Michael Kors HoldingsIVY MATTINGLY

MARKETING PRINCIPLES 310/6382/FALL SEMESTER 1

Table of ContentsPart A: Current Market Situation1. Market Description

A.1.a. Segmentation Slide 5A.1.b. Marketing Targeting Strategy Slide 6A.1.c. Value Proposition Slide 7A.1.d. Factors influencing Customer Behavior Slide 8A.1.e. Buyer Decision Process Slide 9

2. Product ReviewA.2.a. Levels of Product Slide 10-12A.2.b. Type of Product Slide 13A.2.c. Product Lifecycle Slide 14A.2.d. Benefits/Feature Analysis Slide 15A.2.e. Differentiation Slide 16A.2.f. Branding Strategy Slide 17

Table of Contents Continued 3. Competitive Review

A.3.a. Competitive Analysis Slide 18-20

A.3.b. Market Share Slide 21

A.3.c. Competitive Position and Roles Slide 22-23

A.3.d. Strategic Sweet Spot Slide 24

A.3.e. Positioning Slide 25

4. Distribution Review A.4.a. Current Supply Chain Members and Roles Slide 26

A.4.b. Value-Delivery Network Analysis Slide 27

A.4.c. Current Type of Distribution Strategy Slide 28

Part B: Strengths, Weaknesses, Opportunities, and Threats Analysis (SWOT)1. Microenvironments Slide 30

2. Macroenvironments Slide 31

Section ACURRENT MARKETING SITUATION

A. 1.a. Market Description Description of Market Segments•The product of Michael Kors Handbags is mass marketed therefore in this presentation we will not provide a description of market segments. Due to the fact that Handbags are used by a strong majority of the consumer population the product is mass marketed to consumers.

A.1.b. Market DescriptionCurrent Marketing Targeting Strategy

Undifferentiated

•Since Michael Kors handbags are not a common need among a wide variety of individuals of a variety of different backgrounds, gender, age, etc. it would be difficult to establish a target market strategy since toilet paper is so streamlined it would be difficult to offer variations of the product for market opportunities.

A.1.c. Market DescriptionValue Proposition

More for the Same

•Comparable quality at a lower price

•Softness and strength

•Their value proposition is “so good you can less”

•Price is important but price is not the only factor

A.1.d. Market DescriptionFactors on influencing consumer behavior

Social (Family)

•The “more for less” saves families with multiple family members the ability to save money

•The “Charmin Bears” represent the middle class American family

Age and Life Cycle

•Charmin is targeting families especially with young children

•The Charmin Bears represent a variety of ages and different needs of toilet paper

Economic Situation

•The ability to afford more than bottom line product

•Charmin now offers “Basic” at an more affordable price

A.1.e. Market DescriptionBuyer Decision Process

Habitual Buying Behavior

•Consumer has very low involvement in in the buying process of toilet paper

•Consumer is not making a risky buy, toilet paper is a low cost buy

•Consumer has no major differences in brand to compare in the product of toilet paper thus causing very little product research to the consumer

•The buying of toilet paper becomes a “habit” for the consumer (Always reaching for the same brand of toilet paper); “I have always bought that brand” mentality

•Charmin has to use price and product promotions to promote buying: price point (the addition of the “basic” low line toilet paper, a variety of brands not offered by other competitors

A.2.a. Product Review Levels of Product

Core Customer Level

•Comfort

•Quality of Life

•Cleanliness

•Security

A. 2.a Product ReviewLevels of Product

Actual Product

•Quality Level (Charmin emphasizes soft and strong)

•Brand Name (majority of consumers know the Charmin brand)

•Variations or product (Charmin offers a variety of types of toilet paper including Ultra Strong, Ultra Soft, Sensitive)

•Design (Charmin focuses on toilet paper that is safe on septic tanks and plumbing)

A.2.a. Product ReviewLevels of Product

Augmented Product

•Customer Service (Charmin offers a website and a mobile app giving customers answers to questions, also the mobile app offers consumers the ability to located the nearest clean public restrooms)

•Travel Assurances (Charmin offers a mobile app that has clean bathroom locator that allows consumer to find the closet clean public restroom while out in the community or on travels)

