Marketing audit of the brand
A marketing strategy is significant for companies’ competitiveness, profitability, and overall success. The implementation of an appropriate approach may enhance customers’ loyalty and increase the firm’s revenue. This paper provides an analysis of Decathlon, one of the largest sportswear retailers in the world. The report features the environment analysis, the evaluation of the company’s current marketing strategy and performance, as well as its competitive advantages and unique selling proposition. In addition, the paper suggests a product that the company can introduce, providing a rationale for its choice, recommended marketing objectives, and strategies.
Environment Analysis
Decathlon is a large retailer that sells goods for sports, including clothing, footwear, electronics, and other accessories. The company was established in 1976 by Michel Leclerq, who opened the first store in Lille, France (Timeline n.d.). Currently, the organization has more than 900 stores in 46 countries. Most of them are located in Europe; for instance, Decathlon has more than 300 retail outlets in France and almost 150 in Spain (About Decathlon n.d.). The company has over 80,000 employees worldwide and twenty Decathlon brands, which include Btwin, Antonia, Tribord, Oxelo, Quechua (Delas et al., 2015). The organization offers two types of products; the first category is presented by cheaper items for beginners or amateur athletes. The second group includes products for professional athletes, which are more expensive.
Considering the information presented above, it is possible to say that the company’s customers are individuals interested in sports and outdoor activities. The target groups are middle and upper-middle-class as the organization offers goods in various price ranges. The primary marketing strategy of the organization is to provide individuals with a wide range of items for affordable prices; it will be discussed in detail below. The company distributes its products through retail outlets and Decathlon’s website. The organization operates in the wholesale industry, which means that the public demand is in direct relation with the level of the local economic activity. It is possible to say that the company’s main competitors are other sports retailers; they include Kitbag and JD Sports.
The strengths, weaknesses, opportunities, and threats (SWOT) analysis of the organization outlines the following advantages of Decathlon. First, as mentioned above, the company has more than 900 stores globally, which means that its products are available for a wide range of customers from all over the world. In addition, for many locations, such as France, Decathlon can be considered one of the largest sporting goods resellers, as it has more than 300 stores in the country (About Decathlon n.d.). Affordable pricing is one of the major advantages of the company as well because it allows customers of all economic backgrounds to purchase its items. Moreover, the organization has its own brands, which potentially results in higher revenue.
The major weakness of Decathlon is that its global presence is limited. For example, the company has only one store in Mexico and no offline retail locations in the United States (About Decathlon n.d.). The potential threat the organization may encounter is a high competition of global players as many sports retailers, such as the ones mentioned above, are gaining popularity among customers. In addition, it may be challenging for the organization to preserve its cost advantage in the future due to inflation and other economic factors. The primary opportunity of Decathlon is the further global expansion that may result in higher loyalty among global customers.
Evaluation of Current Marketing Strategy and Performance
The company reports that its turnover reached almost €10 billion in 2016 (Vitality and responsibility – 2016 sustainable development report 2016). The turnover rate is significantly higher than in the previous years; for instance, in 2013, Decathlon received less than €5,5 billion. The majority of the organization’s turnover, more than 65% in total, is international (Vitality and responsibility – 2016 sustainable development report 2016). As mentioned above, the areas of the current company’s activities include the European, Asian, Indian, American (Brazil and Mexico), and African zones, as well as the zone of the Commonwealth of Independent States, including Russia. The organization continues to expand globally; for example, in 2016, it opened more than 160 new stores worldwide (Vitality and responsibility – 2016 sustainable development report 2016). Decathlon reports that more than 85% of its customers are satisfied with its products and services. Parreira (2017) adds that the company’s growth is slower than its authorities had anticipated; potential reasons for it include a high level of competition on the market and social unrest.
Considering the abovementioned information, it is possible to conclude that the company’s sales trends are determined by global expansion primarily. Decathlon’s marketing strategy includes presenting diverse items for various kinds of sports and outdoor activities, targeting many groups of individuals. The company provides products for people of all ages, genders, as well as social and economic backgrounds, which enhances customers’ loyalty and trust. Decathlon’s positioning includes its statement that that sport should be accessible to as many individuals as possible (About Decathlon n.d.). The company aims to inspire individuals to be active and lead a healthy lifestyle. The firm is focusing on conveying its message across its stores worldwide.
