Greek shoe company

Cover Page

The sports apparel industry is heavily fragmented from both a domestic and international perspective. For one, the growing middle class of India and China are creating a unique value proposition for sports apparel brands who are global in nature. These global brands are heavily focused on creating a dominate market position within their specific market niche (Aaker, 2020). In addition, these brands are interested in creating occupying a niche within the consumers minds so that they are often associated with certain consumer behaviors. Ideally many brands are looking to become so successful in their marketing campaigns that they become a verb. Example include “Google it” of “I will FedEx it.” Here, companies have essentially become so engrained in the consumer subconscious that they associate routine behavior with a certain company (Abbey, 2018). In this case they associate searching the internet with Google and package delivery with FedEx. Sports apparel companies are no different in this regard. They look to leverage their brands to create a compelling value proposition for customers through marketing, advertising, and promotion Competitors such as Nike are much more heavily focused on brand building and spend heavily to occupy consumer mind share as it relates to apparel and corresponding products (Dove, 1991). They also invest heavily into endorsement and sponsorship. Here Nike is looking to be associated with the great accomplishments of athletes. Campaigns such as “Be Like Mike” empowered fans of Michael Jordan to not only purchase his shoes, but to behave like a champion (Abdel-Khalik, 2020). Through marketing Nike was associated with arguable the greatest basketball player that ever lived. They are currently doing the same thing with Lebron James, Zion Williamson and other sporting athletes (Jones, 2019). Here, the marketing strategy is predicated on associated the brand with many of the incredible on-field or on-court moments. Consumers, wanting to emulate these respective athletes often look to purchase their shoes and other apparel products (Acimovic, 2018).

The start Greek company will be named Area after the Greek god of war. The company will focus on the running show segment with the European region with particular focus on Greece and Spain. The mission of the company will be to inspire all consumers to live an active lifestyle by providing the highest value and quality running shoe in the market. As such, it will occupy the higher margin, luxury running shoe segment. The vision of the company to inspire all individuals to become active. The company will look to market heavily in the Greece and Spain regions to occupy the luxury running shoe segment of the market (Adamson, 2020).

Introduction to the Report

Sports apparel marketing is very complex task. For one, the ability to segment the target market has now become much more sophisticated. Consumers are also much more sophisticated given the number of options they now have available within the marketplace (Fowler, 2020). Globalization and supply chain expansion has increased the overall market availability of footwear (Mamic, 2018)They also heavily utilize the concept of “show rooming” to segment the market for perspective purchases. Each of these elements are used in a manner to allow consumers to better curate and segment products that have a compelling value proposition for their needs. Social media also plays a very large role in marketing. Here, data analytics and other forms of data science can better segment consumers and the products they demand.

Data analytics will be central theme throughout the marketing plan. For one data analytics provides much more pertinent data as what consumers are interested in (Cui, 2019). Through social media, marketers have a glimpse into what consumers search, like, post, and comment on. They also have a better idea of when consumers log onto the platform and for how long they stay on the platform. This is invaluable as it relates to marketers as it allows them to place their advertisements in the right time when consumers will be the most receptive to it. This very important in high growth countries such as China or India, which both have high growth countries (Chen, 2019)As such data analytics lends itself very well to the marketing plan of Ares as it looks to target those looking to purchase luxury shoes.

Main body of the report, with distinct and clearly titled Chapters and sub-chapters

Business Summary

The business summary of Ares is to penetrate the luxury running and apparel market within Greece and Spain. Figure 1 below shows the market segmentation of Europe. Here, Ares will occupy the luxury brands segment with an emphasis placed on quality. The niche market will be the running segment with a higher price point and higher margins (Howard, 2018).

To do so, the company will look to leverage a strong advertising, marketing and branding campaign with its target markets (Yuffie, 2018). The campaign will focus heavily on the technology, quality and ESG standards used to produce the product. In addition, the company will look to leverage sponsorships and endorsements to help promote the product and its brand. These sponsorships will include much more grass roots efforts such as 5Ks, marathons, and other local events. It will also include nations sponsorships of global events throughout the Greece and Spain region (Smith, 2019)

The focus of the marketing program will be centered around data analytics and will have a heavy focus on digital platforms. These digital platforms will consist of Facebook, Instagram, Tik Tok, YouTube, and other digital social media networks. The program will also leverage outdoor media such as billboards which has a consistent and captive audience within its target market. Here, the aim is first to occupy a niche in the consumers mind as it relates to the high-quality luxury shoe products. It will also look to increase repeat purchases be reinforcing the value proposition of the brand to consumers. This is particularly true as shoes brands can resonate with certain initiatives such as feminism, cancer, or sustainability (Buck, 2020).

