Marketing Management Assignment help on : Pumpkin Patch Limited
1. Introduction:
The organization chosen for this paper is ‘Pumpkin Patch’ based in New Zealand, Auckland. The company mainly focuses on the quality, design, retail, marketing, and wholesale of kids wear mostly in UK, US, Australia and New Zealand. The company also operates its business through internet and mail order catalogues and sells its quality products. When they commenced their business they used to sell kids wear only through mail orders but soon after the competition risen, they opened their first store in Auckland, New Zealand (Ruth, 2006).
In addition, Pumpkin Patch’s online business is still growing and they have focused on its continuous growth. It has now more than 190 retail stores presence and wholesale operations in more than 20 markets worldwide. It has maintained company’s position with its brand name that it can be found throughout Australasia, UK, US, as well as preferred countries across Middle East and Asia. Pumpkin Patch considers that growth and brand name cannot be gained overnight or in a day, it may not happen unless something unique and innovative is offered to the customers (Pumpkin Patch Limited, 2012).
Their key products are as follows:
|
Baby Boy |
Baby Girl |
|
Patch Denim Jeans |
Patch Denim Jeans |
|
Tops & Tees |
Tops & Tees |
|
Blue Hawaii |
Tropical paradise |
|
Summer Surf Carnival |
Caribbean Cruise |
|
Beach Boys |
Spring fiesta |
|
Jackets & Knitwear |
Jackets & Knitwear |
|
Urban Safari, Camping Adventure, etc (Pumpkin Patch Limited, 2012) |
Candy Girl, Swimwear, leggings & Skirts (Urban Angel) |
2.0 Strategic position:
2.1 Competitive position and market attractiveness:
One of the specific products of Pumpkin Patch is Candy girl from Urban Angel. The market position of this specific product is at its height because it consists of more than 30 different styles. Candy girl holds around 35% market share of baby girl’s wear market. Its competitive position makes its unique and different from other common brands in the market. Price of clothes and styles available are affordable in comparison to other brands available in the market. The average price of candy girls’ product lies between $15 and $45. The quality of this product can be estimated on the basis of its performance as it is sold in many countries. The market size of Pumpkin Patch is large, as it is the single wholesaler selling quality kids wear. On the other hand, it is considered as the superstar of children wear and even its competitors admire the company’s progress (Pumpkin Patch Limited, 2007).
Following data can represent the strategic position of Pumpkin Patch in its known markets:
· Retail market in Australia has 51% coverage which is 1% down from 2010;
· New Zealand retail market 15% that is unchanged from year 2010;
· 14% in United Kingdom that is also unchanged from 2010;
· US has shown less market share which is only 5% according to the company’s research and therefore, it has to be closed in year 2012;
· Market share covered through wholesaling or direct mail orders (Website) is around 14% that is 1% up from the market share in year 2010 (Price Water House Coopers, 2011)
Apart from this, Pumpkin Patch manages its strategic position by managing company’s assets and liabilities carefully and keeps growing its well known brand name in existing 22 markets. Company focuses on its growth and development and increases its sales and revenue by using the strategies it has used throughout the past ten years.
2.2 Market segment:
Segmentation is done on the basis of demographic, psychological, age, education, income and many other related factors which are decided based on target market.
|
Segment |
Description (Variables) |
Main Competitors
|
|
New Born Babies (Infants)
|
|
Just Kids Gear, The Wool company, Merino Kids, Witchery Kids, Levis kids, Flo, Motion, EllieB, Fresh, Papoose, Le Bon, Elfwear, Osk Kosh, etc (The Wool Company, 2012)
|
|
Children up to nine years
|
|
Just Kids Gear, The Wool company, Wow, Merino Kids, Witchery Kids, Levis kids, Flo, Motion, EllieB, Fresh, Papoose, Le Bon, Elfwear, Osk Kosh, etc
|
|
Girls turning about eight up to fourteen & Maternity items (for moms)
|
|
Just Kids Gear, The Wool company, Wow, Merino Kids, Witchery Kids, Levis kids, Flo, Motion, EllieB, Fresh, Papoose, Le Bon, Elfwear, Osk Kosh, etc (Gregor, 2010).
|
2.3 Marketing Activities (Macquarie conference, 2010):
Marketing activities defined for Pumpkin Patch drive the business for the company. Pumpkin Patch operates and promotes its business only through retail stores, wholesaling and direct marketing via online catalogues and mail orders.