Analysis of Decathlon’s Competitive Advantage and USP
Decathlon shows several competitive advantages; the primary one of them is the affordability of its products. The company has developed the smart cost strategy that allows it to establish lower prices for its items (Vitality and responsibility – 2016 sustainable development report 2016). As mentioned above, the vast majority of the firm’s customers are content with its services, which means that pricing is a significant factor contributing to their loyalty. The other competitive advantage of the organization is a strong global presence, while, in comparison, Kitbag and JD Sports are mostly present in Europe. Being a global reseller has allowed Decathlon to develop a large base of customers and enter several important markets, such as the ones in Mexico and Russia.
It is necessary to mention that the company shows a high level of competitiveness as an employer as well. Decathlon reports that it implements the principles of fairness, transparency, and consistency to motivate employees to achieve their strategic objectives (Vitality and responsibility – 2016 sustainable development report 2016). Approximately 50% of the company’s team is Decathlon’s shareholders that contribute to the firm’s mutual fund. In addition, the employees of the firm have access to market remuneration indexes and discounts. In 2016, almost 60% of the company’s team reported that their salary was fair in relation to their responsibilities (Vitality and responsibility – 2016 sustainable development report 2016).
To perform a USP analysis of Decathlon, it is vital to analyze the core values of the brand as they are fundamental for business. The main value of the company is vitality determined by energy, intense activity, drive, and vigor (About Decathlon n.d.). The organization strives to promote a positive mindset, innovative approaches, and change. Another Decathlon’s value is responsibility; the company aims to be responsible in its decisions both within its teams and with customers (About Decathlon n.d.). It also strives to anticipate the challenges that society may encounter and implement strategies for sustainable development. In addition, the organization aims to provide safety for all of its clients and employees.
It is also necessary to outline the company’s characteristics that are significant for its customers. It is vital for the organization to understand who its target customers are, as well as their needs (Brassinton & Pettitt 2006). The primary one is the affordability of products that do not lead to a lower quality. Decathlon strives to assess the quality of items regularly and ensure that they are durable (Vitality and responsibility – 2016 sustainable development report 2016). In addition, the company performs investigations of production sites, the capacity of suppliers, and transparency of information for its users. The second vital characteristic of the organization is that it is concerned about sustainability and ecology. With the growing awareness of climate change and its adverse effects, customers may be interested in products made of renewable or recyclable materials. Decathlon tries to implement the principles of sustainability in all stages of production, selling, and packaging (Vitality and responsibility – 2016 sustainable development report 2016). In addition, the company sells second-hand items through its Trocathlon system. Such an approach addresses environmental issues and allows individuals to buy products at a reduced price.
It is possible to say that the company’s competitors do not show the same level of competitive advantages. For instance, Kitbag’s products are not targeted at all groups of population; instead, they are designed for experienced athletes (About us 2019). The company is based in the United Kingdom and relies on online sales, delivering its products to more than 180 countries. However, it may be inconvenient for customers wanting to visit offline retail outlets and evaluate the quality of the items. In addition, the organization does not offer a wide range of products. It sells clothing and footwear but no other items for sports or outdoor activities (About us 2019). It is possible to say that this firm has a stronger competitive advantage for the customers that want to buy specific types of products, such as licensed sports merchandise. However, Decathlon offers more benefits for the group of clients interested in sports and physical activity in general compared to Kitbag.
JD Sports has the same target groups as Decathlon as it provides items for people of all ages and genders. It is possible to say that the companies have similar goals as JD Sports also aims to reach international customers. However, the company has various competitive disadvantages compared to Decathlon. For instance, its international markets include only the United States, Europe, and Asia Pacific ones with less than 40 stores opened in mainland Europe (Cowgill 2019). In addition, the company does not show strategies to reduce prices for customers; thus, its products have a lower availability compared to Decathlon’s ones. JD Sports is more concentrated on providing individuals with the excess to exclusive items rather than affordable ones (Cowgill 2019). This factor may be considered a significant competitive disadvantage from the perspective of individuals with lower economic advantages.
