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Analysis of case issues using marketing theory 3.1. The trends in the marketing environment …………………….. 5 3.2. Creating value for customers.......................................................6 3.3. Fitting in with the changing marketing environment...................7 4. Conclusion...........………………………………………………………....8 5. References………………………………………………………………...9 1. Executive Summary In the era of globalization and highly competitive business world, it is the goals and desire of every company to take a good portion of market share for their products in the market place. People in different geographic locations are more connected ever than before with advancement of internet and air travels. Online blogs, YouTube and social networking web sites have changed new socio culture across demographics especially in younger generations. Consequently, consumers are also becoming well informed about the brand and products, value conscious and their purchase decision are made beyond the quality of product and its face value alone. The aim of this study is to analyse the key concepts of Toms Shoes Company marketing strategies and important factors that influence the success of this relatively new shoes company under current market environment. Toms is a shoes company that gives a new pair of shoes to a child in need for every pair of shoes a customer purchases. The company was founded in 2006 by an American entrepreneur who inspired to start a shoes company after his visit to Argentina where he saw shoes giving movement by non-profit organizations. Toms shoes has capture hearts and mind of many customers because its strategies and well executed actions and the company is gradually growing in relatively short period of time. 2. Situation Analysis
as cited by Demetriou et al.1 The trends in the marketing environment Cause-related marketing become more popular in recent years due to increasing trends of consumer’s perception on corporate social responsibility and socially connected marketing environment. brands play an essential and important role in identifying and differentiating products and services through their symbolic nature (Enally and Chernatony. Toms has successfully captured this trend and applied appropriate strategy in the right time. differentiation of products and services. Toms’s strategy is also more effective especially in the environment internet and social networking sites are influencing word-of-mouth marketing as never before. 2010). increase in sales volume. 3. raising of brand awareness.The shoes are basic need product in everyone’s daily life. 2010). 1999 as cited in Alcaniz et al. 2006). development of customer locality. and making CSR and corporate investment visible (Adkins. In order to attract new customers. For consumers. demonstration of corporate or brand values. With this changing market environment and social trend. Because of globalization and interconnected world. a combination of heightened sense of empathy or awareness among consumers. building relationships with stakeholders. Toms understand the concept “exposure to any type of well conceived promotional initiative for a brand leads in theory to more positive feelings and judgements about the brand in consumer’s mind (Bloom et al.. “increasingly. position itself and to take the market share with the lowest cost. Consumer perception on Toms brand is becoming an ethical brand for doing-good cause and its shoes bring more value for consumers. CSR can be defined as concept of business integrates social and environmental concerns in their corporate operations and in their interaction with their stakeholders on a volunteer basis (Demetriou et al. Toms shoes has successfully implemented with its own customer driven marketing strategies in order for the company to penetrate the market. 2010). Toms need to implement strategy that consumers can differentiate the new brand and the value in its shoes..2010). Toms shoes applied Cause. 2005. providing differentiation.Related Marketing (CRM) and it use “one for one” strategy that the company states “with every pair of shoes a customer purchase. Toms shoes has to face challenge to win over all other established competitors in the market. coupled with the increasing significance of world-wide social causes or movements has resulted in consumers who are more interested in consequences of their purchase behaviours” (Brunswick. Studies have shown that cause-related marketing can benefit enhancement of corporate brand reputation. In addition.” Cause-related marketing is effective because consumers can directly link it to corporate social responsibility (CSR) of the company. the consumers in its target market segment are also the most active . Toms shoes has successful take leverage of cause-related marketing combined with word-of-mouth marketing into its strategy. Toms will give a pair of new shoes to a child in need. There are numbers of well known shoes brands and companies in global shoes market and as a new brand.
