So before we discuss that Jeremy, let's look at the five most important value drivers which are idea, benefit, target, perception, reward.
If we look at the idea behind the customers procurement decision we would realize that the quality which is being provided is optimum and hence needs no further special efforts, as already there is enough value which is being given to the quality control and management.
Moving on to the benefits drawn by the customers, once again the feedback that has been received in the past, explains that once the customers use the product they would be satisfied with the same and will be able to positively compare the product with similar other competition available in the market.
Once again the target population makes a lot of difference in terms of the overall company growth and performance, hence the diversification of products has to be done according to the target population which we will select for the further growth of the company, at the same time we will also have to keep in our minds that the selected targeted population should have the requirement of product that we will be supplying.
Now perception is something which is currently a little narrow in terms of the niche which is being served at the moment, the initial product line was supporting adventure sports and sports fabric requirements however this will restrict the market and therefore this is something that we will discuss further.
While, as core value proposition we consider the customer's perspective, we also need to look at the reward that we will get after providing all that which is expected by the customers in the niche that we will be serving.
As discussed above, in terms of idea and benefit we already stand at a good position however perception, target and reward need to be discussed as part of the core value proposition. Talking about perception, there is no doubt that the customers today go with the brand which provides comfort along with cool design and latest trends and this has to be kept in mind while developing the product design strategies. Similarly, the target population needs to be selected according to the perception which will be built by the type of products that will be created, once these two match that is when a relative forecasting of sales with respect to the demand can be done appropriately. Lastly, the pricing has to be justified; as the quality being provided to the customers is high the pricing should be appropriate enough to generate desired revenue which will be enough support the company’s growth target.
“Up until now, Icebreaker has been something of a ‘discovery’ brand … customers found us. Now, moving forward, how should we position this business? What will make us different and desirable?”
Thanks for the question Jeremy; it is important to understand that as every new product till now Icebreaker was perceived as the ‘discovery brand’, however it will be in our favour to come out of that image and to transform it into a product which is basically a regular need. The perception of icebreaker as the discovery brand initially was also good as it helps to create awareness among people about a new product which is basically a result of an invention and therefore there is a different respect that it gains in the market as a product.
A newly discovered product may create interest for the consumers and they might want to try the same however once there is an awareness about the product, and the feedback from the users is positive, the product becomes a regular demand of the market and that is when it gets the value of a specific brand and also achieves to secure a special position in the market.
Having said the above, if we implement the same at icebreaker, our first aim would then become branding at the next level. In the initial phase of branding and spreading awareness, the product specialty and the freshness of its invention was the key, now this must be taken as a first step and as the second step the customers must be made aware of the improved quality and the revamped designing of clothing where Merino wool has been used.
Over the past 15 years icebreaker has done a fairly decent job to introduce this product into the market and it is time that now the earned recognition and name is clubbed with fashion trends apart from the basic clothing specialties. Hence, participation in fashion events is fairly desirable. Once again coming back to the initial point, the marketing strategy needs to be aligned according to the new requirement of market diversification rather than the previous motive of creating awareness about the discovery which has led to the production manufacture of this product. Lastly, diversification in terms of the product line will also really helped to establish the name of ‘Icebreaker’, as a brand which will be known not only for the basic reason that it uses merino wool, but will be chosen by the customers for the specific product that they are looking for, and where high-quality fabric is already a given factor.
“Icebreaker customers can be found all over the world … everywhere, but not everyone. As we grow in distribution reach, who should we segment the market? Who should we target as core Icebreaker customers and why?”
If you see Jeremy, since the start the product has been known for its two major qualities a) the type of fabric and protection from weather b) the odour resistance property, hence these will continue to be the base of growth in the market are ever the target market has to be chosen according to the categories which are broad, and will provide enough sales opportunities to make continuous growth possible.
If we look at the various factors that impact that demand of the product and join those factors together to select the target population, it will really help to focus the approach towards sales in an appropriate manner. The product and the sales are directly related to season, and the requirement of the product will be more in countries where cold weather is common and covers the major part of the year. Secondly, the product line has to be according to the latest fashion and the youth must be the major target which would require selection of the right color and design and diversity of products according to the existing demand which keeps on changing with time. Lastly, the buying power must be kept in mind as in case if the products are overpriced they would only be available to a specific set of population, however underpriced products might be able to generate sales but they may not answer required revenue which would be enough for an exponential growth of the company therefore pricing will also be an important factor.
If we combine the factors that we have discussed, together we will be able to obtain a much clearer picture of the target population which would lead us to the next level of growth. The demand of the product will be directly proportional to cold weather, latest fashion trends and pricing, hence if we combine these we will be able to get the major countries of operation, majorly targeted age group and average product-wise pricing which would enable an effective and consistent growth in the coming years.
“This decision to enter the US market is huge, with major consequences if we get it wrong (again). How would you define our value-chain across a global market? Who holds the real power and why? And most of all, what could we do in this context to gain a competitive advantage?”
It is true that the US market is huge, and it is extremely attractive to any company that is looking forward to grow exponentially, however at the same time it is also important to understand that the US market is already full of products which are high in quality and have established their brand and product line across the world which means that setup of supply chain, distribution, production, marketing etc. In a high-cost market will get completely wasted in case if the company is unable to sustain in the highly competitive market, hence it has to be tough and very calculated decision to enter the US market, also there needs to be a specific strategy in terms of entering as an individual unit or a consortium. The correct definition of value chain is restricted to the use as a product which is primarily designed for adventure sports, thermal wear for extremely cold areas however this has to be changed the perception must be developed in favour of the product where it is considered as a regular and daily wear.
If we look into the past history of Icebreaker, we will be able to understand that in almost all the markets the retailers play the key role in providing a reach to the customer, in a country like US where the industry is already in a highly advanced and the retailers have various options of brands which are consumer favorites and also provide high sales margin it is very difficult to convince them to sell a product which will be new and may not be very advanced in terms of the latest fashion trends. Hence it is clear that retailers have great power and they can play a very important role during the establishment of icebreaker in the US market. In order to gain competitive advantage the following points are highly recommended.
Both sports and daily wear fabric retailers must be contacted so that the product is available for both types of consumers.
Before the launch of product there should be enough information and promotion available so that once the product hits the stores there should be no waiting for the consumers to know about its presence.
US market is highly competitive hence quality will not be something which would make a major impact in terms of competition, but it will be more of a given factor, competitive advantage can be gained by providing products related to latest trends and must be appropriately priced.