The expansion of the UNIQLO into the Australia’s retail carnage has proved the best opportunity for the Japanese retail giant. This marketing plan provides the framework upon which the organization will conduct its expansion.
The Japanese company targets the most promising customers who are reportedly viewed as the market drivers, thinkers, and experiencers in the generations Y and Generation X with age range of about 18-40 years. Importantly, the company believes that the older consumers are working professionals compared to the younger customers (Mattioli, 2012). UNIQLO Australian store will target the Asian students pursuing higher education in Australia.
The company has earmarked Zara, H&M, and TopShop as the possible competitors in the market. It has also considered Country Road, Myer, and David Jones to be the main Australian retailers offering standard products in the targeted market (Dickie, 2010). Nevertheless, in 2018, UNIQLO Australian Store intends to offer stylish clothing cheaper than the competitors do (Payne, 2016).
- In 2018, the retail store will open its first store in Melbourne that will enable it to earn $18.5 million in revenues upon the purchase of about 175,000 units that will form 0.15 percent the share of Australian market (Press, 2016).
- In 2019, UNIQLO Australian Store open another store in Sydney to allow it to earn $37.5 million as it will ensure the customers purchase about 350,000 units leading to 0.3 percent of the market share.
- In 2020, the company intends to expand its stores to Gold Coast and Sydney to allow it gain 0.6 percent of the market share translating into $76.2 million (Fast Retailing Co, 2017). This revenue will be earned from the purchase of 700,000 units.
- Unlike other players in the industry, INIQLO intends to offer high-quality, affordable, and stylish clothing (Joy, Sherry Jr., Venkatesh, Wang, & Chan, 2013). It will offer these products in different colours and use HEATTECH designed fabrics to pull the market.
- The aim of UNIQLO is to position itself as a desirable and stylish retailer redefining the relationships between price, quality, and offer innovative products (Fast Retailing Co, 2017).
- The company will have to train its Australian staff to understand the Japanese service standards thus maintain and understand the culture of the company (Edmundson, 2010).
- UNIQLO Australian Store will utilize the penetration pricing strategy that ensures the end prices to be higher than what is offered in Japan as explained by Dickie (2010).
- UNIQLO will be seeking strategic and visible locations for all its stores
Information marketing and communication
- The store will employ mass media marketing strategy that will involve the use of television, newspaper, and magazines to increase its brand awareness in the new market (Choi, 2013). It will also utilize social networks, emails, and membership lists to build and maintain strong company-customer relationships.
- The Japanese-Australia Store will depend on the Takumi experts to conduct the regular quality control checks. The conglomerates will utilize the services of its Tokyo and New York offices to analyse the current market trends and use customer feedback to meet the standards (Craik, 2015).
- Respond to the growing oversaturation of the domestic market
- In the first year, the company needs to pursue the achievable and steady strategy that embraces growth and expansion.
- Intensify its collaboration with its professional designers to increase competitiveness by creating unique collections (Dickie, 2010).
The Australian fast fashion industry is part of the promising clothing industry in Australia. This industry embraces short product life cycles. UNIQLO (2012) affirms the fashion stores and companies compete fiercely based on their collections and designs. The companies are compelled to produce new collections displayed in various Western cities like New York and Paris during fashion weeks. The consumers expect to access the new fashions and designs at affordable rates. UNIQLO can determine the market trends using the Porter’s five forces (Kotler, Burton, & Kotler, 2009). The fast fashion retailers have to embrace differentiation strategies, quality, style, and affordability of clothing. The retailers can overtake their rivals by responding to the trends thus grow their market share.
Fast Retailing is the parent company of UNIQLO (UNIQLO, 2012). The Japanese company focuses on inspiring the global populace to dress casually by offering the apparels for women and men of different ages. Choi (2013) maintained that Fast Retailing, which seems to control the UNIQLO’s operations including development, production, and retailing stages, operates the Japanese company. The retail store began as menswear chain store but later expanded into other market segments because the Japanese market was becoming competitive and saturated (Craik, 2015). UNIQLO is a revamped brand that continues to undergo rapid growth leading to success in the international markets. It has opened new retail outlets in different countries, such as Russia, Malaysia, France, U.S, and China.
The retail store plans to invade the Asian market by opening more than 100 new stores in the region. It further considers entering Australia and the environment. SoHo remains the largest global flagships the company has ever opened because it is built in New York at 37,000 ft2 (Dickie, 2010). The success of UNIQLO is evident in its Opera, Union Square, and Oxford Street profitable flagships in the leading cities across Europe. Interestingly, the company uses the standardized model in expanding its operations into the European markets.
