defining the lillybee brand
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Defining the “lillybee” Brand:Strategic Market Development and Penetration Strategy
Katrina McDowJohns Hopkins University
Carey School of Business
Applied Research Project
May 2009
AGENDA
Introduction Overview of ARP Objectives Secondary Research Findings Research Methodology Primary Research Questions Results Recommendations
INTRODUCTION
Kassie Rempel - Founder/CEO SimplySoles established in 2004 “lillybee” debuted in 2008 Three-tier Distribution Channels 2008: $2.5 Million in sales
WWW. SIMPLYSOLES.COM
LILLYBEE: THE PRIVATE LABEL Expand the customer base Open new distribution channels Accelerate growth Leverage and amortize core production
costs Yield higher margins
THE COLLECTION
BUSINESS STRUCTURE
Vertical integration strategy “Entry level” luxury shoes and handbags Price points: $135- $195 Manufactured in Brazil 5 designs Emphasis on Customer Service
attributes
DEFINING THE LILLYBEE BRAND
#1 Identifying the target markettarget market
#2 Determining the key competitorscompetitors
#3 Communicating the valuevalue proposition to the customer base
#4 Developing alternative cost friendlyalternative cost friendly marketing strategies
#5 Implementing technologies technologies to improve customer service and point of sale process.
OBJECTIVES
Research Topic1: Determine the TARGET MARKET of Lillybee including the demographics, psychographics and socio economic factors to determine the purchase motivations and preferences of the consumer. Research Topic 2: Identify “lillybee’s” COMPETITION to benchmark price points, distribution channels, trends and design and customer feedback for strategic marketing planning
Managerial Issue: How to market “lillybee” to existing SimplySoles customers and capture and retain new customers and markets to increase sales. Research Problem: How can “lillybee” incorporate CUSTOMER FEEDBACK on design, sales channel distribution and customer brand experience to create innovative marketing concepts such as green marketing, promotion and social networking strategies to market share.
SECONDARY RESEARCH Women account for 70% of “all” shoe buying US footwear sales rose 19% to $49B 2010- sales will increase 23% Shoe shopping is a sport for women Passionate past-time “lillybee’s” General Sales Statistics:
Inbound Sales Channels
Catalog26%
Retail2%Website
72%
RESEARCH METHODOLOGY
Exploratory Research: One on One interviews SimplySoles blog
Descriptive Research: Question Pro internet survey 21 questions Adjusted Sample size – 115 respondents SimplySoles and “lillybee” current customers
PRIMARY RESEARCH QUESTIONS
Research Question #1: Are price, style and eco-friendly attributes of the “lillybee” brand determining factors in a customers purchase decision .
Ho: There is no relationship between price, style and eco-friendly design and purchase decision.
Ha: There is a relationship between price, style and eco-friendly design
and purchase decision.
RESEARCH Q#1 RESULTS
Cross Tabulation:
x2 = 115.577
8 degrees of freedomp-value = .000
Null hypothesis is REJECTED
RESEARCH Q#1 RESULTS
Cross Tabulation:
x2 = 9.487
12 degrees of freedomp-value = .661
FAIL to REJECT the Null Hypothesis
RESEARCH Q#1 RESULTS
Cross Tabulation:
x2 = 8.694
12 degrees of freedomp-value = .729
FAIL to REJECT the Null Hypothesis
PRIMARY RESEARCH RESULTS
Research Question #2: How significant is the association of “lillybee” with SimplySoles as a purchase decision criteria?
Ho: There is no relationship between the association of “lillybee” and SimplySoles as it relates to purchase decisions.
Ha: There is a relationship between the association of “lillybee” and SimplySoles to purchase decisions.
RESEARCH Q#2 RESULTS
Cross Tabulation:
x2 = 123.602
10 degrees of freedomp-value = .000
Null hypothesis is REJECTED
PRIMARY RESEARCH RESULTS
Research Question #3: Is there a differentiation in age between the “lillybee” customer and the SimplySoles customer?
Ho: There is no relationship in age between the “lillybee” consumer and the SimplySoles customer?
Ha: There is a relationship in age between the “lillybee” consumer and the SimplySoles customer?
