerce presence has added value to its outstanding customer experience - particularly with social media platforms and online store to interactively engage with and motivate consumers. Positioning Statement: Uniqlo is the best basic clothing retailer for young adults as the apparels are fashionable, high quality and affordable at the same time that anyone can wear anytime and anywhere. Figure 1. Positioning Map IV. MARKETING TACTICS Product Product refers to the business offerings that satisfy consumers’ needs and wants (Grewal, 2014). The primary product objective of Uniqlo is to provide a mixed array of affordable, stylish, innovative and high-quality clothing, with a wide collection in styles and colours. Young consumers represent the most powerful market segment for Uniqlo. To differentiate its products and remain competitive in the industry, market research should be done to investigate the fashion trends and changing consumption patterns of customers. The R&D team will then source the most suitable materials combining technology to develop the best wearing experience to consumers. Hart & Tzokas (2000) stated that active market research is to ensure Uniqlo visualises potential opportunity to improve existing product performance or develop new products to capture current and potential target markets. In addition, this can also allow Uniqlo to effectively allocate resource by phasing out non-performing products and stock those that perform well. Branding is a process to create a unique impression in consumer minds (Grewal, 2014). The brand identity of Uniqlo is made up of the brand name, logo and slogan (Appendix D). Together they create a point of differentiation from competitors with its Japaneseorientated and innovative apparels. To add, Uniqlo’s product should be consistent in branding message delivery to form part of the successful product strategy. Price Pricing is one of the fundamental marketing mixes that largely impacts on company sales and market share (Grewal et al., 2014). To determine an optimum price, Uniqlo should evaluate the 5Cs of pricing – cost, customers, channels, competition and compatibility. According to Grewal (2004), a successful pricing strategy should reflect the target market’s expectation on the products’ price and quality. The price of products should be able to generate considerable revenue, and at the same time appeared to be competitive and appealing to customers over other competitors. Uniqlo is known for its penetration pricing strategy to set products at a lower price than competitors. Entering the Australian market, the company will need to be aware of the distribution costs and tax payable on top of production and operation costs. Therefore, the price should be set at an affordable level for Young Optism, but slightly higher than in Japan to cover operational costs and aligns to the Australian consumer price index. Moreover, Uniqlo should adopt psychological pricing strategy. It is a practice of using odd or even digits as price endings to emotionally trigger customers’ intention to purchase (Naipaul, 2008). Further, price promotions such as discounts, seasonal sales and limited offers could also be used to further motivate customers to shop at Uniqlo, thus increasing the company’s sales volume and revenue. Distribution Distribution is process when transactions are made through selected channels for final users to access the product (Grewal et al., 2014). Grewal et al. (2014) emphasised that it is vital to ensure the product availability in various markets to achieve expected sales and profit. Uniqlo employs the SPA business model which allowed the company to encompass all stages of the business from design, production to final sales (Fast Retail, 2011). There are two major exclusive distribution channels - ofÏcial online and physical stores. These brand touchpoints are easy to access as flagship stores are often situated at highly-visible, centralised locations and online stores can be easily accessed anytime and anywhere through digital devices. To achieve sales target, Uniqlo could consider adopting selective distribution strategy to provide increased market coverage and distribute its products through selected available outlets. Antoaneta (2008) suggested that this marketing approach is a ‘push’ strategy which selected distributors and channel partners will help to create brand awareness and end sales. While retaining its unique positioning, this distribution strategy can help Uniqlo to gain optimum market coverage and more control with less cost than intensive distribution. Promotion According to Grewal et al. (2014), promotion is a marketing activity that evokes direct response from consumers. The objective-and-task method will be used to determine a series of promotional activities for Uniqlo to reach the stated marketing goal within a