MIDTERM PROJECTMarketing Research MIDTERM PROJECT

Marketing Research

STRUT

By Renee Miller

STRUT

By Renee Miller

Industry OverviewIndustry OverviewThe shoe store industry includes about

30,000 stores with combined annual revenue of almost $25 billion.

Major companies include Payless, Famous Footwear, Footlocker, and DSW (Designer Shoe Warehouse).

Shoe manufacturers, such as Nike and Brown Shoe, also have retail operations.

The industry is concentrated: the top 50 companies have about 80 percent of industry revenue.

The shoe store industry includes about 30,000 stores with combined annual revenue of almost $25 billion.

Major companies include Payless, Famous Footwear, Footlocker, and DSW (Designer Shoe Warehouse).

Shoe manufacturers, such as Nike and Brown Shoe, also have retail operations.

The industry is concentrated: the top 50 companies have about 80 percent of industry revenue.

Strut: At a GlanceStrut: At a GlanceMy business is a shoe

company selling original designs and fashionable imitations of high-end contemporary woman’s shoes.

The product will cover everything from evening, dressy and casual shoes; manufacturing heels, boots, flats and some specialty sneakers.

The product will be more edgy, stylish and fresh than our competitors at a lower price point.

My business is a shoe company selling original designs and fashionable imitations of high-end contemporary woman’s shoes.

The product will cover everything from evening, dressy and casual shoes; manufacturing heels, boots, flats and some specialty sneakers.

The product will be more edgy, stylish and fresh than our competitors at a lower price point.

Strut will also manufacture our shoes with the customer’s comfort as well on top of their wallet in mind.

The target customers are middle class women ranging in age from 19 to 39.

These women like fashion but love shoes (especially at discount prices).

They are career oriented, but on the other hand, they are outgoing and love a night out on the town.

Strut will also manufacture our shoes with the customer’s comfort as well on top of their wallet in mind.

The target customers are middle class women ranging in age from 19 to 39.

These women like fashion but love shoes (especially at discount prices).

They are career oriented, but on the other hand, they are outgoing and love a night out on the town.

The Competitive Market of the Shoe Industry

The Competitive Market of the Shoe Industry

Fashion trends and personal income drive demand. The profitability of Strut depends on our effective

merchandising and competitive pricing. Large companies have advantages in purchasing,

distribution, and marketing. However, Strut can compete effectively by stocking

specialty products, providing superior customer service, or serving a local market.

My company will have to compete with department stores, mass merchandisers, apparel retailers, Internet retailers, and some shoe manufacturers.

Fashion trends and personal income drive demand. The profitability of Strut depends on our effective

merchandising and competitive pricing. Large companies have advantages in purchasing,

distribution, and marketing. However, Strut can compete effectively by stocking

specialty products, providing superior customer service, or serving a local market.

My company will have to compete with department stores, mass merchandisers, apparel retailers, Internet retailers, and some shoe manufacturers.

Competition ContinuedCompetition Continued

Our CompetitionNine WestSteve MaddenAldoAdidas by Stella

McCarthy

Our CompetitionNine WestSteve MaddenAldoAdidas by Stella

McCarthy

Competitive Advantages

Customer ServiceTechnologyUse of Focus

Groups & SurveysUse of major

marketing and promotional vehicles

Competitive Advantages

Customer ServiceTechnologyUse of Focus

Groups & SurveysUse of major

marketing and promotional vehicles

TechnologyTechnologyStrut plans to use integrated computer systems

to manage point of sale (POS), inventory, distribution, and financial operations.

Daily analysis of POS data will allow my company to react quickly to market conditions and make fast decisions on pricing, reorders, and markdowns.

Our inventory management system will help Strut stores develop store specific merchandising plans and identify losses.

Strut will track merchandise by universal product codes (UPC), and use electronic data interchange (EDI) and advance shipment notification (ASN) to aid in purchasing and monitoring deliveries.

Strut plans to use integrated computer systems to manage point of sale (POS), inventory, distribution, and financial operations.

Daily analysis of POS data will allow my company to react quickly to market conditions and make fast decisions on pricing, reorders, and markdowns.

Our inventory management system will help Strut stores develop store specific merchandising plans and identify losses.

Strut will track merchandise by universal product codes (UPC), and use electronic data interchange (EDI) and advance shipment notification (ASN) to aid in purchasing and monitoring deliveries.

Sales and MarketingSales and Marketing

• While the typical customer for a shoe store varies by store type, women between 18 and 49 make the majority of footwear purchasing decisions.

• Appearance-conscious young women are important targets for the shoe industry.

• On average, women spend $40 on a pair of shoes, according to Greenfield.

• While the typical customer for a shoe store varies by store type, women between 18 and 49 make the majority of footwear purchasing decisions.

• Appearance-conscious young women are important targets for the shoe industry.

• On average, women spend $40 on a pair of shoes, according to Greenfield.

Major marketing and promotional tools include TV, radio, newspaper, and print advertising, direct mail, and in-store displays.

Brand name shoes are important. Giveaways and promotional events draw store

traffic. Shoe retailers may encourage multiple

purchases through loyalty clubs or by offering discounts.

Seasonal décor highlights new merchandise. High-end shoe stores may hold trunk shows to feature special designers.

Major marketing and promotional tools include TV, radio, newspaper, and print advertising, direct mail, and in-store displays.

Brand name shoes are important. Giveaways and promotional events draw store

traffic. Shoe retailers may encourage multiple

purchases through loyalty clubs or by offering discounts.

Seasonal décor highlights new merchandise. High-end shoe stores may hold trunk shows to feature special designers.

Most shoe stores have Internet sites providing basic store information, including hours of operation and locations.

