Fashion Marketing and Strategies Case Study

Fashion Marketing and Strategies- Case Study

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The “Second P” PRICE in the marketing Mix of UNIQLO. Briefly discuss the pricing structure operating at UNIQLO. How does it differ from a traditional apparel company?

When it comes to the marketing mix, there are four “Ps”, they include price, place, promotion and product. The second P, which is place, is used by UNIQLO to enhance their marketing strategy. Place is a feature that incorporates distribution and transportation of the commodity and the ease of access it is to the consumers. For UNIQLO, a clothing and shoes company, the location was a major issue. The company moves from a single casual selling point to an international company that has a global clientele base. The movement from Japan to China, then to Europe and Finally to North America was not an easy move. It was achieved through several mistakes and corrections, financial losses were also part of the mistakes.

The company first move to China and then to London led to massive losses because there was a hurried opening of many stress and the work culture was not adhered. However with time and proper analysis of the market and partnership with other renowned labels the company was able to succeed and prosper globally.

The second P is also inclusive of the number of participants involved in the distribution and transportation process of the clothes in to reach their consumer. The supply chain is also an important part as some raw materials require to be transported as well. Compared to the traditional Apparel Company, UNIQLO was able to find a way to decrease the cost of production and distribution. This made the price of the products to be of good quality yet cheaper as compared to Apparel Company.

In Apparel Company, 70% of the cost is taken up by purchasing of fabric, product manufacturing and wholesaling; however UNIQLO has reduced the number of participants between the manufacture and retailing of the products making the cost to be as low as 55%. The marginal expense for UNIQLO is only experienced at the retail point due to changes in consumer’s purchasing power but for Apparel Company, marginal expense is experienced at each point the product changes hands. This leads to an increase in the final price of the commodity.

The decrease in the average variable cost of production for UNIQLO, leads to lower break-even point and allows the company to sell their products at a relatively lower price attracting more and more customers in their global stores. The relative decline in sales experienced by the firm is caused by similarity in the products sold which deters women aged between 18-35 years from purchase of clothes as they would like not to look the same as their fellow age mates.

UNIQLO’s pricing strategy over time has not been based on placing a single price but has been based on a comparative analysis of other companies that sell substitute products. In the different places that the firm moves to, it does an analysis of the general price charged by the other firms that produce similar products. The firm will then offer a lower price of high quality goods because it can afford to be cost effective. This increases it market share control in every location it moves to. The pricing structure is based on the following steps.

Step 1- No Frills Offer

This is placing a lower price in order to create a lasting first impression and excitement on the clients. Once the desired sales are achieved marketing strategies aimed at client maintenance are embarked on and then this is followed by step 2.

Step2- Ladder Pricing

The price is slightly increased with time subject to increase in inflation rates.