Preliminary Marketing Report:

Blue Gorilla

Clothing Company

Air-Stream Jacket 23/10/2013 Mark Hannemann Student Number: 4911040

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Table of Contents 1. Executive Summary.2

2. Introduction..3

3. Industry Definition...4

4. Competitor overview5-6

5. Macro-Environmental Analysis7-8

6. Consumer Behaviour Analysis...9-10

7. Recommended Marketing Research...11

8. Justification for Choice of Segmentation Base..12

9. Profile of Segments13

10. Target Market Choice and Justification.14

11. Proposed Positioning Strategy..15-16

12. Marketing Objective...16

13. Marketing Strategies.17-18

14. Conclusion......19

15. References..20

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Executive Summary. This report was commissioned to examine if Blue Gorilla Clothings revolutionary new product the Air-Stream Jacket is a viable product that can be successfully marketed. The research draws attention to the fact that there are several other inferior products already controlling a market that can be dominated by Blue Gorilla Clothings Air-Stream Jacket. The Air-Stream Jacket, designed by Blue Gorilla Clothing, is an innovative product capable of improving the wearers comfort levels in harsh climates. The report explores these features in relation to both major and minor competitors and concludes that the product is superior in quality and is capable of satisfying consumer demand to a higher level. It is recommended:

The Air-Stream Jacket is sold at a reasonable price, under $200. The Air-Stream Jacket is made widely available for purchase, including local

adventure wear stores such as Rays Outdoors. The Air-Stream Jacket is positioned as a fairly priced, highly adjustable,

equally casual and sporty jacket with high availability Blue Gorilla Clothing sets marketing objectives to;

Gain a market share of 30% by June 2015. Become 1 of the top 3 brands named in the industry by consumers.

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Body. 1.Introduction. The material below outlines background information about Blue Gorilla Clothing Company, the Air-Stream Jacket in particular, and presents the purpose and main areas of the report. Blue Gorilla Clothing, established in 2012, is a relatively new company that specialises in outdoors and adventure-wear. Blue Gorilla Clothing burst onto the market in late 2012 when they launched their revolutionary range of lightweight breathable thermal garments known for their patented ability to Let moisture out and keep heat in. Blue Gorilla Clothing now wants to build on this reputation for high quality, revolutionary adventure clothing by releasing the Air-Stream Jacket, a jacket with the ability to either instantly warm or cool the wearer according to their requirements. The jacket uses a patented system of microscopic vents in the material of the jacket that can be either closed or opened at the pull of a cord. The purpose of this report is to analyse the Air-Stream Jacket, including; an industry definition, a competitor overview, a macro-environmental analysis, a consumer behaviour analysis, a recommended marketing research plan, a recommended target market, a recommended product positioning strategy, and a key marketing objective, and as a result of these provide a practical marketing strategy.

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2.Industry Definition. An Industry definition is used to define what business a company is in. It is important to include an industry definition because companies are affected by their chosen marketing environment, or industry, and this in term influences strategic decisions made by management. (Greaney, S (2011) This environment influences and shapes; the size of the market, who your competitors are and your macro-environmental analysis. It therefore affects investment decisions and strategies made by organisations and the behaviours, needs, wants and expectations of customers. For this reason it is important for organisations to analyse and respond to their marketing environment if they wish to achieve and maintain success. (Kotler, P, Adam, S, Denize, S & Armstrong, G (2009) As shown below, in the case of Blue Gorilla Clothings Air-Stream Jacket the industry is defined as Unisex Specialty Outdoor Wear. - This definition will be used to identify and assess competitors in the next section.

