Executive summary
The following marketing plan provides a market analysis on Billabong International Limited which is an Australian based organization. It deals with production and distribution of surfing sporting apparel and other clothing. The plan stipulates the organization mission, values, vision and objectives. The company has been making loses recently and the situation analysis conducted states that entrance of new companies such as Quiksilver remains a huge threat to its profitability. According to the SWOT analysis conducted, it has an added advantage of loyal customer but has poor customer segmentation. The plan highlights some of the plans that can adopt to retain and increase the competitive advantage.
Marketing Plan: Billabong
Introduction
Billabong International Limited (BBG) is a multinational in-store and online retailer of apparel, clothing, accessories, and sporting goods. These accessories comprises of eyewear, wetsuits, hardboards, skateboard, watches, backpacks, and snowboard products which may be under other brand-names. The brands licensed under BBG are Billabong, Element, Von Zipper, Kustom, Palmers, Honolua, Xcel, Dakine, and RVCA among others. The company was founded in 1973 and is headquartered at Burleigh Heads, Queensland in Australia. The main purpose of launching this organization was providing surfers with shorts and other sporting accessories used in marine sports.
By the year 1980, BBG had made significant establishment in the Australian surf culture. Eventually, the demand increased resulting to tremendous growth around the globe with international operations in USA in 1983, New Zealand in 1985, and Japan in 2001. Billabong was listed on the Australian Stock Exchange in August 2000 which saw the company trade its shares publicly. It employs approximately 1750 labor force around the globe with the highest percentage based on California and Gold Coast. Therefore, this marketing plan delineates the organizational mission and objectives, situation analysis, its marketing strategy, and the marketing plans that enhance competitive advantage.
Organization Mission and Objectives
The organization operates under well stipulated company values and objectives that each of the stakeholders is supposed to observe.
- A commitment to brand protection and enhancement
- Producing design-relevant and functional products that fits customers’ needs
- Expansion in new markets
- Enhancing boards sports through sponsorship and training athletes
- Expand the product range via an effective product mix
- Delivering returns to shareholders
- Enhancing growth in their labor force and creating customer relationship
The organization’s mission statement is “famous for continuously setting a new standard in board sports through youthful lifestyle brands and experiences” Their vision is to provide quality products for refreshing moments. Based on the fact that most of their products are based on surfing, BBG’s main objective is to offer quality products that spice fun to their consumers.
Situation Analysis
The situation analysis refers to an array of techniques that the management employs to evaluate the internal and external organization’s environment. It is concerned with the 5C analysis which represents the company, customer, competitor, collaborators, and climate.
Industry analysis
Industry analysis is an important tool that an organization uses to conduct a situation analysis, as it aids in determining the attractiveness of an industry. It enables the company to formulate a competitive strategy that protects the company from the identified competitive forces. It is also known as the Porter’s Five Forces that aids in scanning the environment to identify looming threats to the firm. To begin with, the market characteristics for Billabong are diverse based on its mode of operation. Their products are purchased on an on-peak and off-peak basis; for instance, swimming shorts are on high demand during holidays. Similarly, activities such as skating are popular during summer holidays. This means that the company will not make enough sales during winter holidays. The bargaining power of the consumers is conditional because they are forced to buy the products by circumstance. For instance, eco-friendly products are highly preferred in Australia. The strong dollar position and improved living standards in Australia are appealing to the economic status. This implies that they depend on seasons such as summer holidays to purchase BBGs commodities. Second, the suppliers influence play a major role in enhancing a firm remains competitive. When they bring supplies in time, right quantity and quality, and ensure an efficient flow of products makes the firm flourish. As a result, Billabong sources for cheaper raw materials from Hong Kong and China that produce garments for sale in Australia.
One advantage that Billabong enjoys is the lack of close substitutes for the products such as eyewear and surfing boards. However, more fun activities that have been formulated may substitute boards, sports and skateboards. In 2012, the company faced major problems that led to its collapse due to the harsh economic challenges it experienced. At least 150 stores were shut down, 400 full-time jobs were shred, and some inventory was sold under TPG Capital that acted as a joint venture. Since then, BBG has been experiencing unpleasant economic factors that have adversely affected the business. The legal factors affecting the company include the rules and regulations stipulated against environment pollution. The organization has to produce quality products that do not affect the sea and its living things.
Competitive analysis
When a firm understands its current position in terms of competition, it manages to employ effective strategies to increase its competitive advantage. Therefore, competitor analysis is evaluating the strengths and weaknesses of a potential competitor and how they can impact an organization. There are numerous companies that offer clothing products but there are some which concentrate on surf wear. Billabong is facing stiff competition from Quiksilver Inc., Rip Curl, Pacific Sunwear of California, Inc., and the Burton Corporation. The others include Nike, Hollister, Kmart, and Big W. These companies have identified the major product to rely on; hence, placing all the concentration on that product. For instance, Pacific Sunwear of California will offer eyewear while Quiksilver mostly produces shorts.
