Alpaca Outerwear

You are going to be submitting a complete marketing plan for ALPACA OUTERWEAR – vegan, sustainable lightweight coat. More information on this new company can be found at https://www.kickstarter.com/projects/luxuryalpaca/alpaca-ladies-luxury-winter-fur-coat?ref=discovery&term=coats

Assumptions for this Assignment

• Alpaca Outerwear has a budget of $500,000 to enter Canadian Market
• Alpaca Outerwear does not currently have any sales force or penetration in Canadian market
• Designed in Florence and made in Toronto.
• First deliveries are slated for September 2021
• Pricing has already been established – see kickstarter page for details.

Create a marketing plan to penetrate the Canadian market. The report will include the following elements:

Executive Summary [200words]

Provides the reader with all the required detail to understand the situation and the appropriateness of the proposed solution. Usually completed at the end of the project.

Environmental Analysis [200words]

• Provide a list, with rationale, of the firm’s strengths and weaknesses.
• What is happening in the market?
• What is the estimated market size?
• Is the market growing, declining or stable?
• If it is growing or declining, what is the rate of the growth or decline?
• Use any relevant tools like PEST, Porters 5 Forces, 5 C’s etc.

Competitor Analysis [200words]

• Who are the primary, direct competitors?
• Who are the indirect competitors?
• Do the direct competitors have any competitive advantage that we do not have?

Segmenting, Targeting, Positioning [400words]

• Define the primary and secondary target markets using one, or more, of the segmentation criteria discussed in class.
• Describe your core customer (Explain who this person is, age, the persona, sweet spot.What do they do on weekends for fun (psychographics) who are they hanging out with, what are their worries, where do they live. Etc.)
• Justify and explain your target market selection.
• How will you position your company? How will you differentiate from your competition? What is the desired positioning of your firm and its products in the minds of your selected target group?
• Include a positioning statement
• Include at least 1 perceptual map

Marketing Objective(s) [100words]

• SMART marketing objectives for the plan – what will you achieve at the end of the plan?

Marketing Strategy [400words]

Product

• Provide a brief description of the product, including the consumer need that it satisfies?
• What is the product and / or line of products you will be producing and offering?How many items are in the line and/or number of SKUs (Stock-Keeping Units)?
• What other elements are important to the consumer?

Price

• What is the pricing strategy and price that you will be using? Justify.
• Will you have a fixed set of options, or will you allow customization?
• What price will you charge for each offering?

Place

• How will your product be distributed?
• What geographic territory will you cover?
• How will your product/personnel/equipment be transported from start to end consumer?
• If you are producing a consumer packaged good where will it be sold?In physical stores? What kind of stores? In what part of the store and where on the shelf?

Promotion

• What is your promotion strategy? How will you communicate with your target audience?
• What are your promotional goals?
• Give an overview of your promotion strategy: how will you achieve those goals?

For each of Product, Place, Price and Promotion don’t forget to tie how each of your decision ties to your target marketing, positioning and resources.

Financial Analysis [100words]

• Include a 2-year income statement with all expenses and assumptions
• Month-to-Month Marketing Budget

Executive Summary

Alpaca Outerwear is a new market entrant that manufactures and sells its men’s and ladies’ luxury winter fur coats in the Canadian market. The company’s core strengths are strong cash flow to finance the marketing aspects and automated technology that may help promote consistency in production. The company should also reduce some of the weaknesses of its newness in the market. The entity has an opportunity to increase its winter wear offers because of the significant market growth and growing preference for lightweight coats. The competitors’ analysis shows that Alpaca Outerwear’s primary competitors are Canadian-based winter wear manufacturers with an extended footprint in the industry. In contrast, manufacturers of close substitutes such as scarfs and shawls are its indirect rivals.

The company focuses on domestic and international consumers as the primary and secondary markets, respectively, and segments the customers on a psychographic and demographic basis. The company is positioned as a premium brand that offers unique and stylish coats for the winter seasons. The entity also uses bundle and premium pricing for its product offerings. The 4p’s; product, place, price, and promotion are used to enhance the brand’s visibility, ensure it produces in-demand products, offers competitive prices, and is well promoted among consumers.

Environmental Analysis

Strengths

• Alpaca outerwear has a strong cash inflow that may generate resources for the company’s projects and finance other aspects such as sales and marketing.
• Alpaca outerwear uses advanced technology to create outerwear that is compatible with extreme weather conditions and stylish at the same time (“ALPACA Outerwear”). The company may build on this advanced technology and automation to promote consistency in its quality and scale up or down its production depending on market demand.

Weaknesses

• Alpaca outerwear’s newness in the market and lack of a sales force may limit its market share and constrain its penetration in the Canadian market.

