Target Market

Forever 21 was founded in 1984 and is known for its trendy and fashionable clothing offered at low and affordable prices that undercut even those of its major competitors, such as H&M clothing and others like Urban Outfitters and Guess. The company has been offering fashion and accessories to teenage men and women for more than 20 years now and most of its apparel is made in California, U. S. A. Forever 21 Pricing If effective product development, promotion and distribution sow the seeds of success, effective and attractive pricing is the harvest and plays an important role in the growth of any business.

Customers do not buy benefits and features, they actually buy value! The recent economic downturn has put many companies in a pricing vice and it is impossible to raise prices where the pressure to slash them continues. However, cutting prices always is not the best option as it can signal to consumers that price is more important than the brand; and Forever 21does not intend to create such an impression. The giant clothing company has carefully selected its target market and has positioned its products well in the minds of its customers.

The target market that Forever 21 basically addresses is the younger generation including teens, college students and young adults who are fashion conscious and so, the prices need to be adjusted according to the affordability of this target market. Forever 21 offers reasonable prices for its clothing with some exceptions such as brands that are specifically targeted towards a niche with the prices tailored to their affordability. An example of this is the “Fabulous Finds” brand by Forever 21 which has inexpensive items that are imported from Vietnam.

(Forever 21 – Wikipedia) Another Forever 21 brand by the name of Twelve by Twelve is a slightly more sophisticated luxury line with a little bit higher prices, but still lower when compared to its competitors. Twelve by Twelve is targeted towards the high-end market. Merchandise at Forever 21 is reasonable, with casual shirts selling from $4. 99 to mostly under $19. 99. Forever 21 also offers hundreds of ddifferent $12. 99 T-shirts at its stores splashed with sports logos etc. The enormous quantities produced allows spectacular economies of sale to Forever 21 which it passes on to consumers.

The right price is that which most adjusts to the value that customer mentally attributes to the product. Product costs set a floor to the price; consumer perceptions of the product’s value set the ceiling. In Forever 21’s case, price is a crucial product-positioning factor that defines the product’s market, competition and design. It follows value-based pricing strategy for its apparel, setting price based on buyers’ perceptions of product values rather than on cost, keeping in mind the pocket book of teenagers and young adults.

Value based pricing reverses the process as in cost based pricing. The target value set for the product is then used to drive decisions about product design and what costs can be incurred and the price is set to match consumers’ perceived value. This is how Forever 21’s sales grow, by offering the right combination of quality and price to its target market. (Pfaff) The pricing strategy used by Forever 21 also includes “Promotional pricing”, temporarily reducing prices on apparel and accessories (specially on those that are out of season) to increase short-run sales and revenues.

Psychological pricing is a basic part of pricing strategies used by many companies today, specially in the U. S, and Forever 21 also practices this. (It’s prices are written with “. 99” which produces a psychological effect on the buyer of paying lesser amounts. E. g. Writing $29. 99 instead of $30) Discount and allowance pricing also has a significant importance. Forever 21 offers its product at relatively lower prices than competitors and introduce special offers such as “Buy 2 get 1 free” or get a “20 percent discount on the second item” which actually motivates buyers to buy even more.

The pricing option that I deem appropriate for the 14-24 year olds category target market of Virgin Mobile will be the third option; “A Whole New Plan. ” This option provides no contracts, no hidden fees, prepaid compared to the post paid, and satisfactory off-peak hours. This pricing structure is a welcome offer especially to those below age 18 since they don’t have to sign any contracts. Considering the purchasing capacity of those who belong in this age category, an affordable price is appealing. Penetrating a saturated and highly competitive market such as the cellular phone industry could be such a challenge.

Introducing a fresh, unique and affordable pricing structure gives the company the chance to introduce its product and capture its own market. The 14-24 year old category is still a less served market and they prove to be a good niche for new entrants who wish to be a player in this industry.

2. How confident are you that the plan you have designed will be profitable? What evidence can you provide to defend the financial viability of your pricing strategy? I am very confident that this designed plan will be profitable.

This new innovative pricing structure can be a breath of fresh air to the less served market of 14-24 year olds, those who weren’t approved by the competitors, as well as to those who experienced extreme dissatisfaction from their current cellular phone service providers. This will attain a considerable quantity in the market share. According to a survey conducted by J. D. Power and Associates, they ranked Virgin Mobile highest in customer satisfaction with prepaid wireless service for four years in a row and 91% of customers would recommend Virgin Mobile to a friend.

