Delivering Customer Value Though Marketing Essay

Custom Student Mr. Teacher ENG 1001-04 27 March 2016

Delivering Customer Value Though Marketing

i) Describe and analyse the brand’s product, market positioning, pricing strategies and its target segment.

ii) Critically evaluate if the brand’s marketing activity is delivering values to its customers. Why?

iii) Suggest ways in which the brand can improve in its marketing strategies or activities.

i) Describe and analyse the brand’s product, market positioning, pricing strategies and its target segment

UNIQLO is a Japanese causal wear retailer. It is also a wholly owned subsidiary of Fast retailing Co. Ltd. The first UNIQLO was opened in Japan in 1984. Across years, successful brand strategies enable UNIQLO to be the fourth fashion retailer in sales volume in 2013, just right after Zara, H&M and Gap.

Marketing mix is a useful tool to analyze UNIQLO’s strategies and its product development direction among competitors.

Marketing Mix (4P):

UNIQLO’s product:
UNIQLO provides a wide range of clothing, including Men’s, Women’s, Children’s, and even in Baby’s wear. UNIQLO manages this range of products in order to satisfy the needs of different age groups and genders. Especially children and baby wear, not all its competitors provide these two lines, this can satisfy customers’ need. UNIQLO has their own R&D team, to design the latest fashion and life-style wear to customer. Also, its materials sourcing team help to bring the most suitable and sometimes the luxury materials into product development in order to give the best wearing experience to customers. Such as premium down, cashmere sweaters and premium cotton are the good examples. UNIQLO gain customer’s trust in quality guaranty.

UNIQLO’s price:
UNIQLO’s products are not expensive comparing to its competitors, such as Gap, Zara, etc. Although UNIQLO’s clothing requires similar price with other fast fashion retailers, its quality is relatively higher than them. It is due to the most fundamental UNIQLO’s direction, “Low price, high quality”.

UNIQLO’s Place:
UNIQLO’s strategies are for both local (Japan) and international. Stores are all over the world, including Japan, America, Euro, China, East and south Asia. This can show the determination of UNQLO to expand its business and build the brand internationally. All the stores of UNIQLO, are in central area, or popular district in the cities. Take Hong Kong UNIQLO as an example, there are totally 21 UNIQLO stores in Hong Kong. The flagship UNIQLO store is in causeway bay Lee Theater, which is the most popular shopping area in Hong Kong. UNIQLO apply the same store strategy internationally, such as Tokyo, Osaka store in Japan, Shanghai store in China, New York 5th ave in USA.

Another strategy to make UNIQLO a good place to shop is their total sale-floor method. UNIQLO tries to enlarge the floor area in every shop and include as many departments and clothing display as they can in the store. That can provide the convenience to customers to buy their favorite things in only one station. And the big display area can attract customer’s focus to their products and give a confidence that UNIQLO can provide everything that they need.

UNIQLO’s promotion:
New product development process in many other companies is very simple. Usually, from idea generation, testing, product producing and so on. However in UNIQLO, the first step of product development is customer feedback. That means all products in UNIQLO are responding to customer. This is also the concept they are promoting to the potential customer. “Cheap, simple design, but is perfect fit for daily use with a good quality”. This sentence shows that UNIQLO is promoting their image to public.

Another way is UNIQLO promotes their products by sport sponsorship. Take Japan market as example, football league is extremely hot among Japanese. So, UNIQLO make good use of this opportunities to sponsor the uniform for a football team in J.League to increase visibility and exposure. Also, UNIQLO is the uniform sponsor for Japan’s Olympic athletics in 1998, 2002 and 2004. They also sponsor uniform for tennis players in high rank tennis competition. Exposure in different sport events can successfully promote UNIQLO as a very good ready-to-wear clothing brand to public.

Market positioning:
The clothing concept of UNIQLO is very strict forwards, which is “Low cost, and high quality”. They produce clothing with simple but fashionable design and good quality for wearing in every day. Their tremendous business expansion can prove that they successfully build their concept to customer and this represent that their business is on the tract.