Some research has reported that word-of-mouth marketing strategy has very strong impact on new customer acquisition and it can have larger and longer lasting effects than traditional marketing activities (Trusov et al. Toms shoes creates the strategy to fit to the changing market environment. substantial. These kind of messages and narrative are effective and appealing to its target segment of customers. Creating value for customers It is the simple fact that a customer will not buy a product that he or she perceives if the value of product or service is not up to his/her expectation. 3. differentiable and actionable (Amstrong and Kolter. consumer behaviours at target segment of demographic.. but if its strategy does not fit with the market environment. serious infection or even not being able to go to school. Toms’s on online marketing video convey the message to its customers in the form of social awareness movement rather than commercial advertisement.demographic in online as well as they are highly interactive in the actual world. and how it can be prevented by making them wear a pair of shoes. The clear marketing strategy of Toms was already in place when the company started manufacturing shoes. If a company has the best product.2. It also share the story of some children with disfiguring disease like Podoconiosis. Toms’s marketing strategy and primary goal is about creating value for customers rather than just to serve children by giving away shoes for those in need. The main factor for Toms’s success is its ability to add value in Toms shoes beyond the face value of its simple product like shoes. every pair of shoes they purchase from Toms will make them achieve additional benefits of charity work . scanning and understanding market environment is vital for the success of a company. 2010).As the consequence their purchase decision will make the customers feel good and fulfilment and longer lasting satisfaction. For the customers. Toms has created more value to its customers. Toms’s marketing strategies satisfy four requirements for effective segmentation. For example one of Toms’s 2011 one day without shoes movement video convey the message of how poor and bare foot children in developing nations have to walk for miles for food. measureable. clean water or to seek medical help and cut and sores on their feet. caused by walking bare foot on the volcanic ground in Ethiopia. Giving away shoes is a key part of Toms’s marketing strategy and also a mission to make partnership with its customers and other stakeholders. In fact. By allowing individuals to participate to its cause related mission of giving away shoes to the needy children in developing countries. Those existing customers will retell about Toms’s stories to the other people around them after their purchase of products from Toms as they become a part of Toms’s greater good cause and Toms’ movement. . it will not be successful in the target market. accessible. The company founder and most of the staffs at the Toms shoe are in the same demographic and as majority of its customers and that factor can also be advantage for Toms in brainstorming strategies and executing its plans.
This segment of market is substantially growing and it can be easily and effectively accessible via online with lowest cost for the company to engage in regular basis. Toms organizes to form “TOMS campus clubs” in different university campus. psychographs and behaviour of its targeted demography. product.600 events for TOMS’s one day without shoes events in 2010. This type of customer communication and engagement also help first delivery through internet especially social networking sites. The participants of the event walk one day without shoes as part of the movement or public awareness campaign to remember those children without shoes and to remind their suffering consequence of walking in bare foot. networking and leadership. price. Toms’s one day without shoes movement is a fun activity for the good cause and the event creates the environment for emotional bond of the people and the brand. Free media coverage of the event can be translated as free advertisement for the Toms shoes brand. promotion (Amstrong and Kolter. promotions. There were 250. Moreover. 2010). Toms uses appropriate and effective marketing mix concepts of four Ps. purchasing power. customers and competitors nowadays. Advertisement and promotional events are almost no cost for the company as they are mainly done in the form of cause-related events and through online media by stimulating social interest.3 Fitting in with the changing marketing environment Toms shoes created its strategy to fit this changing social environment as internet becomes one of the most active market place for marketers. The company also actively recruit interns and its internship program is also designed to bond young students with the company and its movement. Its target segments of shoes market are mainly young adults who are internet savvy generation and the most active age group in online community.2010). Word-of-mouth marketing strategies significantly lower costs for the Toms shoes as the company save millions of money from expensive commercial advertisements such as on TV. One day without shoes event is a big success for Toms marketing campaign and the company gains substantial amount of public interest as well as main stream media attention. Part of the marketing activities. brand or product and company activities online easily and instantly. place. These activities will again bond the participants with the . Both Toms campus clubs and internship programs allow the participating students to develop valuable experience in marketing. viral marketing. The shoes are sold online or in the stores. Under those given market environment. Toms essentially sets the price for a pair shoes at around 30$-80$ range and it is reasonable and affordable to majority of target segment consumers especially young adult age group. Toms marketing advertisement are mainly word-of-mouth in person or online. Consumer also share enormous amount of information related to market. This changing internet social culture also nurtures the word-of-mouth marketing in this new market place. One of Toms shoes strategies for cause related marketing and mobilizing the people is its annual event called “one day without shoes”. 3.000 people from different countries participated in 1. event planning. Toms understand the interest.