|
Marketing activities |
Description |
Evaluation of market share |
Evaluation of market growth rate |
|
Retail stores (High Beam Business, 2012) |
Brand presence in stores, Company owned retail stores |
Company’s full ranges products are showcased highlighting their features. This approach is mainly used in Australia and New Zealand and efforts made the success. There are total 226 stores that are company owned. Out of those, 115 are in Australia, 52 in New Zealand, 39 in United Kingdom and 20 are in United States. It has attained 8% market share in Australia and more than 15% in New Zealand. Retailers make up more than 60% of the total market share of Pumpkin Patch in New Zealand. |
Company represented 27% increase in its turnover and more than 60% increase in its net profit. Retail stores have created high brand awareness amongst its customers in the market. Additionally, there are no changes to its competitive environment as per the expectation. Pumpkin Patch has enough potential for growth in all its existing market with the presence of retail stores. |
|
Wholesaling |
Franchised stores and department store formats |
The target market was concentrated at the regions where it was difficult to reach through new retail stores. Wholesaling made an impact on customers and received positive response from their ends. It is presented at more than 320 locations in 20 different markets worldwide through wholesaling. Subsequently, it has 46 stand wholesale stores in Middle East, 186 doors in US, 33 doors in Australia, 37 are in UK and rest are located in Asian countries |
Company’s got profit through wholesaling where it is not possible to open new retail stores and complemented the same. Wholesaling has facilitated Pumpkin Patch for faster expansion at global level. In sum, company enhances its brand building relationships with associated countries. |
|
Online catalogues |
Internet & Mail orders through online catalogue |
People generally order products through online catalogue and therefore Pumpkin Patch has maintained large market share in relation to direct marketing. Company has its own sales websites in markets of Australia, New Zealand, US, UK and Ireland. Its total market share in New Zealand is over 75% and rest is covered up by discounters and value retailers of the company. |
Colorful ranges of summer and other designer outfits of children have helped gaining the market for Pumpkin Patch. Its main part of growth that is reaches to the customers without any presence of retail stores. It has been proved to be a very profitable business unit for Pumpkin Patch. In addition, it requires less incremental investment that is needed to support growth for any business. Therefore business through direct marketing has covered up around 70% market growth. |
2.4 Sales Forecast (Kong, 2008):
Sales forecast for Pumpkin Patch has been done on the basis of several methods such as industry f orecasts, surveys, researches and company’s financial documents. All these methods have presented both qualitative and quantitative data and report with respect to Pumpkin Patch’s sales revenue and net profit.
|
|
Quantitative |
Qualitative |
Methods |
|
Industry forecasts |
$300,609 sales revenue in 2012. |
Children wear industry of New Zealand reported sales forecast on the basis of their survey |
Overall survey of apparel and children wear industries of New Zealand |
|
Documents |
16.1% turnover in 2012 and 18.6% in 2011. Focus of 70% of its market on playwear for children |
These documents estimated around 16.1% turnover of pumpkin patch in New Zealand (Company’s financial report based) |
Based on balance sheet format of Company |
|
Surveys |
More than around $6 million retail sales in New Zealand |
New Zealand conducted a survey with respect to Pumpkin patch’s market share and position |
Taken from financial records |
|
Research |
$6.1 million retail sales (NZPA, 2009) |
Research was made over Pumpkin and its competitors in the market |
Children wear companies’ turnover were measured and noticed |
2.5 Impact on profit:
Marketing activities of pumpkin Patch has influenced its main markets in a broader way and reported consistent increase in its revenue and turnover over the years.
|
Marketing Activities |
Description |
Impact on profit |
|
Retail stores |
Brand presence in stores, Company owned retail stores |
This applied to each and every targeted segment of Pumpkin patch. Retail stores in different countries made its effective presence and became able to profit out of them. Pumpkin Patch recorded more than $280 million turnover to its financial records which was an increase of 27% in total turnover of the company. Moreover, it also amounted near about 65% increase in net profit of the company. |
|
Wholesaling |
Franchised stores and department store formats |
The impact on profit was measured on the basis of feedback received from the customers. The data got from customers illustrated the net profit margin and sales revenue of the company which was more than $300,000 at the year end of 2012. This represented a total growth of around 25% in its total revenue for the company. Wholesaling has amounted higher net EBIT margins rather than retail to Pumpkin Patch. |
|
Online catalogues |
Internet & Mail orders through online catalogue.
|
As it is the oldest medium of Pumpkin Patch’s business of selling kids wear in the market, it has noticed an overall growth of more than 46% market share for company. In short words, Pumpkin patch is blossoming with its online catalogue business as well. It has acquired and maintained 1.9m active customers through its database system for online business. Another perspective for its impact on growth is that it is a low cost alternative to stores and it also leverages off already existing systems and processes of Pumpkin Patch. |
2.6 Current performance against marketing strategies:
The marketing strategies of Pumpkin Patch involve many activities which lead it toward the success of its business. Pumpkin patch refers to seasonal business as it has different varieties of summer and winter collection. Therefore, it has to make sure the highly effective efforts in order to make most use of buying windows. Its marketing strategies involve event calendars, Social media, press releases, and many more additional activities to get a height. To meet its marketing objective, company is working for its continuous progress. In this regard, Pumpkin patch has introduced a new brand which has been named Pumpkin Patch General, a part of Pumpkin patch Limited. Baby’s non-clothing items are sold through Pumpkin Patch General. On the other hand, company is also evaluating a number of its initiatives which would foster and influence its already existing online and supply chain business capabilities (Pumpkin Patch Limited, 2011).
