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Lecture 11

BUSM 1100 Lecture 11: CurrentMarketingSituation - case study


Department
Business Management
Course Code
BUSM 1100
Professor
Kevin Koonar
Lecture
11

Page:
of 2
AMERICAN APPAREL:
-1989, peaked in early 2000’s, filed for bankruptcy in 2009
-vertically integrated marketing manufacturer
-all operations take place in downtown Los Angeles
- Production = men, women, children ,pets of all ages, 500 styles in 600 colours basic
vintage style .
-Pays factory workers an average of over twelve dollars an hour and often more than
$100 a day
-target market: young urban adults aged 20 to 35 who are culturally aware/sophisticated,
creative, independent minded, well educated enough to receive an annual income of
50k-90k. *advertised through: social consciousness, lack of branding, quality, sexual
image.
-285 stores worldwide in 20 different countries (retail) also americanapparel.net has 10
storefronts and has been operating since 2010
-wholesale located in L.A at headquarters and is sold to 10,000 specialty shops and
screen printers
US apparel Industry:
-100,000+ stores
- combined revenue of $150,000
-rapid shift in trends
-highly competitive
-imports 80% of domestic demand
-competition is based on marketing, design, quality, price, service and location.
Market Growth:
-industry revenue of women’s clothing store: annual growth of 3.4 % over 5 years
-industry revenue of men’s clothing stores increase annual growth of 1%
-store growth: expected 2% over next 5 years
Market Needs:
-production quality
-corporate social responsibility
-customer service
Market Trends:
-demographics: 10% increase in US population, 8% increase of adults between ages 25
and 44, baby-boomer generation will retire and be replaced by younger work force
-retail prices will continue to decrease
-more customers will continue to shop in higher end stores
-clothing store sales will increase by 10%
-competition with international brands will continue to increase
Market Strategy:
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-market penetration
-reposition the product
-alter pricing
-customer retention/improving public image
-product quality/maintaining and improving standards
Marketing Objectives:
-increase positive brand awareness and brand perception
-refocus on social consciousness
-increase market by 1% in 2 years
-increase in-store marketing
-open more stores in the UK and Europe
-establish and reinforce brand loyalty with a loyalty scheme
Marketing Mix:
Product: updated constantly and good quality, improve plus size line, discontinue
unsuccessful lines.
Price: keep price to current value, maximize profit to increase liquidity, more special-
event drawn pricing
Promotion: greater focus on social image, public relations
Place: urban locations with a majority of young population.
Market Research:
-mainly focus groups and surveys although marketers do other research as well .
Macro environment:
-Social: Made access to information about company easier through social media.
-Technology: increase in online shopping has been taking away revenue from stores.
-Environmental: cotton costs have increased due to environment issues
find more resources at oneclass.com
find more resources at oneclass.com