Marketing Strategies: Adult Pleasure Toys and Lingerie

Marketing Strategies: Adult Pleasure Toys and Lingerie

This report discusses the presence of a company that produces adult toys and lingerie. There are several parts to this analysis. First, the report examines the market segment and defines the target customer according to several types of segmentation. For a complete understanding of the targeted market, the report chose psychographic segmentation, demographic segmentation, behavioral segmentation and benefits sought segmentation.

The choice for these methods was a result of the type of product. The conclusion is that the targeted consumer is likely 20 to 45 and is driven by different motivations. In young age, the idea of experimentation is the primary motive, in the upper part of the age segment (30s and 40s) it is likely the need to experiment in the couple.

In terms of differentiation strategies, the report concludes that it is more difficult to differentiate based on the nature of the product, which is less customized, but that the company should focus on other parts of the marketing mix, including pricing strategies. It should also focus on the way the product is delivered. Here, the nature of the product implies discretion, so an online distribution system could be helpful.

Another large part of the report discusses environmental factors that could impact the business. Legal, technological, social and economic issues are discussed. The overall conclusion is that the business is more sensitive to economic issues than other products and the technology offers an opportunity in improving customer experience. As seen previously, this could also become a competitive advantage for the company.

Market segment and target customer

Marketing theory recommends several different methods that can be used to segment consumer markets. This report will focus on three particular ones, more relevant given the background of the business and the type of products it sells: psychographic segmentation, demographic segmentation, behavioral and benefits sought. As a side note to behavioral segmentation, this report will also discuss the market in terms of segmentation by occasions.

According to Fripp (2012), behavioral segmentation looks at the relationship that the client has with a certain product or service. This will likely label the user as a heavy or light user, as a loyal or occasional user etc. A particular aspect of behavioral segmentation is segmentation by occasion. This is particularly relevant, because erotic toys and lingerie are a part example of a product that is purchased primarily around certain holidays, notably St. Valentine's Day.

Taking into account some of the other variables relevant to behavioral segment, one can point out that erotic products are not necessarily the type of products that develop a following. They are more the type of product that someone tries from time to time in order to bring an additional element of novelty into one's sexual life. As a consequence, the company does not need to develop a following.

Lingerie, on the other hand, does develop a following, whether it is or not erotic lingerie. Women grow attached to a particular type of lingerie, and they use this even in conversation with their peers to promote a certain social status. This is not necessarily true only for recognized brands such as Victoria's Secret, but for European ones as well.

Segmentation by benefits is based, according to Reid (2009), on the needs of the customer and on what he perceives will bring him added value when using the product. In the case of the products that this company is commercializing, the customer is seeking to maximize his or her pleasure during a sexual act with his or her partner. This in turn can increase self-esteem, among other benefits. The lingerie part of the business could operate in a similar way, women wearing lingerie not only for the sexual act, but to feel beautiful, to feel good about them.

Demographic segmentation looks at things such as age group, sex or ethnicity. This report believes that the products address the 20 to 45 age group. The company should target females in this age category for the lingerie products and both males and females for the adult toys and other erotic products. The company could focus on married couples although, given the age segment that has been decided as a targeted market, this is not a necessity. The segment should also target individuals with medium and higher income: the products are not expensive per se, but targeted this category of consumers could ensure recurrent purchases over time, helping to build clientele.

When looking at psychographic segmentation, the most important elements to consider are lifestyle and personality. The company should target individuals that are open to sex and sexuality and who are willing to experimentation in their sex life. These individuals should also be interested in sex, although this variable should not be seen as something limitative.

Company's strengths and weakness relative to competitors

The company's strengths and weaknesses are general and not related to particular competitors. For some competitors, such as Victoria's Secret, the company's weakness will appear amplified because of the size of Victoria's Secret and its market share.

The most important strength that the company has is the initial enthusiasm. The entrepreneur spirit means that there is a certain energy about starting a business and this is something that established companies no longer have. The latter are no large bureaucratic structures that lack much of the initial commitment and focus.

Another strength that the company has is flexibility. This will initially be a small company. Small companies are more flexible on the market, they are able to make decisions in almost real-time, primarily because their organizational structures are so much more simplified and communication flows much easier top-down and bottom-up. This increased capacity to react could be an important strength as the company builds its business.

Finally, another strength is that the company is unknown. This is also a weakness, as seen below, but it represents a strength as well because the other competitors on the market have no information about a new company. They do not know how to position themselves. This company, as a new entrant, has, on the other hand, made a solid market analysis and knows very well what its competitors are doing, what their strategies are, where they plan to develop. So, one of this company's strength is a better knowledge of the market.

The primary weakness of the company is that it is a new company on the market. This report shows that the type of products that the company commercializes (adult toys and lingerie) is not necessarily the type of products for which clients are likely to build a loyalty. You do not attach yourself to the adult toy company or to a particular lingerie company, except in particular situations. However, there needs to be something that will convince the customer to switch and choose a new company on the market. A first something could be curiosity, but the company needs to encourage the client towards that curiosity. However, the fact that the company is not yet known is a weakness.

Another potential weakness is the fact that the company is still in its incipient stages and does not yet have a properly developed internal organizational framework. For that matter, even the external network of its connections with other partners (distributors, suppliers etc.) is not that well developed. The company needs to spend time to make sure that the way these structures grow is in line with the organization's strategic vision and long-term objectives.