Similarly, Pumpkin Patch targets the people earning middle-income and can afford its products easily. In addition, it keeps restructuring its business and marketing activities to sustain and gain profit in global market. On the other hand, it has set a marketing strategy to open new stores in different countries. Therefore, research depicted that Pumpkin Patch limited opened its three new retail stores in Ireland market in 2012. In sum, it also re-branded its three stores of Urban Angel as Charlie & me in New Zealand that were for kids of 8+. Pumpkin Patch also noticed continuous growth of its online businesses in 2012 such as Charlie & me. Moreover, Company seeks its major development and growth coming from following;
· Its persistent expansion of retailing with third party which is out of the country through opening department stores in Europe, Australia, the Middle East, The United States, Asia and South Africa;
· Sustained growth of its market focusing mainly on Australia;
· Continued growth of its online revenues through its key websites in New Zealand, Ireland, Australia, The United States and the United Kingdom. (website: http://www.pumpkinpatch.biz/ourcompany_ourfuture.html)
Besides, on the basis of its current performance in New Zealand, it has been ranked highest in terms of retail stores presence of children wears. Pumpkin Patch has been ranked at third position for its share of expenditure (Macquarie conference, 2010).
2.7 PESTEL analysis (Oxford University Press, 2007):
This analysis refers to explanation of each factor involved and affecting the business. These factors are known as external factors which may have both positive and negative impact on any organizations’ business. Political and legal frameworks illustrate the issues related to government policies and status. On the other hand, economic and environmental relates to the populations and considerable factors of a country in which business is operated.
|
Environmental area |
Impact |
|
Demographic: There is one newborn baby comes every 8minutes and 35 seconds in New Zealand (Statistics New Zealand, 2011) |
This represents the ration of earning per children of Pumpkin Patch. The demographic factor makes an impact on its business and raises the revenue for company. |
|
Political: New Zea land is known for its stable political system. The country has two party systems in its political practices. In simple words, the government of New Zealand is very business friendly and stable. |
Therefore, there would not be so many issues for Pumpkin Patch to sustain in New Zealand market. The political framework of New Zealand will provide favorable environment for its business to prosper. The increased service tax on goods and services in New Zealand and in other countries and political unrest distressed the quality and manufacturing process of Pumpkin Patch.
|
|
Economic: Economic factors involve changes in interest rates, taxation and exchange rates and inflation. These factors impact an organization’s business continuous improvement towards the achievement of company’s strategic objectives. The country’s economy is modern, and has developed market with an estimated GDP of US$28,250. Like its government, New Zealand has stable currency which makes positive impact on businesses in the country (Statistics New Zealand, 2011). |
The result of recession occurred in 2009 and 2010 affected the sales and profitability of Pumpkin Patch. High rates of unemployment in New Zealand’s major markets affected cists of living. Therefore, enhancing cost of borrowing and exchange rates adversely affected the business of Pumpkin Patch in every country it has its operations running (Pumpkin patch limited, 2011). |
|
Social: New Zealand contains a small population that is around 4.4 million. Among this, more than 70% population resides in New Zealand’s urban regions. |
Social environmental factors negatively affect the company’s overall revenue when it started its business for women clothing which did not get success as it require more money. On the other hand, Pumpkin Patch’s products are favored across different culture lines because most of the children go to the same kind of schools, buy same things and have similar educational opportunities. Therefore, it does not need to carry separate marketing campaigns for its product promotion in the country.
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|
Technological: New Zealand has highly advanced technologies and application adopted by business and systems. The organization in New Zealand uses e-commerce, retailing, online orders, and business portals to achieve better competitive advantage. |
Thus, Pumpkin Patch has also its software system. This system is used during the value chain of designing of new products to supply chain management to distribution to the customers and clients.
