Executive Summary
For many years, Bonds has been the best-known brand ambassador for Hanes Australasia. The company has established itself as a trusted supplier of basic casual clothing. Currently, the company focuses mainly on the Australian market, but since 2012, Bonds has expanded its supply outside the country. The company has done many socially recognizable things for the community, such as supporting minorities or preserving the environment.
Bonds’ main rivals include established brands like Berlei, Victoria’s Secret, and Calvin Klein, but Bonds has several advantages. First of all, these are competitive prices and high-quality goods. However, the main weakness of the brand is uninspired fashion, which, nevertheless, Bonds seeks to change. The company employs a range of marketing strategies designed to instill consumer trust in their buying decisions. The main recommendations to improve the position of Bonds are the rebranding of representative products, the expansion of online sales, and the opening of overseas branches.
Introduction
This marketing audit report aims to analyze Bonds’ current marketing strategy and market positioning, as well as the company’s strengths, weaknesses, potential opportunities, and threats. Based on the data, this report will attempt to make suitable recommendations to improve the company’s marketing performance.
Situation analysis
Company Analysis
Bonds is the most well-known representative brand of Hanes Australasia, which was founded in 1915 and is an Australian manufacturer and importer of men’s, women’s, and children’s underwear and clothing. It is 108 years old. The brand opened its first branded retail online store in 2011, and only a year later, it began shipping to New Zealand, Canada, the United States, Singapore, Hong Kong SAR China, and the United Kingdom. According to Hanes Australia’s annual report (Annual Report, 2021), every Australian household has over 12 Bond products, and the brand dominates the market with a 90% market penetration.
PESTEL Analysis
Political Factors
According to (Zappone, 2009), Bonds’s headquarters company, Pacific Brands, has a history of moving their factory out of Australia to China, which caused sudden job losses for 1850 people. The company explained that the main reason for the decision was to reduce the cost of manufacturing, and there was political pressure to stop manufacturing in Australia. The brand has to be aware of 7 countries’ political environments to prevent unwanted damage to the brand.
Economic Factors
In 2016, Bonds’s previous owner, Pacific Brands, sold the brand to US company Hanes Australasia for 1.1 billion AUD in cash. Before the acquisition, the brand was struggling with a loss of profits (Kaye, 2016).
Social Factor
The company has engaged in several well-known community-focused initiatives, such as sponsoring the Nippers program, and also has a long history of supporting the National Breast Cancer Foundation, which increases awareness of the importance of early detection of breast cancer and research.
Technological Factors
In 2019, Bonds launched their new innovative X-temp undie range for men made with their new cooling technology. Until this day, the company always finds ways to improve its product quality with the support of new technology.
Environmental Factors
Beginning in 2021, the brand revealed its “Planet Comfy” sustainability project, beginning with the introduction of their famous singlet Bond Chesty, reinvented with GOTS-certified organic cotton. The brand promised that by 2025, all of its products will be made with recycled polyester and Australian-grown cotton. The brand also began to implement its sustainable activation by replacing hangers, paper bags, shipping satchels, tags, and packs of products with more eco-friendly ones.
Legal Factors
Hanes Australasia, the company’s headquarters, is known for its ethical business practices and has won numerous awards, including the Great Place to Work Award and sustained excellence honors for the past eight years.
Competitive Analysis
Bonds’s direct and major competitor brands are Berlei, Victoria’s Secret, and Calvin Klein.
Table 1: Brand competitive analysis
Customer Analysis
Bonds has a long history as a renowned Australian brand focusing on family values. The company positions its products as intended for every family member, including women’s, men’s, and children’s clothing (The Bonds story, 2023). The company operates in the Australian and UK regions. George Allan Bond founded the Bonds Company in 1915 after coming to Australia in the twentieth century (Vincent, 2022).
The company is focused on its customers and constantly strives to maintain contact with them to develop its products. In addition, focusing on society’s values, the business adapts to the most relevant events, maintains its income, and acquires a stable position in customers’ eyes. As such, Bonds continues to hold a significant market share in the Australian apparel industry.
The company, as a representative of Pacific Brand Corporation, is focused on producing underwear for all genders and ages and is focused on sales in various markets. Bonds has been successfully operating in the market for more than 100 years, and it has established itself as one of the most successful and effective companies in Australia (Vincent, 2022). Consumers can get their items directly from the seller if they purchase from a retail store.
A buyer can place an order online and receive the goods in one of the stores. The standard distribution channel for an online store is Australia Post, which can deliver the order directly to your home or leave it in a parcel locker if the buyer is not at home. In addition, it is possible to pick up the order at the post office. Bonds still use Australia Post for out-of-country deliveries.
