Pricing And Distribution Strategies
|✅ Paper Type: Free Essay||✅ Subject: Marketing|
|✅ Wordcount: 2195 words||✅ Published: 27th Apr 2017|
According to Christian Louboutin “Shoes are a mirror of what you want, what you are or what you’re missing” (Time, 179, page 68); these words has inspired the launch of a new footwear brand -LKS. The concept of this new product is to bring forth a new generation for women’s footwear.
LKS is to launch a pair of shoes that will be the missing piece of the puzzle. It will encompass the comfort factor but will also have the creative element for the fashion conscious. The inspiration for this product is that it can be worn from day to night, all day every day. This is because the product will have a detachable heel system which will allow the person to interchange the height, the design of the heel or just wearing the shoes as they are. The diagram below will illustrate the concept:
Detachable heel clips into place
Studies show that wearing high heels can cause Lower Back Disorders (Work, Volume 41, 2012) and can also affect posture whilst at work (Teller Vision, 2013). This is one of the reasons why LKS is launching the detachable heel to tackle these claims.
Further to the detachable heel concept; each heel will have its unique design whether it is a metallic stiletto heel or it is a chunky Perspex one. Every one of the designs will reflect the person’s personality or styles which are interchangeable.
In addition, the idea of the detachable heel is so that an ordinary pair of flat ballerina pumps for example can transform into a pair of glamorous six inch heels; that not only looks chic and fashionable but is also suited to the consumer’s personal taste.
Part A: The Brand Name
Love Killer ShoesThe brand name LKS was originally made up of initials from the group as like most footwear brands: Kurt Geiger, Russell & Bromley and Jimmy Choo. The initials of the brand can be interpreted as a paradox to our original concept of comfort – “Love Killer Shoes”. The fact that the brand strap line uses the word “Killer” is humorous as it is a play on the idea that the product is comfortable but it can also mean that the product can be transformed into something amazing. It displays that the brand is quirky, unique and creative. However, the brand’s logo will depict simplicity. Please refer to the below design:
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The logo is simply “LKS” written in a white font in a black background; which includes the strap line “Love Killer Shoes” underneath also in a white font on a black background. The reason for the choice in colours is because it is minimal and classic like the luxury brand Chanel or Alexander Wang. It can also be compared to the hair straightener’s brand GHD with their strap line of “Good hair day, every day.”
LKS’ vision is to aid the 21st century woman in balancing ones working life with their leisure time. As the population of women in the UK is greater ((51%), Home Office) than men’s, the brand aims to sell to women. These women will be working professionals ((Social Grading of A – C1), NRS (n.d), Keynote (2012)). People of Social grading A – C1 make up a large proportion of consumers in the UK who purchases shoes (Keynote 2012). Statistics in June 2011 shows that (73.1%) women were more likely to purchase shoes much more than men (51.3%). It has also been decided that the brand intends to sell to women between the ages 20 and 34 as
Part A: The brand name (cont’d)
these ages showed one of the highest consumer purchases in 2011. (Keynote, Footwear, 2012).
Despite the economic climate the footwear industry’s growth in 2012 showed a growth of 3.7% (Mintel, July 2012) and as footwear is now seen as a fashion essential many consumer especially women are always looking to buy shoes. Statistics shows that 27% (Mintel, Footwear Retailing July 2012) of consumers buy shoes because they want to find something comfortable; which is one of the reasons why LKS is to launch this unique footwear where comfort and style are put into one package.
Part B: Promotion – (Please refer to Mood Board)
Part B: Promotion, Mood Board justification
LKS’ sole focus is the design of the heel, rather than the entire shoe. LKS’ product will be trendy, quirky and innovative; therefore a range of materials, colours and patterns will be used in its production. The product will also be catwalk-esque, and high street oriented thus catering to fashionistas.
LKS’ detachable heels will each have its own distinctive design and colour (refer to mood board). Jewel colours (greens/yellows/blues/reds) will be incorporated to make the heel vibrant, depicting their glamorous and “gem like” nature. For example a green will signify the colour of an emerald. Metallic colours gold and silver will bring edginess and incorporates the ‘rock image’ instantaneously to the shoe.
Different materials in addition to the colours will create texture to the heel and emphasise the difference of LKS’ heels compared to other “normal” heels. The brand will be willing to mix and match a variety of fabrics with different colours and patterns. This will become the basis for all the heel designs. The diversity of the designs means that LKS can create heels to correlate with the seasons trends.
When considering the marketing strategy, it is crucial to consider the promotional mix. According to Jobber (2009) there are six main components that make up the promotional mix, these include: Advertising, Direct sales, E-commerce, Personal selling, Sales promotion and Public Relations. It is essential to relate to the target audience of young professionals when choosing the most relevant and wide reaching promotional tools. LKS has chosen to utilise Advertising, E-commerce and Public Relations. A push strategy (Jobber, 2009) will be used to stimulate consumer demand for the product.
It has been estimated that 1107 million (TfL statistics, n.d) people utilise the underground every year; this means that there will always be a consistent high footfall especially during peak commuting hours. Therefore, part of LKS’ advertising will take the form of advertisements on the London Underground. These advertisements will capture commuting young professionals’ interests. In addition, advertisements will also be placed on buses, both inside and outside. This will ensure that LKS maximises the use of all methods of commuting.