Customer analysis
BBG has a main target for its products who are surfers; it is concerned with athletes and amateurs who take part in sea sporting activities. Similarly, it sells the products to consumers who visit the beach to relax and unwind, especially people on holiday vacations. Therefore, the consumers are dependent on the demand of beaches and sea activities. One important thing to note is that these customers are affluent because most of them have the ability to spend their vacation on the beach. BBG also deals with other clothing such as caps and pants which are meant to make sales during the cold seasons. During fall or winter, the demand for shorts, skateboards, and eyewear among others is extremely low. To redeem itself, BBG produces clothes that can suit the cold weather. Most of their customers are found in “surf areas” where the land is surrounded or near to a large mass of water. The organization enjoys customer loyalty in different geographical locations such as Gold coast in Australia. Approximately 86% of Australians recognize Billabong while 53% of them consider purchasing BBG’s products. According to the 2013 Billabong Limited Report, the company focused on simplifying their attention by trimming the number of products they offer. More so, the newly elected C.E.O Neil Fiske puts the youth as an important consumer whose expectations should be met. With the slogan “fewer, bigger and better” the company aimed at introducing a turnaround strategy that would increase the customer base.
SWOT analysis
| Strengths
Huge range of loyal customers Strong market position in the industry Brand name, status, and image Diversification strategy; product mix Economies of scale Huge size making mass production and bulk sales
|
Weaknesses
Higher transportation costs to the “surf areas” Concentrated sea side promotions Regular managerial changes Stiff competition from other global brands
|
| Opportunities
Increased demand on clothing and increased “surf activities.” Innovation Digital marketing and distributing Availability of new markets |
Threats
A rise in global clothing brands Consumer continuous changes in taste Bad economic status Emergence of substitute products |
Marketing strategy
After production of goods, a firm has to figure out the most efficient way that these goods will reach the end consumer. Marketing strategy helps in identifying and enticing customers, and distributing the commodities in right quality and quantity. The market dominance is evenly distributed among various industries that deal with apparel and accessories.
Leaders: Billabong, Rip Curl and Quiksilver
Challengers: Nike and Hollister (Abercrombie and Fitch)
Followers: Kmart and Big W
Targeting and positioning: customers targets fashionable and the considered “cool” boardshorts
Benchmarking: Quiksilver is Billabong’s main competitor
Currently, BBG employs the use of brand recognition and diversification as their core competencies. Their brand label has been in existence for quite a while and it has managed to reach a number of consumers. This is why the company enjoys customer loyalty as their main formulated marketing strategy. Similarly, it produces an array of products as a way of profit maximization. Unfortunately, these strategies have proved futile as it continues to make losses each fiscal year. Producing several commodities is challenging as each product requires specific marketing strategy and independent research. This consumes time and wastes a lot of resources leading to losses. BBG can redeem itself by focusing on brands that will be youth oriented and avoid the “old fashion” style that characterizes the organization. The positioning strategy employed by BBG limits its market share because it only concentrates on the surf areas. Most of their sales promotions are done on the sea shores targeting swimmers and people enjoying basking on the beach. The organization can consider marketing their products in other geographical areas that are not situated around a sea or an ocean. This will increase the product recognition and attracting new customers.
Billabong has concentrated on some growth strategies that are aimed at increasing its competitive advantage. Growth strategies are concerned on how a firm can expand and grow towards achieving its goals. BBG incorporates the horizontal integration growth strategy which implies that it has been involved in acquiring other firms that are in the same line of business. Just at the beginning of the 21st century, BBG acquired Von Zipper which was an eyewear brand and Hard Good for the skateboarding apparel. In 2007, the organization acquired Tigerlily brand that produced and distributed wetsuits. Billabong has been involved in a number of acquisition and mergers that help in enhancing growth. As mentioned earlier, BBG has great focus on diversification, which also acts as a growth strategy for the firm.
Marketing programs
An organization requires formulating structures that will aid the product cycle and maintain customers. Marketing programs refers to the processes that the management enacts in order to entice consumers.