Given this scenario, more customers will be attracted and it could mean more profit for the company. Also in the NYSE, Virgin Mobile has shown a quarterly revenue growth of 23. 9% and an 18 cents per share expected earnings. These are clear evidences on the financial viability of Virgin Mobile’s pricing strategy.

3. What is the major source of customer dissatisfaction with cellular service? How do the various cellular pricing variables affect the customer experience? Why haven’t the big carriers responded more aggressively to customer dissatisfaction?

In a survey conducted by the National Regulatory Research Institute, many consumers perceive a lack of quality service from their wireless providers. Billing issues were on top of the list with hidden fees causing customers to distrust and be dissatisfied. Hidden fees incorporated in a client’s bill include universal service charges, taxes, and other one time costs. Many providers also have established pricing buckets, but when customers exceed these buckets, they are charged with extremely high penalties.

Majority of cellular providers issue contractual agreements with their clients; normally within a one to two year period with scrupulous credit checks. This oftentimes gives customers the feeling of discomfort. The big carriers in this industry haven’t responded more aggressively to customer dissatisfaction because they have already established themselves and they have dominantly acquired a big portion of the market share. Also, according to a new nationwide survey, almost one-fourth of all cellular phone users have stayed with their original providers even though they are dissatisfied with their service.

This gives another reason for providers not to aggressively respond to customer complaints.

4. How do the major carriers make money in this industry? Is there a financial logic underlying their pricing approach? The major carriers in this industry make money through marketing post paid plans. These plans usually cover a period of one to two years. The providers often require a credit check before letting the client sign a contract. Also, these carriers target busy professionals and businessmen; those between 30 – 60 age category, due to the fact that these markets have higher and more consistent cell phone use.

The financial logic underlying their pricing approach is obvious; they wanted to target a sure market that can consistently avail of their products and services thereby guaranteeing the continuous influx of profit without the fear of non payment.

5. Do you agree with Virgin Mobile’s target market selection? What are the risks associated with targeting this segment? Why have the major carriers been slow to target this segment? I agree with Virgin Mobile’s target market selection although I have to admit that this option is very risky. Read about Skittles target market

Despite the high saturation in this industry, the target market selection proves to be the least penetrated and therefore have the big potential for growth. The risks associated with this segment can be immense loss probably due to low profit and the possibility of non payment considering that most of those who belong in this category have low income or are just depending from their parents. The major carriers in this industry have been slow in targeting this segment because of that. They are reluctant to offer it to this segment because of low expected income and the absence of “security” when it comes to attaining their target profit.

Due to the marketing research of Barkymate Com and AKC, American dog owners have spent more than $5o billion in 2017. These numbers are rapidly growing from year to year, and more dog lovers use different services to make their dogs happier and healthier. This facility and service is most suitable for dog-owners and lovers, who hold a very tight and busy daily itinerary work being the main reason.  Beginning with the demographic identification, the target person belongs to the age bracket of 24 to 29, a part of lower middle to upper middle social class.

Doggie Day Care also caters to both male and female dog-owners and lovers of any race orientation. In terms of earnings, the facility targets those who have a starting annual income of $50,000 and above. The target dog-owners and lovers are city or suburban residents who are young, full-time professionals holding considerable disposable income and purchasing power of which they set in line for their favorite pet. Holding a very hectic week schedule, these dog owners and lovers only find time to actually spend with their canine pals after a day’s work getting the majority of their time together during the weekends. These dog owners and lovers are relatively young and have been successful in obtaining a stable, high-paying job for their case.

They are hard workers who are very productive in their respective job and earn what they deserve, and vice-versa. During weekdays, they spend time most of their time in the office and devote themselves to work, and in the weekends, they unwind by going out and taking their dogs for a run. In terms of life stage, the target dog owners and lovers are mostly practically single, and delay the occasion of getting married or raising families of their own. Having had ruled out the concept of ‘settling down’ for the meantime, these dog-owners and lovers invest in their pets from a dynamic aspect personally, emotionally, financially, and everything else in between.

