Pacific Brands -- \'Pacific Brands Responds Environmental

¶ … Pacific Brands -- 'Pacific Brands responds environmental forces (takes a hammering)', page 55-7 text book. (Management: Foundations applications, 1st Asia-Pacific Edition.) REPORT OBJECTIVES you expected address objectives report

Pacific Brands: Competition and multicultural marketing in the apparel industry

Pacific Brands is an Australia-based apparel company located in an increasingly competitive industry: apparel. Rival companies operating on a lower cost model are biting at the Australian manufacturer's proverbial heels. "With the elimination of quotas in January 2005, the international textile and apparel industry is facing many challenges. Among them are the increasing number of skilled producing nations, an overcapacity of goods, and a deflation of world market prices. Currently the country with the greatest capacity for capturing the largest share of the world market is China" (Parrish, Cassill & Oxenham 2006). For many years Pacific Brands combined a niche marketing strategy related to its lines of clothing specifically targeted at workers with a more general marketing strategy for its apparel lines such as its underwear and shoe brands.

However, the specific 'niche' of all sectors of the Australian market is no longer a reliable source of revenue for Pacific Brands, forcing the company to abandon its current focus upon that national market base and to pursue a more global marketing strategy. It has long been "believed that the country of origin has an impact on consumers' product evaluations and purchasing intentions to a brand" but the popularity of a company rooted in a 'buy Australia' ethos is no longer translating into widespread sales (Peng & Zou 2007). Unless Pacific Brands can offer a more international perspective and diversify its market base, its long-term profitability is threatened. Once a proud Australian institution, because of external pressures Pacific Brands must change.

Issue identification

As part of its current marketing strategy, Pacific Brands markets itself with pride as a company that employs Australian workers and caters to Australian consumers. "Almost all of Pacific Brands' sales (95%) are made in Australia" and its stress upon its low cost also reflects how it caters to 'working class' Aussies: "close to half (47.8%) of sales in the 2012 calendar year came from discount department stores" (Robin 2013). However, it was recently forced to 'shed' a number of jobs in its work wear lines, due to declining demands. Those jobs were outsourced to less expensive areas of the world, causing considerable consternation amongst many consumers who had bought its clothing to support the company's commitment to remain based in Australia, employ Australian workers, and have an Australian-focused culture as a business (Cavanaugh 2013). Pacific Brands said it had no choice to do so, given declining revenue. However, in the long run, taking advantages of new global markets can be advantageous to Pacific Brands. A more globalized marketing perspective is needed for Pacific Brands to succeed given its over-exposure to the Australian market. "The most ambitious part of the Pacific Brands roadmap is to expand its key lines overseas to the UK, the U.S., Europe, China, and parts of Asia and the Middle East" (Robin 2013). Pacific Brands already markets its products abroad; now it must adopt a truly multicultural marketing strategy.

Critical discussion

Up until now, Pacific Brands has largely pursued an Australia-focused strategy and will need to reformulate this to be responsive to market needs in the areas of the international market it wishes to capture. Although a more multicultural strategy for its brand profile may initially be challenging for Pacific Brands, given that Australia itself is a multicultural society, encompassing a large immigrant population, this actually allows the apparel company to build upon rather than to ignore its history. "The term 'multicultural marketing' is used here to refer to the ways firms use and respond to opportunities and challenges that arise from a multicultural society in serving domestic and international customers. Such marketing increasingly is becoming part of mainstream marketing campaigns and business strategy in Australia because of the multicultural makeup of Australian society and because, as business becomes more internationalized, it is called on to meet the demands of the multicultural world" (Wilkinson & Cheng 1999). While the 'Australia first' image may no longer be enough to sustain the company either in Australia or abroad, certain aspects of its branding, including its low price point, humor, and stress upon ethical marketing (including its commitment to offer a fair wage to its workers) can be used to endear the brand to consumers outside of its immediate market base.

Pacific Brands can still strive to adhere to a low-cost model while changing its image enough to appeal to international markets. It is attempting to cut costs on shipping, for example through consolidation to ensure that costs can be effectively contained while still offering consumers the lowest possible prices. "The rapid growth of online shopping, in particular, means we now have to pick and pack an increasing number of orders for single line items. Larger customers are also ordering smaller quantities of goods, more frequently" (Flexibility, 2013, Demantic). Its most profitable line is its Bonds underwear which combines a fun image that is not specifically Australian with a relatively low price point. Pacific Brands' CEO wishes to encourage such enthusiasm for the company's other brands but a multicultural marketing strategy is needed to do so. "Businesses operating exclusively in a domestic environment are distinguishable from businesses operating in both an international and a domestic context" -- successful multinationals are characterized by their ability to be flexible to market needs in a variety of contexts while still holding true to their brand identity (Roth & Morrison 1992).

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