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Transcript of Marketing Research Report
Assessment Submission Form
Student Name
Sinead Conroy 13332931 Ciaran Ryan 11425208 Louise McDonagh 13321861 Rachel Horetzky 15200936 Chizurum Nwachukwu 12254977
Assessment Title Market Research Final Report
Module Code MKT30050
Module Title Market Research
Date Submitted 10th November 2015
A SIGNED COPY OF THIS FORM MUST ACCOMPANY ALL SUBMISSIONS FOR ASSESSMENT.
STUDENTS SHOULD KEEP A COPY OF ALL WORK SUBMITTED.
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Ensure that you have checked the School’s procedures for the submission of assessments. �Note: There are penalties for the late submission of assessments. For further information please see the University’s Policy on Late Submission of Coursework, (http://www.ucd.ie/registrar/)
Plagiarism: the unacknowledged inclusion of another person’s writings or ideas or works, in any formally presented work (including essays, examinations, projects, laboratory reports or presentations). The penalties associated with plagiarism designed to impose sanctions that reflect the seriousness of University’s commitment to academic integrity. Ensure that you have read the University’s Briefing for Students on Academic Integrity and Plagiarism and the UCD Plagiarism Statement, Plagiarism Policy and Procedures, (http://www.ucd.ie/registrar/)
Declaration of Authorship
I declare that all material in this assessment is my own work except where there is clear acknowledgement and appropriate reference to the work of others.
Signed....................................................... Date ...................................................
Assessment submission form_modular
American Apparel
3
Contents
Executive Summary........................................................................................... 4
Methodology....................................................................................................... 6
Findings.............................................................................................................. 8
- Qualitative
- Quantitative
Limitations......................................................................................................... 15
Conclusions/Recommendations....................................................................... 16
Appendix........................................................................................................... 19
- Secondary Research
- Copy of Survey (hardcopy)
- Presentation (hardcopy)
References......................................................................................................... 22
American Apparel
4
Executive summary
Our group has conducting both primary and secondary research on American
Apparel, a clothing retailer founded in 1989 which currently boasts of having 260
stores worldwide in 19 countries. We discovered that the company has received a lot
of negative publicity over the last few years mainly due to the company’s
controversial adverts as well as the resignation of their auditors Deloitte and Touche
as a result of some irregularities found in the company’s financial statements in 2008.
Despite being backed by an investment firm with an offering of $382.5 million in
2006 the company has not been able to make a profit since 2009 and has lost so much
money that it was nearly delisted from the New York Stock Exchange.
Our secondary research led us to understand that American Apparel needs to make
drastic changes in order to turn the tide it is currently experiencing. From the release
of its most recent financial statements we discovered that its Net sales for the second
quarter of 2015 decreased 17.2% to $134.4 million from $162.4 million for the same
period in 2014, Gross profit for the second quarter of 2015 decreased 25.3% to $61.5
million from $82.4 million for the same period in 2014 and Loss per share in the
second quarter 2015 was $0.11.
In light of this we decided to focus our primary research on two key issues: the
shopping habits of people (who they choose over American Apparel) and their
attitudes, experience and opinions towards American Apparel advertising. We
conducted an online non-probability convenience sampling survey. We received 148
responses and it was from these findings that we chose the topic, issues and questions
to discuss in our focus group. We discovered that 84% of our audience would shop in
AA once a year or less with H&M being the number one choice for our shoppers and
AA ranking 5th out of 6 options. We also learned that 33% of people have found their
advertising offensive citing issues such as "extremely thin models", "Extremely
sexual", "poor portrayal of women". The issue of advertising was also discussed in
our focus group with the main issue being the reasoning behind why a clothing store
uses very little clothing in its advertisements. The findings and discussion are outlined
in detail below.