Segmentation and Targeting
The retail store is targeting consumers based on the different factors including strivers, experiencers, and thinkers. The experiencers and thinkers are valuable customers in the fashion industry. They have high disposable income that they can spend on fashionable products. UNIQLO also focuses on the thinkers who look for functional and quality products offered at a good value. The experiencers in this industry value energy and variety. Interestingly, the strivers may possess the least resources, but they try to follow the footsteps of experiencers (Joy et al., 2013). The Japanese fast-fashion store must strategize to serve the diverse interests of customers depending on the power of their resources. This makes the company a primary product line that serves innovative functions.
The fast fashion industry depends on Generation X and Y. The baby boomer generation is also coming out as a primary target market for the company. In Australia, the company targets the generations X and Y (Fast Retailing Co, 2017). UNIQLO has segmented its target markets into different categories. The first segment is composed of the customers aged 18-25 years with high school qualification. It further targets the secondary market that consists of the working professionals aged 25-40 years and have post-high school qualifications. It has identified the international students studying in Melbourne to be an attractive niche. According to the company, most of these international university students are aged 18-25 years and come from various Asian countries.
UNIQLO is interested in the urban dwellers living in the major Australian cities like Sydney, Melbourne, and Gold Coast. Since Melbourne and Sydney are centrally located and enjoy touristic positions, UNIQLO stands a better chance to boost its market position (Fast Retailing Co. Ltd., 2017). It will take advantage of the busy CBDs in these cities to serve different consumers including tourists, commuters, and city dwellers. The competition in these cities is fierce, and UNIQLO has to modify its offering based on the climatic changes in the region. For instance, the company will have tailored its responses depending on the needs and climate of each city.
Competition in the fast fashion market is intense, and UNIQLO has responded adequately by opting to serve various consumer segments using different product lines. The company is facing off with H&M, TopShop, and Zara, which deals in fast fashion products (Fast Retailing Co., 2017). In fact, these competitors offer basic items like sleepwear, underwear, and socks. David Jones, Myer, and County Road are among the new competitors in the fashion industry in Australia.
UNIQLO has established category membership that has helped it announce or advertise the category benefits depending on the descriptions of each product. Mattioli (2012) holds that UNIQLO is willing to use the point-of-difference to help it provide high-tech fabrics. Importantly, the mass advertising will be the best investment the company will make to remain relevant to the market (Sull, & Turconi, 2008). Through the advertising, the company will detail its benefits to the public. For instance, by using video and photo advertisements, UNIQLO will be prepared to beat its leading competitors in the market (Craik, 2015). Despite the affordable pricing strategy, the company intends to portray its stylish and high-quality brand through celebrity endorsements. It intends to continue using this strategy of celebrity endorsement in the Australian market thus clarify its product offers.
Competitive points-of-parity, points-of-difference, and point-of-parity
This industry demands a high-quality fashion product lines that are in tandem with the market trends (Wilson, 2004). The point-of-parity is based on the stylish and current market trends that determine the customer’s preferences. The companies involved in this industry have to be responsive to the affordability, quality, and the ever-changing stock. Regarding UNIQLO, the company has used the high-tech fabrics to act, as it is a point-of difference (Dickie, 2010). The HEATTECH fabric and design have offered the firm the competitive edge in the industry. The brand image justifies its point-of-parity that offers stylish, high quality, and affordable clothing than other retailers in the market.
The company intends to gain 0.6 percent of the Australian market share by 2020 thus improve its total projected revenue. It intends to open the first flagship store in Melbourne in the first year of operations (2018). It will expand its operations in Sydney where it will also open a new store in the CBD. In the third year of operation, the company will open new outlets in Gold Coast and add other stores in Sydney as indicated in Appendix 1.
- As part of its short-term goal, the company plans to open a new store in Melbourne in its first year of operation in 2018. It believes that this will earn it revenues worth $18.5 million thus translating into 0.15 percent market share. The company projects sales of 175,000 units in 2018.
- The medium term objective is to open fast fashion outlet in Sydney in 2019 thus earning about $37.5 million. The move will increase the company market share to 0.3 percent. This will translate to 350,000 units in sales.
- By the third year, the company shall have opened stores in Gold Coast and Sydney to 10 stores thus earning it $76.2 million in revenues. The expansion strategy will increase its market share to 0.6 percent and corresponds to 700,000 units of sales.