The introduction of a new product
Product Rationale and Specification
It is evident that Decathlon has a vast range of products for all types of activities, including camping, cycling, swimming, boxing, and other sports. However, the retailer does not offer footwear for people interested in sports but have limited access to it due to their physical condition. One of the possible solutions to this issue could be the introduction of orthopedic shoes to Decathlon’s range. The rationale for including this type of footwear in the company’s product range is that it would allow the firm to expand its client base and address the needs of those living with related diseases.
Orthopedic footwear can be beneficial for several particular groups of customers. Lutjeboer et al. (2018) note that it is frequently prescribed to individuals having various health conditions, including degenerative muscle and foot disorders. Such a type of shoe is designed to support the anatomical form of feet, enhancing their mobility and stability. In addition, orthopedic footwear is often associated with a higher level of comfort. Various studies by Bensoussan et al. (2016), Tenten-Diepenmaat et al. (2018), and other authors mentioned below report that this type of footwear can reduce pain in feet among individuals with arthritis, neuropathy, and related conditions. In addition, they are found to be helpful in preventing the further development of several diseases and their symptoms, including those associated with diabetes (Jarl & Lundqvist 2016). It is necessary to mention that although in some cases, orthopedic footwear should be personalized according to the individuals’ needs and conditions, it is possible to manufacture shoes that have corrective insoles and other features of compensation shoes.
Another significant benefit of including this type of footwear in Decathlon’s product range is that it may be helpful for professional athletes recovering from traumas (Pretz et al., 2016). This group of individuals may have a need for footwear that provides increased comfort and stability but is not significantly different from their ordinary shoes. In addition, athletes may use compensation shoes regularly to eliminate the risks associated with professional traumas associated with the locomotor system.
It is vital to mention the potential disadvantages of establishing a line of orthopedic footwear. First, this type of shoe cannot be manufactured and sold at a low price because its development requires a thorough examination of motor apparatus, muscles, and other factors. It means that, for some groups of individuals, this range of items may be unaffordable. Second, because the most effective compensation shoes should be manufactured according to the needs of a particular individual, it may not be possible for Decathlon to offer products that will meet the demands of all clients. It means that the company will only be able to offer products of limited quality in terms of helping individuals to reduce pain and enhance mobility. At the same time, even the inclusion of corrective insoles can result in significant improvements in customers’ comfort and pain reduction (Vinescu & Kersting 2017; Balakrishnan, Jacob & Nair 2015). Thus, Decathlon can develop strategies to introduce a new range of products that may be beneficial for many of its customers.
Segmentation, Targeting, and Positioning (STP)
As mentioned above, Decathlon’s primary group of customers is people interested in sports and outdoor activities, as well as amateur and professional athletes of all ages. The establishment of the new product range will target individuals within the existing customer base that have limited access to sports due to their physical conditions or want to prevent possible diseases. Thus, the target segment is people wanting to expand their physical abilities or minimize the effects of existing conditions. It is necessary to mention that individuals not having health disorders may be interested in purchasing orthopedics shoes too. For instance, there are people who walk much and need highly comfortable and durable footwear; compensation shoes can fulfill these needs.
It is possible to say that the target segment of the new product range will be older individuals of any gender of upper-middle-class economic background. The population interested in the items are people involved in outdoor activities and sports, as well as those who walk much as their hobby or because of their occupation. The countries in which this product range may be presented vary, but geographical positions and climate should be considered. For instance, individuals living in colder climates may not be interested in long walks and hiking.
Market targeting is a significant process that allows for investigating the attractiveness of each segment mentioned above. Kotler and Armstrong (2014) report that it is necessary to choose segments that can help the company to create the greatest value for the clients. In the case of Decathlon and the suggested product line, it is possible to say that the most appropriate segment for this purpose is individuals between the ages of thirty and forty that have higher economic advantages and live in areas with warmer climates. Then, it is necessary to develop a positioning strategy by identifying the primary values of the individuals. Decathlon should outline the benefits of orthopedic shoes using scientific evidence and deliver this message to the customers. It is vital for the company to address the increased quality of this type of footwear and its positive effects on individuals’ health compared to regular shoes used in sports. The organization should offer justification for higher prices, including enhanced comfortability and stability. The possible marketing goals for these types of products will be discussed below.