American Apparel
5
Through our secondary research and conversations had throughout our investigations
we discovered that American Apparel make and produce their clothes in The United
States. Unlike other clothing brands that produce primarily in low-cost foreign
markets, AA operates on the idea of being a "home-grown" and locally produced
product. We felt that this was something we needed to explore further so it became
the second focal point of our focus group. We included a diverse range of students in
our group and asked whether or not the "home-grown" idea could be something AA
can trade on.
Our primary research helped us to understand a number of key issues behind the
problems facing American Apparel:
- Lower cost alternatives offering similar clothing
- Poor, offensive and ineffective advertising
- Poor brand image
- Lack of promotion of "the good stuff" eg, Home grown and made
Having come to the end of our research we have a number of conclusions and
recommendations for American Apparel going forward.
It is clear that there are minor issues surrounding who exactly AA are trying to target
and what their value proposition is as they struggle to compete with very similar low-
cost rivals. There needs to be better definition of who the company are targeting,
whether that be niche or broad, in order to better market and sell their products.
We recommend:
- A new advertising approach and focus centered around the clothing & style
that AA offer
- A greater emphasis on empowered, well dressed women to counter act the
opinion of over-sexualisation and derogatory attitudes towards women
representing their brand
- Better promotion of their standing as a good American employer creating and
maintaining home grown talent
- A more socially responsible approach to their business in order to capitalize
on the changing attitudes of shoppers who are well informed of fair trade,
labor rights and environmental issues.
American Apparel
6
Methodology
After conducting the initial secondary research on American Apparel, we discovered
that the company has not made a profit since 2009. This is largely because the
American retailer has been unable to adjust to the changing behaviours and interests
of its target market. (Kurane, Ramikrishnan & Dastin, 2015) Through background
research on key issues, we were able to develop research goals and methods on
achieving them. In order to gain a better understanding of consumer attitudes and
beliefs about American Apparel and their products, we decided to implement some
exploratory and descriptive research. First, we developed a survey consisting of
seventeen questions on Qualtrics that contained both multiple choice and open-ended
questions to better define the opinions, attitudes, and behaviours that the proposed
target market.
We began the questionnaire with non-intrusive broad questions about consumer
shopping habits. Questions one through four help us discover how often consumers
shop for clothes, what channels they prefer (online versus in store), what criteria are
important in purchasing from retail stores, and where American Apparel ranks
compared to competitors. Then we became more specific in recognising the brand,
asking if consumers were familiar with American Apparel. If consumers answered
yes, they would be directed to another questions asking if they had ever shopped at
the retailer. We created more branching questions from here in order to discover how
often consumers shopped at American Apparel in particular. We created a scalar
question when asking about customer’s thoughts on different aspects of the retailer’s
marketing mix to see where the company could improve. Further down the survey, we
asked very specific, qualitative questions to find out what kind of market consumers
believed American Apparel would appeal to. Finally, we ended the survey with more
serious questions on the retailer’s offensive advertising to identify what exactly needs
to be addressed. We also added questions asking for consumer demographics (age,
gender, occupation) to help better identify a specific target market.
After developing our questionnaire for our quantitative research, we had to identify
our target market for sampling. The element we focused on was fashion-conscious
millennials. Our sampling unit being households with fashion-conscious
American Apparel
7
millennials. The extent, or location, we conducted our research was primarily at
University College Dublin in Dublin and Case Western Reserve University in
Cleveland, Ohio. We circulated the Qualtrics survey from the 14th to the 31st of
October. Our goal was to obtain about 100 responses, and we met our goal with 139
completed surveys. We decided to use the nonprobability sampling technique of
convenience sampling, as American Apparel’s target market is mostly our
generation. We shared the survey through social media sites with our peers that we
knew through the universities, which is why the extent is centered primarily around
Dublin and Cleveland.
