QUESTION
TAMMY LIMITED
Tammy limited is a successful, medium-sized, clothing manufacturer specialising in children’s casual clothes and shoes.
Originally Tammy clothing was sold as own-label nation-wide clothing retailers and supermarkets with a reputation for offering hard wearing, value for money merchandise. A marketing magazine in the early 1980s reported their first contact with a major retailer as a strategic alliance which had the potential to re-vitalise the flagging sales of one of the largest retailer chains at that time. This turned out to be true. In 2005 however, the company launched its own range of clothing and footwear under the Tammy brand.
Tammy clothing’s unique feature was its durability, which came from the tough Indian cotton from which most of its garments were made. Later the company recognised that its customers wanted more fashionable clothing with a greater choice of looks and styles. New styles were therefore introduced including Denim jeans and bomber jackets, and colourful trainers and sandals. In the past Tammy had promoted their clothing and footwear through occasional press advertising but in the main it tended to rely on word of mouth and sales force contact with retailers to communicate the benefits of its product range.
In recent years the market for children’s clothing and footwear has continued growing. In particular, children have begun wearing more informal shoes for school as well as for leisure. According to recent surveys, fashion as well as comfort and quality were becoming increasingly important factors in the decision to purchase shoes for both boys and girls. Other important criteria were price and brand. Tammy responded to this trend by launching its own Tammy shoes range.
Originally children’s shoes were sold through specialist shoe as Barret Clarks but now both clothing and shoes are being sold through specialist children’s clothing such as Gap. Although internet sales of clothing are growing exponentially, sales of shoes and clothing on the internet have not taken off to the same extent, possibly because of the greater need for customers to ensure a good fit.
Tammy has not been as successful as they had hoped in this market, even though the Tammy brand is very well known. However, other children’s clothing and footwear manufacturers have capitalised on this trend and there are now a wide range of brands in this market. These range from premium quality and, own label brands such as Gap, and manufacturer brands such as Levi’s together with brands such as Marks and Spencer. So despite the favourable market conditions, sales growth for Tammy Limited has stagnated as other children’s clothing and footwear manufacturers have tapped into this trend for quality, casual wear.
You have been appointed to help improve the marketing of Tammy Limited. Part of your role is to show how marketing may help improve the future prospects of the firm.
Tasks
1. It is your view that managers at Tammy have no knowledge of consumer behaviour theory and need to be more customer/market oriented if sales are to increase significantly. You have therefore decided to run a workshop for managers entitled ‘Understanding all our customers –how it can increase sales’. Provide details of the theories to be discussed at the workshop and the practical examples you would use to illustrate them. (Please note that your discussion should cover both individual and organisational customers).1000 words
2.Given your knowledge and understanding of the product life cycle, write a report discussing the implications that this concept may have for the marketing of the Tammy range of children’s clothing. Using the supplementary data on the attached sheet include an assessment of the brand’s sales history to date ( its product life cycle) and make recommendations to Tammy senior management for future marketing action based upon its current position in the cycle.1000 words
Supplementary information
Tammy clothing and footwear sales
Year £million
1990 16 1995 15 2000 11 2002 11 2003 10 2004 9 2005 8 2006 9 2007 8 2008 8 2009 9 2010 9
Additional information.
You can find Tammy brand in BHS.
In order to ask question 1 and 2 please use the following models:
Task1
Consumer buyer behaviour-motivation, problem solving behaviour, factors affecting buyer behaviour.
Organisational buyer behaviour- highlighting different priorities of organisational purchases.
Buying the process/ identify the needs/- the buyer is not the user
Please write a line what is consumer buying behaviour .
Task2
Please introduced Tammy, write what is product life cycle/just a line or two/, what is happening to a market as a whole?
PLC- Intro, growth, maturity decline-basic PLC theory-descriptive. Able to draw chart and label stages of PLC using supplementary information. Implications for current position and recommendations for future marketing action. Outline of theory relating to marketing activity at each stage of PLC. Able to offer a realistic suggestions given situation of brand.
Please draw chart and label stages of PLC using supplementary information.
Looking at the sales marketing is growing but Tammy is not, why? 1990 disposable income was going up, market was growing. What was wrong with their marketing
Four piece of marketing/marketing mix/
Please use Mintel/very important!/-at least twice per page and other text books such as:
Kotler, P AND Amstrong, G. and Wong, V.and Saunders, J-Principles of Marketing
Palmer, A – Introduction to marketing and any other relevant books.
SOLUTION
Task 1
1. What is Consumer Buying Behaviour?
Consumer buying behaviour is the behaviour of the final consumer; both individual and household; who buys a product (a product can be a good or a service) with the view of finally consuming it (Kotler and Armstrong, 2008).
For Tammy limited, the target buyers as well as consumer are girls aged 8-16 years. Their buying behaviour is very unique in the sense that they are very patient and try to get maximum value for their money while buying a product. Thus, analyzing the way they perceives the information provided during promotion, the way they take decision to buy a product and most important the way they communicate their experience is very crucial and important for Tammy.
