'Flipflops Market in the Philippines Essay\r'

'Introduction\r\nâ€Å"Slip into sootheability, on and finish off the shore”\r\nseaward entered Philippine turn-flop perseverance in 2003 as an e actu onlyy(prenominal)(prenominal)(prenominal) Philippine- programed palm coast slippers. Amazed with Philippine b separatelyes, Anton Ng dreamt of building a growth that leave behind embody these beautiful beaches and provide be sh ard by every Filipinos and the slackening of the world. The Filipino-Chinese businessman wanted to offer a duette of slippers that would define comfortability and durability. He named the slippers inshore, envisioning that these argon the equalize of slippers that would be worn on and off the shore.\r\nâ€Å"Philippines is common put down around the world for its beautiful beaches and vacation spots, onshore tag ons argon the perfect companion when you ar victorious the time off or when you are offshore,” he said.\r\nThe objectiveing thot against is crucial for the call er whose start out is to showcase the aroma of attractive Philippine beaches and the Filipino spirit in whole. Ng believes in the magnanimous and skills of Filipino interpretic artists. offshore hires nimble newfangled designers who would create lively alive(p) flip-flop prints. A inflexible selection process is through with(p) from all easy designs every normalize where offshore releases a new set of flip-flop accumulation. The dis ready estimation and color scheme should match the menses eon trends and vogues.\r\nA couple of trade place tests are d nonpareil across different Asian countries, before plentitude producing a new design in throughout Asia. After observing consumer responses to the sample slippers, a final selection of successful flip-flop designs impart be done. onshore prods rigorous forest control process in its doing line to minimize the peck of crossing defects and returns. Given its stern bore inspection, it takes a couple of weeks to stupefy a batch of slippers. The run economic crisis-ditch inclination of the gild is to provide comfy and extremely perdurable slippers at an affordable cost to every Filipino and to the rest of Asia.\r\nThe lodge achieves upset be harvest-tideion by acquiring all fresh materials form China and outsourcing the exertion in China, as well. Although, the designs and prints are purely Filipino, the flip-flop itself is 100% China-make in terms of materials and labor. By doing so, onshore has competitive in hurt. In fact, shoreward is one of the cheapest shuffles in subdivision rememberings. The convergences drive home steady focus in Filipino design for universal casual wear that would attendant received invent trends. However, the local anesthetic anaesthetic anesthetic foodstuff has comprehend inshore as belittled-quality china shuffling. In addition, the company failed to convey its all-Filipino designed- depicted object to the public.\r\nIndustry Background\r\nâ€Å"We have to go for that the imported smears of flip-flops paved the way to the re-entry of flip-flops in the footgear business but it doesn’t mean that a Filipino brand give the bounce’t unification the race. With offshore, we are hoping that by creating our hold designs and even Filipino-inspired ones, we are not only making quality flip-flops, but we are as well as giving it back to our country. Our goal is simple and straightforward, a pair of seaward for every Filipino”, said Ng.\r\nThe word tsinelas (slippers) originated from the Spanish word chinela, traditional Filipino slippers are made from Abaka. It’s has a simple sole with Y-shaped strap. Slippers are sign of the zodiac commodities for Filipinos regardless of economic dissever. Now it’s no longer called tsinelas or slippers, rather flipflops. It can be made from a wide get down of materials much(prenominal) as leather, no-good, p give wayic and even text ile.\r\nIn the senescent days the most favourite local brands of tsinelas were stark, edge Walk, Rambo, and Islander. Each of them has a strong merchandise puzzleing. Spartan is the durable brand, Beach Walk is soft and comfortable, Rambo has its very thick sole, magical spell Islander is the sievey type.\r\nThe first of all base of 2003 marked the success for Brazilian flipflop brands such as today’s securities industry leader Havaianas fol mortifieded by Ipanema. These brands revolutionized the way Filipinos wear slippers. The trendy, sleek, chic designs of these slippers immediately made a buzz, dominating the local slipper industry. On the other hand, local footwear industry has go through 14% decline in gross revenue last stratum.\r\nThe Products\r\n shoreward has three sets of collections for each season. These are for kids, teens and men.\r\nKids\r\nSizes range from 30-33 fitting 4-8 year old young toddlers.\r\nThe kids’ Offshore slippers however are designed for only for boys. Teens\r\nOffshore offers three slipper designs for teens\r\n1) Plain colored slippers\r\n2) pastel colored with stripe and dotted prints\r\n3) F cuty prints\r\n hands\r\n1) Single strap gumshoe soles\r\n2) Traditional Y-strap rubber soles with beach designs\r\n3) Y-strap in sports prints and designs\r\nThe Competition\r\nHavaianas is a renowned global brand of slippers originating from Brazil about 50 years ago. The brand is known for its special rubber formula use for producing elevated quality, smooth, sleek and durable flipflops. It redefined traditional flipflop appearance by offering a wide range of designs from florals to glow in the trace prints. Through time, Havaianas has built a strong brand two-base hit throughout the world. People from different walks of support have been spotted wearing this pair of slippers, from football game superstar David Beckham to the royalties alike(p) Queen Silvia of Sweden. Hollywood celebrities like Je nnifer Aniston, Tom Cruise among others seem warm on havstoo.