Situational Analysis For Mr. William Footwear Corporation In The Australian Market Essay.

Situational Analysis

You have just landed your first job as a marketing communications coordinator with an Australian-based manufacturer of footwear. You work in the marketing department and report directly to the Marketing Manager. Although you will be working on Australia-only marketing communication, your company is a wholly-owned subsidiary of a multi-national footwear corporation based overseas, called Mr William. You were hired because you demonstrated critical and creative thinking and handled problem-solving well during the three-stage interviewing process. In particular, they were impressed with your ability to search information and present solutions to problems posed (which were not clearly defined and required you to interpret them drawing on learning from your undergraduate degree). You also demonstrated an ability to work well as a member of a team; at times taking a leadership role, but you were also able to support team members to contribute effectively and were considerate of the ideas of others.

The Marketing Manager is keen to learn more about you and how you apply your knowledge and skills to understanding the Australian retail market for footwear items. She wants to observe how you work in a team and how you work independently. She feels the best way for you to demonstrate this is through the research and preparation of some key sections of the first draft of the annual (12 month) promotion plan for one of the company’s brands (you will be advised of your product line in the first week of the trimester). Therefore some sections of a typical promotional plan will be omitted (see below for full instructions).

The Marketing Manager has said you must proceed on the assumption that your product is primarily distributed through Australian retail outlets. You may NOT assume your company Mr William acts as a retail outlet selling your brand direct to the public (by any means).

However, in Assignment 2 it is expected that you will consider traditional, mobile and digital channels when developing your promotional strategies (more advice will be provided on this during the trimester).

The first assignment is completed as a group exercise and the second assignment is completed independently (solo). In the first assignment, your group researches and analyses the market for a specific product line associated with ‘footware’ (which you will be given).

The research process involves gathering data and information from authoritative and relevant secondary and online sources which are used as input into the situation analysis. Be advised that it is better to start gathering data early in the trimester and not to leave it until the last minute.

You will also need to make some decisions to develop your brand and your imaginary product line. Mr William is the parent company so your group MUST come up with an original brand name too. Other decisions you need to make include identifying the target market and positioning. In making these decisions you need to try to build in an element of realism but we do understand that in all areas this is not possible. Essentially what the markers will be looking for is whether the draft promotional plan you develop demonstrates: critical and creative thinking and willingness to be innovative in your approach; use of problem solving; and effective and professional communication. Your markers will also be

assessing the degree to which your ideas and approach can be developed into a promotional plan that has a good chance of success given the brand scenario you create.

And now an important note about desk research

You will be working with an imagined scenario; however, the market conditions, the retail context, and the target audiences you are appealing to should be real. You will need to build your knowledge of your product’s retail market and target audiences (and the social factors that influence their behaviour) by finding and referencing reputable industry documents. A useful place to start is:

• Youl, Tom June 2018 IBISWorld Industry Report C1352 ‘Footware Manufacturing in Australia’.You can access this from IBISWorld. You must be logged into the Deakin Library to access it. You will note there are other product market/retail context reports which may (or may not) be relevant via IBISWorld. This is for you and your group to 

Mr. Williams is a multinational footwear corporation based overseas. The organization has a fully owned subsidiary in Australia. Considering the fact that the apparel industry of Australia is highly lucrative for the multinational brands, Mr. Williams is also trying to enhance its market share as well as the annual revenue in the mentioned industry of Australia. The chief objective of the management is to enhance the market share in the Australian footwear market from 2 percent to 2.5 percent by the end of 2019. Not only this, situational analysis of the Australian footwear industry will help the management of Mr. Williams to understand the specific needs of the local consumers as well as to gain consumer loyalty. In this report, situational analysis will include market analysis, PESTLE and SWOT Analysis. In order to conduct the market analysis, market segmentation s well as porters five forces analysis will be performed in the following paragraphs.

