COURSE: Developing Marketing Strategies Professor: Pr. MichelsStudent Name: Daria Chizhova Program/Year: MBSDate of submission: 24.04.13

Spring Semester / Term I – Academic Year 2012-2013

Answer on the questions to the case « Big Skinny»

Question. What should Kiril focus on next? What should be his lowest priority? Why?

Answer. I think Kirill should focus more on his online presence, because as he thinks it would bring him more customers and more sales. Even though the market now is stagnating, because of being full with countless commercial proposals, products available and services provided, but the e-commerce and m-commerce are still very much developing. I suppose, that M – commerce might also be a good option to think about and find also big retailers like Amazon or Ebay, but on m-commerce market. In addition, social networking and blogging now are bringing a lot of attention, as he Kirill mentioned that sales already yielded through them – he should continue.

Question. Evaluate Big Skinny’s sponsored search strategy. Are there any search keywords for which you would encourage Big Skinny to increase its bid? To lower its bid?

Answer. The emphasise that he puts on key words, such as thin, thinnest, etc. is bringing him the clients, who look for small sized wallets. That’s why I think she should also increase his bid on words such as leather and nylon and any other name of material, because clients, who are looking for thin leather wallets will definitely pay attention to something, which is 50% thinner, even though it is not from leather. The leather is just a classic material, many people stuck with it, whereas now it might be cheaper and more convenient to have something more advanced. And here comes another proposition for words like easy cleaned wallet, or how to clean a wallet, wash it, etc.

Question. How effectively is Big Skinny using social media to sell its wallets?

Answer. Quite effectively as his yields for sales is increasing and booming after the videos he posted with his clients’ references and all the integration services he provides on the blog and website. Also social networks like Facebook, Twitter and etc., are having millions of users, which increase the probability of getting a client.

Question. Should Big Skinny expand its partnerships with online distributors?

Answer. I think it should, but only if he can provide them with enough number of products, because it seems that the company is not big, but if you work with international retailers and you go for a global scale, you should be able to support the demand for your products. For all the other things, the retailer like Amazon seems to be extremely friendly to even small producers, like Kirill because it helps them with the payments, fulfilment, and also brings them the brand security and thus the customers, that trust it and ready to shop with their help.

Answer on the questions to the case « Abercrombie and Fitch»

Question. Discuss the impact of branding in the high fashion clothing market.

a. Which marketing technique does A&F Co. use?

b. How does it differ from its competitors?

c. Would you say it was successful?

Answer. a) The main marketing technique that they were using is in-person promotion, which was the appearance of their employees. The company believe that no one else can make the better marketing than its employees, who are looking in Abercrombie way and promote its special and unique lifestyle. These “brand representatives” were chosen very carefully so that they fit the criteria to become an ambassador of the store and lifestyle. They would also invent nice stories of the company creation, which is absolutely not true, but sounds sophisticating and thrilling, showing the international background and attracting the clients who love stories. They also have certain designs for the shops depending on the brand, that gives this exciting impression of belonging to something special, luxury living, they emphasized emotional experience for the customer. Another technique to attract the younger generation was to set provocative, and sexual marketing campaigns.

b) Competitors are also using some interesting techniques, but they are different from Abercrombie’s approaches. For example American Eagle Outfitters were using a TV show, where people in prime time would wear their clothes and the brand was obvious. Gap has tried to market itself by changing the logo, which was not a good idea, since the customers came out not to be happy about it. Aeropostale.Inc is using different methods to create customer awareness like setting big promotions, like giving a CD with every specific purchase or Holiday Beers; also many charitable programs. Victoria’s Secret method of marketing is from my point of view the closest to Abercrombie and Fitch, they were using annual fashion show to create boom around their models and then send the catalogues.

c) As the company is still growing internationally and keeps its prestige on a certain level, which is reflected in the price, means that company was successful. But the fact of closing the shops in United States, which are in malls or directions, where shopping is not that intensive, says that their sales is experiencing problems. The company have targeted the segment, which is not that much active now in United States, especially during the crisis of last years.

Question. How had A&F Co.’s foundation affected the company today?

Answer. As soon as Ezra H.Fitch started to manage the company itself it took the direction she wanted it to be and became the first line to sell both women and men clothes, the brand became really popular and thus left a good trace. The stores took best locations in New York and expanded to other cities; and despite the Big Depression were still selling the goods. It had unbelievable numbers for biggest profit in the history. However they started to decline in their profits and sales when company decided to go to warehouses. That was a mistake, because they were positioning their clothes as not the luxury, but expensive high quality clothes, which didn’t fit everyone. That obviously resulted in their modern statement, as they say their clothes is only for certain young, fit, beautiful group of people that want to differentiate.

Question. Discuss where the brand will focus its attention regarding sales in the future

a. Why has A&F Co. decided to close stores domestically?

b. How has direct-to-consumer operations changed for A&F Co.?

c. Discuss the brand’s international expansion plan.

d. Briefly discuss financials of the company.

Answer. a) Because majority of these stores were located in malls, which were not that attractive for type of clients they are looking for and their sales there are just declining, or some other locations, which are not emphasizing their authentic approach and audience.

b) The direct to consumer sales including shipping and handling was rising year on year since 2003 and the last result we have is in 2013. The online access and web site are bringing more and more clients and sales to the company.

c) Company actively expanded on European market, but the biggest number of stores they had in English-speaking countries like UK and Canada, as to move there is always easier for American company. Their profit from international sales is forming quite a significant part of overall number and they plan to expand more abroad from United States, which I think is a right solution, because the brand is already well-known, has a good reputation and customers abroad may starve for their clothes. All their researches on the locations to entry paid off in good results for the company.

d) The Revenue of the company had fallen in 2010 comparing to 2009, however in 2011 they it came almost to the same level as it was in 2009. Income level though, was still lower than in 2009. The most profitable company for Abercrombie is Hollister, which is bringing 45% of the sales to the whole company.