Solgaard Global Expansion
Solgaard is a community-focused business headquartered in
New York. The company produces tangible goods for various consumer lifestyles
including backpacks, work bags, luggage, and watches. One of Solgaard’s top
priorities is its stakeholders, including its fourteen thousand Kickstarter
backers, as the company acknowledges, “We wouldn’t be here without our
community of backers and customers. We make sure to keep that in mind every
step of the journey” (Solgaard, 2020, para. 3). On March 2016, the company
launched its Lifepack backpack on Kickstarter and since released several other
products like the Hustle Backpack, the Carry-On Closet, and Hex Watches.
Another company priority is environmental conservation.
Seventeen billion pounds of trash enters the ocean per year and Solgaard’s
mission is to reduce that amount by half by 2025. As of 2019, the company has
retrieved 75,000 pounds of plastic with a goal to remove one-million pounds by
2020. The company removes five pounds of
plastic from water sources for every product purchase (Solgaard, 2020). The
company uses some of the ocean plastic in its products, such as the luggage
lining. However, in November 2018, Solgaard released its first product that is
fully made from ocean plastic, the Shore-Tex Lifepack. The Shore-Tex Lifepack
is solar-powered and has an NSA-approved anti-theft lock (Solgaard, 2020).
Consumers can add a blue tooth speaker for an upcharge. The company’s stylish,
innovative, and durable goods, paired with its environmental consciousness,
meets the needs of the millennial global market, specifically India.
Analyzing and Evaluating Market
Segments
Marketing informs consumers of
products and services available, so they can make the best purchasing
decisions. Businesses cannot thrive in markets without marketing and cannot
build consumer loyalty or brand recognition without it because of the competition
in most markets. If companies enter foreign markets, then the economy is
stimulated through growth and expansion. Marketing creates job and circulates
more funds into the economy through exchanges. Large businesses are not the
only ones expanding globally.
For global expansion, it is
important to understand where market growth is predicted. Overall, Morgan
Stanley’s 2020 Global Macro Outlook foresees a 3.2 percent GDP growth for 2020
and 3.5 percent by 2021. This increase will come largely from developing
economies (Morgan Stanley, 2019). As of July 2019, 15 countries hold
three-quarters of the 86 trillion dollar global GDP (Desjardins, 2019).
Consumers in countries with a higher gross domestic product (GDP) have the
financial means to purchase a product and a higher willingness to buy (Gupta,
Pansari, & Kumar, 2018).
There are several ways for Solgaard
to look for their target segment. The most effective segmentation for Solgaard
is age, income level, and lifestyle values. Within the next several years,
India’s population will consist of approximately 440 million Millennials and
400 million Gen Zer’s. Sixty-four percent of the population is working age, but
over 50 percent of those workers are younger than 24 (Adnan, Ahmad, & Khan,
2017). Solgaard will want to understand the needs of this large population,
then focus its marketing efforts to smaller segments. Indian youth view their
support of green products as a way to distinguish themselves from others
(Adnan, Ahmad, & Khan, 2017). Their purchasing behavior indicates that two
important considerations are, “self-identity and uniqueness on consumers green
buying” (Adnan, Ahmad, & Khan, 2017, p. 364). Solgaard’s products will meet
the needs of many segments within this market.
Competition
in Home and Foreign Markets
In India several popular brands sell
handbags, back packs, travel bags, and accessories. In 1978 Dilip Kapoor
founded Hidesign which makes leather goods. Well-known designer Louis Vuitton
invested in the company in 2007. Hidesign sells forty thousand handbags a
month. Lavie is brand located in Gurgaon that targets a younger,
fashion-conscious segment. Lavie’s products are available at many retailers
including Samsonite and it received an award from PETA in 2007 for selling non-leather
products. Ladida, who joined the market in 2001, uses a synthetic, non-vegan
leather in its products (Maps of India, n.d.).
Some of the popular backpack and
luggage brands in India are: American Tourister by Samsonite, VIP, Skybags, and
Delsey. Samsonite and its brand American Tourister are known for their high
quality, durability and style. VIP markets to modern travelers. Skybags offers
various colors and designs that reflect a customer’s personality. Delsey is a
French company and is the second-largest luggage manufacturer globally (Walk
Through India, n.d.). Wildcraft is also a popular brand of backpacks that is
well-know for its durability. College students and outdoorsy consumers prefer
Wildcraft backpacks. F Gear is another popular brand of back packs that markets
primarily to men (Swati, 2019). None of these popular bag makers mention the
use of recycled material or ocean plastic as part of the product materials.
In the United States there are many
bag manufacturers that use a variety of materials and some companies make bags
from recycled plastics, but Solgaard’s 100 percent ocean plastic bag is unique.
Patagonia is the largest possible United States competitor to Solgaard.