These dog owners and lovers truly value particular aspects of in keeping their canine companion healthy and in good condition.  They understand the needs and wants of their dogs, and value the ‘man’s best friend’ relationship the bond they have. They provide the proper materials and tools for hygiene maintenance. They also purchase good amounts of dog food and toys for play.  They also provide their dogs the companionship, as they themselves are unable to do so. They recognize very much the emotional aspect of being a dog owner, and realize the consequences of being a dog lover. Hence, as they have a busy lifestyle, Doggie Day Care is the next best thing for them.

Furthermore, in the case of Freeport Studios, though there was significant confidence in the profitability of the venture even as it failed dismally to meet expectation for the first two years of its launch, long-term projections based on its initial performance and market response foreshadowed it (p. 1) . Given the performance of the catalogue and extrapolations, the company has had significantly decreased its initial expectations. However, even when the desired outcomes were decreased, the catalogue was still not able achieve sales targets.

Moreover, there was even a diminished response from buyers from the target market which suggested that it was better of as part of the original set of catalogues. This indicates that the CLV will not increase over time substantially enough, given 1999 performance, to mitigate concern for Freeport Studios. The lack of increase, moreover diminished CLV, over time indicates that it would be to the advantage of the company to cease operations right away Analysis

The case study of Freeport Studios highlights the challenges in pegging, if not justifying, the launching and success of a service or product on expectation. Moreover it creates greater weight of valuation systems in achieving desired outcomes and in turn the criteria for success. Thus, at the time of the case under study when Freeport Studios missed its performance targets by as much as 75%, Fran Philip, the company’s senior vice president and general manager was under pressure to create a turnaround for the new catalogue.

A challenge that Lal and Weber believed with requires rethinking how target was characterized and evaluated (p. 1, 22-24). Freeport Studios was backed up by its parent company’s experience, reputation and access to markets. Therefore, traditionally resistance in market entry which would have diminished initial assessments of its CLV for the first year of operations does not apply. However, it should be noted that at the time that new catalogue was launched, L. L. Bean was already under pressure against competitors and declining growth rate. The launch of Freeport Studios was motivated to develop an existing clientele into a separate and distinct market in an effort to harness its potential by building existing competencies of the company with the segment. Lal and Weber point out that the company needed to follow a creative strategy that will augment current performance and the need to utilize resources from its parent company.

Though the company has been specific in its identification of its target market segment, there is reservation on their aptitude in attracting the market which had already had shown lukewarm response to previous catalogues of L. L. Bean. Aside from the low CLV, request for catalogues have not increase significantly nor have sales in other catalogues from the segment been affected. Thus, there is indication that Freeport Studios has not been able to elicit not only interest in the products featured but also interest in the catalogue itself, indicated by the 3% response rate, limiting the potential exposure of the items to clients.

The advertisement selected for this task is promoting Sydney Opera House. This advertisement has been published in Mice. net magazine. This advertisement has been promoting an event by Opera Point Events, which is been held in the Sydney Opera House. Sydney Opera House is located in North South Wales. It is located on the Sydney Harbor at Bennelong Point (Sydney, 2007). This monument is considered one of the greatest master pieces of the modern world. The monument was created by Jorn Utzon and opened in 1973. It is one of the most popular tourist destinations in Australia.

A lot of tourist and travelers throng to the city to catch a glimpse of this master work. Tourism Statistics In Sydney, tourism is one of the important sources of revenue for the city’s economy. The city plays host to a number of domestic and international tourists. In 2008, the number of domestic visitors was 7. 6 million while international visitors to the city were 2. 7 million. The city’s major attractions are the Sydney Opera House, the Sydney Harbor Bridge, Royal Botanical Gardens, the beaches, Sydney Tower and Luna Park.