Part B: Promotion, Mood Board justification (cont’d)
Magazines and newspapers will also form a basis for LKS’ advertising. LKS will focus on high end glossy magazines such as Elle which has a combined readership of around 1 million (National Readership Survey, April 2012) for print and website compared to Vogue which has an estimated 1.4 million (National Readership Survey, April 2012) combined readership. Limiting the print in only high end glossy magazines will aid LKS to develop a prestigious image and also to show the young stylish professionals that LKS’ products are of high quality and are the latest must-haves.
To further aid with the advertising of LKS; it is important to ensure that the brand gets acknowledgement from these high end magazines. LKS will send out sample products to fashion bloggers and magazine companies for them to review the products and therefore extend brand recognition.
Social media is currently becoming an essential part of the daily life; hence the brand will strongly focus on E-commerce which will be social media websites such as Facebook, twitter and Instagram. Statistics shows that on Instagram alone there are 90 million monthly active users and 1000 comments are posted every second (Instagram Press Centre, n.d); LKS will launch with an Instagram account allowing consumers to access new product launches including exclusive insider photos of all aspects of LKS; offering their feedback to ensure the consumer feels valued and connected to LKS.
Further to Instagram; Facebook itself has 1 billion monthly active users since October 2012 (Facebook Newsroom, n.d) and twitter (Tweetstats, n.d) who has nearly 1 million users and will indefinitely support the advertising of the brand through competitions and limited “sneak peek” photos and information.
The use of Public Relations will develop the relationship between both consumers and the media. LKS’ clever stunt will capture both consumer and media attention; taking influence from Lanvin for H&M who used Marble Arch in London as a giant billboard by projecting images onto it (Popscreen, n.d). For example, LKS can place a giant shoe, highlighting the detachable heel in Trafalgar Square.
Part C: Pricing and Distribution Strategies
There are three pricing methods (Jobber, 2009); Cost, Competition, and Marketing Orientated Pricing. LKS will be focusing on the Marketing Orientated Pricing which means that it takes into account a wide range of factors; that aids in price setting.
LKS’ product is of a unique nature therefore the price of the product will be higher than a conventional pair of high heels. The brand wants to be perceived as a high quality luxury brand on the high street and so a premium pricing strategy will be used.
Reports on Keynote (2012) shows that consumers highest spending on footwear in the year ending June 2011 is between £20 – £149. As mentioned, LKS will be targeting young professionals in the social grading A – C1 so it was essential to set a price that is both affordable for this target group yet will also provide the basis for LKS to be seen as a high end brand. Although LKS’ product is different from any other products on the market; the competition aspects are still considered to play a vital role in the pricing strategy. It is important to be able to identify the various types of competition in the market, shown in Figure 1. To define LKS’ Immediate Competitors, the brand has looked at other parts of the footwear industry; what other brands offered on the high street.
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Kurt Geiger is at present one of the leading footwear brands in the UK and is a retailer that supplies luxury and fashionable shoes. It has been estimated that at the end of January 2011 the company had a turnover of £185 million (Keynote, 2012). This is one of the main direct competitors of LKS, as both brands are targeting the stylish, young professionals. As shown on the table for Kurt Geiger the pricing range is from £55 – £410 which is a large variation compared to Russell & Bromley and CJG. LKS’ Recommended Retail Price will be starting at £100 which is competitive against the lowest price point of the main competitors and does not make LKS to be perceived as a “cheap” brand but a premium one.
There are three aspects of channel strategies LKS must consider: Channel Selection, Distribution Intensity and Channel Integration (Jobber, 2009)
To allow for greater consumption and transparency (Jobber, 2009) the main route of distribution will be through online sales and concessions within the well established department stores. The use of an intermediary is essential to distribute to concession as this will assist to improve efficiency and accessibility for consumers (Blythe, 2009) as the products will be dispersed in smaller batches allowing measurement of stock and an even distribution. However, with online commerce; direct producer to consumer channels are the most effective as young working professionals may not have the time to shop in LKS concessions; online shopping will be the most efficient way.
Distribution Cont’d (Intensity)
There are three types of distribution intensity. LKS has reviewed all three types:
Figure 2 (Source: Jobber, 2009)
LKS has opted with Selective distribution into high end concession stores. This will create brand prestige along with brand loyalty. The use of department stores offers a guaranteed footfall compared to a stand-alone store. Harrods for example has over 1.3 million customers every year from more than 134 countries (Chamber Cocktail, 2011). Using Selfridges, Harrods and Liberty’s as a platform for the product will allow well established customers the chance to try something refreshing, but from a trustworthy and recognised shop.
E-commerce has provided consumers with the ability to shop from home; especially when people work all day and have no time to browse around in shops. Online shopping has grown rapidly throughout the years; an approximate value on average for weekly internet sales is £466.1 million in August 2012 (Office for National Statistics, 2012) which is a growth of 7.5% compared to the previous year. Alongside online website a mobile application will be launched allowing for increased accessibility for shopping on the go.
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