UGG is a premium wearable mainly footwear company having its headquarters in the United States of America. It was founded by Brian Smith who was an Australian and the products of the company are largely made from sheep skin which reflects his love for the material. Ugg is a designer brand which initially started its journey in the United States and spread into other markets like France, the United Kingdom and Japan. The product line of the company can primarily be divided into four categories, footwear, apparel, care and cleaning accessories for shoes and accessories for the users like sheep skin groves and scarves. Ugg Australia is the Australian subsidiary of Ugg (ugg.com, 2018). The subsidiary besides marketing wearable products, markets home accessories like cushions as well.
Figure 1. Logo of Ugg Australia
(Source: ugg.com, 2018)
Product line of Ugg consists of footwear products, apparels, shoe caring accessories and home accessories. The fashion house has succeeded in positioning itself as a premium end brand manufacturing products for men, women and children. The product line targets the upper class society customers who enjoy consuming high-end fashion outfits as status symbols (Seifert et al., 2015).
Figure 2. Sheep skin boot by Ugg
(Source: ugg.com, 2018)
Ugg Australia in order to place its brand is a premium fashion brand targeting the upper class customers of Australia. The firm opts for premium pricing strategy and charge high rice for its products. The products of Ugg Australia are mostly made from high quality ship skin which raises the cost of production. This also results in the high prices of Ugg products (Caniato et al., 2014). Thus, the customers associate the high prices of the Ugg products with the authentic sheep skin origin. The high prices, in fact have emerged as the guarantee for their high quality which would create value for the rich customers. Thus, the pricing strategy of Ugg is the reflection of the high quality and customer value which the products stand for (Caro & Martínez-de-Albéniz, 2015).
Figure 3. Gift voucher
(Source: ugg.com, 2018)
The place strategy of Ugg Australia consists of both physical brick and mortar stores and online portals. Ugg Australia has strong presence in the premium retail market in form of stores and outlets in all its significant markets. The customers and interested business partners like other fashion companies can also gain information about Ugg on its official website. The website helps the buyers to view the products offered by the fashion house and gain details about them (Bedford, Hustvedt & Bhardwaj, 2016). The interested customers can also shop for the product online. Thus, it can be pointed out that the place element of the marketing mix of Ugg Australia reflects the upper class customers who have access to internet through expensive gadgets like tablets. It also reflects that Ugg facilitates the customers shop products as per their convenience both at the physical stores and online shopping portals (D’arpizio et al., 2015).
The promotional mix of Ugg Australia is designed to attract the rich upper class customers all over the world. As indicated before, the target group of customer segment consists of upper class customers. The customer segment of Ugg consists of men, women and children. Geographically the market of Ugg can be divided into North America, Asia, Europe and Australia (Ruppert-Stroescu & Hawley, 2014). Thus, the digital media acts a powerful promotional tool which helps the brand to promote its products worldwide to this vast group of customers. Ugg partners with top international personalities all round the world to promote its products. The premium fashion brand presents its collections at the leading international fashion shows like New York Fashion Week. The strong association with international fashion magazines like The Vogue and international newspapers like The Times empowers its premium image among its customers (time.com, 2018). These powerful promotional strategies enable the premium fashion house to market its products to rich customers all over the globe and collosal profits.
Figure 4. Showcasing Ugg boots at New York Fashion Week
(Source: vogue.co.uk, 2018)
Ugg Australia should market its products in Canada and earn high profits. The following rationale would prove that entering Canada would be profitable for Ugg Australia.
The macroeconomic study of the Canada reveals that the country is politically stable and experiences a high GDP (cbc.ca, 2018). This means that the people of the Canada have more disposable income to buy expensive premium fashion boots and apparels. This means that the fashion brand can experience high demand among the rich customers in Canada. The fifth figure shows the increasing median income in the Canadian society which means that Ugg Australia would receive high demand for its premium products in Canada. The firm can expect to earn high revenue by catering to the rich customer base in Canada.
The legal system in Canada is very strict and checks any sort of infringement of copyrights. This means that the Ugg Australia can acquire patent for its designs and protect them from infringements more effectively. Canada is technologically very strong which would allow the firm to sell its products online to a global base of customers using its advanced online portal. Canada is well connected by internet which would allow Ugg to promote its products on the digital space to attract a huge clientele in Canada (Buccafusco, Heald & Bu, 2016).
Figure 5. Figure showing medain income in Canada
(Source: statcan.gc.ca)
Figure 6. Statistics showing increasein GDP in Canada
(Source: cbc.ca, 2018)
The environment of Canada would provide a strong boost to the business of Ugg, Australia. The marketing mix shows that the main materials used in the products of Ugg are leather, sheep skin and wool from sheep. This means that the products of Ugg would receive maximum demand in a cold country compared to a warm country. The summer temperature of Canada can be around 80 degree Fahrenheit while the winter temperatures can be very cold. Several parts of Canada experience extremely cold winter season with temperature falling below freezing point (statcan.gc.ca, 2018). This means that there remains high demand for clothes from sheep wool and skin. This means that Ugg Australia would find a large market in Canada to sell its premium products all the year round. The online order accepting portal of Ugg would allow it to receive online orders from large consumer base even in the harsh weather when the stores would remain closed. This discussion shows that the market conditions and weather conditions of Canada provide strong rationale for Ugg Australia to enter Canada (Rinaldi, 2015).
