Case Study Summary
TOMS’s shoe was a brainchild of Blake Mycoskie. He established the company in 2006 with the aim of donating one pair of shoes to a poor child elsewhere for every pair of shoes sold by his company.
This idea came after Mycoskie paid a vacation in a remote village in Argentina where he personally witnessed poor children who could not afford shoes walking bare footed oblivious of the dangerous skin disease called podoconiosis that could be transmitted from soil.
He had passion for these children and could not think of a better way to help them apart from setting up a for-profit shoe company that would supply children with shoes every year.
In addition, the unique design of the low-cost alpargatas shoes traditionally made by local Argentineans had a unique design not common in the north. As a result, Mycoskie thought of starting up a shoe manufacturing company that will not only emulate the design, but also improve on it. In other words, he was determined to introduce a unique fashion makeover in the manufacture of shoes (Armstrong & Kotler, 2011).
Since 2006 when TOMS shoes was incepted, the company has given out tens of thousands of shoes to poor children across the world. Moreover, TOMS shoes has struck licensing deals with quite a number of companies with the aim of not just marketing the product but also sensitizing the entire populace on the need to assist needy children.
For instance, Ralph Lauren has been one of his partners alongside other retail stores scattered across New York ad other states. For Blake Mycoskie, running a one-for-one business model will ensure sustainability of the business.
As he argues, he could have spent the whole half million dollar to donate shoes for poor children only once but be unable to assist them thereafter. However, the one-fo- one model is a sustainable way of keeping the business afloat apart from fully participating in philanthropic activities.
Marketing theories
The most vibrant marketing tool for TOMS shoes has been charity work or philanthropic activities. Even in the midst of recession when most retail and wholesale business were underperforming, TOMS remained profitable. When other companies were reducing their workforce, TOMS was hiring even more.
The company has grown from a local little known firm in United States into a renowned shoe manufacturing firm with subsidiaries across the world. For instance, it has manufacturing and distributing plants in United States, Argentina, South Africa and Ethiopia.
As a marketing theory, philanthropy has worked well for TOMS. It has created a very powerful network for the company in the sense that people like associating themselves with businesses which do not just seek profits, but do so for a particular cause. For TOMS, this cause has been realized through giving out a pair of shoes to a poor child whenever a pair is sold by the company.
Mycoskie had really struggled for some time thinking about the type and nature of business that would elicit passion to him, over and above making profit. After participating in The Amazing Race with his sister and later came across the needy children in Argentina, he had his goal rightly fixed in place.
At this point, it is imperative to note that the choice on which type of charity marketing to engage to engage in is usually a more difficult decision. There are quite a number of businesses on the ground which does participate in charity activities as a way of marketing their products but unfortunately, the outcomes are not impressive.
In the contrary, Mycoskie chose a charitable business that he personally believed in. He had affinity and passion for it. As a result, he spends a lot of his time distributing thousands of shoes to needy children and sometimes playing with them.
Philanthropic marketing needs to offer a meaningful exposure not just to beneficiaries of the charity, people with influence should also be able to identify themselves with such businesses (Armstrong & Kotler, 2011). Besides, the best talent and skills should be brought on board whenever carrying out philanthropic activities. In this regard, TOMS has been doing quite good.
The company has received several recognitions in United States. For instance, the company received a People’s design Award way back in 2007. In addition, TOMS has excelled beyond imagination in line with social entrepreneurship.
In terms of attracting talent, Mycoskie argues that it would be an exercise in futility if employees work with the knowledge of meeting a need somewhere while individually, they are not inspired or motivated within their line of duty. The company confirms that motivation is crucial for its workforce.
In most cases, psychological desires precede motivation. An employee who is intrinsically motivated does not necessarily require to be impressed by external factors before working smart to improve the productivity of an organisation. However, most employees would appreciate to be externally motivated, either by the style of leadership in place or better working conditions, where job satisfaction is not an illusion but reality.
It is therefore most important for the management at TOMS to devise ways and means of maintain a high level motivation to employees for sustained productivity (Armstrong & Kotler, 2011). One away through which TOMS can motivate its huge bulk of employees is by enriching their jobs.
The different roles and responsibilities assigned to employees should be designed in a manner that it will provide chances for growth, attaining set goals and recognizing achievements. Job enrichment should also entail greater authority among employees to exercise not just their skills and competences but also the unique talents which each one is endowed with.
TOMS employees can be motivated through a well defined process of setting goals for the organisation. Studies have revealed that people tend to be motivated to work when there are certain goals to be achieved after a given period of time.
At this point, it is undisputed that TOMS can attain its short, medium and long term goals once they have been set. Nevertheless, it implies that employees will only be motivated when they are part and parcel of goal setting.
Moreover, each group member within wider TOMS community should be made to visualize the importance of the goals being set. In most cases, employees will not inject an additional effort if they have no clear idea on how the set goals are going to beneficial, not just to the organisation, they should also derive quantifiable benefits upon achieving the goals (Kaynak, 2002).
Goal setting as a way of motivating employees comes with its own cost if it is to be successful. Firstly, there are five core principles which the management at TOMS should bear in mind for this theory to be fruitful: the set goals should be clear, challenging, demonstrate high level of task complexity, have a feedback system and also demonstrate commitment.
The performance of employees and their general commitment to the well being of a organisation is paramount. The commitment of employees in organizations in relation to corporate social responsibility is very important if any positive growth is to be realized.