budget of AUD $50,000. While traditional media is effective for branding and marketing of the major product offerings, digital media is used to further enhance the marketing impact. The former include billboard, television advertisements and magazines which have a wide cover and can be segment-specific, the latter involves the use of the internet and social media which allows Uniqlo to facilitate two-way communication and actively engage with existing and potential consumers via digital devices (Grewal et al., 2014). To highlight, online marketing is lower in cost and the ROI can be instantly trackable. The below table will illustrate the suggested promotional activities to achieve 30% increase in national sales within 6 months. These activities aim to increase brand visibility, awareness and motivate customers to make purchases, which ultimately enhance the consumer loyalty and increase sales to reach marketing goal. Category Item Frequency Cost OfÒine Billboards 4 weeks during Christmas $10000 Transit Advertising (Full Back) 5 buses for 24 weeks $15000 Magazine & Radio Monthly during sales period $2000 Event Marketing Special Event at Queens $3000 Street Mall to drive trafÏc into the stall Online Sports Event Sponsorship Once a year $10000 Search Engine Marketing On-going $2000 Social Media Platforms Facebook, Instagram, $3000 Snapchat, LinkedIn, YouTube and more Direct Email Marketing Operational Cost Both Create an online membership club & $5000 membership card Total: $50,000 Table 2. Budget Allocation. VI. APPENDICES APPENDIX A SWOT Analysis for UNIQLO Strengths Weaknesses  A wide range of product in different styles and  Weak brand awareness in Australia colour  Product line focuses on winter apparel  High quality of clothing offering at reasonable prices  Too many layers in distribution channels  No exchange or refund for certain products such as  International brand with stores in strategic locations (i.e. Queens street Mall, Emporium)  Well-trained and helpful sales assistance (Uniqlo’s socks and underwear  Plain design and lack of fashion styles  Lack of advertising and marketing staffs are trained for at least one month before start working on sales floor)  Online store to enhance sales  Free altering service Opportunities Threats  Positive brand perception of consumers  Stiff competition from other fast fashion operators  Possibility to become state-wide, such as opening stores in Darwin and Perth  New technologies leading to more innovative such as H&M and Zara  Unpredictable and constantly changing fashion trends  Expensive rental fee for flagship and physical clothes  Global marketing penetration stores APPENDIX B CDSTEP Analysis for UNIQLO Factors Culture Demographics Social Technology Trends & Implications  The Japan culture is highly valued in Australia. Australian is well-aware of Japan providing excellent brands and quality products from Samsung electronics to Toyota vehicles. There are fashion conscious Australians who know well about international fashion brand like Uniqlo.  Uniqlo’s slogan is “Made For All” (Uniqlo, 2017). The brand sells both basic and trendy apparel products that ideally attract everyone. Since Uniqlo’s stores are usually situated in highly urbanised area, the major demographic population will be young adults living in metropolitan areas.  Australians are the world’s second largest consumers of fast fashion. According to Pepper (2017), an Australian buy average 27 kilograms of new clothing each year.  Uniqlo has a corporate sustainability initiative which supports factory worker and the environment through Uniqlo funds and recycle projects.  Uniqlo’s signature product range HEATTEAH is a new technology that creates apparel products that absorb and maintain body heat to keep wearers warm  Economics   Political/Legal  (Uniqlo, 2017). The high internet and mobile penetration rate has given opportunities for Uniqlo to communicate and distribute products to customers through a variety of digital platforms. Australia is currently experiencing a stable and growing economy with consumers having high disposable incomes (IBISWorld, 2017). Consumers are more willing to spend money on fast fashion and this trend gives confidence for international fashion retailers to establish presence in Australia. According to IBISWorld (2017), the industry revenue has an estimated annual growth of 21.5%. The fast fashion industry is extremely competitive with global giants such as H&M, Zara and Cotton On. The Japan-Australia Economic Partnership Agreement (JAEPA) entered into force in 2015 has significantly promoted bilateral trade between Japan and Australia (DFAT, 2015). Uniqlo has gained advantages from this policy to export quality goods and access Australian market at a low cost. APPENDIX C Fast fashion industry market share APPENDIX D Uniqlo Brand Identity Prism