A.2.b. Product ReviewType of Product

Convenience Product

•Toilet paper is a frequent purchase for the consumer

•Toilet paper has little planning on purchasing with the consumer; usually on the consumers “grocery list” when needed

•Charmin is a low cost product

•Charmin is widespread distributed in the United States

•Charmin is found in multiple locations, e.g. Walmart, Kmart, groceries stores, pharmacies, gas stations

•Charmin uses mass promotion of the television commercials, online ads and website, and a mobile app

A.2.c. Product ReviewProduct Lifecycle

Maturity

•Sales: Charmin sales are at a peak, in 2013 Charmin was the best selling toilet paper with 2.3 billion dollars in sales

•Cost: Charmin is a low cost to the consumer, Charmin added the “Basic” toilet paper a lower cost option to their line

•Profit: Charmin has a high profit of toilet paper sales (2.3 billion in sales in 2013)

•Competitors: Charmin has a variety of competitors offering toilet paper brands however the market sees very little new brands

•Advertising: Charmin stresses the brand differences (variety of options) along with the benefits of using Charmin “so good you can use less”; they stress saving money to the consumer; market to families using the “Charmin Bears”

A.2.d. Product ReviewBenefits/Features Analysis

Feature Benefit

•Soft toilet paper Comfort to consumer

•Cleans so well you can use Saves money for consumer

up to 4 times less

•Affordably priced Save consumer money

•Only toilet paper with Comfort and less rash/breakout to consumer

soothing lotion and a touch

of Aloe and Vitamin E

•3 times stronger Consumer uses less and saves money

A. 3.e. Product ReviewDifferentiation

Product Differentiation

•Charmin uses product differentiation to market their toilet paper to consumers by showing differences in their products. They implement this through the types of toilet paper they offer for example UltraStrong, UtlraSoft, Sensitive, etc. They utilize the thought of soft yet strong to emphasize comfort and saving consumers money while still getting a quality product. Lastly, implementing their mobile app gives them another option not provided by similar product brands.

A.2.f. Product ReviewBranding Strategy• Charmin is a national brand starting in 1928 and was originally manufactured by Hoberg Paper Company. In 1957, Procter & Gamble acquired Charmin Paper Company.

•Charmin toilet paper and Procter & Gamble have a variety of products such as diapers, wipes, personal care items, etc.

•The Charmin toilet paper packaging clearly has the Pocter & Gamble label presented on all packages. Along with the Charmin bears that represent the average middle class family in which to target too.

A.3.a. Competitive ReviewCompetitive Analysis

Angel Soft

•Price: their prices are lower than Charmin

•Features: Pretty toilet paper, softness, lasting strength, “price that won’t break the bank”, 2 layer, safe on sewer and septic tank

•Variations in product offered: 2- Classic White and Angel Soft with Pretty Prints

•Mobile App offered: No mobile app

A.3.a. Competitive ReviewCompetitive Analysis

Cottonelle

•Price: lower cost than Charmin

•Features: Strong, absorbent ripples, comfort, safe on plumbing

•Variations of product offered: 3-Clean Care, Ultra Care Comfort, Gentle Care

•Mobile App offered: no

A.3.a. Competitive ReviewCompetitive Analysis

Quilted Northern

•Price: same as Charmin

•Features: Softness, strength, 3 layers, silky feel

•Variations of product offered: 2-Ultra Strong and Soft, Ultra Plush

•Mobile App offered: no

A.3.b. Competitive ReviewMarket Share

Private Label 17.2%

Angel Soft 15.50%

Charmin Ultrasoft 12.2%

Scott 11.8%

Charmin UltraStrong 10.8%

Quilted Northern Soft & Strong 8.1%

Cottonelle Clean Care 5.1%

Charmin Basic 4.1%

Cottonelle Ultra 3.6%

Quilted Northern Ultra Plush 3%

A.3.c. Competitive ReviewCompetitive Positions and Roles• The toilet paper market’s leader is currently Charmin with 25.5% shares of the market giving

Charmin a 3 point lead in the market. Quilted Northern is a close second in the market with 21.5% of the market shares and then Cottonelle comes in at third with 12.7% of the market sales.