Situational analysis refers to the collection of methods that are used by managers in order to analyze the internal as well as the external environment of the organization. While the external environment will help the management of Mr. Williams to understand the common trends of the Australian footwear industry, the preferences of the consumers, the approach of the rules and regulations implemented by the government on the mentioned industry, the strategies implemented by the competitors and the scope of flourishing the business, the internal analysis, helps the organization to understand its own strengths and weaknesses along with the opportunities it posses and the potential threats that may be faced by the organization while pursuing its business in the Australian apparel industry.

The 4Ps of marketing refers to the model followed by the managers in order to understand the market and thus create as well as maintain its position in the mentioned industry. The marketing mix can defined as the combination of strategies as well as tactics that an organization uses in order to execute its marketing plan on the paid of Product, Place, price and promotion.

The Australian footwear market is comprised of organizations that sales products for men, women as well as kids, the chief products that are sold include sport shoes, orthopedic shoes, dancing shoes, dress shoes, boot shoes and casual shoes. Among all the product lines, the current most popular footwear of the Australian consumers is the sport shoes. . Considering the fact that Australia is a developed nation, majority of the consumers in the footwear industry belong to the middle and upper middle class of the society. The consumers that the Mr. Williams Company should target are of the age range 15 to 40. Based on type, the Australian footwear market can be segmented into men, women and children footwear. The largest share in the market belongs to the women’s shoes segment due to the at leisure trends amongst women’s segment.

The men’s segment dominates the market after the women. Considering the fact that majority of the Australian population is getting inclined towards a healthy lifestyle, the trend of exercising and fitness is increasing. Sport shoes in men’s as well as children’s segment are expected to create a huge demand that in turn has the potential to reinforce the market growth in near future.

Market Mix Analysis

As being discussed earlier, majority of the consumers of the Australian foot ware industries are getting inclined towards sports and physical activities in order to ensure a healthy lifestyle. This factor should be targeted by the managers of the Mr. William organization. The organization should invest more on sports shoes both male as well as female. Whether it is playing, watching or simply talking about sports, these activities shape personalities and lifestyles. The major competitors of the organization make their advertisements at creating a feeling that transcends the product. In order to manipulate the consumers psychologically, several athletic contexts as well as sports improvement Clinique are sponsored and organized respectively by the major competitor of the Mr. Williams’ Organization.

When it comes to the price strategy, 63 .5 percent of the organizations in the Australian footwear industry uses the value based price strategy in order to gain competitive advantages   over the competitors. This element of the marketing mix analyzes the prices that an organization applies in order to maximize the profits while attracting the desired share of the market. Considering the fact that the competitions between the organizations are huge, consumers possesses the power of shifting their loyalty from one organization to another in case of slightest of dissatisfaction. With the help of value based strategy, Mr. Williams will be able to consider the perception of the consumers about the value of their products. This value will help the managers of the mentioned organization to access the maximum amount of price the consumers willing to pay while buying thee shoes. When a favorable condition is reached, the companies often raise the price of the products in order to generate higher sales and revenues. In order to gain loyalty of the consumers, Mr. Williams should lower their own price range without hampering the quality of the shoes so that consumers get attracted towards their product. Besides the company should also invest of a good number of discount strategies in order to enhance their consumer base which in turn will help them to enhance the loyalty of the consumers.

Considering the fact that the current aim of the management of the Australian subsidiary is to focus entirely ion the local market, at various states, Mr. William should promote its business keeping on mind the preferences of the consumers of that specific states. For example, at New South Wales, Victoria and Western Company Australia, consumers are keen about sport activities like football and soccer. Keeping this in mind, the mentioned organization should develop its promotional campaign across the world. For instance, in order to promote their shoes in Western Australia they should use basketball while promoting in Queensland golf should be used as part of promotional campaigns. Majority of the organizations in the Australian footwear company focuses on making the consumers feel like an athlete. According to researchers, it is highly crucial to understand the behavior of the consumers while providing them a special as well as unique feeling. The competitors of the mentioned industry, always seeks to build consumer loyalty. In order to gain the same, the Mr. Williams Company should focus on the quality, choice as well as innovations.