In order to identify other company issues and areas for potential growth for American
Apparel, we decided to use a focus group for qualitative research. We assembled a
group of five people and met for about an hour on the 4th of November in a study
room in Quinn. Since we wanted to form a focus group that reflected American
Apparel’s target market, we recruited both male and female college students between
the ages of 19 and 24. We also wanted to ensure that all members of our focus group
had either shopped at, or had been familiar with, American Apparel so they could
give us informed and descriptive feedback on what they thought of the brands and its
products. While we conducted the focus group in Dublin, one characteristic that
differentiated members was their location of origin. Participants were either from the
United States or Europe, which could have affected their responses and how they
perceive American Apparel.
With Rachel as our moderator, we began recording the focus group discussion with
the participants seated in a circle. We opened the focus group by encouraging each
member to take turns introducing themselves with their names, ages, where they were
from, and where they most frequently shopped for clothes. These introductions
helped us to better identify target market demographics and main
competitors. Similarly to the survey we sent out, we drafted an outline of questions
for the focus group that began broadly and became more specific later on. The first
couple of questions in our group centered around the industry trends and what
American Apparel does well, whether it’s in comparison to the named trends or just in
general. The next question shifts focus to the retailer’s shortcomings, so we can
American Apparel
8
better help them improve. The last two questions are extremely specific, one focusing
on American Apparel advertisements and the other focusing on a possible future
market campaign. We printed out ads from the past couple of years and asked what
the participants thought of them. Our purpose of asking such questions was to obtain
in-depth opinions on the retailer’s advertising campaigns and see what needed to be
changed. Our final question looked to the future of American Apparel to see what it
would take for consumers to purchase more of the retailer’s products. The finding
from our research are discussed in-depth in the next section.
Findings
Primary Research
Based on the findings our secondary research, the focus of our primary research was
centred on two main issues: Firstly, shopping habits of target market, including the
brands that they chose over American Apparel and secondly, their attitudes,
experience and opinions towards American Apparel. By asking researching into these
two main areas we would be able to test the findings of our secondary research on
sample portion of American Apparel’s target market and determine whether there is a
correlation between these findings.
Quantitative Method
Survey Results
The questions that were asked within the survey were centred on the clothing retail
shopping habits of American Apparel’s target market, their awareness of the brand,
their perception of it and factors that influence their buying habits. From the 139
people who participated in this survey, the detailed summary of our findings is a
follows;
1. When asked to rank the stores that the participants frequent at the most in
order from 1 to 6. 1 being the most and 6 being the least, their answers are as
follows;
American Apparel
9
Order Ranked Brands
1st H&M
2nd Forever 21
3rd Nike/Adidas
4th American Apparel
5th Calvin Klein/FCUK
6th Calvin Klein/FCUK
The results above show that majority of sample population frequent at H&M
the most which is a fast-fashion brand, followed by Forever 21, Nike/Adidas,
American Apparel, and then Calvin Klein/ FCUK.
2. When asked how frequently they shopped for clothes, the majority stated the
following; less than once a month at 42%, followed by once a month at 29%, 2
to 3 times a month at 24%, once a week at 3% and 2 to 3 times a week at 1%.
3. 71% of the sample prefer to shop in stores while 29% prefer to shop online.
4. When asked to rank the criteria that they considered when buying a product
from a retailers from 1 to 6, 1 being the highest priority and 6 being the
lowest, the following was the result. Indicating that style and price and their
most important priorities.
Criteria Order Percentage
Style 1 59%
Price 2 54%
Promotions 3 44%
Brand Image (e.g loyalty to logo) 4 33%
Location Convenience 5 38%
Social responsibility (e.g sustainable business
practices) 6 62%
American Apparel
10
5. 86% of the sample said that they were familiar with the American Apparel
brand, while 14% were not.
6. However only 48% of the population have ever shopped at American Apparel.
7. The ages of the sample population was mostly from 19 to 21.
8. When asked how often they shopped at American Apparel, 84% said once a
year, 14% said once every three months and 1.75% said once a month.
9. When asked who they thought the target market for American Apparel was,
the most common description was that they were young adults male and
female or young adults that were mostly female and who were teenagers or
older.