There are four factors that can help to analyze UNIQLO’s positioning, they are:
1. Product quality
2. Prices
3. Distribution
4. Image

1. Product quality
UNIQLO is always proud of their products’ quality. Their CEO Tadashi Yanai had said that, they are a technology company rather than a fashion company.
Their high quality clothing enables them to be worn every day. UNIQLO is positioning their product in a relatively higher quality compare to other fast fashion companies, such as Zara , H&M. These company concern fashion trend more than quality. However, UNIQLO is not a luxury brand, so their quality is not comparable to other luxury brand, such as LV, Gucci, etc.

2. Prices
UNIQLO’s concept is “Low cost, but High Quality”. UNIQLO’s price is fair, but they offer a better quality of clothes at the similar price compare to other fast fashion companies. UNIQLO’s price is not the cheapest one, but quality is the highest among its market competitors.

3. Distribution
All the products UNIQLO selling are in their own stores. They do not have franchises or displays in department stores. So they can control all the promotion or logistics without third parties’ constrain. It is known as “SPA” (Specialty-store of Private-label Apparel), selling their own product in their store and exclusively. Take Hong Kong UNIQLO as an example, they have 21 stores in Hong Kong, which has a broader coverage than its main competitors. Zara only have 7 stores in Hong Kong. However, comparing to the local competitors like Bossini and Giordino, UNIQLO does not have a greater advantage in store numbers, but their number of stores are already much higher than other international fast fashion brand in Hong Kong market.

4. Image
UNIQLO is selling clothes with their functionality rather than fashion style. So, their image to customer is very simple, which is basic, simple, cheerful and comfortable. Comparing to Zara, and H&M , UNIQLO’s image is linked to quality and simple to mix and match for every day while the former two competitors focus more on trendy and fashion but sometime not easy to carry.

Position Map:
In this part, I am going to simply illustrate UNIQLO’s position with the position map by considering only two factors, Quality, and Price.

LV & Gucci surely come to the top rank in both quality and price because they are luxury brands which have a very different position comparing to UNIQLO.

UNIQLO, Zara and H&M can be grouped together due to their fast fashion nature. The price of their products is similar, but UNIQLO provides the highest quality while H&M is the last one.

Bossini or other local fashion chains usually don’t provide a very high quality, but they have local network and channels to sell their product. They sell their product in a lower price comparing to other international brands in order to sell more and earn more.

Local small bountique is the bottom one, in both quality and price. They target those people who concern money only but not quality.

Target segment & Pricing Strategies:
In this part, we need to identify UNIQLO’s target segment and then to anaylse it’s price strategies.

Target segment:
Few background recall:
UNIQLO’s concept is “low cost, high quality” as mentioned above. Its products are sold within a reasonable range. It provides a wide range of products including men’s, women’s , children’s and babies’ . Its style is “simple but trendy, easy to mix and match” .

Then we can analyse the market segment by parts.

a) Demographics
Babies – Right target of it’s babies line
Children – Right target of it’s children line
Adolescent – Right target of it’s Men’s and women’s lines Adult – Right target of it’s Men’s and women’s lines
Mature – Non-target , due to less fashion requirement of this group Elderly – Non-target , due to less fashion requirement of this group

Both female and male are their targets

The target customers’ income is low to medium, due to its cost and its pricing level.

b) Psychographics
For people who have a basic requirement on trend and pursuing good quality on clothing.

UNIQLO’s clothing is simple and comfortable. It is suitable for people who always have light exercise and sports in their living habits.

Pricing strategies:
After analyzing UNIQLO’s target segment, we found that their target population is very large. In order to enlarge the target group, a penetration price strategy is adopted by UNIQLO. Their target’s income is not high, they must have a price sensitive characteristic. So, UNIQLO try to maintain the products in a low to reasonable price to match the target’s income. In this sense, UNIQLO can make profit only when high volume of sales has been made.

ii) Critically evaluate if the brand’s marketing activity is delivering values to its customers. Why?

Customer value is the benefit that people will derive from their purchase of the goods or service. In this case, it means if UNIQLO’s marketing direction can generate benefit to customer after they bought the products. Overall, I think the existing brand activities of UNIQLO can deliver value to their target customers because of the below reasons.