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|
Environmental: These are the factors which are associated with industry’ environment affecting any business’ systems and processes. That can be temperature & climate changes and other changes in environmental scenario. |
In this context, Tsunami which is also called natural disaster shaken the market and created conflicts which harmfully affected Pumpkin Patch’s business up to an extent. |
|
Legal: Legal factors have a potential to change the behavior and way of functioning of an organization. There were strong quota systems imposed in UK, Europe and in some other countries which were placed as a gauge of safeguard regarding export from Auckland to other countries. |
The quota system affects the market for Pumpkin Patch up to a little extent. Therefore, legal factor have not made any changes to Australia, New Zealand and UK’s tax system which automatically do not influence the company’s tax rate which are 30%, 33% and 30% respectively 9Pumpkin Patch Limited, 2012). |
2.8 Marketing resource allocation (Event Helix, 2012):
An organization’s efficiency and effectiveness mostly depends on optimum allocation of resources that may be human resources, capital or any other resources available in the organization. Resource allocation directly relates to the organizational structure.
|
Marketing Activities
|
Description |
Impact on profit |
Required resources |
|
Retail stores |
Brand presence in stores |
This applied to each and every targeted segment of Pumpkin patch. Retail stores in different countries made its effective presence and became able to profit out of them. Pumpkin Patch recorded more than $280 million turnover to its financial records which was an increase of 27% in total turnover of the company. Moreover, it also amounted near about 65% increase in net profit of the company (What makes a good leader, n.d) |
Effective and designer outlets, retailers, brochures |
|
Wholesaling |
Customer data and feedback |
The impact on profit was measured on the basis of feedback received from the customers. The data got from customers illustrated the net profit margin and sales revenue of the company which was more than $300,000 at the year end of 2012. This represented a total growth of around 25% in its total revenue for the company |
General merchandise, Clothing & apparel suppliers, Children wears boutique, department stores |
|
Online catalogues |
As it is the oldest medium of Pumpkin Patch’s business of selling kids wear in the market, it has notice an overall growth of more than 46% market share for company. In short words, Pumpkin patch is blossoming with its online catalogue business as well. |
Software system, Business portals, holder of portals, online brochures |
3. Strategic options for marketing activities:
3.1 (i) Target market: Target market is differentiated on the basis of nature and size of the business. Pumpkin Patch also segments its market based on its quality kids wear business.
Target market for Pumpkin Patch is infant and children up to age of fourteen years.
|
Option |
Description |
|
1 |
Products can be advertised through Television |
|
2 |
Company can create a separate website to promote both of its online and retail business |
|
3 |
Pumpkin patch can also promote its products in children fair. |
|
4 |
Promoting the product brand through providing discount coupons and cash vouchers |
(ii) Demand: Focus on a particular set of target market and expanding its products to a range of new varieties, working upon pricing strategy of the company.
(iii)Product: New products can be introduced as it already launched non-clothing items of babies through launch of Pumpkin Patch general. Moreover, introducing a new product line, and expanding the business to maternity products (Gordon, 2012)
(iv)Pricing: Pumpkin Patch has already maintained its product’s pricing strategy and offered products in reasonable price to the customers. It can use discounting, penetration, gift vouchers, lowest price guarantees for the clients (Udanga, 2011).
(v)Place: Pumpkin Patch can use intensive, exclusive and selective distribution systems to place its product to the global market (Lean Marketing, 2011).
(vi)Promotion: As mentioned above, it should take support of television, separate websites, magazines, newspapers, etc to promote and advertise its products in the market.
3.2 Evaluation of options:
Each marketing strategic option attempted in 3.1 have been compared with the given factors:
(i) Ability to maximise key opportunities and marketing strengths
(ii) Critical success factors in the intended market
(iii) Marketing capabilities and resources
(iv) Market characteristics
(v) Competitive factors
For each of these have A 1-5 SCALE 1=LOW, 5 = HIGH
|
Promotion |
Option |
(i) |
(ii) |
(iii) |
(iv) |
(v) |
|
Products can be advertised through Television |
4 |
3 |
2 |
5 |
4 |
|
|
Company can create a separate website to promote both of its online and retail business |
5 |
5 |
4 |
3 |
4 |
|
|
Pumpkin patch can also promote its products in children fair. |
3 |
3 |
4 |
4 |
5 |
|
|
Promoting the product brand through providing discount coupons and cash vouchers |
5 |
5 |
5 |
4 |
4 |
|
|
Demand |
Pricing strategy & increased focus on target market |
3 |
2 |
4 |
4 |
5 |
|
Target market |
Based on Kids of all age |
5 |
4 |
4 |
4 |
4 |
|
Product |
New product line, |
4 |
3 |
4 |
5 |
4 |
|
Expansion of the products in same line |
5 |
4 |
3 |
5 |
4 |
|
|
Price |
Discounting penetration |
5 |
5 |
4 |
4 |
4 |
|
Lowest price guarantees |
4 |
4 |
4 |
5 |
5 |
|
|
Place |
Intensive distribution |
5 |
4 |
5 |
4 |
4 |
|
Exclusive distribution |
4 |
4 |
5 |
3 |
3 |
|
|
Selective distribution |
3 |
4 |
3 |
5 |
4 |
3.3 VRIO analysis (CarrieWilkerson, 2012):
VRIO analysis illustrates the question of valuable resources, their rarity, imitation and organizational structure and fit. All these factors have been covered up in the following table:
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Valuable Company has maintained its valuable level and it never let down any opportunity and makes most of their uses. Like, Pumpkin Patch accepted an opportunity of launching Urban Angel and made profit out of it. Similarly, Pumpkin patch took an opportunity to start Charlie & me online business which got success in its starting period of commencement in 2010. If its resources are not valuable enough, it will result in competitive disadvantage and vice-versa.