10. When asked about their opinion of the following aspects of the store; Layout
of the shop, facilities, quality of clothes price and staff, the following where
their answers;
As can be seen above, the majority believe that the layout of the shops, the
facilities, the quality of the clothes and the staff are either good or fair but the
majority also believe that the price is very poor. This suggests that the price of
the clothes fail to reflect the disposable income of the target market may also
be reflected in the store’s sales.
11. When asked if they had ever noticed American Apparel advertising, 55% said
no.
12. When asked where they had seen American Apparel advertising, 70% said
online, 48% had seen an advert in either a paper or magazine, 46% had seen
an advert on either a billboard or a bus stop.
13. 67% of these people stated that they had found the brands advertising
offensive at some point.
American Apparel
11
14. When asked what they found offensive about the brands advertising, majority
of the sample population stated that they felt that the brand’s adverts over
sexualised women’s bodies.
Conclusion from the survey
From the survey, we have learned that American Apparel’s target market are;
• Young adults who prefer to shop in stores once a month.
• Their two most important concerns when buying clothes are quality and price.
They are not too concerned about corporate social responsibility.
• Most of them have heard of American Apparel. Even though more than half of
them claimed to have not seen their adverts at first, 70% of them say they have
seen their adverts online.
• Most of them found the adverts offensive and too sexualised.
Qualitative Research
Focus group
The following students were interview for the focus group;
Name Devin David James Tony Julia
Age 20 24 19 21 21
Country of Origin
Pennsylvania
, USA
Dublin,
Ireland
Mayo,
Ireland
Detroit,
USA Spain
The last store they shopped
at H&M H&M
Holliste
r
Holliste
r Mango
1. When asked if they had all heard of American Apparel, they all said yes.
2. When asked what sort of trends they saw happening in the fashion industry in
terms of what they could currently see as popular they said the following;
“There appears to be mixture of tight clothes and loose clothes and cheaper
stores such as H&M are now adapting”.
“Sports stores have recently become more appealing to girls, like with
leggings and leg warmers”.
American Apparel
12
3. For those of you who have shopped at American Apparel, what do you like
most about the products and why have you shopped there?
“I like the way there’s no branding on their shirts, it’s just plain colours and
usually I just like plain clothing or maybe something written across”.
“My friend liked their hoodies, apparently they’re they best in the market.
They were always a good gift”.
“I would never shop there for girl clothes even though I wear non branded
clothes I wouldn’t”
4. How does American Apparel fail where other companies succeed, where do
they fall short?
“There’s only one shop in Ireland and I’ve just never been there before”.
“There’s an American Apparel store on my campus at home. I walked in there
but then I walked out. I find that their stuff is really plain and simple, which I
like, but if I were going to buy something that simple I would just go to J.C
Penney or Walmart and buy it for a lot cheaper”
“The thing is the price, but at the same time I understand why they make it
more expensive. They want it to be more luxurious, more premium because
it’s made in America.
5. The group was presented with the following adverts and asked if they feel that
they are effective in encouraging to them to purchase their products. They
reactions were as follows;
American Apparel
13
“I don’t know what’s being advertised”
“It’s very hyper-sexualised, I would assume that it is targeted towards men but
it’s female clothing, so it’s actually targeted towards women”.
“It’s weird, I would never shop because of that. I don’t want to look like that”.
“It’s good for publicity, it gets people going to the store”.
“It’s controversial so it gets people going through the door”.
6. If American Apparel decided to move away from their sexualised imagery
would you shop there? What would it take for you to shop there?
“One of their main things is that they are made in American, but I think I
would rather buy products from my home country, Spain or Ireland”.
“I think people in American would rather buy something because it’s cheaper
rather than because it’s made in America”.
“American Apparel sells essentials such as plain t-shirts and plain shorts. I
guess I would go if they were on sale. If they were cheaper I would buy it”.