Most large companies sell merchandise through websites or link with existing retail sites, such as Amazon.

The Internet is especially important for shoe stores with specialized inventory, such as large size shoes.

Companies may use Internet sites or catalogs to drive traffic to stores.

Most shoe stores have Internet sites providing basic store information, including hours of operation and locations.

Most large companies sell merchandise through websites or link with existing retail sites, such as Amazon.

The Internet is especially important for shoe stores with specialized inventory, such as large size shoes.

Companies may use Internet sites or catalogs to drive traffic to stores.

Strut’s PerspectiveStrut’s PerspectiveHow can Strut break into the shoe industry

successfully?Our business strategy is that we understand the

value of customer relationship management.There is a strong correlation between customer

satisfation and customer retentionKnowing your customer and increasing valued-added

components to the customer is a key dimension to profitability

Market ResearchThe use of real-time customer information to achieve

a competitive advantage: Surveys, focus groupsThe following slides are examples of Strut market

out-sourced data intelligence.

How can Strut break into the shoe industry successfully?Our business strategy is that we understand the

value of customer relationship management.There is a strong correlation between customer

satisfation and customer retentionKnowing your customer and increasing valued-added

components to the customer is a key dimension to profitability

Market ResearchThe use of real-time customer information to achieve

a competitive advantage: Surveys, focus groupsThe following slides are examples of Strut market

out-sourced data intelligence.

The Customer:Woman’s footwear

purchases in the past 12 months, March 2007

The Customer:Woman’s footwear

purchases in the past 12 months, March 2007

All % Yes, women’s footwear purchased in last 12 months 67

All % Yes, women’s footwear purchased in last 12 months 67

Source: Mintel/Greenfie ld Online

Attitudes towards shoe shopping, by Region

Attitudes towards shoe shopping, by Region

All Northeast Midwest South West % % % % % I wou ld buy more shoes if I could afford it 71 71 68 72 73 Shoe shopping is always a pleasure 58 54 52 62 63 I buy shoes to treat myself 56 53 50 60 61 I ofte n buy shoes I don’t really need, but really want

42 39 36 46 44

The stores are often out of my size 36 44 39 31 35 I cons ider my feet hard to fit 32 40 31 27 35 I ofte n have to “settle” for a style that I don’t really love

24 24 23 22 28

Base: 680 women aged 18+ with Internet access who bought footwear in the last 12 months Source: Mintel/Greenfie ld Online

Women’s footwear purchases in the past 12

months, by Age

Women’s footwear purchases in the past 12

months, by Age

All

18-24

25-34

35-44 45-54

55-64

65+

Yes, women’s footwear purchased in last 12 months

67% 77% 64% 69% 73% 54% 62%

All

18-24

25-34

35-44 45-54

55-64

65+

Yes, women’s footwear purchased in last 12 months

67% 77% 64% 69% 73% 54% 62%

Base: 1,020 women aged 18+ with Internet access

Women’s footwear purchases in the past 12 months, by Household

Income

Women’s footwear purchases in the past 12 months, by Household

Income

All Under $25K $25K to

$49.9K $50K to $74.9K

$75K to $99.9K

$100K

Yes, women’s footwear purchased in last 12 months

67%

53%

68%

71%

84%

73%

All Under $25K $25K to

$49.9K $50K to $74.9K

$75K to $99.9K

$100K

Yes, women’s footwear purchased in last 12 months

67%

53%

68%

71%

84%

73%

Base: 1,020 women aged 18+ with Internet access

Competition: Retail Distribution

Where women purchased shoes in the past year, by retailer type, March 2007

Competition: Retail Distribution

Where women purchased shoes in the past year, by retailer type, March 2007

All % Payless, DSW, Shoe Carnival 43 Target or Wa l-Mart 40 Sears, JCPenn ey, Kohl’s 31 Macy’s, Nordstrom, Bloomingdale’s

22

Nine West, Steve Madden 11 Zappos.com, endless.com 9 Other 24

All % Payless, DSW, Shoe Carnival 43 Target or Wa l-Mart 40 Sears, JCPenn ey, Kohl’s 31 Macy’s, Nordstrom, Bloomingdale’s

22

Nine West, Steve Madden 11 Zappos.com, endless.com 9 Other 24

Base: 680 women aged 18+ who bought footwear in the last 12 months Source: Mintel/Greenfie ld Online

SWOT Analysis of StrutSWOT Analysis of StrutStrength: Strut can compete effectively

over large mass merchants by stocking specialty products, providing superior customer service, and catering to a local market. Technology: Intergated computer systems,

POS, UPC, EDI, ASNWeakness: Strut will have a major

disadvantage in purchasing, distribution, and marketing due to its small size.

Strength: Strut can compete effectively over large mass merchants by stocking specialty products, providing superior customer service, and catering to a local market. Technology: Intergated computer systems,

POS, UPC, EDI, ASNWeakness: Strut will have a major

disadvantage in purchasing, distribution, and marketing due to its small size.

Opportunities: Strut can conduct surveys and focus group discussions in order to generate new ideas about products and services as well as to help explain changing customer preferences.Sales and Marketing: Ads, direct mail, in-store

displays, Giveaways and promotional events

Threats: Major mass production shoe merchants who have a competitive edge because of their size; they have an advantage in purchasing, distribution, and marketing.

Opportunities: Strut can conduct surveys and focus group discussions in order to generate new ideas about products and services as well as to help explain changing customer preferences.Sales and Marketing: Ads, direct mail, in-store

displays, Giveaways and promotional events

Threats: Major mass production shoe merchants who have a competitive edge because of their size; they have an advantage in purchasing, distribution, and marketing.