In the New South Wales regions, tourism has an important role to play in the economy. Due to this factor, it has value in this region. The domestic as well as international tourists have equal importance for the economy of NSW. It receives around 24. 3 million domestic overnight visitants. This brings in revenue of more than 82 million in the nights. The state of New South Wales gets 2. 8 million international overnight visitors. They earn the revenue of around 60m in night time. The day trips are also very profitable for the state. It receives the revenue of around 4.2million from the domestic visitors’ daytrips. These daytrips form one third of the total Australian daytrips. This tourism business provides a lot of jobs and income for the city which is higher as compared to other states. This industry is valued at around $27 billion which is a huge amount. The importance of this industry can be noted from the fact that it provides nearly 157,800 direct quality jobs. According to the Tourism Forecasting Committee report 2009, the inbound tourist rate is likely to fall in 2009 by 4. 1 percent (Tourism NSW Presentation to Industry, 2009). The next year i.e. 2010 look more promising as according to the report, the arrival rate is going to bounce back by 5. 3 percent in 2008. In 2009, the rate of arrival of domestic visitors at night would decrease by 0. 9% but in 2010, this figure will improve by 1. 0 percent. The international travel as per the Latest International Visitor Survey shows little weakening signs but still the domestic visitors would help in contributing to the revenue. Cost Components of the tailor-made package There are different cost components, which are offered by the company in its events to provide tailor-made package.

These are as follow: Menus: This requires the eye-catching designing and format to attract the first sight of any client or company. It includes the prices of different options offered in the menu for the purpose of event.

Beverages: The company offers various beverage packages to its clients for event. Event management services: The Company offers its guidance to the needy clients apart from the catering part. It offers various service components necessary for an attractive event such as floral, themeing, entertainment, table centrepeices, corporate gifts and audio visual equipments.

Evaluating the Opera Point Events Opera Point Events manages The Utzon Room, The Summer Pavilion, Opera Point Marquee, the Southern Forecourt and the Northern Foyers of the Opera Theatre and the Concert Hall. This venue holds a number of events for the business and professional people. An instance of this was an event held to introduce Simon Sandall’s food and the new Opera Point Events team to the people. The target markets for this venue were media, professional conference organizers, inbound operators and event managers (Creating and Costing Your Event, 2009)..

The aim behind organizing such kind of events was to make this venue the preferable choice for holding these kinds of events. The Opera Point Events wants to establish the image of Opera House as the place of choice for holding the city’s main events. This venue offers a unique place for holding conference and corporate events of various sizes. The staff provides event planners which offer customized services and a number of options for the customers. These options can be anything like providing breakfasts, short meetings, conferences cocktail parties etc. Conclusion

The advertisement by the Opera Point Events very well covers the target market of this region. The main target is the business class people. The pictorial graphics have been used wisely to depict various services and grandeur offered by choosing for this location. The message of the advertisement is successful in giving the details of the unique services and various advantages offered by this venue. Overall this advertisement has been successful in targeting the market for this region. Designing an advertisement is an important part of any marketing strategy.

It is very essential that the advertisement message and design must reach out and appeal to the target audience.

References

Tourism NSW Presentation to Industry. (2009). Retrieved April 30, 2009, from http://corporate. tourism. nsw. gov. au/Sites/SiteID6/objLib59/TNSW%20Presentation%20to%20Industry_March%2009. pdf Sydney. (2007). Retrieved April 30, 2009, from http://www. btp. net. au/99/section. aspx/category/2/catalog/10/page/287 Creating and Costing Your Event. (2009). Retrieved April 30, 2009, from http://www. operapointevents. com. au/CreatingYourEvent/518/n/3/0/0/

Parker Pen: An Adventure in Globalization pg. 547 1. -This is the history of the failure of an international marketing strategy. Which were the reasons? Analyze the 4 P’s. (Price, Product, Place, Promotion) Being one of the largest pen industries in the world, Parker Pen was a failure for having international marketing strategy. This is due to the fact that Parker wanted its products to fall under the concept of standardization. He called this the “Janesville strategy”.

Under promotion, Parker Pen wanted his pens to follow the mission of “one look, one voice”, meaning all Parker products would be sold and re-produced the same way in all countries the company would make partnership with overseas. As a result, all packaging and advertising would mirror the original Parker Pens in all participating countries. The problems which would arise from this is that standardization may not cater to different countries, who may have an interest for specific supply of pens. For example, locations such as France and Italy are fond of expensive fountain pens.

Consequently, promotion strategies would lead to the decisions with regards to the distribution of products. Parker wanted all his pens to focus on a common positioning, which meant that the same types of pens would be allocated to its specified locations. The problem here is that the target markets values and interests are different across different markets, and cannot be dealt with similarly. Parker failed to realize that that you cannot use the same tactics on all individuals because each individual is unique in their own way. On the same note, this reduces the level of customization and personal preference.