SWOT and TOWS Analysis
Strengths
Competitive Pricing
Price matters regardless of the product. The company aims to become the most sustainable comfort clothing retailer by leveraging the flexibility and cost-effectiveness of the basic fashion model to offer high-quality products at a lower price point.
Product Variety
A wide variety of products also attracts more consumers. The Australian brand offers high-quality, comfortable, and fun sports clothes, tank tops, and bras for men and women.
A Valued Brand
Bonds has taken a customer-centric approach to business since its inception. Understanding the person behind the purchase is key to a close relationship between the consumer and the product. The number of testimonials has increased rapidly, and with it, their connection with the customer base has expanded. It has allowed the company to create a valuable brand that customers trust.
Strong Online Channels
In the digital age, companies that more effectively implement and use the Internet have a huge advantage. Since the store is available 24 hours a day, the buyer can order something even at night. Once one receives an order notification, they can contact the buyer, discuss the details, and submit the order. Bonds is focused on increasing online sales; therefore, it strives to establish itself on the Internet on numerous platforms.
Efficient Supply Chain
Global companies require an efficient supply chain to communicate more effectively with suppliers and customers. Given that Bonds are distributed both in Australia and outside the country, it is important to maintain the supply chain effectively, which the company can cope with.
Community-Driven Approach
Considering the interests of communities is an effective way to build a sustainable business. The company is constantly releasing merchandise in support of women and various minorities. For example, in 2020, they partnered with LGBTQIA+ youth advocates, Minus18, launching the first-ever Pride campaign (The Bonds story, 2023).
Weaknesses
Uninspired Fashion
Bonds’ designs rely on traditional, basic fashion trends established over the years. Modern young people pay a lot of attention to fashion trends, so this is the brand’s main weakness.
Price Hikes
Pacific Brands has been heavily impacted on the economic front, which has had a bigger impact on its Bonds brand. This impact was caused by the fall of the Australian dollar, which made it more expensive to manufacture clothes in Asia (Kimura et al., 2020).
Opportunities
Diversification of Offers
Businesses that offer a wide range of products are stable and earn more. Bonds can improve its profits by diversifying offerings to include fashion trends. Today, more and more people are trying to follow fashion. Bonds can expand its range of products while remaining a well-known casual wear brand. For example, a business can attract more young audiences by adding trendy prints.
Focus on Emerging Markets
Bonds could have great potential in the emerging markets of Asia and Africa, where the middle class is growing.
Threats
Tough Competition
Bonds face stiff competition from new and old brands looking to increase market share and reduce demand for the target company’s products. Bonds face serious competition from some companies, primarily underwear. This competition is worldwide as these companies offer their services in many countries, unlike Bonds.
Rising Fixed Costs
As labor and raw materials costs rise in global and local markets, retailers’ margins are gradually declining. Increasing costs threaten the profitability of any trader, including Bonds.
Table 2 presents the Bonds TOWS Matrix, which compares strengths with opportunities and threats with weaknesses based on the abovementioned SWOT analysis.
Table 2. TOWS Matrix for Bonds
Segmentation, Targeting, and Positioning (STP)
Table 3: Segmentation
Marketing communication usually focuses on addressing the consumer’s mindset that Bonds’ underwear or clothing can fulfill their safety and protection needs.
Since 2021, Bonds has been trying to change their segmentation direction to the Gen-Z generation. We can see their attempts in their last marketing campaign, the ‘Ungenderwear’ project. The campaign introduced its new genderless underwear line, collaborating with the LGBTQI community to remove all gender barriers. (Palmer-Derrien, 2022)
The company explicitly targets young, active individuals between the ages of 18 and 35 by offering affordable prices compared to other brands.
Marketing Mix Audit
Product
The Company’s Product Portfolio
Bonds offer a variety of product lines, including underwear, swimwear, sleepwear, clothing, and bedding for men, women, kids, babies, and home customers of all ages.
Bonds has many iconic products, namely 400 million sold Chesty singlets, 155 million pairs of Cottontails pants, and 20 million baby Wondersuits. The brand’s most popular products are Cash Cows due to their strong penetration in the market and low market growth.
Table 1 – Product Portfolio
The Brand Strategy of the Company
Bonds changed its marketing strategy in recent years, attempting to shift its traditional artwork to a more trendy aesthetic by hiring brand ambassadors Miranda Kerr and Iggy Azalea. To increase market share and attract younger customers, the company adopts the persona of a popular young celebrity while maintaining its affordable and long-lasting trademark image.
Price
The pricing structure aims to keep Bonds available, affordable, and less expensive than other brands in the industry. For example, Calvin Klein’s three men’s underwear packages cost 59 AUD, whereas Bond’s products cost 35 AUD. Compared to competitor subsidiary brands like Berlei and Holeproof, Jockey Bonds has lower prices starting at $3.
