1Versatility refers to the ability to mix-and-match items after the purchase. 2Traditional suits have low versatility as they are expected to be worn as a ‘whole’ suit (or uniform).
2. The traditional suit (TS) customer is different than the target customer for high-quality separates (HQS), as they have distinct preferences and exhibit different behavior. Firstly, the TS customer will require sales assistance, while the target customer for HQS will prefer to shop by self-service. Secondly, the TS customer likes to plan his purchase, while the target customer for HQS will most likely make his purchase spontaneously. Thirdly, the target customer for HQS prefers versatility in the form of choosing and customizing his own suit, while the TS customer does not mind purchasing the prescribed design of a business suit. Finally, the TS customer puts higher emphasis on achieving the ‘executive look’ when they make a purchase, while the target customer for HQS focuses on comfort and ease of purchase. 3. With regards to merchandising and marketing techniques, high quality separates (HQS) will offer a good fit with Jaymar Ruby (JR). As the Jaymar customer is already a quality-slack (or separates) customer, encouraging him to purchase other quality separates would be considerably easier.
Hence, selling HQS in JR will seemingly be an expansion of the product line since JR already has a head-start in selling ‘separates’. In addition, the aggressive marketing strategies of JR would be put into good use when introducing this new segment of products into the market. However, it is worth noting that the quality of garments in JR seems to be in conflict with HQS, as JR’s garments are classified as 1 make (Exhibit 4), which is in the lower end of the ‘quality spectrum’. In spite of this, HQS will offer a good fit with JR as the competitive advantage reaped in initiating the separates business via JR outweighs the conflict in quality of garments. A possible solution to this issue is to communicate clearly to the customer that HQS are of a superior quality. 4. This will depend on the position that HSM will take. The separates customer ignores quality in preference to the ability to purchase more garments, and might not perceive any difference between HQS and low-quality separates (LQS).
Hence, if no action is taken by HSM, the separates customer might still prefer LQS (since it costs lesser than HQS, and enables them to purchase more garments), and HSM will still face significant competitive threat from LQS. Therefore, HSM must be able to differentiate HQS such that the separates customer perceives distinct benefits in HQS as compared to LQS, which also justifies the difference in price. One example would be to market HQS strategically so as to convince the separates customer that higher quality will equate to higher comfort (since separates customer places emphasis on comfort), which justifies the higher prices charged for HQS.
Thus, LQS could cater to the separates customer who prefers having the ability to purchase more garments (and hence, sacrificing ‘comfort’), while HQS could cater to the separates customer who does not mind paying a higher price for more ‘comfort’. Hence, if HSM is able to create perceived value for its HQS and communicate this message effectively, it will be able to successfully thwart the competitive threat from LQS in the short run. However, it should be noted that if HSM experiences success in selling HQS, companies of LQS will then consider upgrading to HQS, or new competitors could be attracted to the market. Therefore, in the long run, it is a likelihood that the competitive threat faced by HSM might then intensify.
5. HSM should introduce a line of HQS. Firstly, from the perceptual map, we can see clearly that HQS, LQS and TS each represent a different benefit combination, and hence, could cater to different segments of customers. As seen from the second question, the traditional suit customer and the target customer for HQS have distinct preferences and behavior, and HSM could thus better target the separates customer by introducing a line of HQS. In addition, as seen from the 3rd question, HSM will have a competitive advantage in selling HQS as the avenue chosen for starting the separates business (JR) is already selling quality slacks, and introducing HQS in JR would only be an expansion of the product line. Also, as mentioned in question 4, introducing a line of HQS will be able to thwart the competitive threat from LQS for the time being. Therefore, based on the above points, and that the current level of competition in the market for HQS is nearly non-existent, it is strongly recommended for HSM to introduce a line of HQS.
Courtney from Study Moose
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