“The quality is good, but I would never shop after that type of advertising.
Also there are other stores that I prefer and are more palatable”.
“I think if they tailored the stuff more towards a specific style, maybe more
people would shop there, other than just plain clothes”.
7. When you think of American Apparel, what characteristics would you give
their brand and what type of people do you feel shop there?
“Hipsters, annoying hipsters”
“I would say very preppy people”
“Their target audience is the same as Urban Outfitter”
“I would say that they are targeting 11 to 15 years olds”
“Every girl in America who has a crop top and high waist jeans”.
American Apparel
14
8. If the company were going to rebrand its product ad more of a “home grown”
marketing campaign for example if they opened stores in Dublin and said that
their products were made in Dublin or if they opened up stores in Spain and
said that they were made in Spain. Would this persuade you to purchase the
products?
“I feel that not everyone will be bothered about such things like where the
clothes are made”.
9. What are the main factors that influence you to purchase a product or
branding?
“Price, quality and fit”
“Brand association e.g when I heard about the things that were happening with
the CEO I didn’t wasn’t sure that I wanted to shop there anymore”.
“Majority of people don’t care about brand association, even when apple was
accused of mistreating workers, people didn’t stop buying from them. It’s a
very select few”.
10. What is they did something similar to Tom eg they give an item for free to
poorer countries. “There are other way of helping people that are more
effective than clothing”.
Closing thoughts? The clothes for men seem simpler than the clothes for
women, all the clothes for women are crop tops and short shorts. Maybe if
they make their women’s clothes similar to the clothes they make for men I’ll
go there.
Conclusion from focus group
The results from the focus group reflect that of the survey but the following news
findings were found;
• Their controversial adverts may be an effective means of creating awareness
for the brand on social media platforms such as Facebook but they are still
repelling a lot of people from feeling comfortable about buying their products.
• Brand association also plays a part in influencing some buyers eg. Dov
Charney’s numerous sexual harassment lawsuits may have repelled a lot of
women from buying the brands products.
American Apparel
15
• The Made in American promotion approach is not effective for an
international audience. What about other countries? But still only a select few
in the target market care about where the clothes that they buy are made.
• The brand needs to provide more female clothing options other than mini-
skirts and short shorts. Their hoodies are of very good quality.
Limitations
Lack of time
Due to the time constraints imposed for this project we knew we had to design and
send out our survey as quickly as possible. This could have resulted in a survey more
rushed than we would have liked adding to the factor of human error. For example, a
grammatical error was spotted as the first batch of surveys were being sent out.
Consequently, we had to revise the survey and resend it to all our participants. Lack
of time also had an influence on our approach method. As a result, convenience
sampling was chosen in order to try to overcome this problem as we did not have to
endlessly search for appropriate candidates. This was also a decision based on
resource availability which is discussed in greater detail in the next paragraph.
Lack of resources
Due to the fact that we had no budget for this marketing research campaign, we were
limited in terms of our research scope and approach. The Quantrics online survey
facility greatly helped us overcome this issue. It allowed us to analyse the data with
ease and efficiency, for example, as we could all access and edit our work. Evidently
we did not have any financial resources for this marketing research. This narrowed
our scope in terms of the variety of participants we could reach. Once again we found
a solution from the internet, which allowed us to reach most specifically the American
audience bracket. This said, older participants were not as easily reached, as they do
not use social media forums to the same extent as younger cohorts. While this may
not have been a massive issue due to the fact that our results showed us our main
audience is the teenage and/or young adult category, we feel this is an issue that
should be highlighted as the use of social media on the internet in particular does not
overcome all market reach issues. Furthermore, while convenience sampling was
appropriate for our research project, lack of financial and other resources narrowed
the various approaches we could have taken to begin with.