The company is intending to offer its targeted customers innovative, stylish, high quality, and affordable clothing. These characteristics have differentiated it from its rivals thus make it possible to competitive in the declining fast fashion industry. The company offers its product in different colours and designs. It also developed the HEATTECH design to cater for the needs of customers during winter (Edmundson, 2010). The clothing offer will be range from professional, fashionable, and casuals from various colours and quality. It will target younger and adult fast fashion customers because UNIQLO understands the significance of fashion in the dynamic market.
UNIQLO was a victim of brand perception decline in its home market due to oversaturation and introduction of different fleeces by rivals. This led to teasing of even schoolchildren who were putting on this brand (Tungate, 2009). Although UNIQLO prides of quality assortments, its image was tainted. In this new market, UNIQLO is offering the best-perceived value that the targeted customers will embrace (Fast Retailing Co., 2017). The company intends to detail the fabrics using icons to improve the market awareness of its innovation and functionality (Dickie, 2010). Similarly, UNIQLO intends to redefine the relationship between quality and affordability. This redefinition will introduce a new appeal to different market segments because it focuses on values, affordability, stylishness, and quality.
As part of its service strategy, the company will have to persuade its consumers so that they can reconsider repurchasing the UNIQLO’s products. Through the motivation, the consumers will have the reason to revisit its outlets as explained by Fast Retailing Co. Ltd (2017). The firm will have to use proper communication methods to accommodate the needs of the targeted consumers. The company has valued the Japaneseness thus differentiating its products from the competitors (Dickie, 2010). The company will have to train its employees to allow them to combine the extreme Japanese culture of service-mindedness and quality of the products (UNIQLO, 2012).
UNIQLO intends to introduce perceived value to satisfy customers through reliability. It will allow the consumers to return the clothing within 28 days after purchase. The UNIQLO Australian store has to embrace the tradition and culture of the company (Edmundson, 2010). This will see it create copious open space thus allowing the consumers to shop and browse comfortably.
UNIQLO has used penetration pricing as part of its brand strategy. This pricing strategy would deserve the Australian market thus make it possible to compete with TopShop and Zara (Edmundson, 2010). UNIQLO will charge its consumers the lowest market price on its high-quality clothing. However, the company intends to increase the prices of its stylish products like button-down shirts and UT t-shirts upon the increased adoption rise and brand awareness. UNIQLO will promote brand awareness by intensifying advertising as the best method to persuade consumers to purchase the highly desirable fashion products (Van Nes & Cramer, 2005).
The company will continue using a one marketing channel to distribute its products from the manufacturer to its outlets. Although the company has a strong network of manufacturers in many countries like Southeast Asia and China, it is yet to centralize its operations to these affordable and dependable manufacturers abroad (Winge, 2008). Since Australia has established strong ties with its Asian manufacturers, the company will benefit from low shipping costs thus improve its higher margins and stabilize its operations in Australia (Skov, 2002).
UNIQLO also values the placing strategy as an expansion model overseas. It focuses on the establishing the strongest brand image relevant to the systematic openings (Welters, 2008). It will benefit by opening a multi-story store in Melbourne thus counter the rivals like Zara, Myer, and David Jones. It will also open new stores in Sydney that will be strategically located to allow for the young and trendy shopping experience in the touristic areas.
The company intends to persuade the Australian consumers by establishing the best reliable relationship (Shaw & Riach, 2011). It will ensure that the employees serve the consumers satisfactorily based on the Japanese culture. The advertising strategy will redefine its stylishness and affordability to ensure it persuades the targeted consumers. It will utilize invoking images that the local consumers will value.
The company intends to utilize different media platforms to increase brand awareness in the first year. This will involve the use of digital, mass and print media to reach more consumers (Bellman, 2016). In 2019, the fast fashion will invest in creating strong intimacy with clients. In 2020, the firm will build strong resonance and loyalty. McCoy, Everard, Polak, and Galletta (2007) recommended online advertising for the company to achieve its business objective.
Conclusion and Recommendations
The Japanese fast-fashion company values its business model, and it seems to use it in the Australian market. The company intends to achieve its business objectives thus improve its revenues by complying its strict service standards. This has ensured the company remains stylish, desirable, and affordable to the targeted customers. UNIQLO also intends to utilize its efficient communication channels to create strong customer relationship thus penetrate the targeted Australian fast fashion industry. Its success in this new market will depend on:
- Collaborate with the top expertise and designers who can create unique collections.
- The company will also have to pursue achievable and steady market share and revenues and establish brand recognition, awareness, and adoption using an aggressive strategy.
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