Opportunities

The significant growth of the winter wear market offers Alpaca outerwear growth and expansion opportunities into this industry. Studies show that this market was valued at USD 268.3 billion in 2018 and is anticipated to grow at a compound annual growth rate (CAGR) of 4.3 percent between 2019 and 2025 (“Winter Wear Market Size”). Besides, lightweight coats and jackets account for the most significant growth of the winter wear market because consumers prefer fashionable apparel with maximum comfort. Alpaca Outerwear should capitalize on this market growth to scale up its production and secure a large consumer base.

Competitor Analysis

Alpaca Outerwear’s primary competitors are Canadian-based winter wear manufacturers that share the former’s strategic plan of vegan, sustainable lightweight winter coats and who have had a long footprint in the industry. Some of these competitors include Canada Goose, a renowned brand that manufactures winter jackets. Wuxly, a famous manufacturer of animal-free, environmentally friendly, and stylish winter jackets, is also Alpaca Outerwear’s close competitor. Essentially, the company’s direct competitors have a competitive advantage which they derive from brand image recognition. Notably, most of the company’s primary competitors have been in the industry for a longer duration, and consumers can easily recognize these brands through their logos, slogans, and packaging. Studies show that this brand recognition influences consumers’ purchasing decisions in that they would be more willing to purchase from brands they know well (Shahid et al. 37). Therefore, brand recognition is one of the factors that may allow the direct competitors to outperform Alpaca Outerwear.

Besides the primary competitors, Alpaca Outerwear also faces significant competition from indirect rivals who manufacture winter-jacket close substitutes. Literature shows that the shrinking cold period triggered by global warming influences people to buy lighter versions of winter clothes such as several thin layers of fabric (“Winter Wear Market Size”). This changing preference subjects Alpaca Outerwear to indirect competitors such as companies that manufacture scarves, cardigans, and shawls.

Segmenting, Targeting, Positioning

Alpaca Outerwear has two target markets; primary and secondary markets. The company’s primary target markets are mainly individuals whom the business perceives as likely to purchase its vegan, sustainable lightweight winter coats. These individuals are segmented on a psychographic and demographic basis, consisting of men and women with high income who want a warm, stylish but official look for winter seasons or those who prefer casual wear because of the unofficial nature of their work. The company may also expand its operations to target secondary markets who are groups of consumers or organizations to whom the products may appeal. The secondary target market may be segmented geographically, consisting of international consumers looking for luxurious, vegan, and lightweight winter coats.

Essentially, the above target markets selection is based on their attractiveness and long-term profitability. For example, studies show that men accounted for the largest share, 45 percent, of the winter wear market in 2018, with the women segment expected to expand the fastest, CAGR of 4.8 percent over the next few years (“Winter Wear Market Size”). Therefore, the company will target men and women as the primary target market because they are more likely to purchase the products as casual and business attire, thus increasing its profitability. Besides, the literature indicates that the shrinking cold period triggered by global warming influences people to buy lighter versions of winter clothes (“Winter Wear Market Size”). This information supports the decision to include psychographic segmentation, notably, consumers with specific winter preferences, such as light and stylish winter clothes, in the primary target market. Moreover, the international market, fostered by the increased rate of globalization, may be an attractive market for Alpaca Outerwear.

Company’s Core Customer

The company’s core customers are men and women between 27-31 years, with a sweet spot for stylish, unique, comfortable, and luxurious winter coats. This group of consumers is likely to belong to the top one percent income level; thus, they may settle for an elegant, stylish and unique rather than standard and loss-priced winter coat. Besides, this consumer is always looking for new designs and is attracted to light-weighted winter apparel.

Alpaca Outerwear will be a vegan, sustainable, lightweight, premium winter coat manufacturer and distributor. This market positioning will help communicate the company’s intent of producing unique, stylish, and warm winter coats while also ensuring that the production is animal-free and environmentally sustainable. Furthermore, the company will differentiate itself from the competition based on the premium quality product. Most prominently, the outerwear will be made from fabrics that are water and windproof, an inner layer to insulate the body, thumbholes to keep the hands warm, and a detachable liner to ensure comfortability (“ALPACA Outerwear”). Besides, the company will position itself in consumers’ minds as a premium manufacturer of quality, unique and stylish coats for cold seasons, a brand positioning reflected in the fabric and designs produced by the entity.

Positioning Statement

The company’s positioning statement will be, “For the unforgiving winter season, Alpaca Outerwear gives a premium-quality, unique and stylish wear that will guarantee you warmth and protection throughout the day.”