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Rare Pumpkin has its full control on resources and there is a level of rarity in firm which it has maintained. The rarity control leads Pumpkin Patch to its competitive advantage. Company also ensures the rarity of its resources in order to utilize them at the time of utmost requirement. In this context, there may be financial, technological, physical and organizational rare resources for use. Other intangible resources used by Pumpkin Patch for rarity are human, innovation & creativity and reputation of its business in the market. |
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Imitable Pumpkin patch imitates when it seeks the least cost in obtaining competitive advantage. In addition, it chooses the best possible alternative available for imitation with its valuable and rare resources. Additionally, Pumpkin patch has set a standard format for its valuable, rare and imitate resources. It states that if resources are valuable and rare but costly to imitate, it will provide a sustained competitive advantage. On the other front, if resource are not costly to imitate, it will leave the organization with temporary competitive advantage
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Organization Pumpkin is a well organized and structured organization and always ready to exploit company’s resources. By doing this company enjoys the sustainability of competitive advantage. Afterward, Pumpkin Patch has also management control system techniques in their business practices to manage their organizational framework (Pumpkin Patch, 2012). Pumpkin Patch obtains a sustainable competitive advantage if it has organized and structured its business systems, process and resources carefully and effectively. |
Similarly, Pumpkin Patch has organized its key competitive advantages are as follows:
· Quality, best designs and marketing strategy
· Well-established brand name in both retail and online sales
· Superstar position in children wear market
· Centralized distribution and proper logistics systems
· Vital opportunities for growth
· Diversified market for business prospect
· One of its key competitive advantages is that no any other apparel company has such capability to offer the investment story like Pumpkin Patch
3.4 Key competency evaluation:
|
Promotion |
Option |
Competency 1 Quality & Design |
Competency 2 Brand name |
Competency 3 Superstar position |
Competency 4 Centralized distribution |
Competency 5 Growth opportunities |
Competency 6 Diversified markets |
Competency 7 Investment system |
|
Products can be advertised through Television |
High |
Medium |
High |
Medium |
High |
Low |
High |
|
|
Company can create a separate website to promote both of its online and retail business |
Medium |
High |
High |
Medium |
High |
Medium |
High |
|
|
Pumpkin patch can also promote its products in children fair. |
High |
Low |
Medium |
Medium |
Medium |
Low |
Low |
|
|
Promoting the product brand through providing discount coupons and cash vouchers |
Medium |
High |
High |
Medium |
High |
Medium |
Low |
4. Selecting marketing strategies:
4.1 Ranking is done on the basis of possibility of success of strategic options available for business promotion. Pumpkin Patch Ranking has been done on the basis of their impact on profit and growth of Pumpkin Patch:
|
Promotion |
Option |
Ranking
|
|
Products can be advertised through Television |
1 |
|
|
Company can create a separate website to promote both of its online and retail business |
2 |
|
|
Pumpkin patch can also promote its products in children fair. |
4 |
|
|
Promoting the product brand through providing discount coupons and cash vouchers |
3 |
|
|
Pricing |
Discount |
2 |
|
|
Combo offers |
1 |
|
|
Gift vouchers and coupons |
3 |
|
Place |
Intensive distribution |
2 |
|
|
Exclusive distribution |
3 |
|
|
Selective distribution |
1 |
|
Product |
Maternity products |
3 |
|
|
New product line |
1 |
|
|
Launch of new products |
2 |
4.2: Analysis of risk and return:
There may be two types of risks associated with investment return. One is systematic risk which is non-diversifiable and another is non-systematic which can be diversified. Following table has estimated the risk and return for Pumpkin Patch:
|
Promotion |
Option |
Risk |
Return |
Overall Feasibility
|
|
Products can be advertised through Television |
Costs more than 100,000
|
It will increase the overall sales of the company |
MEDIUM |
|
|
Company can create a separate website to promote both of its online and retail business |
Cost Setup 5000 plus $450 weekly |
Increase in Sales, Business portals will complement its separate sites
|
HIGH |
|
|
Pumpkin patch can also promote its products in children fair. |
Costs 5-10,000 |
Slight Sales Increase, Increase in Brand awareness , image and information about the kids wear |
MEDIUM |
|
|
Promoting the product brand through providing discount coupons and cash vouchers |
8,000 max vouchers Cost is 80c to make |
Increase consumer knowledge and understanding of the brand |
HIGH |
4.3 Organizational fit (Houston chronicle, 2012):
|
Marketing strategies |