Product

The Mr. Williams organization is currently planning to sell its product through popular retail stores like Westerners as well as Woolworth. Considering the fact that the organization currently lacks the market share that will encourage it to establish its own store in Australia, the management is planning to reach the consumers through the popular retail stores across Australia. Apart from offline stores, Mr. Williams should also conduct online marketing. The distribution strategy of the mentioned organization should be as follows in the near future:

1. Retailers
2. Official online stores
3. Their own retail outlets
4. Retailers like Wesfarmers and Woolworths

Due to its stable political condition, Australia is considered to be one of the safest places for investment. The political as well as regulatory environment of the nation is stable, progressive as well as open that in turn provides the investor with high degree of certainty and confidence. The open environment of the government is both beneficial as well as threatening for the organizations that are established in the apparel industry of Australia. Open environment means that the federal government of Australia allows new investors to invest in the footwear industry of the nation, which in turn impose positive impact on the economy of the country.On the other hand, this enhances the number of competitor in the mentioned industry and thus the saturation of the market gets increased.

When it comes to the risk of military invention, Australia is almost free of such risks. The excellent military arrangement of the country protects it from unwanted inventions that in turn encourage the investors to invest. The level of corruption is also less in Australia compared to any other countries across the world. Australia is considers to be the most stable market for the MNCs in the Asian market and the nation hosts a flourishing.

Considering the fact that the country have suffered the recession that took place on 2008, the economic status of the consumers are slowly recovering from the mention mishappening. However, according to Nossar et al. (2015)¹², Australia is a promising place for doing business. The total population of the nation as per a recent survey is more than 32.4 million and more than 89 percent of this population leaves in urban areas¹⁰. The nation’s economy ranks 12^th place across the world and thus represent 1.9 percent of the world’s economy.  When it comes to the footwear industry of Australia, the value of the industry was more than 3.2 billion USD in the year 2017 and is expected to undergo a huge growth in the forecasted period. The industry is chiefly driven by the enhancing discretionary spending coupled with the rising fashion trends in the country. Consumers are investing more on their footwear and as a result by the end of 2019, the revenue of the footwear industry is projected to grow on the bass of fashionable as well as sports shoes. However according to McDonnell, (2018)¹¹the aging population of the country has given rise to labor shortage in the nation. This in turn possesses the risk of imposing negative impact on the small footwear organizations like Mr. Williams.

The consumers of the Australian footwear industry are highly getting inclined to both sports as well as fashionable shoes. Being the resident of a developed country, majority of the consumers are getting inclined towards healthy lifestyle. Besides that the increasing physical issues associated with obesity have enhanced the sports activities of the nation. As a result of this, the sports shoes are fetching majority of the revenues. The second most popular footwear that has gained the attention of the consumers is the fashionable foot wear. Considering the fact that women are the chief consumers of the mentioned sector, the footwear manufacturing organizations are concentrating more on women footwear compared to men’s and kids footwear. van et al. (2018) argued that, the increasing labor costs as well as recession have imposed negative impact on the buying capability of the consumers. Consumers are proffering non branded high quality footwear at a cheaper price compared to branded foot wears at a much higher price.  According to a recent survey, more than half of the Australian population spends their money for getting ready for trips while more than 40 percent of the money is spent for buying cloths as well as footwear due to their overseas journey⁴.

When it comes to the fashion market, it has been observed that men are getting increasingly worried of their looks. This is evident through 2% retail value growth of men’s footwear in both retailing as well as manufacturing during 2013, with the latter registering AUD 1.2 billion when it comes to value. When it comes to the high end fashion market, these brands have successfully avoided the fluctuation in sales and are not affected by the confidence level of the consumers in the economy. The fact that Australians are captivated by European fashion cannot be ignored. This is more evident since; the Australian footwear industry is comprised of Major European Brands like Hollisster, River Island, Timberland and Urban Outfitter. However, several of this brands have been accused of charging up to 35 percent more from Australian consumers that their other overseas branches.

When it comes to design, the Australian consumers call for adaptation from these international brands. Footwear manufactured in Australian style is always appreciated by the consumers. Thus the requirement of Libirinto shoes for local design in its value chain activities can easily be detected.