1.1. Why we need to examine consumer Buying Behaviour?
• The success of a company depend on the success of its marketing strategies which in turn are dependent on reactions of buyers
• Study of consumer buying behaviour answers few important ‘W’ i.e. why, what, where, when and how the buying by consumers take place and this helps a company to formulate its marketing mix. This marketing mix is a key tool to achieve consumers’ satisfaction.
• Study of consumer buying behaviour help to anticipate consumers’ reaction to various marketing strategies.
For example, study of buying behaviour of girls aged 8-16 years reveals some interesting facts. These girls are very price and style conscious. They are very keen to know about sale and promotional activities of brand. They like to receive e-mails and newsletter from the brand to keep them updated and informed. Whenever they come to know about any new brand or trend, they discuss it with their friends or sister or cousin. Thus, by understanding the buying behaviour of its consumer, Tammy can formulate better marketing strategies and can also start designing its future products accordingly.
1.2. Stages of the Consumer Buying Process
Broadly there are five stages which constitute the buying decision process of a consumer. They are as follows:
Stage 1: Realisation of the problem: At this stage a consumer gets aware about his/ her need and decides where he wants to reach and where actually he stands.
Stage 2: Looking for alternatives: In this stage buyer looks for various alternatives which can fulfil his/ her desire.
Stage 3: Rating alternatives: In this stage, buyer ascertaining or fix the value or worth of various alternatives available to him/ her based on buyer’s priorities and preferences.
Stage 4: Decision to purchase: after evaluating various alternatives available, a buyer opts for any one alternative.
Stage 5: Evaluation of alternative post purchase: The kind of satisfaction or dissatisfaction a consumer experiences determines the post purchase evaluation.
1.3. Factors affecting consumer buying behavior
1.3.1. Cultural factors
Consumer behavior is deeply and broadly impacted by cultural factors. Understanding of buyers’ culture (basic values, perceptions, wants and behaviour), subculture (nationalities, religion, racial group and geographic region) and social class is quite essential to understand the consumer buying behavior. It is the cultural factor which induces the wants in a person. According to Harwood (1999), teenager girls buy products not only to fulfil their needs but also to get recognition in their peer group and attract opposite sex. For example, a thirteen year girl who has grown in the culture of fitness and youthfulness would like to dress herself according to these values only. Thus while choosing her clothes she will give more preference to the comfort factor rather than style. Another example, a 9 years old girl who is very much influenced by Hannah Montana would like to dress up like her. She will look out for footwear which she wears.
1.3.2. Social Factors
Social factors such as group, family, social roles and status and most importantly opinion leader impact the buying behavior. Opinion leader is a person who socially influences the consumer because of his/ her special skills, knowledge and personality. For example, girls aged 8-16 years, are very close to their friends and family. They are the one who push their buying decisions. Thus this social group has a substantial bearing on the buying behaviour of consumer of Tammy limited.
1.3.3. Personal Factors
Personal factors like buyers’ income, sex, race, age, occupation, lifestyle and personality etc are also key determinant of his buying behavior. If a research from Mintel is to be believed in Britain it is the mother who get the job of buying gifts for children. 26% of Britain’s mums (almost 2.2 million) buy presents, compared to just 12% of the nation’s dads (amounting to 0.8 million) (Mintel, a leading market research company). Thus, while developing goodies for the teenager girls, it is very important to understand the perception and motivation behind the buying decisions taken by mother.
1.3.4. Psychological Factors
Motivation, perception, learning, beliefs and attitude are the factors which impacts the psychological factors of customer. For example, most of the girls aged between 8-16 years have an attitude to maintain their own peculiar style, while some prefer to follow the trend and their friends and very few are tempted by “cool” girls at school. Thus everyone has their own attitude and perception.
Conclusion
Understanding Consumer Buying Behavior is a complex job. Generally the above mentioned buying process is followed by every consumer. The success of any business depends on the success of its understanding of its customers. The appropriate marketing strategies can only be formulated if a company knows what its customer want and how to bring maximum satisfaction to them. Over the last five years online fashion sales in Britain has gone up 152% till 2010. In fact, in the year 2010, 35% Brits bought clothes through online shopping (Mintel, a leading market research company). But this is not the same figures for Tammy limited as their sales through internet has not taken off. There can be numerous reasons for the same. Company can undertake a qualitative research program in order to understand what are the barriers which stop them from buying clothes and footwear online. Through customers feedback and reviews the can make their website more user friendly.
Task 2
Product Lifecycle of Tammy Limited
2. Product Life Cycle
A product can be defined as anything that satisfies need of a customer. It can be a good or a service. A product undergoes many stages; all these stages jointly form a cycle which is known as product life cycle.