Product differentiation: This strategy will help the company to distinguish its brand as a high end producer and retailer stating that Pumpkin patch sells quality and designer children wear in comparison to its competitors. This will also help cultivating its brand image in the market. |
Market segmentation: It can develop different target markets for different age group of children such as new born babies, small children up to nine years, pre-teen and infants. |
|
Sales strategies |
Retail stores: Company’s products can be showcased with their full features in retail stores providing the information. Moreover, retail stores will represent greater brand value of the products |
Wholesaling: Wholesaling will complement retail stores where it is not possible to open the stores. Additionally, it will also determine the market’s viability by receiving customer’s feedback. |
4.4 Current performance: As mentioned above in section 2.6, Pumpkin patch is doing well with its business and accounting to an average growth of more than 68%. The company has increased its total turnover to 27% from 20%. During the past six to seven months, it has faced volatility in its market and has taken support for improvement. It headed towards its online mail orders in US and earned reasonable profit in this regard.
Corrective actions: Pumpkin Patch should impose some effective strategies to generate more revenue and improve its position in global market of children wear.
It is suggested pricing strategy for Pumpkin Patch which will help improving its customer base and strategic position in the market.
|
Strategy |
Time frame |
|
The company should open at least one new store in its anticipated market, like in Ireland where it can grab a large market share. On the other hand, it can also renew its existing stores to get them an attractive outlook for the customers |
For this, Pumpkin Patch requires at least 6 months |
|
It should increase the number of new product designs and lessen the time period for product development |
It needs less than 6 months but should be completed on a continuous basis |
|
In addition, Pumpkin patch should increase the number of its distributors for target market (Sachs, 2007) |
It would take around 1 to 3 years |
|
It can develop its new market by creating an effective investment system. Options can be China, Lebanon and Malta. |
It requires at least 2-3 years for market development in new countries. |
5.1 Desired market positioning:
|
Areas / Criteria |
Positioning
|
|
product attributes |
What colour, quality, design and appearance would be of product? In case of Pumpkin Patch, kids will like candy, flossy, stylish and colourful dresses
|
|
usage and users |
The basis of using products in wearing good quality dresses. Babies can also be offered non-clothing items like toys and gifts packages for them. Users or Target Market (Infants, newborn babies, children from age group up to fourteen) and pregnant women who require comfortable dresses to wear during their pregnancy.
|
|
product class |
Classification on the basis of brand of the product like Pumpkin patch has classified its products in different classes such as urban angel, Denim, great gifts, maternity, Esale, etc
|
|
consumer needs and benefits |
Consumers want to have designer, good quality and unique products which have comfort factor also included with it.
|
|
Competition
|
The level of competition is not that for Pumpkin patch because threat of new entrants is low, power of buyers is moderate, power of suppliers is high, threat of substitute products is high and intensity of rivalry is high according to Porter’s model analysis (Porter, 2008). There are other brands also available to compete with which have good stand in the market. Likewise, research has identified the competitive markets from where customers buy kids wear such as directly from farmers, warehouses, Postie Plus, Kmart, T&T, Baby factory and lastly JK. All these are biggest markets in New Zealand and well known to people of New Zealand.
|
5.2 Formulation of marketing strategy (Gourville, 2012):
|
Strategy |
Explanation
|
|
status quo
|
Status quo of Pumpkin Patch will not be changed easily and would not be acceptable because brand name has been already created and maintained by the company with its existing status quo. |
|
intense growth
|
Company has to focus on its approach to retail stores from global market perspectives to increase the overall sales of the company. For that, company needs to expand its market to multiple countries such as China and Malta that may be a good market for Pumpkin Patch. |
|
market penetration
|
For this, company has to be in same market but increase the market share. Apart from this, it should also focus on its pricing strategy. People are considered to be price sensitive rather than anything while making a purchasing decision. Therefore, Pumpkin patch should penetrate the market with its strategic pricing scheme.
|
|
product development
|
Pumpkin Patch should develop new products but within the same established classes for children wears. |
|
diversification
|
It should expand its market to the new areas like offering non-clothing items of babies of every age and maternity cloth for pregnant women.