The recommended selected market would be Canada and the entry strategy would be subsidiary business model. The discussion points out that the market conditions of Canada are favourable for the entry of Ugg Australia. The premium fashion brand would earn a huge profit by catering to the large upper class population in Canada all the year round.
The appropriate market entry strategy which Ugg can adopt to enter and succeed in the Canadian market is subsidiary business model. The subsidiary business model would require the fashion firm to set up its own firm in Canada. This model is recommended as the entry strategy because of several factors though it is expensive in the initial stage. The export model would prove to be less expensive and only require the premium fashion brand sell its products through third party business entities along with other brands. This would have prevented Ugg from gaining direct access to the upper class customer base in Canada and given the distributors opportunities to infringe the intellection property rights of its designs (Klingebiel & Joseph, 2016). The franchisee model would have also involved franchisees which are third party business firms selling the products of the Ugg exclusively. The franchisee model would have also exposed the firm to the risk of IPR infringement, thus causing high business losses. Thus, using the subsidiary business model would provide the company establish its own stores in Canada and gain direct access to the rich customer base of the country. This would allow the firm to differentiate its products from the competitor premium fashion brands and create a loyal customer base of its own. This would allow Ugg to earn huge profits and grow in the Canadian market in the long run (Wang, Cavusoglu & Deng, 2016).
The competitive strategy of Ugg Australia would use localisation and niche marketing. The brand should present itself as a Canadain fashion brand which is responsive to the fashion sense of the Canadian upper class society. The subsidiary of the firm should have a logo which would differentiate it from its other counterparts like Ugg Australia. The Canadian subsidiary of Ugg should restructure its marketing mix to adapt to the tastes and preferences of the Canadian customers. The product line of the Canadian subsidiary should contain products depicting Canadian arts and other features typical to Canada (Hollensen, 2015).
Ugg should use niche marketing as a powerful competitive strategy to succeed in the Canadian market. The premium fashion manufacturer should present multiple variants of one particular costume to match up to the tastes of the customers. For example, the fashion house can offer a dress in sheep wool and leather variants to attract individual customers. Thus niche marketing strategy would enable the fashion brand to attract large number of customers and earn huge revenue.
Ugg Canada can use premium pricing to function in the Canadian market. As discussed in the marketing mix, the high prices of high-end fashion products act as guarantee for the upper class customers of the superior quality of the Ugg products. This would yield high returns from the market which would provide Ugg to finance its Canadian business smoothly. This firm would be able to diversify its high cost of production to manufacture designer goods over this revenue and maintain the high quality of the products. Thus, the firm should use premium pricing strategy to function profitably in the Canadian market (Barney, 2014).
Ugg should use its existing promotional strategy to promote its products in the Canadian market. The rising per capita income in Canada and increasing demand for premium fashion goods among the people of Canada means increasing popularity of fashion magazines like The Vogue. Ugg should use promote its high end fashion outfits in these international fashion magazines to attract the rich people towards its products. The firm can use its official website to advertise and sell its products in Canada. The next promotional strategy which Ugg must use to position itself as a high end fashion brand is to showcase its new collections at prestigious fashion shows like Toronto Fashion Week (toronto-fashionweek.com, 2018). The firm must advertise its products on audiovisual media like television to reach a large consumer base. The promotional advertisements of Ugg should be made available on the social media like Youtube which enable the consumers to view the Ugg products at their convenient times. The firm must promote its products and fashion shows on these media like magazines and digital space. These promotional strategies would enable Ugg to promote its products among the upper class society in Canada and earn huge profits.
Ugg Australia should adopt a combination of online order accepting and physical store distribution strategy to succeed in Canada. The firm should open physical brick and mortar stores in the main cities like Ottawa mostly in areas where the rich people live. Then the firm must spread its network of stores into other cities as well to get access to more upper class customers. The next distribution strategy of Ugg to promote its premium fashion brands in Canada would be its own online portal. The firm should accept orders exclusively on its official ecommerce portal to maintain brand differentiation in the market. The firm should not use other ecommerce portals like Amazon to distribute its products as this would expose it to imitation of its designs by third party firms (Block et al., 2015).
References:
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Barney, J. B. (2014). How marketing scholars might help address issues in resource-based theory. Journal of the Academy of Marketing Science, 42(1), 24-26.
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Pithers, E. (2018). Ugg Boots Have Gone Thigh High Thanks To Y/Project. Vogue.co.uk. Retrieved 23 January 2018, from https://www.vogue.co.uk/article/ugg-thigh-high-boots-debut-at-paris-fashion-week-mens
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