Their pricing strategy focuses on consumers who seek affordability rather than brand-conscious consumers. Furthermore, their long-standing trusted brand image helps them avoid having a low-quality, cheap brand image that only sells cheap products. The company’s pricing strategy focuses on price endings, with all products ending in 9. In addition, the brand has a loyalty program called Bonds&Me membership that offers 10–30% off, free shipping, birthday gifts, and exclusive invites to build a customer base.
Place
Since Bonds is a customer-centric business, the social and cultural environment is critical and influences the commercial level more than any other. In the era of globalization and the universal spread of social responsibility, large companies are increasingly focusing on maintaining environmental sustainability. Bonds do this by developing strategies and practices that create a global economy that the planet can sustain indefinitely (Vincent, 2022). In this way, Bonds aims to reduce its environmental impact.
The drive for continuous improvement in the state of the environment is supported through the application of guidelines such as reduce, reuse, recycle, and replace. In addition, Bonds comply with the Australian Packaging Agreement (APCO), which reduces the environmental impact of packaging in Australia (Wurm et al., 2020). The Australian Packaging Agreement is a sustainable packaging initiative that aims to change the business culture to develop more sustainable packaging, increase recycling, and reduce packaging waste (Wurm et al., 2020). By applying these guidelines to its production environment, Bonds is meeting the standards set by its customers.
Promotion
Bonds’ primary customers are young women, and they need to ascertain the benefits of the brand from reliable sources. Bonds have had various Australian pop culture ambassadors who have promoted the brand and what the company stands for (The Bonds story, 2023). In addition, businesses actively promote in the media and on the Internet. For example, one of the most significant campaigns, dedicated to the brand’s 100th anniversary, was broadcast on television and through YouTube and social networking websites such as Twitter or Facebook (The Bonds story, 2023). In addition, billboards are still used in malls to direct customers to the Bonds store. Thus, the company uses various marketing tools that provide confidence in the purchase and increase the likelihood of positive post-purchase behavior, such as repeat purchases.
Recommendation
Suggestions for improving the company’s current situation are as follows.
Rebranding
Rebranding of their representative products by changing their shift towards a family-oriented image. The current marketing image is too focused on women and trendy communication, such as the LGBTQI community. Although Bonds states that their target audience is people of all genders and ages, the focus is still on young women. By expanding the range, for example, adding trendy items to the collection, the company will also be able to attract teenagers and young adults.
Additionally, businesses should add more menswear offerings to build confidence in this audience. As a result, the ability to go beyond the core business will reduce sensitivity to industry risks and increase the brand’s competitiveness. That, in turn, will positively impact the sustainability of the business and its creditworthiness, as it will allow it to get away from dependence on one product (basic things) or audience (young women). In addition, it will be possible to increase financial performance and the company’s market power growth.
Online Sales
The company should focus its efforts on several major online sales initiatives. That will meet the expectations of today’s new consumers and improve the customer experience, including customer engagement through technology. Bonds must adapt and improve their working methods, becoming more flexible, faster, and efficient, as these are the leading indicators of a quality business today. The company can improve its position by accelerating digital development, optimizing the store portfolio, and integrating sales channels.
Expansion
The business is looking for new growth points by launching foreign branches and trying to establish home market supplies. Bonds currently offer the ability to send orders to other countries, but business awareness may grow due to the expansion of physical branches worldwide. Larger enterprises achieve lower unit costs and spread their administrative costs over a wider product line. The business can achieve economies of scale by investing more money in people, innovation, and technology. Expanding a business can allow it to improve and thus become bigger.
Conclusion
Based on the data and information about Bonds’ clothing brand, this marketing audit report analyzed the current situation and recommended a plan to increase its market presence. The first section outlined the company’s current situation using PESTEL and SWOT analyses. The marketing mix audit was then performed, which included product, price, place, and promotion. Also successfully presented are recommendations for increasing the brand’s market presence.
References
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Kimura, F., Thangavelu, S. M., Narjoko, D., & Findlay, C. (2020). Pandemic COVID‐19 policy, Regional Cooperation and the emerging global production network. Asian Economic Journal, 34(1), 3–27. Web.
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Vincent, P. (2022, October 2). Vb, bonds, Tim Tams, Milo, fourn’twenty pies: No longer Australian owned. Daily Mail Online. Web.
Wurm, F. R., Spierling, S., Endres, H. J., & Barner, L. (2020). Plastics and the environment—current status and challenges in Germany and Australia. Macromolecular Rapid Communications, 41(18), 2000351. Web.