Patagonia began making fleece products from recycled plastic bottles in 1993
and continues to be an innovative market forerunner (Burke, 2019). Patagonia
prices its bags comparably to those of Solgaard’s, ranging from $79 to $149 for
a basic bag and $200 to $400 for a heavy-duty hiking sack (Patagonia, 2020). Companies
like Speery’s, OloKai (REI), and Adidas use ocean plastic in certain shoe
products. Girlfriend Collective, Outerknown, and United by Blue have several
clothing items that use recycled plastics. 4ocean makes water bottles and
bracelets (Burke, 2019). Solgaard has a market edge in foreign countries and in
the United States.
The Targeting and Positioning
Approaches
The targeting and product positioning approach is to
promote the many uses of Solgaard’s products. The company makes products for a
variety of activities and lifestyles: for work, outdoor use, for school, and
for travel. The targeting approach is to locate consumers who will benefit from
the product and have a willingness to spend. Solgaard will determine who the
target segments are then select the appropriate marketing channels that each
segment uses frequently. Indian consumers may use social media and applications
different that the United States market and this must be considered.
Highlighting the product’s differentiation is another
positioning approach. Solgaard’s products are made partially or entirely of
recycled ocean plastic. This innovative product will appeal to consumers who
consider how their purchases impact the environment and seek out companies who
share the same environmentally conscious values. Many companies have the goal
set to reduce their carbon footprint, use renewable resources, and eliminate
waste (McClimon, 2020). As far as social responsibility Solgaard has an
advantage over other companies in the market since the company’s goal is not
only striving for zero waste within the company, they are cleaning up the
ocean. In the United States 88 percent of consumers believe a business’s
operations should also improve the community and environment (Epstein-Reeves,
2010).
Major
Nongovernmental Regulatory Forces
The four marketing P’s as controllable because they are
internal factors, however, competitive, economic, political, legal and
regulatory, technological and sociocultural forces are external factors that
companies and marketers have little to no control over. These external forces
may even impact and restrict the amount that a marketer can change the
marketing mix (Pride & Ferrel, 2017). For example, a company cannot lower
the tax rate to reduce the overall price to satisfy consumers. If a company
sells politically-themed items for one campaigner, and that campaigner loses
the election, a marketer will face a challenge in selling the now practically
irrelevant product. If one country disallows the sale and import of DVD’s, then
promotion in that country would be ineffective. The Indian economy in a
non-controllable force that may impact Solgaard’s sales.
One way for Solgaard to prepare for non-controllable
forces is to establish pricing methods, understand competitors’ prices, and
allow for fluctuation according to economic events. Unless the product is a
luxury or premium product, the marketer needs to know competitor pricing so the
pricing is set within a reasonable margin. If the price is too high or too low,
then the product may not perform well in the market (Pride & Ferrel, 2017).
Many consumers are price-conscious and will not purchase a high-priced item
without a justified value. According to sales and growth expert Ian Altman, “if
you can only sell because you have the lowest price in the industry, your
product isn’t worth selling” (2018, para. 10). Most product pricing will fall
within the current market price range. Companies factor in the product quality,
market competition, market position, and consumer behavior to set a base price
(Pride & Ferrel, 2017).A company’s pricing and marketing objectives
determine which pricing strategy is appropriate to meet those needs. There are
several pricing options and deviation of such as psychological, odd-number,
negotiated, premium, customary, discount, and bundle, which are more complex,
but appropriate according to a company’s goals. Through the consideration and
analysis of these steps, a company obtains a final price or price range
necessary to reach its goals (Pride & Ferrel, 2017).
A company may choose to focus on one of several goals
involving profits, market position, and market share. The next step is
evaluating how target consumers perceive the product’s value and suitable
pricing. Product pricing changes according to market demand. For most goods in
a stable market, this is an inverse relationship in which as the price
increases, the demand will decrease and vice versa (Pride & Ferrel, 2017).
A product’s quality and price elasticity can cause the relationship to deviate
from the standard. If a company knows the price elasticity then pricing is
easier, but one must also factor in costs and profits (Pride & Ferrel,
2017). Companies cannot price the item below the cost and generate a profit.
Determining a Retail
Site Location
Solgaad operates primarily online
and the company supplies wholesale products to global retailers (Solgaard,
2020). If the company chooses to open a physical retail location, then it is
important to note that the American consumer will travel 11 miles more to
purchase a product from a company with a cause (Epstein-Reeves, 2010). When
choosing a physical location for a store, Solgaard must consider what the
target market is how the segment is dispersed across India. An area with a
surrounding high population that is centrally-located is ideal for a retail store.
Since clusters of stores and malls often attract different demographic,
behavioristic, psycho graphic, and geographic segments, that location would be
ideal for Solgaard’s products.