|
|
integrated growth
|
For this, Pumpkin Patch should adopt a marketing strategy which should be a combination of all above mentioned strategies except status quo. It needs to open new retail stores, start with new distribution centres and logistics systems.
|
5.3 Best marketing approach:
|
Strategy |
Explanation
|
|
mass marketing and distribution |
It should not be an adequate strategy for Pumpkin Patch as it will have equal consumer base for distribution which the company has already maintained.
|
|
product variety marketing |
It will be the distribution of different ranges of products to different markets and will not be sufficient for company’s growth. Pumpkin Patch already have variations in its product line.
|
|
differentiated target marketing |
This strategy will be the best of all as differentiated target market will be focused for each class of the products
|
|
concentrated target marketing |
It will also not be as per the expectation of meeting organizations’ objectives as it will concentrate only on one specific target market
|
5.4 Confirmation of target market:
|
Products |
Target market |
|
Collection for infants, Classic wears |
Newborn babies |
|
Separate collection for baby boys and baby girls like candy girl, Hawaiian punch African sunset, etc for girls and beach boys, camping adventure, all star sports for boys |
Children up to nine years old |
|
Products classified under urban angel |
Girls turning about eight up to fourteen years |
|
Maternity products |
Pregnant women |
Winter and summer collection would be on the basis of seasonal demand and maternity products will also be produced on the demand that may be latent pattern of demand.
5.5 Communication to stakeholders:
Every company follows an internal framework for communication of marketing strategies and objectives to the stakeholders. Pumpkin Patch has also included a well-defined format for communication to the stakeholders about their planned marketing activities and goals.
|
Stakeholders |
Objectives |
|
Customers, employees |
Stakeholders will be communicated through a process of communication; employees are delivered with the marketing and organizational objective by the management or through meeting and conferences. |
|
Suppliers, shareholders, |
Suppliers and shareholders are communicated through a formal mail from the company mentioning their role clarifications and specifications |
|
Communities, government, Non-government agencies |
If company finds the role of government in their business activities, they are also communicated with full information that has to be used during accomplishment of marketing goals & objectives (Radiolive.co.nz, 2012) |
5.6 Marketing plan:
Pumpkin Patch has been suggested an effective market plan according to its nature and distribution chains of business. Plan is as follows:
|
|
strategic marketing plan |
|
performance measures |
Cost, leadership, motivation, technology & competitive advantage |
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review mechanisms |
Key performance indicators, output produced in given period of time |
|
resources |
Equipments, environment, technologies, methods, design processes, human capital, etc |
|
Responsibilities |
Better performance standards, appropriate resource allocation, cost advantage, maintenance of products and brand name in the market, increase net profit over the years |
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Misc… |
Additionally, Pumpkin patch should follow good human resource, international business, finance, marketing & sales, operational management strategies in order to gain competitive advantage and effectiveness in the market |
1. Introduction:
The organization chosen for this paper is ‘Pumpkin Patch’ based in New Zealand, Auckland. The company mainly focuses on the quality, design, retail, marketing, and wholesale of kids wear mostly in UK, US, Australia and New Zealand. The company also operates its business through internet and mail order catalogues and sells its quality products. When they commenced their business they used to sell kids wear only through mail orders but soon after the competition risen, they opened their first store in Auckland, New Zealand (Ruth, 2006).
In addition, Pumpkin Patch’s online business is still growing and they have focused on its continuous growth. It has now more than 190 retail stores presence and wholesale operations in more than 20 markets worldwide. It has maintained company’s position with its brand name that it can be found throughout Australasia, UK, US, as well as preferred countries across Middle East and Asia. Pumpkin Patch considers that growth and brand name cannot be gained overnight or in a day, it may not happen unless something unique and innovative is offered to the customers (Pumpkin Patch Limited, 2012).
Their key products are as follows:
|
Baby Boy |
Baby Girl |
|
Patch Denim Jeans |
Patch Denim Jeans |
|
Tops & Tees |
Tops & Tees |
|
Blue Hawaii |
Tropical paradise |
|
Summer Surf Carnival |
Caribbean Cruise |
|
Beach Boys |
Spring fiesta |
|
Jackets & Knitwear |
Jackets & Knitwear |
|
Urban Safari, Camping Adventure, etc (Pumpkin Patch Limited, 2012) |
Candy Girl, Swimwear, leggings & Skirts (Urban Angel) |
2.0 Strategic position:
2.1 Competitive position and market attractiveness:
One of the specific products of Pumpkin Patch is Candy girl from Urban Angel. The market position of this specific product is at its height because it consists of more than 30 different styles. Candy girl holds around 35% market share of baby girl’s wear market. Its competitive position makes its unique and different from other common brands in the market.
