Getting into a new market is a very sensitive part of the business process. This is because, “producing a product or service and making it available to buyers requires building relationships not just with customers, but also with key suppliers and resellers in the company’s supply chain” (Armstrong & Kotler, 2011, p.338).
This is why it is important for Kleinaci to consider carefully the options available for it to enter this new market. Distribution planning confirms the importance of location in marketing (Levinson et al., 2007).
Designer products appeal to a niche market. The target market comprises of up-market clients who have the purchasing power and the status needs that predispose them to acquire designer clothing. These marketing of products do not use low pricing as a means of differentiation. In fact, the higher their comparative prices, the more attractive they are. What differentiates them is the brand appeal each product range has.
There is need to consider the financial implications of entering a new market. It is an expensive affair. A wrong entry strategy may lead to irrecoverable losses. What is required of an entry strategy is effectiveness, and not expensiveness.
There are four options for entering the market with a designer product. One of them is entering into an exclusive deal with an up-market department store. This will involve using their distribution chain and limiting all releases to their stores. The products will have a designated point within the stores, and will be cost effective. It will require a proper strategy to enable Kleinaci to cope with competition (Porter, 1991).
The risk is that they may end up competing for attention for similar products. The next option is to establish a Kleinaci chain of boutiques as distribution points. This option is more expensive but it assures exclusivity. The third option is direct marketing strategy.
This strategy works best for mass-marketed products. Going this route will increase the marketing budget and may make the products lose their prestigious image. The fourth option is franchising Kleinaci stores in various parts of the city. This option transfers the management needs for the brand to the franchise holders but it reduces the profit margin.
For a new product offering, Kleinaci will have the best shot at getting into the market cost effectively by doing an exclusive deal with an up-market department store. This option has the least commitment in terms of financial outlay but requires an aggressive marketing campaign.
The section or shelves dedicated to Kleinaci products will need to have very creative branding to eliminate the competition from all the other products in the store since “department stores carry a wide variety of product lines” (Armstrong & Kotler, 2011, p.374). The branding options include use of attractive colors, shelf and space design to communicate the aspirations of brand.
This section needs to be turned into “an environment to be experienced” by shoppers (Armstrong & Kotler, 2011, p. 384). The department stores, located in the up-market areas, already have the correct location, which Kleinaci will use to leverage on the opportunity. The target market is already familiar with these stores since this is where they do their regular shopping.
One advantage of this is that the deal can be time bound to ensure that Kleinaci has time to review its effectiveness and if need be, a new strategy can come into play. This will take into consideration the caution offered by Armstrong and Kotler (2011) that, “management must design its channels carefully, with one eye on tommorrow’s likely selling environment as well as today’s” (p.340).
Reference List
Armstrong, G., Harker, M., Kotler, P. & Brennan, R., 2009. Marketing: An Introduction. 10th ed. Upper Saddle River, NJ: Financial Times Prentice Hall.
Levinson, J.C. & Levinson, J., 2007. Guerella Marketing: Easy and Inexpensive Strategies for Making Big Profits. New York, NY: Houghton Mifflin Company.
Porter, M.E., 1991. Competitive Advantage. In C.A. Montgomery & M.E. Porter, eds. Strategy: Seeking and Securing Competitive Advantage. Boston, MA: Harvard Business School Publishing Division.