Retail

Clothing

Mens Unisex General Fashion Speciality: Outdoor wear

Tops

Shirts Jackets Temperature Adjusting Jacket

Bottoms

Womens Food Automotive Services

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3.Competitor Overview Competitors are defined as companies which offer goods or services in the same defined industry as your own, they are a key part of the Micro-Environment; factors or elements that are in an organisations immediate area of operations and affect its performance, decision making and freedom (Goldsmith, R. E., & Flynn, L. R. (2004), and generally come under the heading of actors. Actors are forces that are close to an organisation and affect its ability to serve its customers. (Kotler, P, Adam, S, Denize, S & Armstrong, G (2009) It is important to include a competitor analysis because it identifies weaknesses and strengths that competitors may have, and then uses that information to improve marketing strategies within the company. (Hughes, A, Chitty, B & Fripp G (2011) Blue Gorilla Clothings Air-Stream Jackets competitors are listed below. Main Competitors ClimaWare Jackets. ClimaWare clothing is a relatively new product launched by MIT graduate, and now CEO of Dhama Innovations, Kranthi Vistakula. The ClimaWare jacket has the ability to maintain internal temperatures between 18 to 40 degrees Celsius, and can operate in environments between -30 and 50 degrees Celsius. However, it is only available for purchase online and at $300 it is an expensive product, another concerning aspect is that it works by using thermoelectricity and for this reason can be interpreted as a dangerous product. (ClimaWare Jacket). Helly Hansen H2Flow Helly Hansen clothing was founded in 1877 by Norwegian captain Helly-Juell Hansen. Their products became famous for their ability to keep users dry and warm and they have continued to build on this by utilising the latest in micro-fibre technology. Their products are used by world-class sailors, skiers and adventurers who spend their time at the mercy of nature, and demand full protection and performance when the conditions are at their worst. The H2Flow Jacket is relatively expensive at $250 and is only available for purchase online. It combines insulation with air vents and the ability to make adjustments to the garment in order to better regulate body temperature, for this reason the product is very lightweight. However, due to the lightweight nature of the product its temperature controlling abilities arent as detailed as other competitors. (H2Flow Jacket).

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Minor Competitors Merrell Moab Spring Soft shell jacket. Merrell clothing, founded in 1981 by boot maker Randy Merrell, quickly became renowned for their high quality boots and moved onto the adventure wear market. These days they are constantly working on new technologies and products to inspire people to get outside and brave the elements. The Moab Spring Soft shell jacket is lightweight product that provides high-level wind resistance along with breathability in an affordable product ($180), it is also readily available for purchase at Rays Outdoors. However, it is not as well insulating as other products on the market and for this reason can leave users more often that not, feeling the cold. (Mens Moab Spring Softshell) Based on the above competitor analysis it is recommended that The Air-Stream Jacket is marketed at a reasonable price, under $200, and is readily available for purchase at local adventure wear stores such as Rays Outdoors.

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4.Macro Environmental Analysis A macro environmental analysis is a review and analysis of all the factors that a company is unable to control. Macro Environmental Factors include; Demographic, Economic, Natural Environment, Technological, Political and Cultural. However, it is unlikely that all factors are applicable to every industry and product so in most cases only the relevant ones are analysed. (Hughes, A, Chitty, B & Fripp G (2011) (Agins, T. (2010) It is important for companies to conduct Macro Environmental Analysis so they can stay informed about an issue in their current business environment and therefore find a way to stay ahead of it and use it as an advantage rather than a weakness. (Hughes, A, Chitty, B & Fripp G (2011) Blue Gorilla Clothings Air-Stream Jackets Macro Environmental Analysis is shown on the next page.

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Macro-Environmental Factors

Trend Opportunity or Threat

Strategic Implications.

Demographic.

Geographic Shifts. Recent trends show that more people dont live their entire lives in 1 country; they are moving from one to another.

Opportunity. It is advised that the product is marketed worldwide as there is a demand from customers who may be having difficulty adjusting to new climate.

Economic.

Changes in consumer spending patterns. After the Global Financial Crisis in 2008 consumers became more aware of their spending and have limited spending on non-essential and expensive products.

Threat. It is advised that the product is marketed as attractive and practical. It should also be marketed at a reasonable and affordable price.

Natural Environment

Energy Costs. The cost of energy, electricity in particular, is increasing every year and will soon be too expensive for people in lower socioeconomic classes.

Opportunity. It is advised that the product is marketed as a cheaper alternative to contemporary climate control (heating and air conditioning.)

Technology

Fast Change of Pace. New technology and products are constantly being launched and updated. Consumers are attracted to this and always want to have the latest and best product.

Opportunity/ Threat.

It is advised that the product is marketed as the latest and best technology available on the specialty outdoor wear market.

Sub-Cultural

Increase in outdoor living. There is an ever-increasing trend for healthy outdoor living and dining in the contemporary western lifestyle.

Opportunity. It is advised that the product is marketed as a must have for the contemporary outdoor living consumer.