2.1. Four Stages in Product Life Cycle
2.1.1. Introduction Stage
In this stage, a product is introduced in the market. A company incurs high cost in the research and development of the product. In addition marketing costs are also quite high because of promotional activities. A distribution channel is also created for the product at this stage only. Sales of the product remain low in this stage because customers do not know about the benefits of the same. Thus, the chances for a company to make profits at this stage are very rare. Performance of the product is very crucial at this stage as it forms the basis for the management’s decision to continue the product or end it.
2.1.2. Growth Stage
At this stage revenue growth is rapid since more and more customers come to know about the product and its benefits. At this stage, a product experiences profit growth as well. Economies of scale, enhanced pricing and familiarity among buyers lead to increased profitability. Generally companies try to grow their market share of the product at this stage because the risks associated with the product are minimal at this stage. Tammy also introduced new style clothing like denim jeans and bomber jackets, and colourful trainers and sandals to satisfy the need of more fashionable clothes and to provide wide choice of variety.
2.1.3. Maturity Stage
The most common and competitive stage for any product is the maturity stage. Though the profitability is maximum during this stage but the growth in sales is low due to high competition and decreasing market share. During this stage, marketing and financing activities of a company are at their peak. Generally company restrict themselves from making any kind of modifications or changes in the product during this stage.
2.1.4. Decline Stage
With the change in customers’ taste and technology the sales for a product starts declining. At this stage, great care has to be taken to manage the product carefully. It may be possible to take out some production cost, to transfer production to a cheaper facility, sell the product into other, cheaper markets. Care should be taken to control the amount of stocks of the product. Ultimately, depending on whether the product remains profitable, a company may decide to end the product.
2.2. Marketing Mix
The marketing mix is the set of controllable tactical marketing tools – product, price, place, and promotion – that the firm blends to produce the response it wants in the target market (Kotler and Armstrong, 2010). In order to implement effective marketing strategies, the marketing department of a company has to take decisions regarding following four important factors:
• Product
• Price
• Place
• Promotion
Bormann (1985) stated that a brand is the emblematic incarnation of all the details associated with a product. Allison (2004) also suggested that details of a product and branding have substantial impact on teenage girls. Similar research by Deutsch (1999) noted that teenage girl’s buying decision is very much impacted by brand’s logo. High school students tend to like clothing with prominent logos (Wall Street Journal 2001). For Tammy, branding has become quite essential in this declining stage of PLC. They should develop a logo or a symbol of their own which tells people about its main feature i.e. durability. Once the brand will win its due recognition, consumer will start associating company with the brand.
Tammy is substantially dependent on the word of mouth publicity and promotion. They need to understand the importance of promotion in the time when market for teenage girls is growing but the sales figure of Tammy is facing southward direction. The most appropriate and effective source of promotion for Tammy at this stage is Teens magazine. A study reveals that, teens magazine is the most preferred source of information for this category of consumer. Moreover, advertisements in the magazine are the most trusted source than any other media. Thus, Tammy should opt the magazine advertisement to promote its products.
Market for kids clothing and footwear is in growth stage but still the sales figure of Tammy Limited are facing southward direction. This indicates that the company’s products are facing stiff challenges from its competitors. Tammy Limited needs to focus on its marketing strategies. First of all they need to introduce themselves to the potential customers. The most unique feature of Tammy’s clothes is their durability and they should cash the same. In addition they should also try to understand need of their customers. E-tail i.e. electronic retail is still in its infant stage where as kids clothing and footwear market is concerned. Tammy can take initiatives to capture this segment by understanding consumer behaviour. Tammy limited should also introduce new innovative products along with its existing products.
References
Kotler, P. And Armstrong, G., Principles of Marketing. 12th ed. India: Dorling Kindersley
Consumer behaviour research regarding children’s clothing and accessories shopping – exploratory brand image study, PMR Research, [online] available at: http://www.research-pmr.com/p522/consumer-behaviour-research-regarding-childrens-clothing-and-accessories-shopping-exploratory-brand-image-study [Accessed 09 April 2012].
The Euro RSCG white paper., 2009. The Teenage Girl as Consumer and Communicator. [online] The Euro RSCG white paper. Available at: http://www.prnewswire.com/news-releases/study-provides-bridge-to-an-elusive-but-powerful-consumer-demographic-teen-girls-86866797.html
Deutsch, K.A. (1999), Why Generation Y? Here’s Why!” Why Generation Y?. Retrieved [e-journal] Available at: http://www.specialtyretail.net/issues/June99/why.htm [Accessed on 11 April 2012]
Boughton, J.M., 2002. The Bretton Woods proposal: an in depth look. Political Science Quarterly [e-journal] 42 (6) Available through: Blackwell Science Synergy database
Bormann, Ernest G. (1985). “Symbolic Convergence Theory: A Communication Formulation.” Journal of Communication
Allison, AM., Gualtieri, T., Craig-Petsinger, D. (2004) “Are Young Teens Influenced by Increased Product Description Details and Branding During Consumer Testing?” Food Quality and Preference
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