Another socio-cultural factor that affects Australia’s footwear industry is that Australians wants to follow the global trend of buying footwear. In spite of the fact that the location of the nations allows the citizens to have different seasons, they prefer to buy footwear in two seasons that is in winter as well as in summers. This means Australians have initiated to stock both the seasons at the same time. This in turn indicates that retailers initiate preparing for winter as well as summer shoes simultaneously.

Being a developed country, Australia is highly advanced in technological factor. The technology provides the manufacturers with the opportunity of 24*7 hours internet, transport and other technology related facilities. Especially the ecommerce facilities provided to the retailers have benefited their business to a great extent. Considering the fact that the population of the nation is aging, people are more inclined towards online shopping compared to that of offline shopping. Even consumers who prefer offline shopping search online process before purchasing. The technological advancement also helps the manufacturers to communicate easily with the potential and target consumers. Thus establishing business in Australia will enable the management of Mr. Williams to easily communicate with the consumers with the help of popular social media sites like Facebook and Instagram.

The majority of the imported goods in Australia do not require licenses. Besides that, the nation is responsible for labeling of product in order to certify that they comply with the needs as well as the goods and service Tax of 10 percent is also charged. According to the Trade Market database of Australia, leather footwear products are labeled with the help of Harmonized system. Tariffs for exports of this good from the EU to Australia are 5% of FOB value.

Australia refers to a huge country. However, the country is concentrated in certain cities that lead to one of the largest urbanization rates across the world.  Another aspect of environment that affects the shoe production is the climate change of the nation. In line with this global warming occurrence is the increased heat waves felt in this county and reduced frosts.  This imposes impact on the fashion and design o the footwear organizations.

When it comes to the establishment of the company in the business ground of Australian footwear based manufacturers has experienced tough competitive and operative environment over the past decade. Therefore, this part of the study intended to provide an overview of the operating environment of Mr. William which is Australian based footwear through identifying the strength, weakness opportunity, and threat.

 In order to describe the strength of Williams, the comparative character of Mr. Williams need to consider in the market of Australian footwear market.  Since Mr. William is competitive footwear based manufacturer,   this competitive character enhances the establishment of Mr. William in the market of Australia.Moreover, strength of this Australian in based footwear manufacturer is that it sells the footwear through primary distributions in different outlets. Therefore, many local markets have the opportunity to keep the different Variety if the footwear from Mr. Williams and loyal customers can have it the products easily.

The weakness of the company relies the way of establishing a successful position in the business market. Since Mr. William sells the goods as a retailer in different branches, they lack their own individuality. According to Ervural et al. (2018)⁶, those organizations that have its own individuality such as j robins, Bata, and Nikes, the loyal customers are more willing to buy from these brands rather than buying shoes from retailers in the local market. Moreover, another weakness of Mr. William is that there in terms of profit they have to depend on the distributing branches.  The prices that are decided by the local markets for the footwear, the profits will depend on that.

Several opportunities can be pointed out when it comes to the Mr. Williams organization. Considering the fact that Australian consumers are getting inclined towards fitness, the company should promote their sports product line. Since the chief target of the company is local consumers efforts offline promotional techniques should includes campaigns, sponsorship of sports or health event, In order to enhance the consumer base, online marketing should also be introduced. This is because; more than 67.3 percent of the population of Australia prefers online shopping over offline shopping.

Being a footwear manufacturer, Mr. William has to face a lot of competitor in the business market of Australia which in turn affected the profit of the manufacturer. Other famous brands such as Nike, J robins and Bata are a potential threat to the profit of Mr. William since these famous brands have loyal customs who consume products directly from the showrooms. On the other hand, Mr. William is a retails who has no showroom and depends on the distributing branches and therefore, the effort of establishment shadowed down. Therefore, through direct selling of goods by opening showroom will reduce the threats coming from other companies in terms of business.

Conclusion

From the above discussion, it can be concluded that Mr. Williams possess the potential to enhance its Market share in the footwear industry.  For this, it is highly crucial for the mentioned organization to understand both the internal as well as well as external environment so that they can develop effective strategies to gain competitive advantages over the chief competitors. The enhancing demand for footwear will definitely impose positive impact on the sales of the mentioned company.

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