Introduction
Billabong international limited is a leading manufacturer, marketer, distributor, wholesaler and retailer of accessories, apparel, eyewear, hard goods and wetsuits in board sports. Billabong products are licensed in several countries worldwide and are distributed through the company’s privately branded retail outlets. Promotions and marketing are done with high-profile athletes, both amateur and professional.
Billabong produces and sells swimwear, t-shirts, jumpers, shorts, wet suits, bags, pants, jeans, and accessories to roughly 3,000 surfing and boarding shops across the world. Most of the Billabong products are sold in Australia while Europe and North America comes second and third respectively (Vallabhaneni, 2009).
By using BCG matrix, which is a tool developed by a US consulting group, one can determine the strategic business units, SBU, that play a role in maintaining the company accounts rolling (Doyle, 2008). Each SBU is a product line, division, or a profit gainer within the mother company. A strategic business unit can be considered a separate entity competing for the corporate resources of the parent company.
The main SBU’s are board shorts, caps or hats and lady bikinis. From this product line, arguably, sales and availability of product the caps or hats are the Dogs. They are in low-growth markets and have a low-market share. It is best to avoid them, get rid of them, or have minimised them (Doyle, 2008). The stars in this institution are the board shorts. They are easily accessible in most markets and are in high-growth markets and have a high-market share (Stalk & Stern, 1998). They generate income in copious amounts and should be held on to at all costs.
Lady bikinis are cash cows; they bring in more money than the currency that is pumped into them. They command a high-market share in a slow-growth market (Stalk & Stern 1998). For the case of analysis, I choose to do a situational analysis of the board shorts as they are doing fairly well in the market.
A situational analysis is crucial in conducting an examination on a product before any given marketing strategy is conducted. The components whose consideration is of value include current product, target market, distributor network, current competitor, financial analysis and external forces.
Board shorts
Product
- Board short is chosen because it was the preliminary product line of the company. The product has received accolades for its elegant designs among pro-surfers also its durability and functionality in and out of water
Price
- The product enjoys subsidized pricing at the distributor level. Offered at affordable rates for retailers, and hence the buyers can afford to purchase as many as they may want.
Distribution
- The product was first produced in Queensland Australia and was sold in other nations like United States and Japan following license agreements established in the early 80’s.
- Most of the nations obtained their orders by shipping but currently most Billabong outlets are subsidiaries, for example, billabong USA, billabong Asia among others. Billabong board shorts are obtained or sold in particular outlets. This is the limited distribution strategy.
- Rather than, sell at any other sports store, they are sold at specialty shops creating a perception of exclusiveness and uniqueness. The demographic is wide spread catering to both genders, of whichever occupation (Behrer & Kerkstoel, 2011).
Promotion
- Billabong conducts rigorous campaigns for safe surfing in an effort to promote their brand. They had also sponsored athletes who may be seen wearing their shorts when they surf.
- The product can be said to be etched in the market as most surfers refer to their shorts and shirts as billabongs (Jarratt, 2010).
- The growth of sports such as snowboarding and its inclusion to the Olympic 2002 games also increased the popularity of the board shorts.
External environment
The current target market of billabongs board shorts is becoming the world’s leading manufacturer of surf shorts. Their age target of 12-20 years is fast expanding to include older age groups from the world over (Booth 2011). The brand of the products is mainly build by its strong quality of its products which makes them very competitive in the market.
Board shorts are particularly targeted at the young youth who are very active in sports such as board sports and snowboarding. Billabong has a target market that keeps changing with age group and fashion trends hence, a need to keep up lest their products become redundant in the market.
A preference for independence and individualism also pushes for changes in the market trends. It is not possible to measure the full growth of a sports market as it is relatively new (Jarratt, 2010). The expansion to other regions such as Asia has increased sales. Productivity will be enhanced by re-positioning their brand name and increasing service efficiency (Booth, 2011).
SWOT analysis
Conclusion
Billabong enjoys a good brand name, but needs to device more strategies to capture more market share. This can be done by bettering their distribution channel and in particular by marketing their products abroad. Undoubtedly, such strategies can make its products a market lead across the world (Anandan, 2004)
References
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