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5.Consumer Behaviour Analysis. A Consumer Behaviour Analysis is an overview of the typical consumers process by which they select from several choices, products, brands or ideas. The process may involve complex mental activity, a simple learned response, or an uninvolved choice, which may even seem random. The process moves through five stages; Need recognition, Information search, Evaluation of alternatives, Purchase and Post-purchase analysis. Each of these stages is influenced by internal and external factors. Internal factors are mainly associated with psychological and personal influences, whilst External factors are generally concerned with social and cultural influences. (Kotler, P, Adam, S, Denize, S & Armstrong, G (2009) It is important for companies to conduct Consumer Behaviour Analysis so they can learn more about; what consumers buy, who buys it, how they buy it, when they buy it, where they buy it, and most importantly, why they buy it. This information is then used to find out how consumers respond to various marketing techniques/stimuli and which ones they should use. (Hughes, A, Chitty, B & Fripp G (2011) Blue Gorilla Clothings Air-Stream Jackets typical Consumer Behaviour Analysis is shown on the next page.

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Decision Making Stage.

Internal Factor. External Factor. Strategic Implications.

Need recognition.

Dissatisfied with current clothing comfort/warmth.

Friend/family member mentions how comfortable/warm their clothing is.

Encourage consumers to see that their current clothing isnt comfortable/warm enough. Eg. Advertising.

Information search.

Reflecting on the product they noticed last time they were in an outdoor specialty store.

Search the internet for products that can provide warmth/comfort.

Provide information where customers are likely to search. Eg. Sales Training, Brochures, Easy to Navigate Websites.

Evaluation of alternatives.

Self-evaluation on the features (comfort/warmth) and price of current products.

Reading online reviews on available products and taking those opinions into account.

Identify most important evaluative criteria and provide data the consumer can relate to. Eg. Warms and cools up to 20C.

Purchase.

Decision to buy the product based on past evaluation of features.

Sales person informs consumer of an offer on a product.

Provide communication that encourages brand decision. Eg. Tried and tested in Australia.

Post-purchase Evaluation.

Comparing the physical product to the previous expectations.

Friends/Family mention how cool or trendy the product is.

Encourage accurate consumer expectations. Eg. Honest advertising and sales techniques.

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6.Recommended marketing research. Marketing research refers to the process of collecting, analysing and interpreting data about customers, competitors and the business environment in order to improve marketing effectiveness. In order for a company to succeed it requires information on; what customers want, when they want it, where they want it, and what other competing companies are doing about it. The better a company is at conducting high quality marketing research the more successful it will be. (Kotler, P, Adam, S, Denize, S & Armstrong, G (2009) When conducting marketing research it is recommended that the company follow the four steps of the Marketing Research Process. The first two steps of this process will be outlined below with specific reference to The Air Stream jacket. The first step of the marketing research process is to define the problem. In the case of The Air Stream jacket the problem is a new product and unfamiliar brand with very little following and exposure. After defining the problem it is important to determine the correct research design, with The Air Stream jacket the chosen design is primary research that focuses on exploratory research. (Marzo-Navarro, M., Pedraja-Iglesias, M., & Rivera-Torres, M. P. (2004) Primary research is usually the preferred option because it is current and reliable. Exploratory research has been selected because it focuses on the customers and their attitudes and opinions about products and competing products, as well as their awareness, knowledge and beliefs about a product. (Kotler, P, Adam, S, Denize, S & Armstrong, G (2009) The second step of the marketing research process is to develop a research plan. Having selected exploratory research the next step is to choose which methods of research to use. It is recommended that Blue Gorilla Clothing conduct consumer interviews and focus groups so they can gain a formal understanding of how they respond to certain variables, in this case the features and character of The Air Stream jacket. It is also recommended that Blue Gorilla Clothing conduct ethnographic research by immersing themselves in a hiking or other outdoor recreational group to understand exactly what the consumers wants and needs are.