Marketing mix
Marketing mix focuses on products, their prices, distribution, and how they are promoted to the consumers. Billabong store has a variety of sports clothes that fit customers of all ages. It provides surfing clothes for both genders and additional accessories such as wallets, belts, caps, bags, slippers, and even sunglasses. The qualities of these commodities are in accordance with the international standards. When it comes to the place or area of coverage, Billabong is found in Asia, Europe, and America. The recently launched places are Brazil and Dubai, which are new holiday destinations. However, continents like Africa remains unexplored despite the looming opportunities in their holiday destination sites. The pricing strategy employed by this firm includes a low-price strategy that aims at appealing to all the customers. Prices are evenly distributed and reflect that of their competitors. The promotional methods employed by this firm include commercial adverts that are played on TV and other mass media platforms. It sponsors athletes and sea sports as a way of creating awareness about its existence. One of the most common advertising features for Billabong includes billboard advertisements. However, the organization is yet to utilize the social networking sites as their advertising channels. Sales and offers can be mailed to registered customers or creating a hash tag on tweeter that will create awareness to consumers.
Loyalty programs
On 1st march 2013, Billabong launched a membership program in Asia known as Billabong Team Membership. This loyalty program offers rewards, services, and status of the organization to its members. The program is a gesture of customer appreciation that offers exclusive loyalty rewards, premiums, and privileges to the participating members. Similarly, the Surfervillage Global Surf News is a platform that updates the customers with surf news around the globe. It enhances integration and cohesion among all its customers around the world.
Social responsibilities
Billabong understands the impact of sustainability and maintaining the environment. It launched an initiative in the previous decade, which involves recycling materials instead of dumping the obsolesce goods. Dumping does not only result to environmental pollution, but also attracts diseases in the society. Recycling of products is one way of keeping the society healthy and achieving better living standards. Billabong is environmental accountable in accordance with the newly inaugurated global goals. First, the company respects and observes all the applicable environmental laws and regulations. It provides a globally measurable supply chain standard whose operations observe environment sustainability. There are channels that aids in reporting individual activities such as recycling and commitment to reduce waste. This means that an employee who breaks these rules is entitled to disciplinary actions; the success of sustainability has to be enacted from the individual employee to the entire organization.
Traditionally, Billabong has initiated several programs that are deemed positive and beneficial for the environment. This implies that it is geared towards climate change which includes support for environment groups, reduction in the use of packaging materials, and the use of more environment-friendly fabrics. As per the year 2008, the group made a report about greenhouse gas inventory as stipulated by the Australian Greenhouse Office Factors and Methods Workbook and the Greenhouse Gas Protocol Corporate Accounting and Reporting Standard (GHG Protocol). By 2017, the company intends to reduce carbon emission by 15% through introduction of more energy efficient lighting technologies.
Customer service and trade promotion
Billabong organized an event known as “I love spoiling dad this father’s day” competition where fathers participated in fun activities with their families. There were rewards and compensation for each entrant, which was a way of trade promotion method.
Implementation plan
It is important for Billabong to focus on developing structures and designs that will ensure that the product remains relevant to the consumer. One of the strategies was change in leadership which has already been enacted. Secondly, the company needs to specialize on a specific product instead of meandering around diversification and it is not working out. The product design should be evaluated and refurbished in order to be youth oriented. Young people are increasingly becoming interested in sporting activities and they are part of the consumers of Billabong products. The firm should also realize the important role of media and public relation aspects in order to reach the consumers. Creating commercials is an essential sale promotion method because most of the consumers always make time to watch television. Public relations aids in creating a rapport with the external environment; hence, creating a reputation and brand image. Social networking is another untapped channel that can increase the popularity of Billabong products. Platforms such as twitter, Facebook and You tubes can be used to sell the company’s products. The other plan that can be implemented is reviewing the aging stock and re-introducing it in a more appealing form. Consumers may be skeptical about the aged stock and it may lead to customer turnover. Lastly, customer segmentation is important since the organization operates in different geographical location. This may include downsizing the network and placing consumers with similar preference in a specific segment. This will help in addressing their needs and giving them the required attention.
Contingency plan
If the implementation plan fails to work, it is always advisable to have an alternative strategy. A contingency plan helps the organization to be prepared for a bleak future in case the plans do not work out. One of the significant predictions is the immense technological advancement in the society. There is an upward trend towards the use of technology in almost all human activities. This implies that Billabong has to invest heavily on technological innovation, research and development. Surfing is increasingly receiving attention around the world and coming up with technology powered board sports would increase the competitive advantage. Similarly, the company can embrace a vertical integration growth strategy where it invests in a business which does not offer similar services and products. For example, it can invest in financial sector and start offering banking services to the customers who are on vacation. This means that they will be loyal to Billabong because it offers an array of services which are essential to their tour. Billabong can also outsource marketing firms who are experts in marketing strategies. Outsourcing helps in offering expatriate services and this would increase the market presence of Billabong.
Conclusion
Billabong is a world renowned organization that has operated for more than three decades. Unfortunately, it faced a challenging period in 2012 and it has continuously made losses. One of the main reasons for this failure is lack of a well-developed marketing plan. It should invest heavily on its marketing strategies and youth orientation. Therefore, conducting a market analysis and evaluation, implementing the recommended s