the company is respected as ethical company and consequently builds trust by its customers and achieve retention of customers.8 million people volunteered through or for an organization at least once between September 2009 and September 2010 in the United States which is 26% of nation total population (U. Toms is expected maintain its long term sustainability and high growth in the years ahead. References . the trend of cause-related consumption will continues and increasing numbers of consumer will engage more with the brand that has good reputation as socially responsible behaviour. As long as Toms keep promoting its brand image as socially responsible company while improving appealing shoes design with competitive price and quality for its target market. Toms “one for one” strategy. In its own website. Toms is also able to tap into this segment of market by its strategy. its shoes donations and shoes delivery to needy children also stimulate the interest of individuals with volunteerism. Toms effectively use online social media and continuously communicate and engage with its customers.S department of labor. About 62. These fans and followers continue retelling Toms shoes story to other people around and consequently maintaining the good reputation of brand and expanding the market. These numbers are also indication of increasing people interests in volunteer in developed countries especially in the United States. In addition to the interested individuals who view Toms web site. events. Toms driving of cause-related mission and words-ofmouth marketing strategies make the company is uniquely stand out and Toms brand and product are differentiated from among many other shoes brand in the market. Stories. Because of its continuous engagement with customers by using effective tools and fitting in with changing market environment. Toms states that the company has given over one million pairs of new shoes to children in need through giving partners around the world as of 2010 which is the strong indicator for the success of this relatively young shoes company. Its socially responsible mission also attracts advertisement of big brand marketing partners such as AT&T. bureau of labor statistics 2010). Rapid change of socio-culture and market environment.4 million Facebook fans and twitter followers. Conclusion Because of Toms’s brand innovation by the use of caused-related marketing. Toms is expected to well maintain its customer equity.brand and all respective individuals involve the company marketing activities and all of them collectively become part of the marketing force of the company. news and personal activities are shared by millions of people in every hour in online social media. Toms shoes company now has over 1.
Cause-related marketing: Building the corporate image while supporting worthwhile causes. Carlos E. One day without shoes . Kevin Lane. Enrique.bls.. Volunteering in the United States 2010. USA. United States department of labor (2010): Economic news release.Retrieved from http://www. Ioanna.htm Toms Blog (2011). 2(1). Alcañiz. Michael.. Consumer purchase behaviour and helping: An exploration of this approach to marketing strategy. Randolph E. p49-55 Demetriou. 10th edition. Steve. (2010). Marle.Armstrong.nr0. MIT sloan management review.youtube. (2010) Monetary value of wordof mouth marketing in online communities. How social-cause marketing affects consumer perceptions. Hoeffler. Pérez. Gary and Kotler.( 2006). p26-33 Bureau of labor stastics. Retrieved from http://www. Marketing: an introduction. Paul N. Ruben. p108-112 Bloom. Pearson Prentice Hall. Basurto. Gary J.. Vrontis. Alliances between brands and social causes: The influence of company credibility on social responsibility image.. Retrived from http://www.. 2010). (2010). Vol.toms. Philip. 96 (2). Journal of business ethics.. Marketing intelligence review. 17(4) p266-278 Trusov. p169-186 Brunswick. Pauwels.release/volun. Journal of brand management.gov/news. Demetris. 47 (2). (2011).. Keller. Meza. Summer Internet Proceedings.com/user/tomsshoes#p/c/D5837B5856648DC1 . 12. Bucklin. Rafael. Papasolomou. Koen. Cáceres. (June.com/blog/ Tomsshoes channel (2010)..
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