RESEARCH Q#3 RESULTS
Cross Tabulation:
x2 = 123.026
4 degrees of freedomp-value = .000
Null hypothesis is REJECTED
RESEARCH Q#3 RESULTS
Cross Tabulation:
x2 = 115.924
15 degrees of freedomp-value = .000
Null hypothesis is REJECTED
RESEARCH Q#3 RESULTS
Scatterplot:
20-35 Age –website purchase
35-50 Age – website/catalog purchase
Primary Research Question
Research Question #4: Does “lillybee’s” price and customer loyalty variables have a competitive advantage over its competition?
Ho: There is a relationship between “lillybee’s” price and customer loyalty and its competitive advantage over its competition.
Ha: There is no relationship between “lillybee’s” price and customer loyalty and its competitive advantage over its competition.
RESEARCH Q#4 RESULTS
Coefficientsa
Model
Unstandardized Coefficients
Standardized Coeffici
ents
t Sig.B Std. Error Beta
1 (Constant) 2.397 .560 4.277 .000
Price -.091 .068 -.178 -1.338 .186
ProductQuality -.010 .074 -.020 -.142 .888
Brand -.072 .078 -.161 -.924 .359
DesignStyle -.066 .067 -.156 -.981 .330
Comfort -.017 .068 -.036 -.255 .799
CustomerService -.009 .075 -.020 -.125 .901
a. Dependent Variable: RetailPurchase
Regression Analysis:
Criterion/Dependent Variable: Retail Purchase and Catalog PurchasePredictor/Independent Variable: Price, Product/Quality, Brand, Comfort and Customer Service
Regression Analysis:
Fail to REJECT the Null Hypothesis
RESEARCH Q#4 RESULTS
Coefficientsa
Model
Unstandardized Coefficients
Standardized Coefficients
t Sig.B Std. Error Beta
1 (Constant) 1.397 .696 2.007 .049
Price .048 .082 .075 .586 .560
ProductQuality -.049 .090 -.078 -.550 .584
Brand .097 .090 .181 1.079 .284
DesignStyle .006 .081 .011 .068 .946
Comfort .077 .083 .127 .933 .354
CustomerService
-.012 .091 -.022 -.138 .891
a. Dependent Variable: CatalogPurchase
Regression Analysis:
Brand has the greatest impact- likelihood to purchase from catalog
B = .097 T-value = 1.079
RECOMMENDATIONS AND CONCLUSIONS
#1 Target “eco-friendly” sub-niche
Develop streamlined strength and opportunity strategies to market eco-friendly competitive advantage
Green marketing campaigns i.e. Earth Day and promotion pairings of eco-products.
73% respondent “Somewhat eco-friendly” 16% respondents “Very eco-friendly”
RECOMMENDATIONS AND CONCLUSIONS
#2 Create a marketing motto emphasizing viral marketing techniques
www.ilovelillybee.com Supported by SimplySoles’ strong brand equity Incorporate customer feedback as a pivotal component:
“They don’t fit! No half sizes”“Pictured items did not match the shoes received”“Not aware of brand”“Just learning of the website”
RECOMMENDATIONS AND CONCLUSIONS
#3: Targeted web 2.0 initiatives incorporating data profile of the 20-35 age market
16%: Ages 20-35 38%: Ages 35-50 37%: Ages 60-65 83% of respondents – www.simplysoles.com online purchase Twitter, interactive games and web casts, Facebook, You Tube
RECOMMENDATIONS AND CONCLUSIONS
#4: Further analyze the variables of age and yearly shoe expense to determine marketability and price compatibility of the 20-35 target market
20%: $1,000 - $2,000/yearly 20%: $500 - $1,000/yearly Implement CRM Database techniques
RECOMMENDATIONS AND CONCLUSIONS
#5: Strategic brand positioning of lillybee in distribution channels:
“lillybee” Purchase - 56% “Bettye Muller” Purchase - 13% “Butter” Purchase – 14% 25% respondents – combined lillybee, Butter and/or Bettye Muller
as favorite Simply Soles brands. Analyze common appeal of designs, style and comfort amongst
three brands
Thank You!!
Kassie Rempel Karen Hollingsworth
and the Simply Soles teamDr. Paul Duffy
Family and Friends