American Apparel
16
Lack of control
Because American Apparel has a strong association with being American, it was
essential that we got some perspective from Americans themselves. This said, it was
difficult to control the response levels from both American and non-American
participants to achieve an even/accurate spread. We have an American in our group,
so it was not too big an issue in terms of reaching this audience. However if we had
not had access to the American audience in this way, we would have had to rethink
our marketing research approach entirely. As well as this, we could not control the
gender mix from the respondents. This was a consequence of our non-probability
convenience sampling approach and restricted our results in ways, because there were
significantly more female respondents.
Conclusion & Recommendations
Our research gave us great insights into the young consumer of today and we were
delighted that the results from the survey and the focus group corresponded well. This
information allowed us to discover what AA are doing right and the areas in which
the need to improve to gain competitive advantage. From our research, the main
things we learnt as follows:
Our first question in our survey asked participants to rank in order the store the
frequent most. We gave them 6 options with American Apparel being one of them.
Out of 139 responses, American Apparel was ranked 5th with only one participant
marking it as the store they visit most. This told us very quickly that the company was
not to the forefront of consumers’ minds and we began to delve deeper to find out
why.
From the survey we concluded that consumers feel that American Apparel charge too
much money for their close and as result shop elsewhere to find cheaper alternatives.
The research showed that when it comes to shopping, consumers value things such as
style price and promotion ahead of social responsibility and brand loyalty. 21st century
shopping is all about finding the best value for one’s money and loyalty is non-
existent. At present, American Apparel manufactures their clothes in the United States
and as a result are forced to charge higher prices. They need to hone in on this and
constantly remind consumers that their clothes are made on home soil and use it to
their advantage. They should encourage customers to shop in their store as their
American Apparel
17
money will be going straight back into the American economy, thus helping
American people. This may be a cultural difference between Ireland and the United
States. In Ireland, people tend you get behind Irish made products to support our
economy and all things Irish. American Apparel needs to find a way to make this
work for them or else begin to think about outsourcing their manufacturing to a
cheaper country to reduce the costs of their clothing.
In today’s competitive market, digital marketing has become extremely important for
businesses. American Apparel should get their customers involved more through
social media by running competitions and offering incentives such as
discounts. According to Socially Stacked, 42% of Facebook fans like a page in order
to receive a coupon or discount and doing this would incentivize customers back to
the brand. Content marketing is something that could be cleverly implemented by the
company. We believe that they should consider creating a blog and vlogs that talk
about all things American apparel and detailing information about their store and
customers experiences with the company
Of the participants who had heard of the company, 52 percent had never shopped
there and of the 48 percent or 57 people who had, 48 of them claimed they only
shopped there once a year. This is in no small amount due to their advertising
campaigns that have been heavily criticized since the company was founded with
some respondents going as far as saying that they would never shop in a store that
conducts themselves in this manner. Our participants found the advertising to be
explicit, full of sexualisation and nudity, and ultimately a poor portrayal of woman.
We would recommend that in the future, American Apparels advertising campaigns to
be more focus on their clothing and promoting real and empowered women. The
company needs to dispel the perception that the women who represent the brand are
only sex symbols. They need to create a positive image of empowered women who
wear their clothing and who are proud to represent the brand.
Another interesting problem we identified was that our participants were unsure as to
what style the brand is trying to portray. When asked the question; in your opinion,
who do you feel the target audience of American Apparel is? (e.g., style, age,
gender?), we received some very interesting responses. Some said young skinny
American Apparel
18
preppy people; others said hipsters, while some even stated that they had no idea who
they are trying to target. There were very few answers between all participants.
American Apparel needs to start portraying this to potential customers through better
advertising campaigns. We also believe that they need to identify themselves who
they are trying to target, and tailor styles and preferences to their customer’s needs.
The best our participants could give us is that they provide plain, tight clothes for
skinny people. This problem needs to be addressed or American Apparel face losing
out on a large percent of the market.
In conclusion, American Apparel has a long way to go in regards to repairing the
relationship it has with its customers but with the correct leadership and guidance, we
believe that they can make a full recovery and return to the heights they were once at.
