Price is the revenue-generating element of the marketing mix and price premiums are the most important brand equity benefits of building a strong brand. Prices can play multiple roles to the consumer, such as signaling value or quality and competitive pricing. There are two main pricing strategies:
Value pricing aims to strike a right balance of product quality, product costs and product prices that fully satisfies the needs and wants of consumers and firm’s profit targets. Despite increasing competitive pressure on cheaper prices, a strong brand can still command price premiums if consumers value perceptions remain high.
Everyday Low Pricing (EDLP) focuses on maintaining a consistent set of “everyday” base prices on products, encouraging consistent consumption and hence, higher brand loyalty. It is seen as a complementary pricing approach to determine nature of price discounts and promotions over time.
2. Product
When it comes to the Product element, Hang Ten needs to consider not just the tangible clothes apparel that is being sold, but also the perceived quality and value and brand intangibles that are associated with their products. Products should offer functional benefits and also provide process and relationship benefits to best meet consumers' needs. Hence, besides providing quality clothes apparel, Hang Ten should also consider the following aspects:
Process benefits emphasizes increasing the perceived quality and value of the products by ensuring that customers have easy access to product information and broad product selection. This helps in the customers’ decision-making process.
One possible source of product information is their own website. Currently, Hang Ten Singapore’s website lacks product information and there is no other avenue to deliver the relevant product information other than through the stores themselves. Hence, Hang Ten can consider utilizing their website as a source of information through the use of catalogues.
Relationship benefits focuses on fostering loyal consumers. One method to do that is through loyalty programmes. Currently, Hang Ten offers ‘Hang Ten’ membership with every $30 spent, but they fail to publicize this. Hang Ten can consider concentrating more on the differentiated loyalty rewards and communicate them properly.
3. Place
The ‘place’ component refers to the channels of distribution where Hang Ten products are being sold. The plethora of department stores, retail stores, web-shops, etc. can be categorised into two major channel types:
Direct channels are where products are offered to end-consumers without the use of any intermediaries or third-party retailers and distributors such as company-owned stores, company website, phone or a physical sales force.
Indirect channels are where products are offered to end-users with the help of intermediaries, i.e. department stores and retailers that assist sales with functions such as bulk-breaking, customer matching and risk-bearing.
Hang Ten Singapore operates its own company-owned stores across island-wide, and maintains a presence in selected department stores (e.g. BHG). With its recurring discounts, it is evident that Hang Ten employs a strong ‘push’ strategy to move its products through the channels.
Hang Ten’s indirect channels, however, contribute little to its already strong brand awareness and emphasis should thus be placed on strengthening the brand experience instead. The ability to customise store layout and décor to strengthen its image and support marketing communications make company-owned stores a better tool to achieve this aim.
4. Promotions
The overall promotions mix consists of many complex elements that are explored below:
Advertising
Advertising can potentially bridge the gap between Hang Ten’s identity and image and build brand equity. Hang Ten needs to choose the right type of media collaterals and target the accurate avenues of advertising.
Hang ten currently employs only the use of outdoor advertising; posters in-store. Though it is highly repeated and easily noticed, exposure time in consumer eyes is far too short and the posters are forgettable with no clear message. Furthermore, the people that see the posters are most often already Hang Ten customers.
As mentioned in assignment 3, this collateral lacks description of what Hang Ten stands for, and does not tell the consumers anything. There is no product info or brand statement, and the ambiguous “We’re Hang Ten” does no better.
Hang Ten’s offering of trendy, simple, relatively cheap, substitutable and basic shirts, meanwhile, makes it a low-involvement purchase decision. Companies in this category typically take advantage of using celebrity endorsements to support their collaterals.
Other than improving the collaterals, we believe that Hang Ten should employ more visual, visible and interactive avenues. This automatically rules out the use of Radio and means that they should employ the use of print media and interactive forms of advertising. We have removed television as it is very expensive and our target market, the young adults and youths, are watching television less and less.
Sales Promotions
Sales promotions are another possible type of promotions which Hang Ten can undertake and would entail providing short-term incentives in order to encourage trial or usage of their products. There are two types of sales promotions:
- Consumer promotions
Consumer promotions consist of strategies such as samples, demonstrations, coupons and refund offers and are designed to change the choices, quantity or timing of consumers’ product purchases. Out of these, Hang Ten could consider implementing discounts, coupons and refund offers which could increase sales. However, we feel that this would end up diluting the Hang Ten brand and exacerbate current challenges, reinforcing the cheap, washed-out local brand perception consumers already hold.
- Trade promotions
Trade promotions are not relevant as Hang Ten operates their own company-owned shops and do not need to consider providing any financial incentives or discounts to retailers and distributors.
Events Marketing and Sponsorship
Public sponsorship of events or activities, art, entertainment or social causes that are relevant and in sync with the brand image can be considered. If the appropriate events are chosen, Hang Ten can successfully identify themselves with their target segment, increase brand awareness and generate positive consumer perceptions about key brand associations. This method also helps create experiences and evoke feelings amongst consumers, enhancing corporate image dimensions and ultimately, deepening their relationship with their target segment.
Although coverage may not be as wide as other promotions methods, this limitation is mitigated by the importance of our priority to convey brand identity to our target segment. Events marketing and sponsorship is high on contribution unlike sales promotion which may end up diluting the brand or projecting a negative brand identity. Even though the cost of event marketing and sponsorship would be fairly high, it is a worthwhile investment and could reap substantial benefits by boosting awareness and creating strong brand associations in the minds of target consumers.
Social Media
Hang Ten can consider Social Media as a new addition to the integrated communications mix with a choice of several outlets such as Twitter, Facebook, YouTube, Blogs and mobile phones applications.The proliferation of social media platforms for marketing purposes has seen tremendous growth over the past few years, allowing companies to reach out to their target audiences and share information easily with anyone with an internet connection. Through social media marketing, Hang Ten would also be able to drive online traffic to their own website while simultaneously branding themselves with positive associations such as modern, trendy and being sociable which would help to boost their brand image amongst youth who embrace social media.
Personal Selling
This method uses face-to-face interaction with one or more prospective purchasers for sales. The personal interaction allows detailed, customized messages to be delivered to consumers and consumers can give direct feedback. A relationship is established between the marketer and the consumer, hence ensuring customer satisfaction and subsequently, brand loyalty.
Although personal selling gives emphasis on the customer and builds positive brand responses, it is too costly and lacks breadth. We do not recommend this method for Hang Ten as it is irrelevant and attempts to enter resonance stage prematurely.
Endorsement
Using well-known and admired people to promote products can attract attention to a brand and shape brand perceptions that consumers infer based on the knowledge they have about the endorser. The celebrity should be popular amongst the target group to improve awareness, image and responses for the brand. A credible endorser would induce a rich set of useful associations, judgments and feelings amongst consumers.
Hang Ten does not engage celebrity endorsement, hence missing out on a potential positive source of brand equity. If implemented, Hang Ten should strategically select well-known celebrities that are relevant to the brand. There must be a logical fit between the brand and the person, and marketing communications should use the celebrity in creative ways to highlight brand associations and facilitate their transfer.
No comments:
Post a Comment