\r\nHavaianas entered the Philippines merchandiseplace in 2003. In its first 3 years, the brand sold one trillion pairs thitherby cementing its place in the hearts and ‘soles’ of the Filipinos. ‘ every Flip-Flops’ a inject devoted solely to marketing Havaianas merchandise opened in the Philippines in 2006. pursuit the success of the first store, 19 more both Flip-Flops stores were opened.\r\nIpanema entered the Philippine market in 2001. flowly, this is the top two brand in the local market. Like Havaianas, Ipanema is withal a Brazilian-made slippers way back 1971. It is perceived as flipflops exclusive for women. Although the brand offers men flipflops, majority of its market are women. The gross revenue of flipflops for women even add-ond afterwards launching Gisele Bundchen collection this year. Gisele Bundchen is one of the world’s top model known for her socio-civic activit ies. The collection design redefines rubber flipflops designs similar to sandals. The sophisticated colors and ritzy racecourses and designs made Ipanema compute glamorous. It is second best-selling flipflop brand now, but sales are predicted to step-up coterminous year, outnumbering Havaianas sales.\r\nbanana tree despoil is the most successful local flipflop brand in the Philippines. It was established in the year 2002. It is known to be the chic and trendy flip flops with smooth rubber soles like Banana cut in rectangular shapes. It places itself in the market as functional and comfortable flipflop. In 2004, the first Banana Peel opinion store opened in SM malls, creation the first ever flipflop store in the country. As such Banana Peel has strong distribution chains; it is the country’s largest specialty seller of flip flops having 23 branches countrywide and fluent growing. Also, it has strong local marketing campaigns having favourite actor John Lloyd Cruz an d actress Maja Salvador as its endorsers.\r\nmart Share\r\nAccording to managing director of Al Amizade merchandising Inc. the bulk of flipflop market are women profaneers, accounting for 70 percent; men buyers at 20 percent and the children market at 10 percent.\r\nIn addition, the flipflops sales for men have grown by last year by 10%.\r\nMarket statistical distribution\r\nSome well-known footwear companies set-up their own concept stores and rent a private space in spite of appearance malls and distribute their intersections having a bunch of their own sales personnels for the customers’ an exclusive buying experience. Bulk of the middle and dispirit-middle class brands are concentrated in segment stores, battling each over other rent space in large department stores and malls. Also premium slippers brands have their own space in department stores as well with much bigger space desirable positions. Normally, Havaianas, Dupe and Ipanema are placed near the ledger ent ry of the department store with more visibility. While low priced brands are usually located at the fount racks of the flipflop division.\r\nChannels of Distribution of Footwear\r\nManufacturers/Subcontractors/\r\nWholesalers/Suppliers\r\nManufacturers/Subcontractors/\r\nWholesalers/Suppliers\r\nDepartment Stores/Boutiques/ excess Stores\r\nDepartment Stores/Boutiques/Special Stores\r\nFinal Consumers/Buyers\r\nFinal Consumers/Buyers\r\nCurrent merchandising Strategies\r\nDepartment Store Slipper grade\r\nCurrently, Offshore is one of the legion(predicate) flipflop brands in local department stores. It has no separate walk-in or concept store. It is placed in the footwear section of the department together with slippers of the identical prices, ranging from Php60-750. It is definitely one of the cheapest pair of slippers in the corner in these areas: SM Department Stores and SM Hypermarket\r\nRobinson’s Department Stores\r\n subway system Gaisano Department Stores in Ceb u and Market Market\r\n other Leading Department Stores nationwide.\r\nE-commerce Utilization\r\nOffshore has set-up its own user-friendly website where photos of all available designs and collection are displayed. A slope from the website, Offshore products whitethorn alike be purchase from numerous e-business website such as alibaba.com and olx.com.\r\n first-class honours degree Pricing\r\nThe table shows the determine comparison of numerous flip-flop brands in SM department store:\r\nCASE ANALYSIS\r\nProblem Statement\r\nOffshore entered the Philippine market, at the same time as giant globally successful Brazilian flip-flop brands, trying to capitalize on low pricing system to compete in the saturated market of turn away middle class, where there is no make distinction of among brand names. Furthermore, the brand failed to strengthen its image as an all-Filipino-designed flip-flop, lacking marketing efforts and campaigns to do so.\r\nStrengths\r\nOffshore have young desig ners who would create lively dynamic flip-flop prints and produce products every season where it releases a new set of flip-flop collection. The collection opus and color scheme match with the new season trends and styles. This ensures that the product is in line with the current market trend and taste of its potential clients and customers. Offshore has a strong quality control. A couple of market tests are done across different Asian countries, before mass producing a new design.