Organizations which optimize on the potential of employees in their different areas of skills, competence and talent are more likely to reap huge benefits alongside meeting the needs of consumers in the dynamic market.
Moreover, there is a close link between organizational commitment and the general social corporate responsibility (CSR). Through well coordinated CSR, employees and above all, the target market will be able to build long terms relationship. This will in turn create a healthy ground for customer loyalty towards consuming products and services from a particular organisation (Kaynak, 2002).
One significant attribute of employee-focused CSR is that organizations can boost the performance of their employees by engaging then in social exercises like in the case of TOMS. One way through which this can be achieved is through involving the employees in the process of identification of the community needs as well as charting the way forward on how to meet the very needs.
Further, organizations ought to involve the welfare and overall well being of employees in the course of discharging corporate duties. Consumers complete the channel of production and as a result, their needs should also be met. The success of the benefits derived from employee-focused can only be met if the respective organizations comply with the government requirements.
Case study questions
What trends in the marketing environment have contributed to the success of TOMS’s shoes?
TOMS shoes has benefitted a great deal form the current marketing trends in place. It is worthy to note that trends in marketing have changed a lot especially with the introduction and adoption of internet as a marketing tool. Similar to most companies, TOMS shoes is also ridding on the merits of internet marketing.
For instance, the company has made managed to market its One day Without Shoes event through the internet. By joining this marketing bandwagon, TOMS is currently well known around the world.
The second most popular marketing entails the use of Search Engine Optimization (SEO). Using search engines to locate companies and their product offering has continually grown in popularity and it has equally been good riddance for TOMS shoes. Search engines enable sites to appear and be easily seen by prospective clients.
Most companies are currently are utilizing SEOs to drive more traffic into their sites. More benefits can be derived when SEO is used appropriately.
TOMS is also upbeat in the use of video marketing in marketing itself to the world. It is a common and growing concept through which businesses are utilizing as an outreach channel for the target market.
It is a trend that has gripped the market bearing in mind people will generally prefer to watch a video clip as a piece of advertisement in preference to reading. Video marketing engages the prospective client both by sight and sound (Wang, Wang & Williams, 2010).
The intensive use of social media is also taking shape and growing very fast in today’s marketing world. At first, social media was never thought to be an effective tool in marketing. However, it has gained popularity and most companies have opted for it. As a viral marketing tool, the use of social media such as facebook, twitter and blogs is generally affordable.
Finally, TOMS has also not been left out in e-mail marketing. It is one way of reaching out for a large number of people within a very short time. Besides, costs associated with e-mail marketing are relatively low.
Did TOMS’s shoes first scan the marketing environment in creating its strategy, or did it create its strategy and fit the strategy to the environment? Does this matter?
TOMS shoes is a story of innovation and an original idea that incorporates charity as well as profit making. Its uniqueness is what makes the company stands out. As such, TOMS shoes created its own marketing strategy and then fitted it into the marketing environment with the aim of making a difference in a poor child’s life as well as driving the company toward profitability (Wang, Wang & Williams, 2010).
There are several practices within the company that support this position. For example, the one-for-one movement is characteristically unique; for every pair of shoes sold by the company, one pair is charitably given out to a needy child. It is a simple but unique business model. Surprisingly, the strategy fitted so well into the environment since clients were well convinced that it was for a worthy cause.
It really matters for a new business entering a competitive market to devise marketing strategies that will be above par relative to other competitors. TOMS shoes did not have to scan the environment first and develop parallel strategies. Rather, it came up with an unfamiliar marketing concept that has seen it grow by leaps and bounds.
Is TOMS’s strategy more about serving needy children or about creating value for customers?
Realistically speaking, TOMS’s shoes serves both purposes. Firstly, Mycoskie had long thought of a business plan that would not merely generate profits, but that which would elicit passion, fun and interest. He was already running a personal company but he was not fully convinced if it was the right thing to do.
According to the video case, the inception of TOMS shoes was a turning point for Mycoskie since he could do business as well as engage in charity work at the same time. From the view of things, he loves children.
On the other hand, Mycoskie was also inspired by the native design of the traditional Argentina shoes. He felt that by exporting the design to United States, people will love it, and he did exactly that.
For him, it was a vacation turned business venture. As can be noted both in the text and video case, TOMS shoes are found in various designs. The company is continually working on other innovative ways of improving both quality and design in order to meet the tastes and preferences of customers.
In spite of TOMS success in the manufacture, sell and charitable distribution of shoes, the company can still widen its business scope in reaching out for a bigger population. It is pertinent to note that TOMS shoes is currently operating in just two African countries namely Ethiopia and South America.
Worse still, there are millions of children who have not been reached yet. In order to improve the outreach program, it is vital for TOMS to decentralize its shoe manufacturing and marketing operations in the needy areas so that the shoe drops can be implemented quite easily.
In addition, the One day Without Shoes event should be made more public and well known. The company should devise more rigorous marketing tools that will see it sell more shoes and donate more as well. For instance, Search Engine Optimization (SEO) is one area that has not been utilized optimally.
References
Armstrong, G. & Kotler, P. (2011). Marketing: an introduction, (10th ed.), New York: Pearson Prentice Hall.
Kaynak, E. (2002). Strategic global marketing: issues and trends, New York: Haworth Press.
Wang, J. Wang, G. & Williams, L. (2010). Able Trend: Identifying and Analyzing Market Trends for Trading Success, Hoboken: Wiley & Sons.