Perceptual Map

Marketing Objectives

One of the primary marketing objectives is to increase Alpaca Outwear awareness among the target consumers within the next two years to enhance the brand’s visibility in the Canadian market and increase the company’s revenue. The objective is SMART because it is specific about the marketing plan’s purposes, which is to foster brand awareness and increase sales and brand visibility. The objective can also be measured by surveying to determine the number of people who know about the brand. The marketing objective is also realistic because it can be accomplished. Besides, this objective is time-bound and aligns with the company’s goal of producing unique, stylish, and warm winter wear.

Marketing Strategy

Product

Alpaca Outerwear provides a vegan, sustainable, lightweight, unique, and stylish winter coat in different colors for men and women. The company’s product satisfies consumers’ need for warm and comfortable jackets that also uphold their fashion sense (“ALPACA Outerwear”). This product element is vital for its marketing plan because it helps it ensure that it provides in-demand and good quality products (Al Badi 3). Essentially, the company has two product lines consisting of men’s and women’s luxury winter fur coats and face masks. The winter coats have four SKUs; the color, sizes, price and style, while the face mask has one SKU, color. Alpaca Outerwear product ties to the market positioning in that it is unique and stylish.

Price

Alpaca Outerwear will use two core pricing strategies; bundled and premium pricing. According to Deshpande, premium or prestige pricing involves setting goods at a high price to give them the appearance of quality (77). This pricing strategy is ideal because it will display the intended perception of high-quality, stylish, and unique products. Besides, premium pricing will provide consumers with a sense of luxury, which is part of the company’s positioning in the market. The company will also use bundling pricing, which involves selling two or more products in one package (Musa 128). This pricing strategy will be appropriate for enticing consumers to purchase the dual layers and a two-pack mix and match to get maximum value from the company products. Moreover, the company will have a fixed set of CA$329 for one layer and $499 for dual layers in its women and men product offerings.

Place

The company’s products will be distributed directly to the consumers to avoid the additional costs of intermediaries who may increase the prices beyond the competitive level. Most notably, the entity will sell the products over the internet, whereby consumers can place their orders and provide their addresses for shipping purposes. These products will first be distributed within the Canadian market, notably Toronto and other cities, before expanding to certain countries with an attractive and significant customer base. The selected medium of distribution for the product, personnel, and equipment from the start to the end consumer will include road and airway. This place element ties to the company resources, whereby it lacks a sales force implying that sales will have to be done directly from the inventory center to the consumers.

Promotion

Alpaca Outerwear will mainly rely on social media marketing as its core promotional strategy. The company will use social media platforms such as Instagram, Twitter, and Facebook to promote its products. This promotional strategy may prove effective because of the significant social media subscribers and exposure to a broad base of potential consumers on social media sites. The company will also communicate with its target audience on these social media sites by creating content that consumers can engage in and responding to the audience’s comments and inquiries about its product. The primary goal of these promotional strategies will be concentrating the company’s limited resources to building brand awareness, increasing sales, and securing a significant market share in the Canadian market. Besides, Alpaca outerwear’s promotion strategy ties to its resources, which are pretty limited for the entire project. Therefore, the entity will utilize social media marketing because it is cost-effective and reliable in targeting a large consumer base and building brand awareness.

Financial Analysis

Income Statement

Alpaca Outerwear

Income Statement

For the Year Ended September 2021

Month-to-Month Marketing Budget

The company will mainly rely on social media marketing as its sole marketing strategy. This marketing strategy may cost approximately CA$40 to pay the marketing team. An additional CA$100 may also be required to pay for social media ads.

Works Cited

“ALPACA Outerwear- Vegan Sustainable Lightweight Winter Coat.” Kickstarter, www.kickstarter.com/projects/luxuryalpaca/alpaca-ladies-luxury-winter-fur-coat?ref=discovery&term=coats. Accessed 29 July 2021.

“Winter Wear Market Size, Share- Global Industry Report, 2019-2025.” Grandviewresearch.com, 2019, www.grandviewresearch.com/industry-analysis/winter-wear-market. Accessed 29 July 2021.

Al Badi, Khalid Suidan. “The Impact of Marketing Mix on the Competitive Advantage of the SME Sector in the al Buraimi Governorate in Oman.” SAGE Open, vol. 8, no. 3, 2018, p. 215824401880083.

Deshpande, Satyajeet. “Various Pricing Strategies: A Review.” Journal of Business and Management, vol.20, no.2, 2018, pp.75-79.

Musa, Muhammad Ichwan. “Bundling Pricing Strategy on Purchasing Decision: A Case of Indihome Product.” Management, vol.7, no.3, 2017, pp.126-130. doi: 10.5923/j.mm.20170703.04

Shahid, Zarlish et al. “The Impact of Brand Awareness on the Consumers’ Purchase Intention.” Journal of Marketing and Consumer Research, vol. 33, no. 1, 2017, pp. 34–38.

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