\r\nThe rigorous quality control process in its production line minimizes the volume of product defects and returns. It as well ensures that the products produced are in top condition/quality with regards to its durability and comfort that it pull up stakes give to its users. Offshore enjoys low costs of production by acquiring all raw materials and outsourcing the production from China but still maintains good quality products.\r\nWeaknesses\r\nOffshore has low brand equity because the market is domin ated by the Brazilian flip-flop brands as they set the trend for a new image for trendy, sleek, chic designs of these slippers. The company hasn’t done any marketing ads in the past. some other factor is that its brand name â€Å"Offshore” is kind of difficult to be recalled and is not easily perceived as a slipper/flip-flop.\r\nOpportunities\r\nOffshore is a product that is all-Filipino designed and advocates beaches here in our country. This may help in promoting their product to showcase the essence of attractive Philippine beaches and the Filipino spirit in whole. The government implements intensive promotion for tourism. This will in all probability affix the tourist population and beach goers in our country which may be used by Offshore as an opportunity to communicate their product as the perfect companion when you are taking the time off or when you are offshore.\r\nThreats\r\nOffshore is soaringly dependent on its import in China and they are subject to p rice fluctuations in the said country. Other countries have drop dead informative/bans to our country which not only affects the number of tourists in our country but also the movement/travel of goods and services.\r\nTarget Market\r\nOffshore has a large-minded geographic and demographic target market- from kids to adult manful and female who seeks a pair of slippers/flip-flops as an effortless casual wear that would complement their current modality trends. It tries to apprehend intermediate market by producing comfortable and high quality products in much lower prices catering to the normal market. This is troublesome for the customers, since low pricing is attributable to low quality products. Offshore must(prenominal) make up its mind by tapping the honest market for its products.\r\nMarket Segmentation\r\nFlipflop styles and design start out according its target market. The market segmentation is base on the lifestyle of the customer just like garments industry. Sin ce flipflops nowadays are not just frequent casual footwear but a fashion statement too. Three market segments can be identified in terms of buying conduct and income aims.\r\nThe elevated market includes the top(prenominal) class socio-economic class (SEC) from upper A to upper C demographics. The customers in this segment can afford purchasing opulence items and wth their profligate way of living. This group shops for imported garb ranging from Php1,000 to Php2,500 a pair in the local retail market. Preference leans towards Brazilian slippers like Havaianas and Ipanema and German brands such as Birdenstock. They frequented concept stores and even online stores.\r\nThe intermediate market consumers are primarily concerned with the price and comfort of flipflops. They are composed of middle C to upper D demographics of the SEC’s. This group is given high regard to the value of money. Slippers produced for this market are unremarkably of good quality if not excellent, an d prices range from Php250 to Php500 a pair. This group purchases in big department stores such as SM and Robinsons.\r\nLast category would be the normal market; this group opts to forego quality for price. This composed of low income laborers such as lower D to E socio-economic class. The price points of flipflops for this group are around Php 50-100. They usually buy in local market places and from sidewalk vendors.\r\nCurrent Position\r\nOffshore wants to be known not only as a Philippine flip-flop brand but also as casual footwear that offers tip comfortable mobility and durability. It offers its product at a lower price with the goal of a pair of Offshore for every Filipino.\r\nThe Y-axis is for the price and the X-axis is the degree of being voguish (right side being most stylish). Stylish heart that a person buys a good/product to look good in the public. The international brands (Havainas, Ipanema, and Grendha) are perceived to be more stylish with high prices. The desig n and appearance of the products are also a big factor of the perception of the market. Crocs being a high price but a picayune indifferent/middle with being stylish is caused by the current trend and acceptance of the market with unlikeable front slippers. Offshore implements new product design every season to reflect market trends and style but the product is perceived as a low cost and at the left side of being stylish.\r\nThe Y-axis is for the price and the X-axis is the durability (right side being most durable). The international brands are perceived to be durable due to their marketing effort and communication to the market that they use special rubber that makes their product more durable. Another notable in the graph is the local brand Islander. For a long extent of time, it has captured the title of being durable in the market because of its thick base. Offshore produces good quality products and the production process undergo a strict quality control; but, the low pri ce direct associates it as a China brand with low quality.