Shoes of Prey – Research Assignment help
Executive Summary
This report analyses the opportunities and threats that will be faced by company named Shoes of Prey (SoP) planning to expand its product offerings to an Asian country. SoP being an Australian brand is a renowned international company around developed companies, which now is willing to increase market share and customer attractiveness. SoP is an international brand that started as an online store providing customers the option to customize shoes depending on personal choices. The quality of footwear and their delivery logistics department is quite strong that contributes towards a positive brand image. Therefore, entering into Singapore market will increase its customer base, targeting potential customers and then later entering into other Asian countries. The step to enter Singapore is the initial stage for capturing Asian market and creating strong brand image among Asians. The main focus of the report is discussing strengths and weaknesses of the parent company keeping in view other competitors, highlighting market segments and positioning strategy for the company in case of Singapore. Singapore is considered to be the most attractive market, looking at its growth perspective in terms of target segmentation and marketing mix for shoe industry. In order to do this, they need to conduct a research on the company performance on the basis of internal and external environmental analysis with the market potential of Shoes of Prey. After the analysis of industry, macro-environment and consumer analysis, one can decide if Singaporean market is feasible for SoP and then develop marketing and positioning strategy accordingly.
Industry Trends
The global trend in the footwear industry is projected to increase by 430 billion US dollars by the end of 2025; the main reason for this increasing trend is due to the increased disposable income of the middle/upper class and new design trends being followed by customers (Rising Household Disposable Incomes and Footwear Design Innovations Drive the Global Footwear Market, 2017). Other factors that might lead to such a trend includes rise of technology and informed customers in terms of designs, fabric, sole and raw material innovations. The shoe industry is further classified into two categories; athletic footwear includes tennis, hockey, football, basketball, hiking, sports shoes and non-athletic footwear comprising of casual shoes, boots, formal heels, sandals, etc. According to the analysis of 2016, the segment of non-athletic shoes contributes to around 52% to 64% in terms of revenue and market share (Footwear Market Size, Share, Growth | Emerging Trends, Forecast 2017 – 2025, 2017). In addition to this, the shoe industry is further categorized on the basis of distribution channels; most of the footwear companies are functioning through physical stores whereas others are operational online. Hence, the margin of physical stores is seen greater when compared to the overall industry estimating around 70%. Much emphasis on online shopping is not appreciated by everyone in the shoe industry, therefore companies need to improve customer’s perception regarding this.
Looking at the perspective of Singapore’s shoe industry, currently the revenue of shoe segment totals to 162 million US dollars. There’s a lot of potential in shoe industry for coming years if customer needs are tapped properly, the selected market will prosper in near future (The Statistics Portal, 2017). The footwear industry in Singapore is quite saturated as many local and global shoe companies are present within the region, knowing it’s a gateway to Southeast Asian region. Therefore if companies utilise their resources and deliver efficient shoes fulfilling all customer requirements, the revenue will be increased in large numbers which will be quite beneficial for the economy.
Shoes of Prey – Company Overview
SoP Australian based company, initially started as a small venture by three friends in Sydney during the year 2009, having an intention to offer customised shoes to the customers. It is an online retailer offering customized footwear services to females using online platform; order is placed online once they design the shoe and gets delivered within a week or two (Shoes of Prey Pty. Ltd. , n.d.). Therefore, SoP is using customized service and efficient delivery network as their competitive advantage; attracting large customer base for quality services at reasonable price.
SoP is a global start up offering women to design shoes of their choice by giving them a variety of selection starting from style of the shoe to minor detailing. The company customises, manufactures and delivers all types of shoes including sandals, stilettos, wedges, flats, oxfords, etc. that are accessible online as well as retail outlets. Some physical stores are located in Washington, California, New Jersey, Virginia, San Francisco, Illinois and Australia (Textiles, Apparel and Luxury Goods – Company Overview of Shoes of Prey Pty Ltd., 2017).Choices to select sizes, styles, shapes, heels, textures, colors and other designs were provided in the category of shoes. According to CEO and creative head of company, SoP achieved high growth due to frequency of orders from countries around the world. During year 2016, company has manufactured and dispatched orders to around 92 countries within five months’ time frame which is indicating high growth of the company and is quite self-explanatory (Cawthorne, 2016). The main reason of success is tapping market needs right on time and capturing customer needs through their products.
Taking profitability perspective of the company, it faced growth over eight years of establishment. After fulfilling demands of Australians, company added five physical outlets in United States capturing target customers through customised services. U.S. is considered to be the second largest target market for SoP; Australia being first. Later lots of other investors including Nordstom, Blue Sky, Blackbird and Khosla ventures stepped in to increase market share and profit revenues (Shoes of Prey Pty. Ltd. , n.d.). Using 3D designer process for shoe manufacturing, the company has won many awards; latest being Retailer Innovator for the year 2016 in Australian Retail Awards (Shoes of Prey Press Release, 2017).