Price of clothes and styles available are affordable in comparison to other brands available in the market. The average price of candy girls’ product lies between $15 and $45. The quality of this product can be estimated on the basis of its performance as it is sold in many countries. The market size of Pumpkin Patch is large, as it is the single wholesaler selling quality kids wear. On the other hand, it is considered as the superstar of children wear and even its competitors admire the company’s progress (Pumpkin Patch Limited, 2007).
Following data can represent the strategic position of Pumpkin Patch in its known markets:
· Retail market in Australia has 51% coverage which is 1% down from 2010;
· New Zealand retail market 15% that is unchanged from year 2010;
· 14% in United Kingdom that is also unchanged from 2010;
· US has shown less market share which is only 5% according to the company’s research and therefore, it has to be closed in year 2012;
· Market share covered through wholesaling or direct mail orders (Website) is around 14% that is 1% up from the market share in year 2010 (Price Water House Coopers, 2011)
Apart from this, Pumpkin Patch manages its strategic position by managing company’s assets and liabilities carefully and keeps growing its well known brand name in existing 22 markets. Company focuses on its growth and development and increases its sales and revenue by using the strategies it has used throughout the past ten years.
2.2 Market segment:
Segmentation is done on the basis of demographic, psychological, age, education, income and many other related factors which are decided based on target market.
|
Segment |
Description (Variables) |
Main Competitors
|
|
New Born Babies (Infants)
|
|
Just Kids Gear, The Wool company, Merino Kids, Witchery Kids, Levis kids, Flo, Motion, EllieB, Fresh, Papoose, Le Bon, Elfwear, Osk Kosh, etc (The Wool Company, 2012)
|
|
Children up to nine years
|
|
Just Kids Gear, The Wool company, Wow, Merino Kids, Witchery Kids, Levis kids, Flo, Motion, EllieB, Fresh, Papoose, Le Bon, Elfwear, Osk Kosh, etc
|
|
Girls turning about eight up to fourteen & Maternity items (for moms)
|
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Just Kids Gear, The Wool company, Wow, Merino Kids, Witchery Kids, Levis kids, Flo, Motion, EllieB, Fresh, Papoose, Le Bon, Elfwear, Osk Kosh, etc (Gregor, 2010).
|
2.3 Marketing Activities (Macquarie conference, 2010):
Marketing activities defined for Pumpkin Patch drive the business for the company. Pumpkin Patch operates and promotes its business only through retail stores, wholesaling and direct marketing via online catalogues and mail orders.
|
Marketing activities |
Description |
Evaluation of market share |
Evaluation of market growth rate |
|
Retail stores (High Beam Business, 2012) |
Brand presence in stores, Company owned retail stores |
Company’s full ranges products are showcased highlighting their features. This approach is mainly used in Australia and New Zealand and efforts made the success. There are total 226 stores that are company owned. Out of those, 115 are in Australia, 52 in New Zealand, 39 in United Kingdom and 20 are in United States. It has attained 8% market share in Australia and more than 15% in New Zealand. Retailers make up more than 60% of the total market share of Pumpkin Patch in New Zealand. |
Company represented 27% increase in its turnover and more than 60% increase in its net profit. Retail stores have created high brand awareness amongst its customers in the market. Additionally, there are no changes to its competitive environment as per the expectation. Pumpkin Patch has enough potential for growth in all its existing market with the presence of retail stores. |
|
Wholesaling |
Franchised stores and department store formats |
The target market was concentrated at the regions where it was difficult to reach through new retail stores. Wholesaling made an impact on customers and received positive response from their ends. It is presented at more than 320 locations in 20 different markets worldwide through wholesaling. Subsequently, it has 46 stand wholesale stores in Middle East, 186 doors in US, 33 doors in Australia, 37 are in UK and rest are located in Asian countries |
Company’s got profit through wholesaling where it is not possible to open new retail stores and complemented the same. Wholesaling has facilitated Pumpkin Patch for faster expansion at global level. In sum, company enhances its brand building relationships with associated countries. |
|
Online catalogues |
Internet & Mail orders through online catalogue |
People generally order products through online catalogue and therefore Pumpkin Patch has maintained large market share in relation to direct marketing. Company has its own sales websites in markets of Australia, New Zealand, US, UK and Ireland. Its total market share in New Zealand is over 75% and rest is covered up by discounters and value retailers of the company. |
Colorful ranges of summer and other designer outfits of children have helped gaining the market for Pumpkin Patch. Its main part of growth that is reaches to the customers without any presence of retail stores. It has been proved to be a very profitable business unit for Pumpkin Patch. In addition, it requires less incremental investment that is needed to support growth for any business. Therefore business through direct marketing has covered up around 70% market growth. |
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