This also reduces customer consideration and individuals do not feel there is a sense of providing customer satisfaction. For the product, Parker pens lose its value in the pen industry for providing individuals with the writing instruments they need and have a value in. The Janesville strategy was a failure also due to the fact of pricing barriers. As stated in the article, Parker produced low-cost pens, which were not functional and were unable to do what they were intended to do. Leading up to this was a large controversy on the goodwill of the company in comparison to their actual products.

Parker pen was a known as a company of quality, yet with this new global strategy, they failed to reduce costs yet at the same time satisfy the needs of customers. 2. -What role do people play in implementing any strategic decision? Analyze the role of Mr. Peterson, Mr. Smith and Mr. Parker. During the crisis of Parker pen, there were many roles being played. Mr. Peterson worked at reducing costs by laying off employees to reducing the product line to 100. He believed that entering into the global industry, it would require a single “world class agency”. Both Mr. Peterson and Mr.

Smith decided that Parker pens needed to target the low-end of the market, meaning low cost pens would need to be produced. This would also result in the pens being in lower quality and standards than the original Parker pens. Mr. Smith, being promoted as the new president of the Parker pen company, planned to develop the Vector on the high scale and a disposable pen named the Itala on the low scale. Mr. Smith wanted Parker pens to take on markets of the pen industry that has never been done by any other company before. He decided that this would be the success of the company in entering into the global markets.

For the company, this was a large risk as green ventures are unknown are this may cause a large fall in profits and sales. Mr. Smith also researched on the sales of Parker pens and discovered that the company had only a small share in the pen industry as most of its profits were coming from pens selling for less than three dollars. Mr. Smith decided that a change was needed, therefore pushed for the promotion of high scale to low scale products. Under the management of Mr. Peterson and Mr. Smith, 400 company managers were trained to market Parker products the same way in all locations. On the other hand, Mr.

Parker was a believer of new product development, turning Parker pens into a company producing over 500 lines of products. His thoughts on the development of the global market were contrary to the ideas of Mr. Peterson and Mr. Smith. 3. -Was it a good idea for Parker Pen to produce and sell a wide range of pens from high-cost to low-cost? Why? It was not a good alternative for Parker Pen to produce and sell pens ranging from high-cost to low-cost. Parker pens are known for the quality in writing instruments and changing their production process by purchasing reduced quality materials will diminish the goodwill of the company.

The first decision of determining if a company should globalize consist of the following items: knowing the company and its strength and weaknesses, knowing the product and its selling points, knowing the home market, knowing the target market and its background, and being able to leaves one’s predetermined values, beliefs, and propositions. There are many factors that need to be taken into consideration. Contrarily, the concept of having a wide range of products can be a success if adequate research was done to understand each markets’ values.

In low growth developing countries, the most viable option may be to sell low cost pens because individuals may not have the ability to afford prestigious ones. 4. -If customers from different places are buying similar products, do you think it is possible to approach different markets with the same advertising theme? Why? Customers from different places may have values in buying similar products, but it is not possible to approach different markets with the same advertising theme. The reason for this is that you need to custom to each market. You need to change your advertising strategies according to the values of that particular location.

For example, some locations may want to feel a personal message directed towards them in order to attract them while others may want advertising to be assertive and straightforward without any underlying messages. By assisting distribution to extensive research, Parker Pens can gain a larger understanding of each markets’ needs when dealing with promotional planning and marketing strategies. In other words, Parker Pen took on the concept of Ethnocentrism and Geocentrism, which means that the use of strategies are the same for all countries worldwide as it is in the home country.

This may be both beneficial and detrimental for a company’s marketing process. Looking at standardization versus adaptation, a potential starting point for Parker Pen could be standardization; however, a company must also know when to make a change. Subsequently, adaption and modification of products would need to be implemented in order to maintain brand recognition in a global society. 5. -Which had been your recommendation for the international marketing plan of Parker Pen in 1982? Since Parker pens was previously established as an industry of high quality writing instruments.

With a product line of 500, the company should have done more research and evaluation of each international target market before pushing their products into that particular country. Since Parker Pen is a company of no direct foreign marketing, in determining which products should be distributed can be handed to an expert and advisor who will perform that research. Market selection is done using secondary data from previous companies who may have been successful in international markets. Another option is to use precedence to determine whether the company will survive in the global industry.