American Apparel
19
Appendix
Secondary Research
Competition in the U.S market
Through researching online articles and journals, we learned that American Apparel’s
main competitors are clothing brands who target young adults between the ages of 18
to 25. Such brands include Abercrombie and Fitch, Gap, H&M, and Zara. American
Apparel receives majority of it sales from the U.S market. At the moment fast-fashion
brands such as H&M and Zara have taken a lot of market share from the U.S over the
last five years. As can be seen in the pie chart below, 65 percent of the apparel market
is being occupied by fast-fashion brands and private retailers. Other leading brands
include Macy’s with 9%, Walmart with 8%, Gap with 5% and Abercrombie and
Finch with 1% (Trefis, 2015)
(Trefis, 2015)
The key reason behind this current trend is because while traditional specialty brands
have design teams who create products that they predict will be trendy a year in
advance and risk losing profits if their predictions fail, fast-fashion brands have teams
of buyers who source current trending fashion from third party vendors. While
traditional brands update their collections once a season, fast-fashion brands such as
Zara stock very little in their inventory and update their collections with new designs
twice a week. Their strategy works because it encourages customers to come back to
the store expecting to see new products. It also gives the buyer a sense of urgency to
buy the products that they feel they like before it sells out (Lutz, 2013).
American Apparel
20
Brand Positioning
In 2005, American Apparel was known as one of the most influential brand is
America, it opened its first store in Britain in 2004 and by 2008 it had flourished and
was named the Guardian’s brand of the year. The company marketed itself as a brand
that produced high quality clothes that were sexy and not too expensive. The brand
successful managed to differentiate itself among other expensive brands by portraying
a socially conscious of image of stating that its products were “Made in the USA”
providing jobs for people within the country and paying an hourly wage that ranged
from $8 to $18 depending on their rate of production within that period, while many
of its competitors were moving their factories to countries where they found
opportunities for cheaper production (Dean, 2005).
However, since 2010 the company has seen a significant drop in sales and has
recently filed for bankruptcy. Some of the blame is suspected to have come from the
negative media attention that its founder and former chief executive officer Dov
Charney brought to the company as a result of the numerous lawsuits that were
brought against him over several years (Hartley-Parkinson, 2015).
The brand also has a reputation for using unnecessarily sexualized adverts, one of
which was banned earlier this year for appearing to sexualize a child. Another reason
could be due to the increase in customers currently buy from fast-fashion retailers
who them similar products at much lower prices (O’Reilly, 2015).
Classification of Segments
Demographic Segmentation
The brand target young adults, both males and females between the ages of 18 and 25,
a demographic that is known to invest in fashion, these are usually college students or
recent graduates with entry level jobs and so the brand’s prices need to reflect what
this demographic can afford.
Geographic Segmentation
The company opens its stores in areas where there is high density of people within its
target market such as the in college towns in the U.S such as the store on the Harvard
Campus in Cambridge Massachusetts and busy urban city areas such as the store on
Grafton street in Dublin (Segran, 2015).
Psychographic Segmentation
American Apparel
21
The brand targets young adults who have a desire to appear unique and to make a
statement about their personality through the clothes that they wear, in 2006 the brand
was described as being hipster-centric. The brand also targets socially conscious
shoppers which is why it promotes its clothes as made in the U.S.A and sweatshop
free (Segran, 2015).
Conclusion from Secondary Research
The key points that we have learned from our secondary research are as follows;
• Fast-fashion retailers are currently stealing market share from mainstream
brands in the fashion industry and this may be a main cause of the brand’s
drop in sales.
• The negative publicity it has received over the years may be another cause to
its decline in sales.
• The brand was able to differentiate itself in the U.S market through vertical
integration and its ‘Made in the U.S.A’ promotions.
• Its target market are young socially conscious adults who have a desire to
appear unique.
American Apparel
22
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