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7.Justification for choice of segmentation base. Market segmentation is the process of dividing a larger market into smaller pieces bases on more meaningful, shared characteristics. Segmentation is used because it is impossible to please all people all the time, its easier to divide customers into segments and market to then according to shared characteristics. The four basic market segment bases are; Geographics, demographics, psychographics and behaviour. (Hughes, A, Chitty, B & Fripp G (2011) In the case of The Air Stream jacket the market has been segmented according to demographics. The possible segments that come under demographics include; Age, gender, family structure, income and ethnicity. The product wasnt segmented under age because consumers from multiple age groups could use the product, it wasnt segmented according to gender because the product could be used by either gender, it wasnt segmented according to family structure because people from all stages of life can use it, and it wasnt segmented by ethnicity because the product can be used by all people from different countries and climates according to their specific climates needs. The market was segmented according to income because the product isnt a cheap one, nor is it a necessity. It is a comfort item that is designed to improve comfort levels in harsh climates. Although the product will be widely available it wont be within the budget of lower income consumers.

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8. Profile of segments. A segment profile is an analysis of a segmentation base, including multiple characteristics, which are used to develop several possible consumer profiles. These profiles are then analysed to identify a specific segment that the product is to be targeted at. (Hughes, A, Chitty, B & Fripp G (2011) Blue Gorilla Clothings Air-Stream Jackets Profile of Segments is shown below. Segment

Build a Profile

Income Level (PA)

Usage Rate Affordability Psychographic

Low (

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9. Target market choice and justification. The target market is the group (or groups) that a company selects to turn into customers as a result of segmentation and targeting. The target market is important because without it companies can waste valuable time and resources on marketing a product to consumers who have no interest or need for it. (Kotler, P, Adam, S, Denize, S & Armstrong, G (2009) When selecting a target market from a list of segments it is important to evaluate them by using a list of requirements. The segment that has been selected as the target market for Blue Gorilla Clothings Air-Stream Jacket is Upper average income. This segment has been selected because it is possible to identify and measure it via the use of readily available statistics such as abs.gov.au, it is large enough to earn a profit, and is stable enough to grow via product line expansions, such as higher and lower quality versions. The upper average income segment has also been selected because it is homogeneous, that is; customers in the segment all prefer the same quality of product quality products that last. Whilst the remaining segments are heterogeneous, that is; they have different quality preferences. The upper average income segment also responds consistently to a given market stimulus, can be reached by market intervention in a cost-effective manner and is useful in deciding on the final marketing mix.

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10. Proposed Positioning strategy A positioning strategy involves developing a marketing strategy aimed at influencing how a particular market segment perceives a good or service in comparison to the competition. It is important because it differentiates products from one another and gives them unique characteristics and selling points. (Kotler, P, Adam, S, Denize, S & Armstrong, G (2009) Below are 2 perceptual maps for Unisex Specialty Outdoor Wear, featuring Blue Gorilla Clothings Air-Stream Jacket and its competitors.

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Blue Gorilla Clothings Air-Stream Jacket will be positioned as a fairly priced, highly adjustable, equally casual and sporty jacket with high availability. This position will be optimal for the upper average income target market because it offers the best mix of factors in the unisex specialty outdoor wear jacket industry. 11. Marketing Objective Marketing objectives define what a company wants to accomplish through their marketing activities, they are generally less focused on the overall corporate operations and more specific to the companys brands, sizes, and product features. Marketing objectives are critical because they; highlight the importance of marketing by showing how the organisation will benefit, emphasise goals that encourage teamwork, and offer benchmarks to measure progress, helping to determine future marketing efforts. (Hughes, A, Chitty, B & Fripp G (2011) A marketing objective should be S.M.A.R.T, meaning; Specific The objective should be clear and precise. Measureable The success of the objective should be assessable. Achievable The objective should be reachable; sights shouldnt be set too high. Realistic The objective should be achievable according to company resources. Time specific The objective has a timing plan for when it should be achieved. (Kotler, P, Adam, S, Denize, S & Armstrong, G (2009) The marketing objectives for Blue Gorilla Clothings Air-Stream Jacket are listed below. To gain a market share of 30% by June 2015. To become 1 of the top 3 brands named in the industry by consumers.