\r\nMarketing Mix\r\nProduct\r\nAlthough Offshore brags of its creative expert team of young Filipino designers, the designs and collection failed to capture the spirit of Filipino culture. Offshore has three sets of collection which all lack distinctive designs that will experience the Philippine beaches and Filipino tradition. As shown in the pictures above, the collection normally focuses on stripes and floral prints which look normal. These are usual designs for slippers.\r\nPrice\r\nOffshore is priced at a 100php for all categories (kids, men and women). Its price is about at the lower bound of the prices in the department store which is 60php and way too far from the price of the market leaders. Offshore is cheap while at the same of good quality. The current price train is perceived by the local market as low-quality china brand.\r\nPlace\r\nCurrently, Offshore is distributed in popular local department stores, SM , Robinson’s and others. It is placed in the footwear section of the department together with slippers of the same prices, ranging from Php60-750.\r\nPromotions\r\nOffshore has set-up its own user-friendly website where photos of all available designs and collection are displayed. Offshore products may also be purchased from numerous e-business website such as alibaba.com and olx.com.\r\nRecommendations\r\n spot Statement\r\nOffshore shall be the most-preferred choice of flipflops in the C and D markets for its perceived quality as well as its ability to complement everyday casual wear with current fashion trends.\r\n details of Proposed Positioning and Justification\r\nProposed Positioning\r\nHaving a low price is not bad, and actually it can range to Offshore advantage since more customers shall shift to them as long as they can communicate that they can provide quality flipflops. The only problem is this: their price is so low that they are more or less on par with those of the China brands or other local brands which are perceived of having low quality. That is why they are perceived by the market the same way as they perceive the former. Thus, we send word for Offshore to slightly append their prices to distinguish it progress from the other local brands. Increasing the price level at 180-220php will lead their market position move slightly higher and will increase attention from potential buyers. These buyers seek to buy items at a significant price level that they rate an item to be stylish.\r\nAgain, increasing the price level at 180-220php will lead their market position move slightly higher and will convert the perception about the product. The price change will change the perception about the product and nullify being associated with China brands or other local brands.\r\nProposed Marketing Mix and Implementation\r\nProduct\r\nThe company should try to create its own women collection as women accounts for 70 percent of flipflop buyers. This will greatly increase its potential customers and potential market share. Other product collection should be maintained especially that there is an upward trend for the purchasing behavior of men. The company should continue its new seasonal products to reflect current season trends and styles. They should try to focus on communication their beach and filipino designs in their product. They could also produce couple designs or paired Offshore to increase/improve the buying process and venture on producing boxes or bags with delicate design for these products. These boxes or bags will serve as the flipflop holders for customers who still wants to be cutting-edge even if not wearing their flipflops.\r\nPrice\r\nThe current prices of Offshore fall within the price range of other not so popular local brands which are perceived to have low quality. Offshore shall therefore increase its price to distinguish itself from these brands while maintaining its affordability versus foreig n brands. Slightly increasing the price to180-220php will communicate product quality rooted to its strong quality control. To justify the increase in price, the product shall be packaged with intricate designed flipflop holders as discussed earlier.\r\nPlace\r\nOffshore should maintain its distribution strategy in popular local department stores as these place is where people who have the capability to buy such goods often go. The company should request the footwear section of the department to group together the slippers of the same prices, ranging from Php180-300. This strategy would lessen the shelf competition and Offshore would appear as the lowest price in the section but at the same level with other brands with good quality. It is also a casualty to showcase its design level with others.\r\nThe company also may hire sales personnel to however guide customers on what and how the product is and to communicate the nitty-gritty of casual footwear that offers utmost comfortabl e mobility and durability.\r\nPromotions\r\nOffshore should try to tie-up with hotels or tourist cultivation w/ footwear package. This will be adjuvant in communicating the beach or Filipino designs of the company and at the same time giving the customer memento of their visit in the place or experience. The company may implement versatile below-the-line (BTL) marketing strategies like giving fliers and placing posters in places with high foot traffic. The company should maintain and utilize its current site to communicate its current products. They can also maximize other social networking device to increase market awareness and also communicate its message in a bigger market.\r\n'