How
to Develop, Execute and Measure the Campaign
The basis of the marketing concept is for a company to
supply products that meet a consumers’ needs while meeting the company’s needs
(Pride & Ferrel, 2017). A marketing
strategy selects the appropriate target market, decides what resources are
needed to meet the goals, and deploys those resources to meet the goals. An
effectively executed marketing strategy gives the company a competitive
advantage in the market (Pride & Ferrel, 2017). The major components of the strategic
planning process are creating or refining the company’s mission statements and
values. The next step is to perform a SWOT analysis to understand the company’s
strengths, weaknesses, opportunities, and threats (Pride & Ferrel, 2017).
First, Brenda Stoltz suggests that marketers use
analytics to find exact ROIs which will explain the effectiveness (or
ineffectiveness) of the marketing campaigns. Next, Stoltz encourages marketers
to locate which segment of consumers that a campaign will effectively lead to a
purchase. The third suggestion is to focus on consistency, starting with
cohesive messages, images, customer experiences, and offering to build consumer
loyalty (Stoltz, 2016). While many businesses use mobile marketing, some do not
understand the importance. According to the Pew Research Center, as of 2019, 96
percent of Americans own cell phones of which 81 percent are smart phones
(2019). If a company transmits the right content to its consumers, stronger
relationships can form. Lastly, a look at the company’s competition may reveal
opportunities that are missing from the market and highlight strengths and
competitive value within the company (Stoltz, 2016).
Digital marketing is the promotion of a product online,
via mobile, email, or other web-based applications through exchanges with
consumers (Pride & Ferrel, 2017). Digital and social media have expanded
the options for the marketing mix. There are now many places that consumers can
shop from such as mobile sites, internet browsers, from their phones, laptops,
or tablets. Companies can use these tools to encourage global customer
engagement. Consumers add value to a company through feedback, comments, and
recommendations (Gupta, Pansari, & Kumar, 2018). Solgaard must encourage
consumer engagement and respond to their visitors to improve their brand
identity and increase sales. For example, in the retail world engaged consumers
spend an average of $373 per visit, while unengaged consumers spend around $289
(Gupta, Pansari, & Kumar, 2018).
Promotion
is a form of communication used to inform consumers about product benefits and
to help differentiate the product from its competition, with the intention of
attracting new customers. Solgaard can use an attraction promotional strategy
to target the intended segment who needs the company’s products. A sales
promotion temporarily increases sales, however, this is not a long-term
solution (Alexandrescu & Milandru, 2018). An introductory sale may raise
awareness of the Solgaard brand in India. The element of promotion is greatly
impacted by digital and social media. Before the internet, advertising was more
one-directional, but digital and social marketing is an opportunity for two-way
communication and more authentic relationships. Engagement and communication
are ways for brands to increase sales and customer loyalty. According to one
survey, over 60 percent of consumers want brands to engage with them online and
70 percent feel more connected to brands who are active on social media (Sprout
Social, 2019).
Public
relations consists of several activities that influence consumers’ brand
perception in a positive manner (Alexandrescu & Milandru, 2018). One
promotion and public relations tool is a video explaining how the company
removes plastic from the ocean and informing the public why there is a need for
its removal. The company should release this informative video on social media
sites, the company websites, and YouTube. The company has received several
commendations on its products from Forbes, Time Magazine, Esquire, and Mashable
(Solgaard, 2020). These articles and mentions are good publicity, and free
advertisement, for the company.
Ethical
Marketing Considerations
Social responsibility is, “An
organization’s obligation to maximize its positive impact and minimize its
negative impact on society” (Pride & Ferrel, 2017, section 3-8, para. 1).
The pyramid of corporate social responsibility shows the four areas where
businesses can be socially responsible. The core of a business is to make a
profit, therefore, the base of the pyramid is economic. The next level of the
pyramid is legal obligations, or societal laws and morals that companies must
abide to. The next level is ethics, because a company has the responsibility to
do what is right and cause no harm to its stakeholders and consumers. The top
of the pyramid is philanthropy, because a company should be a good citizen and
improve the community (Pride & Ferrel, 2017).
Conclusion
Innovation and entrepreneurship
allow American companies to contend and expand globally (Bagley, 2013). As Jodi
Berg, Vitamix president says, “Whether you are part of a startup company or one
that’s several generations old, you have to continue to reach above and beyond
what you have done before to stay relevant. In other words: innovate or lose”
(Bagley, 2013, para. 8). Solgaard produces an innovative, unique product and on
the other side of the globe is an upcoming market of consumers looking for
environmentally-friendly, unique products. The time is optimal for Solgaard to
expand globally and promote the product to a market in need while the market
continues to grow as quickly as possible. Otherwise, the competition may beat
Solgaard to the Indian market.
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