Environmental Scanning

The luxury shoe market is expected to be a $47 Billion dollar market by 2026 according to kbvresearch. Figure 2 below depicts the compounding growth of the footwear market overall. This growth is roughly 4.8% per year which exceeds that of the world-wide GDP growth of 3%

Figure 2 – Luxury Foot Market Sales Projections

The larger growth rate is attributable to the larger growth rates of developing countries. Although the marketing strategy is centered around Greece and Spain, the company will undoubtedly sell to other foreign markets due to globalization. Globalization and the emergence of e-commerce have significantly contributed to the higher growth rates being realized in the luxury apparel space.

The dominate player in this space is Nike. The company boast an extremely impressive track record of growth and profitability (Paulicelli, 2020). It is a fierce competitor in the luxury space and has a very strong competitive advantage. However, the market is large enough to allow for more competitors in the luxury apparel segment. Likewise, the current market environment is heavily fragmented with no single player taking more than 20% market share. As such, the market provides opportunities for both growth and market share gains for those that can create a compelling value proposition for consumers (Højer, 2019).

Figure 3 – SWOT Analysis

Strengths

· High growth market that exceeds the growth rate of worldwide GDP

· Customers are willing to pay premium prices for products

· Consumers are much more active and looking to live a healthier life

· Middle class incomes are rising in many of the target markets of the company

Weaknesses

· Highly fragmented customer base with low switching costs

· Consumer sentiment can easily change

· Brands are highly beholden to retailers for space and display settings

Opportunities

· Highly fragmented market

· Consumers looking to be more active and those purchase ancillary products such as wearables

· Large growth opportunities in emerging markets such as India and China

Threats

· Very strong competition from incumbents in the market

· Large degree of low-cost options in the market

· Suppliers and labor costs are increasing due to supply chain constraints

· Barriers to entry are low

· Customer switching costs are low

· Strong brands tend to have the highest market share and growth

Target Market

The target market will be individuals in both Greece and Spain with very high disposable incomes. The typical customer will make between $60,000 to $150,000 gross income per year. They will typically have larger amounts of discretionary income and have above average income and wealth characteristics (Thomson, 2019). Likewise, the target consumer will be between the ages of 25-64 and will be living an active lifestyle. The target market will be consumers looking for high quality, long lasting shoes that also look stylish. The target market is not price sensitive and are willing to pay premium prices for higher quality goods and services (Jacalyn, 2020).

Market Strategy

The market strategy will first look to provide a compelling value proposition to consumers. To do this, the strategy will be to provide consumers with a high-quality product that is unparalleled with the luxury goods segment. The strategy will also look to leverage data analytics to better pinpoint customers when they are in needs of a product good or service that the company provides (Coye. 2019). The market strategy will be heavily focused on digital platforms such as social media and other digital mediums. Finally, as the target market tends to have a high net worth, the strategy will leverage some elements of guerilla marketing using billboards and other signage in highly trafficked areas of commerce (Reynolds, 2019).

Figure 4 – 7 P’s

Product

Luxury shoe apparel with an emphasis on running shoes

Price

High price point ($90 - $250)

Place

Distribution will be through luxury retailers who align with the brand of the company and have customers within tis target market

Promotion

The company will leverage value limited promotions as promotions only devalue the brand in the consumers mind. The brand should be somewhat exclusive.

People

Target market is consumers ages 24-64 with incomes between $60,000 and $150,000 per year

Process

Process will center around marketing in digital spaces through data analytics. The company will then strategically place ads in front of those most likely to purchase the product

Physical Evidence

Reporting will be reviewed monthly to course correct the marketing campaign if necessary.

Budget

Figure 5 – Budget

Media Plan

The media plan as describe above will be focused heavily on digital elements on online channels through data analytics .

Summary and Conclusion

In summary, the Ares brand will be predicated on serving the luxury consumer with the sports apparel segment. Emphasis will be placed on the running shoe category. The industry overall in experiencing very high growth rates relative to the world economy which allows the company to capitalize on this trend. In addition, consumers are living much more active lifestyles which enables the company to better penetrate the market. The luxury segment is also much more recession resistant to that the other mass market segments which bodes well for the company. The marketing strategy will focus heavily on digital and online channels and emphasize a luxury and quality value proposition.

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