In the Strategic Decisions in International Expansion model, Parker Pen did not go through the decisions of determining whether the company was export ready and what modes of entry the company would enter by. There was a lack of strategy implemented on the marketing mix and how the company were to distribute their resources. For Parker Pen, there was an overuse of self-reference criterion, where both Mr. Peterson and Mr. Smith believed that a high volume of low-costing pens would perform well in locations overseas.

This was a failure to realize differences and be able to put down one’s own values and accept the values of customers and the target market. Consequently, there was a lack of evaluation and knowing thy target. Segmentation variables are those that involve the demographics of each individual. In high developing countries, there may be a larger group of young individuals who are looking for affordable working pens to get them through the day at school, while in high business and technology based environments, individuals may value higher-priced pens because it produces an image of respect and status.

However gender and race represent segmentation criteria of the consumers, they will not be taken into consideration when selecting the target market as the Foster beers are addressed to both men and women and all races. The major selection criteria to be taken into account are represented by age, level of education and school graduated, income and social behavior. The proper identification of the target market is vital for Foster as it saves the company time and efforts and helps them address the right consumers (Pinson 1993).

Both target markets are formed of individuals who currently consume both Foster’s beers as well as beers from competitive producers. Several marketing strategies must be developed by Foster’s by which to increase customers’ loyalty to the brand. The division of the market into the two target markets is useful as it helps the company better address diverse needs and financial capabilities. As such, the first target market will be addressed less expensive products with satisfying qualities, whereas the second target market will be addressed higher quality beers at higher prices.

The product strategies which are to be developed and implemented by the Foster Group in regard to promoting their beers should basically revolve around increasing their customers’ loyalty to the brand and increasing the company’s current customer palette. Several decisions must be made in regard to the functionality, packaging, branding, labeling, (2007 Net MBA) extensions or length of the product line. The functionality of the Foster beers is implied by the product itself, which is aimed to be a beverage consumed and served at social gatherings, sports events or simply to clinch the thirst of the consumers’.

All Foster’s beers are to be packed in handy and convenient receptacles of modern designs. As such, the drinks could be bottled in 500 or 300 ml bottles or in metallic cans of 500 ml. Each container will be labeled according to the contents, ingredients, manufacturing and bottling date as well as the expiry date. The labels will also contain the name of the brand (such as Corona or Cascade) and the name of the producing group (Foster’s). The beers will be available for single purchase or in packages containing several containers, such as the most famous six-pack.

In packaging their beers, the producer must also take into account its tremendous international orders and the proper mass packaging of their products. In other words, Foster’s must insure a safe traveling of their products and their successful reaching of the destinations. In this order of ideas, they must pack their beers in solid containers which protect the cargo against damage throughout the transportation. The most efficient packages are the plastic boxes, but they have the inconvenient of occupying too much space.

For the beers packed in metallic containers, the producer could use cart boxes. The length of the product line must be established based on thorough market researches which take into account customers’ preference for specific beer types, the frequency of purchase and the demand on the market. Also, it must take into consideration the company’s financial possibilities and the seasonal aspects (for instance, the consumption of beer decreases significantly in Europe during the winter season).

Conclusions

Foster’s Group is based in Australia but serves customers across the entire globe. The producer’s customers are generally similar to the consumers of other beer producers. They come from all social backgrounds; have various levels of education and income and different hobbies. A major issues confronting Foster’s is the need to increase its customers’ loyalty to the brand.

Bibliography:

• Bawden, Tom, 2006, S&N Turns on Foster’s Tap in Europe, Business Times Online, http://business.timesonline. co. uk/tol/business/industry_sectors/consumer_goods/article704447. ece (accessed on January 3, 2008)

• Chessell, James, 2004, Cheers! Why Every Brewer Loves a Premium Beer or Two, The Sydney Morning Herald, Sydney

• Crouch, Andy, 2002, Ring the Bell and Prospective Beer Drinkers Reflexively Reach for Cases of Light Premium American Lagers, Beverage Business, http://www. beveragebusiness. com/bbcontent/art-arch/crouch0902. html (accessed on January 3, 2008)