Macro-Environment Analysis
Looking at the global perspective for SoP, one must conduct an analysis to ensure Singaporean market is a good choice for the company; based on opportunities and threats that will be discovered through macro environmental analysis. Therefore, PEST analysis will provide a thorough understanding before entering the market.
Political: Political stability is the foremost thing to look before entering a new market, looking at Singapore one can be assured that government has brought proper reforms for social stability, employment, housing and improved living standards for citizens (Hamre, Skogsrud, & Bidne, 2010). Therefore Singapore is an attractive market for new entrants in terms of political stability, as corruption levels are relatively low as compared to other Asian countries. Factors that SoP needs to consider before entering are complying with the legal terms of media, online business, and advertising being followed in the country.
Economic: Considering the economic environment of Singapore, it is seen as the hub of Southeast Asia because of its strategic location (Footwear in Singapore, 2017). Once SoP start its operation in Singapore, they will have easy access to other regions of Southeast Asia due to the financial & manufacturing hub and seaport facilities. Since Singapore is a growing economy with skilled labour, majority of its population belongs to upper middle class having high level of income disparity. Therefore, increase in disposable income will lead to greater consumer markets which will ultimately benefit SoP. In addition to this, Singapore’s online shopping market increased by $4.4 billion dollars according to the research conducted by Paypal (Jia En, 2013). Looking at this increase in online shopping industry, there’s a wide range of opportunity for SoP as it will start the operations through its website where customers can place their orders online and get the delivery on time.
Social: Social analysis of Singapore explains the lifestyle of people residing in the country; the target market of Singapore is highly educated in terms of fashion trends and are willing to try new trendy fashion styles. Therefore, SoP will fill this customer need through their product offerings, as they will provide customized option to Singaporeans. Moreover, around 25% of the population of Singapore is foreigners who might be aware of the brand as the company has strong presence in Australia and American countries (Hamre, Skogsrud, & Bidne, 2010). Therefore, SoP can utilize this factor for creating brand awareness amongst the citizens.
Technological: Looking at the improved seaports of Singapore, it seems that the nation focuses great emphasize on technological development and modern equipment. Therefore, SoP can benefit as they are using the latest technology for manufacturing the products; mainly the improved service to customize shoes while sitting at home on the customers’ convenience (Jia En, 2013). Since Singapore has skilled labor force who are well aware about the latest technology, SoP can take advantage in this terms for making online shopping easily accessible for its customers. Moreover, the city has a strong telecommunication infrastructure and seaports that makes it accessible for SoP to import and deliver their shoes around the city.
Market Segments Overall
Market segmentation is next big step that the company needs to figure while launching their product. For this purpose, insights from data analytics usually collected through technology are extracted; regarding kind of customers reaching the brand, demographics based on the location, type of shoppers, and more details of customers that are targeted towards the brand (Kimmorley , 2014). Therefore, getting to know the customer well and then segmenting according to their needs is the result of market segmentation. Such segmentations can be based on geographical location, demographics, psychographics and behavioral segments. Looking at SoP, they segmented their market into two subcategories, primary and secondary customers. The main target of the company are online customers, therefore geographic segmentation is not considered in case of SoP. The primary customers’ category falls under regular customers who are conscious to fashion trends, loyal to the brand always willing to purchase shoes from them as they are fully satisfied with the quality delivered. Women of 20 years above belonging to middle and upper middle social class will be primary segment for the company (Tiwari, 2014). SoP’s primary target will be women including young adults and working executives who are regular users of footwear and normally purchases couple of shoes every month, this segment will be favorable for the company as they are attracted to latest designs. Secondary customers are those who are willing to buy good quality shoes at an affordable rate, these segments focuses on trendy, fashionable shoes being budget conscious at the same moment. The secondary segment for SoP will be innovators and usually students who like to experiment new fashion styles, as their personality is diverted towards creativity and daring. Secondary customers mostly falls under the age group of early 20s who attend social events, parties, concerts and fashion events.
According to (Statistics Singapore – Population Trends 2017), the following diagram shows the demographics of Singapore; presenting female population and employment rate in the country.
Primary Segment and Decision Making
It is a well-known fact that females generally are not satisfied with the footwear they buy; reasons being uncomfortable, color issues, heel problems, and other related factors (Mobin-ul-Haq, 2008). Therefore SoP is targeting the segment of customers by positively responding to their demands in the footwear category that were not addressed previously. Giving customers the opportunity to design their shoes based on their comfort level, is the recent trend that is being followed by SoP. However primary segments will be having high involvement towards the product offerings when making decisions, as they will be customizing the shoe depending on their own choice and satisfaction.
Competition
SoP has a number of competitors in shoe industry, online based ventures as well as physical stores offering female footwear with high quality and customization facility. Some of the following companies are direct and indirect competitors of SoP:
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