An important absolute weakness, although not one that is necessarily relative to the other competitors, is that the products are particular and, as such, are more complicated to sell. This takes into account everything from the way these products will be marketed to the way these products will be distributed and delivered.

The financial weakness should also be considered relative to the other competitors. These competitors are already operational, so they have activities that are generating money. The company is only at the very beginning, so it is in an investment phase where debt has been accumulated in order to start the business, with revenue in the very beginning likely at lower levels. The company should consider monitoring closely its cash flow, so that it is not in a situation where it will not afford to pay day-to-day expenses.

When it comes to the lingerie business an important weakness that should be analyzed is its access to the modeling world. A successful lingerie business will operate better if a well-known model advocates for it. Victoria's Secret is a well-known example in this sense. The company should ask itself whether established models are likely to model for a company that is new on the market and that, additionally, also sells adult toys as part of its business. Some may consider this damaging to their reputation and may think twice before agreeing to commit to cooperation.

Differentiation strategy

It is difficult to differentiate when it comes to adult toys and lingerie, so this subsection will discuss two different approaches that could be considered. The first is a non-product differentiation. The company will be a newcomer on the market and could innovate when it comes to pricing strategies, for example. It could decide to accompany the purchase of an adult toy with a free piece of lingerie, thus both maximizing customer satisfaction and promoting its lingerie line.

The first obvious differentiator could be diversity. Admitting that there are so many types of adult toys that can be discovered, differences can appear when it comes to the number that is available for each product category. The more diverse the product category and product lines are, the more the company is likely to access a more diverse array of potential customers.

Another differentiator could be the price itself. Certainly, when someone purchases an adult toy, the respective individual will not necessarily be looking for the cheapest product. However, being able to offer a quality-competitive product at a lower price than another company could sometimes mean that the respective client will purchase the cheaper product.

An important differentiator could be the way that the products are delivered and here discretion is an important element. So, the online aspect of things can be part of the differentiation strategy: the fact that the client can purchase the products online, in a secure and discrete manner, can greatly improve his purchasing experience.

Leader vs. follower

An initial consideration for this subsection is that whether a company is a leader or a follower does not necessarily determine the company's successfulness (McFarthing, 2013). Another important element to be mentioned is that the decision to be a leader or a follower is not only given by the moment when the company is launched, but also by the nature of the products.

If the product is a highly innovative one that is likely to be disruptive on the market, then the company can assume a leadership role on the market even it has only been created. The pharmaceutical industry or the information technology industry are examples where products can really make a difference when launched, bringing more to the market. Other products may simply not be on the cutting edge of innovation. Launching such a product should take into consideration a follower strategy.

The company will aim to be a follower. The follower strategy has several important advantages from which a company such as this one can benefit. The first advantage is that it is less exposed to threats on the market than a leader. For an incipient company that has just been launched, this is very important and allows it to develop and become better prepared to handle condition on the market.

The second advantage is that the company can benefit from this time to study and learn from the leader. Some of the leaders in this industry are established players, with a large market share. Victoria's Secret, for example, is not a simple lingerie producer. It is a recognized leader in this market, creating trends, defining how women should look and dress. It is a business model from which the company can learn and understand what they did in order to reach this level.

Another motivation for being a follower in this case is that the products that the company is launching on the market are not the actual elements of differentiation. As previously shown, there are other areas whether a differentiation strategy can be implemented and not in the product field. Adult toys, erotic objects and lingerie are not objects that can benefit from cutting-edge innovation processes. The company needs to embrace the idea that it will produce, more or less, similar things to what is already on the market. There are ways of making them differently, but the way they look and the way they function will resemble what already exists on the market.

So, the company does not only choose to be a follower, but, indeed, it has no other option at the very beginning, when the best strategy will likely be a niche strategy. Such as strategy could develop as a way of gradually building market share, while at the same time learning more from the competitors on the market that have more experience.

Macro-environmental issues or trends facing the company

Legal issues/trends. The legal issue is an important one and has been previously mentioned in this report. The problems with the legal aspect of things include the fact that (1) legislation is particular when applied to the type of products that this company proposes to commercialize and (2) that legislation on this type of products varies from country to country and, within the United States, from state to state.

The company needs to take into consideration the fact that the type of products it sells could, at some time or other, be banned in some of the countries where these are commercialized. If banning does not take place, there may be rules and regulations as to how these are commercialized. For example, the company will not be able to sell them in hypermarkets, a location that would otherwise have brought a lot of potential customers.

The company will either decide on opening its own line of stores or it can use existing sex shops and build deals with these to sell its products. The sex shops operate with their own set of rules and regulations that do not always make business so easy. For example, sex shops have to cover their windows, so that a person walking on the street cannot see inside.

All these are examples of things that impede the business process for the company and for the products it sells. While in the case of other products, part of the marketing is substituted with simply walking by a product and noticing its quality, this will not be available for this company.

The company should also recognize the fact that it will never be able to sell its product in some of the religiously conservative countries because of legal issues. Its market is thus not a global market, it is more of a geographical targeted market. Its market is also easily influenced by potential future legal trends. Legislation can always be introduced to limit the area where adult toys can be sold, to increase the age of people who are allowed to purchase them etc. From this point-of-view, the company's products remain sensitive to such potential changes.