• To promote the Charmin brand the company has been showing up at local state fairs to use “Charminzed” bathrooms that emphasize a clean public restroom stocked with Charmin toilet paper products. The introduction of the “Charmin Bear” and the Cha-Cha-Cha Charmin dance gives Charmin a playful and family oriented. Quilted Northern uses a more caring approach with the slogan, “It’s Quilted because We Care.” Cottonelle is using a puppy to promote their product emphasizing, “We look out for your family,” that like a puppy your family needs to be taken care of.

A.3.c. Competitive ReviewCompetitive Positions and Roles•Due to the fact that there is not a whole lot that can separates one brand of toilet paper from another and for the consumer toilet paper is a common household need (they are picking because of price and not brand loyalty) companies are going to great lengths to get their products and positions across.

•The vulnerability to each of these brands is the cost of the product. If a brand comes across with a low cost and quality product the consumer would then go with that product due to the fact that there is very low consumer involvement and brand loyalty.

A.3.d. Competitive ReviewStrategic Sweet Spot•Charmin sweet spot is the offering of their mobile app in which consumers can locate the nearest clean public bathroom along with learning about Charmin products and the ability to leave comments and reviews on products offered.

•Charmin saw that consumers had no reason to have an interest/relationship with the Charmin brand so by implementing the mobile app that allows consumers to find clean public restrooms they are now creating a relationship with the consumers.

A.3.e. Competitive ReviewPositioning•Due to the fact that there is not a whole lot that can separates one brand of toilet paper from another and for the consumer toilet paper is a common household need (they are picking because of price and not brand loyalty) Charmin is going to great lengths to get their products and positions across.

•Charmin is using its “Basic” line to emphasize a lower price toilet paper while their Ultra Strong and Soft lines are targeting consumers to save by using less quality toilet paper. The use of the mobile app is creating a relationship of Charmin and consumers to create a brand loyalty.

A.4.a. Distribution ReviewCurrent Supply Chain Members and Roles

Channel 1: Direct Marketing Channel-Producer Consumer • This is done through Charmin’s online website and mobile app which lets consumer directly buy their

products through the website or app

Chanel 2: Indirect Marketing Channel-Producer Retailer Consumer• This is done through Charmin distributing products to retail stores such as but not limited to Walmart,

Kmart, Groceries stores, pharmacies and gas stations and then the consumer buying the product from those retail stores.

A.4.b. Distribution ReviewValue Delivery Network Analysis

Vertical Marketing System (VMS)

•Charmin uses a variety of systems that work in a unified manner to get the product to the consumer using the vertical marketing system. Charmin distributes directly to their consumers via online and mobile apps. They have contracts with retailers such as but not limited to Walmart, Kmart, groceries etc. that get the Charmin product to the consumer. This is the same with the idea with Wholesalers like Costco or BJs wholesale companies that provide the Charmin product to their consumers. By using the VMS system Charmin is able to provide their product to their target population (mass marketing) by using nationwide retailers and wholesale along with Charmin’s website and mobile app.

A.4.c. Distribution ReviewCurrent Type of Distribution Strategy

Intensive Distribution

•MK stocks the as many of their products in as many outlets as possible

•Due to the convenience of a needed household product Charmin uses as many retailers, wholesalers etc. to get their product to the consumer-convenient to consumer

•Due to the nature that the product has very little difference from one brand to another Charmin utilizes as many outlets to offer their product so consumers can recognize their brand-maximize Charmin exposure

Part BSWOT ANALYSIS

B.1. SWOT MicroenvironmentsStrengths

•Product Innovation- online website and mobile apps

•Offers multiple products-variety of products offered (Crossbodies, Totes, Shoulder Bags )

•Strong Brand

Weaknesses

•Increased promotional spending to keep healthy sales

•Customer Concentration-due to mass marketing a variety of customers to target too

B.2. SWOT MacroenvironmentsOpportunities

•Implementing a stronger presence in the media via socially and in print

•Selling directly to consumers-online and mobile apps

•Host promotional events, ie; fashion shows

Threats

•Limited amount of distribution centers

•Decrease in consumer spending

•Increase cost of materials

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