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12. Marketing Strategies A marketing strategy is a selection of what decisions a marketer should make about what activities they must accomplish to achieve the marketing objectives that were selected earlier. This generally involves deciding which markets to target and then developing marketing mix strategies (product, price, promotion and distribution) to support how the product is positioned in the market. The marketing strategy is important because it is used to decide how a company wants its consumers to think of their product in relation to other competing products. (Hughes, A, Chitty, B & Fripp G (2011) The marketing mix strategy for Blue Gorilla Clothings Air-Stream Jacket is shown below. The product strategy is the most fundamental part of the marketing mix; companies cant make a profit without having something to sell. The three levels of a product are; the core (Benefit or service), actual product or secondary service (quality, brand, style, features, packaging), and the additional augmented aspects (Installation, delivery and credit, warranty, after sales service). The Air-Stream Jacket has a core benefit of providing consumers with comfort in harsh climates; this is identified in the industry definition. The aspects of the actual product include its brand name Air-Stream Jacket and the patented, revolutionary ability to either instantly warm or cool the wearer according to their requirements. This ability coupled with the positioning strategy of providing a high quality product at an affordable price set the Air-Stream Jacket apart from its competitors. This is reflected in the fact that the Air-Stream jacket also comes with a full 5 year warranty. Air-Stream Jacket positions itself as a superior product not only in the short term, but also retains this after years of use. The price mix strategy essentially determines what price a company will set for its product; it is the most important aspect from the point of view of the consumer, producer and seller. Without an effective pricing mix strategy many companies fail and become bankrupt. (Hughes, A, Chitty, B & Fripp G (2011) The Air-Stream Jacket is using competition based pricing, in particular Sealed-bid pricing, meaning the Price is based on how competitors will price rather than on its own costs or demand. This concept also crosses over with market penetration pricing, meaning the price is set low in order to attract many consumers and control of a large market share. These pricing strategies have been used in order to achieve the marketing objective of gaining a market share of 30% by Jun 2015.

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The promotion mix strategy is used by marketers to communicate product benefits and features with the target market, this process is called Integrated Marketing Communications (IMC). The mediums used to communicate IMCs generally include; advertising, sales promotions, public relations, direct marketing, sponsorship and personal selling. (Kotler, P, Adam, S, Denize, S & Armstrong, G (2009) The integrated marketing communications for the Air-Stream Jacket; 1. Identify target market. Upper Middle Class Income earners, as identified in section 8 (Profile of segments). 2. Determine the response sought. Fairly priced, highly adjustable, equally casual and sporty jacket with high availability. as identified in section 10 (Product positioning strategy). 3. Select a message. It is recommended the Air-Stream Jacket is communicated as identified in section 10 (Product positioning strategy). 4. Select the media The Air-Stream Jacket should be marketed in media which are effective with the target consumers. This information would be acquired during the research process. 5. Select the message source The message should be communicated by someone trustworthy the target market can relate to. Eg. Bear Grylls. 6. Collecting feedback The IMC message should be tested on a select group of target consumers to ensure it is effective. 7. Setting the budget The budget for the IMC is dependent on the resources of Blue Gorilla Clothing. As it is a new company it is recommended it use a large campaign to build target consumers brand awareness.

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Conclusion. It can be seen that Blue Gorilla Clothings Air-Stream Jacket is a viable product that

can successfully be marketed. This can be seen in the competitor overview where

several other, ultimately inferior, products are already controlling the market.

The macro-environmental analysis reveals that although there are trends affecting the

market these can be used to Blue Gorilla Clothings advantage by targeting the right

consumers, positioning the product correctly in the market and using the correct

strategies to achieve specific marketing goals.

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References.

Agins, T. (2010). The End of Fashion: The Mass Marketing of the Clothing Business

Forever. HarperCollins.

ClimaWare Jacket, Dhamainnovations.com, Accessed 17th October 2013,

Goldsmith, R. E., & Flynn, L. R. (2004). Psychological and behavioral drivers of

online clothing purchase. Journal of Fashion Marketing and Management,8(1), 84-

95.

Greaney, S (2011), Marketing Case Study, Niche Media, South Melbourne.

H2Flow Jacket, HellyHansen.com.au, Accessed 17th October 2013,

Hughes, A, Chitty, B & Fripp G (2011), Marketing 2 Real People, Real Choices,

Pearson Education, Sydney.

Kotler, P, Adam, S, Denize, S & Armstrong, G (2009), Principles of Marketing,

Pearson Education, Sydney.

Marzo-Navarro, M., Pedraja-Iglesias, M., & Rivera-Torres, M. P. (2004). The

benefits of relationship marketing for the consumer and for the fashion

retailers.Journal of Fashion Marketing and Management, 8(4), 425-436.

Mens Moab Spring Softshell, Merrell.com, Accessed 17th October 2013,