FUBU Marketing Strategy

 

FUBU Marketing Strategy

 Contents

Introduction………………………………………………………………………………………………….3

Market Environment

Political………………………………………………………………………………………………………4

Economical…………………………………………………………………………………………………4

Social………………………………………………………………………………………………………..5

Technological……………………………………………………………………………………………….6

Marketing Strategy…………………………………………………………………………………………6

Conclusion…………………………………………………………………………………………………..9

References…………………………………………………………………………………………………..11

Appendices…………………………………………………………………………………………………12

 

 

 

 

 

 

Introduction

FUBU is an apparel company whose initials or acronym mean For Us By Us. Initially it meant the Five Urban Brothers United. FUBU was founded by Daymond John in the year 1992 in Hollis, Queens in New York. The company received a boosts when a South Korean Company, Samsung decided to invest in the company in the year 1995. By the year 1998, the company’s turnover had reached over $350 million dollars. FUBU has branded T-shirts, Denin Jeans, Shoes, Rugby shirts among other apparels and sports items.

The PEST analysis of the American Apparel market is outstanding.

Political

The political factors in the US make it a number one investment location. The democratic governments offer stable political atmosphere even in times of disasters and terror strikes. It’s a capitalist’s state in a free market economy. There are various Multinational corporations operating in the US.

Economical

The economy of the US is very stable.

In the first quarter of 2008, USA had a GDP growth rate of a 1.8%. In 2009 USA growth rate decreased to -2.6%, while in 2010 it experienced an increase in its growth rate which registered a 2.6% growth rate. This was about an improvement of 200% from the previous year that’s 2009.There was a slight decline in 2011 but its currently showing an increasing trend which is steadily improving towards the year 2013.

 

Growth %        USA Economic indicators

                      Years

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An unemployed person in the US is a person who belongs to the civilian labor force who is willing and available for any chances of employment in his line of profession or liking, has worked for wages of less than an hour per week and is actively involved in searching for employment. (Sullivan, Sheffrin, 2003)

United States of America had an unemployment rate stood at 3.9% in the year 2008. It rose to 9.9% at the end of 2009. It adopted a declining trend with slight fluctuations to 8.5% at the end of the year 2011 and continued declining to 7.9% in 2012. In the year 2013 it’s expected to have dropped further. These is a favorable trend as declining rates of unemployment indicates an improvement in employment figures.

Inflation is the average rate at which the prices of all goods and services are increasing and the negative impact on purchasing power. To calculate the inflation rate, simply work out the differences between the two consumer price indexes i.e. the previous year’s CPI from the current year’s CPI and multiplies the difference by 100 to get a percentage. (Sullivan, S., 2003)

The inflation premium is the provision for expected effects of inflation expected by the investor given the prevailing economic conditions. The three year maturity bond should have a margin of at least 5% inflation provision to cater for the erosion of the expected returns on the investment due to the negative effects it has on the expected income.

In the first quarter of 2008, the US had an inflation rate of 5.2%. From the first quarter of 2008 till the end of the second quarter in 2009, the USA experienced a sharp drop in its CPI ratings which registered a negative growth rate of 0.2%. This was about 108% reduction from the year in 2009. In 2010, the inflation rate increased to 2% and later to 3% in 2011 then it dropped to 2% in 2012. It’s expected to decrease further in the year 2013.

The legal system in the US recognizes the rights of the workers and stipulates the minimum wage rate that’s payable to employees.

Social

The social life in the US is standard as in other European countries. The official language is English and the official currency is the dollar. The majority of the population is made up of the white population while the others are the Latinos, the afro-Americans and other minority groups. The FUBU apparels were initially targeted for the Afro-American market but it has spread to other races as well. FUBU has the potential to expand globally to countries that are still developing. The market is still large and with the advent of modern communication systems, it would be easy to manage and oversee the operations of the foreign branches from the mother countries. With the success it has had in many countries out the USA with the exception of a few, it will be to its future advantage if it started planning and strategizing early how to expand to such markets.

Technological

United States of America leads in technological advancement. The use of automated systems controlled by digital networks and aided by the internet has changed the way people conduct business in the US and globally. The introduction of the internet sales and marketing opportunities has had an impact on the sales of FUBU line of products. The FUBU fashion undertook most of its promotion and coordination of its distribution networks through the internet.

FUBU’s Marketing Strategy

Promotional strategy is a function that involves informing, persuading or influencing the decisions of the customer. Its major objective is to develop and promote a products primary demand. Different companies have varied promotional strategies. Some use these strategies to expand in their different markets while others use them to reach selected and particular markets. Most promotional strategies goals are to provide the basic necessary information about the product and to differentiate in order to increase its sales, its value and to stabilize its overall market. (Blythe, 2008)

To provide the basic information of the existence the FUBU brand, the company hired Stealth marketing Corp to that developed its marketing and communication strategy that involved making key decisions about who the customer was, how they were to be contacted and the kind of message that was to be conveyed. For instance, FUBU was to target different distinct celebrity groups who wore promotional fashion items. (Nance-Nash, 2010)

Positioning involves the development of brands as the images of the company’s products or services. The combination of all the required elements of marketing mix is needed to achieve the required strategy. Positioning explains the uniqueness of the products in the market place and also its advantages against the other apparel fashion companies. Branding is a tool that is often utilized to position the product by designing its image and the marketing used on the posters. For any communication to be effective, the customers must form a picture mentally about the perception of the product which eventually influences the price they are willingly or a ready to pay for the product. Brand equity occurs where customers are willing to pay much more for a product because of its position.