Recommended Marketing Objectives and Goals
The overall goal of Decathlon that can be suggested is to enhance customers’ loyalty to the brand by expanding its range of footwear and making it available for individuals having health conditions. Specific marketing objectives may include increasing the market share by at least 5% within the next year and diversifying the retail locations that offer the new range of products within the next six months. In addition, Decathlon may increase the recognition of Decathlon’s own brands within the next two years, create new contacts with potential customers, and reach a 95% level of client satisfaction within two years. It is possible to say that customers already show a high level of familiarity with Decathlon; however, it may be important for the new product line to gain recognition rapidly (González-Benito, Martos-Partal & San Martín 2015). Finally, the company may consider entering the American market within the following two years as, currently, the company does not have stores in the United States.
It is also vital to note that, in marketing, the concept of value plays a significant role, which means that it is vital to increase the product’s value to the potential customer (Blythe 2013). As mentioned above, the company should implement strategies aimed to enhance the individuals’ understanding of the benefits of the new product line. Decathlon’s goal for the next year should be to collaborate with professionals in the field and develop campaigns that can form a clear perspective on orthopedic shoes and their significance among potential customers. In addition, the organization should aim to develop high-quality items to expand its market share and gain competitive advantages in the field.
To increase its sales, Decathlon should use its competitive advantages. For example, Florea et al. (2016) report that the primary benefit of the company is reasonable prices as a result of appropriate strategies of transportation and storage. The organization should continue to implement approaches aimed to retain lower prices compared to its competitors. It will allow for higher profitability, too, because the products will remain attractive to the customers due to their affordability.
Appropriate Marketing Strategies
The marketing mix of the brand involves its product, price, place, and promotion. As the company offers a wide range of items for sports, the new product range will ensure that all individuals can engage in athletics and outdoor activities. Considering the company’s aim to provide items at a lower price compared to its competitors, the new products should not have high pricing. Decathlon should optimize its design and logistics processes to ensure that they do not result in significant increases in the costs of orthopedic shoes. As the organization’s stores are currently present in almost 50 countries, it is vital for the product management specialists to consider whether the new line will be of interest to all of these populations (About Decathlon n.d.). The company may consider performing surveys to identify the needs of global customers to avoid the risks of ineffective marketing.
Promotion is the most significant factor that should be considered while developing a marketing strategy. As the company is an innovative brand that aims to establish effective communication with its customers, it is vital for it to use all available methods to promote new products. For instance, Decathlon should enhance its recognition and publicity by utilizing social media, which can be one of the most effective marketing tools (Felix, Rauschnabel & Hinsch 2017). In addition, the company can provide customers with unique in-store experiences by inviting them to attend informal events aimed to enhance individuals’ awareness about the new product line and its peculiarities. Decathlon can invite professionals in the field of sports, medicine, and nutrition to help individuals in learning how they can enhance their health and well-being using its items.
It is necessary to mention that the organization should use traditional types of marketing strategies as well. For instance, paid advertising may be used along with social media tools to enhance customers’ recognition of the brand. Relationship marketing is another strategy that can be recommended because it can help Decathlon to build trust-based relationships with its client base and increase their loyalty. Informal events mentioned above can be part of this approach to marketing. As the company is present in various countries, it is vital to implement diversity marketing as well. The firm’s campaigns should consider cultural differences and perspectives and avoid bias and discrimination. For example, Decathlon should evaluate whether citizens of the country tend to avoid uncertainty or have a long-term orientation to highlight the benefits of the products that will be particularly vital for these groups of customers.
Conclusion
Decathlon is one of the largest global retailers of sportswear that is present in more than 45 countries. The company shows high competitive advantages, including low prices and the high affordability of its products, a wide range of available items for various types of activities, and a major global presence. The company’s target segment is individuals interested in sports and outdoor activities, including amateurs and professional athletes. The suggested product that the organization may introduce to its range is orthopedic shoes. This type of footwear can help individuals having physical conditions to engage in sports, reduce pain, and enhance their health outcomes. In addition, it may be used by people who want to prevent the development of diseases or those who walk much and need comfortable shoes.
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