1. Technology focus:
UNIQLO owns many technologies that its competitors do not have, such as Heat-tech, anti-smelling, lighting down, anti-UV, etc. These are the material advantages from competitors, indeed it gives extra value to customer and more attractive to buy UNIQLO but not buying other brands

2. Simple “trendy” design,
There are not many fashion pioneers in the world. Most of the people in the world are relatively simple, especially UNIQLO’s target. UNIQLO hires some famous designers to develop a hybrid type of clothing that perfectly merge basic into trendy. It makes their “basic” wear easily to be carried and extra “fashion” value added onto it although people originally is seeking for basic style.

3. Convenient store location,
Take Hong Kong UNIQLO as an example, it owns 21 stores in Hong Kong. All of the stores are in population area, such as Kowloon Tong, Causeway bay, Tsim Sha Tsui, Sha Tin, etc. Convenient stores location means customers can enjoy service or purchase easier. And after-sell service, such as goods return, can be accessed easily to customers. It is an intangible value.

4. Pricing strategies
UNIQLO produces all the products by its manufacturing sites. So it can minimize the cost , and then sell them in a lower price. Its penetration strategy enables more people to access their products. Also, with their advanced technology and materials choosing, the ratio of price to quality can be utilized greatly to customers.

5. Excellent store visual merchandising,
UNIQLO did very well in visual merchandising. First of all, different styles are well organized and distributed in distant area. In some multicolor basic shirts sectors, they make the whole sector to be more cheerful and colorful by folding the shirts subsequently and orderly. It can let customers to find the color they want more easier and enhance visual conditions. Also, UNIQLO can let your family to buy clothes for all gender and age groups in only one stop. Every store of UNIQLO sell men’s, women’s and children’s at the same site. Their professional store visual management can increase buyer experience and enjoyment in shopping.

All these marketing activities from UNIQLO can perfectly match the need of their target customers. So, we can say that UNIQLO is generating benefits to customers and even give them benefits out of their expectation.

iii) Suggest ways in which the brand can improve in its marketing strategies or activities.

In this part, we should identify the relative weak area of UNILQO first, and then target the weakness to formulate improvement way.

a) Design too simple
This is what UNIQLO proud of, but meanwhile it might be its weakness. UNIQLO emphasizes a basic style clothes that can be worn for every day. However, the fashion trend runs too fast recently, customers might be tired of plain pattern of UNIQLO clothes. So, in the future, I think UNILQO can maintain its original design and also add a few more fashionable and trendy lines. A fashionable and high quality apparel should be successful because it merge advantages of H&M and UNIQLO itself.

b) Brand Image
UNIQLO’s concept is “Low price, high quality”. Due to this concept, it limits UNIQLO to build a “High End” image. This low end image make UNIQLO with less pricing flexibility. People will not buy a “low end” brand with a high price. In long term, apart from the original line and image, UNIQLO can expand its brand image towards “Middle end” or “High end” by expanding some attractive lines. It will definitely increase product’s attractiveness.

c) Improve advertising and brand visibility
UNIQLO is weak in advertising. Comparing to its competitors Zara and H&M, these competitors are willing to spend much more on the public noise. Apart from product quality and store expansion, UNIQLO can expand the brand’s visibility and awareness with the aid of proper TV advertisement.

d) Elderly market
In the existing target segment of UNIQLO, elderly is not the main focus group. However, we can not underestimate the potential of this market, especially in some countries, such as Japan and Hong Kong, aging population is getting more. UNIQLO can put more resources on elderly by developing some specialist garment for people who need extra care. For example, heat-tech sweater is suitable them because elderly easily lose temperature. Also, UNIQLO can use its technology advantage to make some functional apparel to them like high elastic trousers which can provide protection from joint damage during walking. These functional products not only can attract elderly, but also can attract all age groups who need functional products. Moreover, they can invite some famous old celebrities to be the brand’s spoke person to increase the influencing power in this age group.

Overall, UNIQLO is a very successful international fast fashion retailer in the world in both sale volume and inspiration in fashion. UNIQLO successfully use “Simple” to compete with others in this fast pacing fashion world. UNIQLO’s high “price to quality ratio” makes them very attractive to its target group, and penetrate brand image to more people. The existing brand’s activities are useful in expanding business and deliver benefit to customers.

However in this challenging market, changes is the ever rules. UNIQLO should focus more the changing of people’s interest and the trend. Simple mix and match can be sword for brand building and harms if people change to pursue more fashionable styles.


6. 7.

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  • University/College: University of Arkansas System

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  • Date: 27 March 2016

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