The development of product advertising message was undertaken after the successful positioning of the potential customers and the requirements of the target group. Distinctive, creative and well branded advertising strategies were created that resulted in impressive results that ensured successful marketing and promotional strategy. To make the product more appealing to the customers or the target groups, the adverts designers were constantly referring to the customers to tailor the adverts according to their needs. (Blythe, 2008)

This process, known as market segmentation divides the market into groups which are very distinct from each other. In one of the messages,    FUBU products target the celebrity class with such messages referring to good life, endless entertainment and fashion. While in other messages it targeted the general public.  www.fubu.com

The importance of market segmentation is that it increases the efficiency in marketing operations by narrowing the market specifically toward a designated and defined segment in a way that is consistent with the characteristics of the segment. Market segmentation leads to product differentiation from each segment while tangibly or intangibly differentiating it from the rival products from the competitors. (Smith & Taylor, 2004)

The choice of a promotional mix is directly related to the selection of the promotional strategy the company will adopt to promote its products or service. There are two strategies available to the marketer. i.e. pushing strategy or the pulling strategy. The pushing strategy is an approach that’s sales oriented. The product or service is marketed wholesalers and the retailers in the marketing process or channels. (Kotler & Armstrong, 2010)

Sales promotion involves other forms of increasing sales other than advertising, personal selling or public relations through one time or occasional selling. Initially sales promotion was a supplement to a company’s sales efforts or advertising process, but it has become part of the promotional mix for most firms. FUBU offered special discounts and promotional branded materials like T-shirts, hand bags, caps and other attractive gifts to celebrities to increase their sales. These items were usually trendy and well designed to attract potential consumers.

A pulling strategy generates the consumer demand for its product or service mainly through advertising and sales promotion and marketing appeals. The ultimate aim of the advertisement is to create a demand for the product among the potential clients who will eventually be attracted by the product or service. The marketer believes that the strong demand created will pull item, the product or service by compelling the marketing intermediaries to accommodate it through the marketing channels. In most cases both strategies are used depending on the products or service being promoted. Pulling strategy is mostly used for consumer products while other industrial products use the pushing strategy. (Wood, 2003)

FUBU required some kind of advertising, whether yellow pages were to be used or the bill boards, the most important and basic requirement was the strategic thinking, the references behind the advertising and the needs of the targeted audience. Informative advertising is an approach that builds and creates the initial demand for the product or service during the introductory process of the life cycle of the product. Persuasive advertising is used in the later stages of the product to improve its competitiveness among its competitors. Other forms of advertising that can be used are comparative advertising and reminder oriented. FUBU utilized the efficiency of its positioning that was critical to its success and its promotional strategy.

The promotion of product takes place after the product has being successfully position and the potential customers and their needs have been identified i.e. the requirements of the target group. A distinctive, creative and well branded advertising generates impressive results that ensure successfully marketing and promotional strategy. To make the product more appealing to the customers or the target group then the adverts designers should be constantly referring to the demands and tastes of the clients.

Conclusion

To conclude, Daymond believed that the strong demand created will pull his product by compelling the marketing intermediaries to accommodate it through the marketing channels. In most cases both strategies are used depending on the products or service being promoted. Pulling strategy is mostly used for consumer products while other industrial products use the pushing strategy. Daymond promoted his products extensively and used all the strategies which were available to him. At one time he engaged the services of one of the prominent US rapper and music icons LL Cool J to promote his product by performing while dressed in his popular FUBU jerseys. These strategies assisted his marketing strategies to improve the sales of his apparels and sprung his products into the national lime light. The financial promotion he got from Samsung also promoted his company to expand and exploit other forms of branding that included sports equipment and other designer items that were associated with the FUBU brand of clothing.

 

References

Blythe, J. (2008) Essentials of Marketing. 4th edition. Essex: Pearson Education Limited.

http://research.stlouisfed.org/publications/iet/

Kotler, P. & Armstrong, G. (2010) Principles of Marketing. 13th edition. London: Pearson Education Ltd.

Nance-Nash, S. (2010, July) “FUBU Founder Daymond John Stages His Next Act”. Dailyfinance.com. Retrieved 2012-09-03.

Smith, P.R. & Taylor, J. (2004) Marketing communications. An integrated approach. 4th edition. London: Kogan Page Limited.

Sullivan, Sheffrin, S (2003). Economics: Principles in action. Upper Saddle River, New Jersey

 

Pearson, Prentice Hall.

www.fubu.com FUBU Mainpage, Who we are/The company/Company profile”.

Wood, M. (2003) The Marketing Plan: A Handbook. New Jersey: Pearson Education Inc.

Appendices

www.fubu.com FUBU Mainpage, Who we are/The company/Company profile”.

Nance-Nash, S. (2010, July) “FUBU Founder Daymond John Stages His Next Act”. Dailyfinance.com. Retrieved 2012-09-03.

http://research.stlouisfed.org/publications/iet/

 

 

 

 

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