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Contents 1. Executive Summary 2 2. Introduction 3 3. Research Findings 3 4. External & Internal Analysis 4 External – Market segmentation & Definition 4 External – Market Analysis 6 External – Competitor Analysis 10 Internal – Analysis of Organizational Competencies 13 SWOT Analysis 14 5. Strategic Objectives and Issues 15 Financial Objective 15 Marketing Objective 16 6. Competitive Marketing Strategy 16 Defensive Strategy 16 Offensive Strategy 16 7. Marketing Mix Tactics 17 Product Tactics 17 Pricing Tactics 18 Place/Distribution Tactics 19 Promotion/Communication Tactics 21 8. Marketing Budget 23 9. Implementation and Control Guidelines 24 10. Appendix 25 11. Bibliography 57 Executive Summary Vogue Australia has faced stiff competition in its women’s fashion magazine industry recently. Vogue Australia has relatively small market share compared with its competitors. The purpose of the marketing strategy is to help Vogue Australia change its profile and increase its profitability. In doing so, Vogue Australia would use a combination of offensive and defensive competitive strategy. Defensive strategy would allow Vogue Australia to protect its current niche market share while offensive strategy would permit Vogue Australia to penetrate to a newer market segment, which represents a higher growth opportunity. The aim of the competitive strategies is for Vogue Australia to enter the younger market and leverage its prestige image to appeal to its new target audiences (See Appendix I). The tools of marketing mix would be implemented to achieve the objective of increasing sales while protecting the niche market share. The marketing mix tools include, product, price, place/distribution, and promotion/communication. The main message to be communicated to the target audiences is “ A Breathe of Fresh air”, which indicates the intent of Vogue Australia to change its traditional image of being old fashion. The message is also a sign of Vogue Australia’s intention to move into new market segment – younger female professionals. The actual product provided by Vogue Australia would not be changed dramatically. There is a need to maintain the consistency of the product provided, so the loyalists are not being alienated. New changes would be introduced to correspond to the needs of the younger segment of the market. Pricing would not be changed while there would be slight modification with respect to distribution. An easier access for its target audiences to Vogue Australia would be the main point of distribution. In order to maximize the effectiveness of the communication campaign of Vogue Australia the mediums, message content, and the presentation of the communication used would reflect the target segments. To survive the competitive market Vogue Australia has to enhance customer value by improving the perceived benefits and/or reducing the total costs of ownership. The competitive strategies and the marketing mix tools are designed to maximize the prosperity of Vogue Australia in this volatile and ever changing industry. Introduction Vogue Australia is one of the magazines, which Condé Nast publishes in Australia along with various products such as Vogue Kids, Vogue Entertaining & Travel, and Vogue Living. As part of the international group, The Condé Nast Publications Pty Ltd is a wholly owned subsidiary of Condé Nast Publications Inc (CNP). CNP is a publishing company incorporated in the United States. Through its subsidiaries, it is engaged in publishing in the United Kingdom, France, Germany, Italy, Portugal, Spain, Australia, Japan, Korea, Taiwan, Brazil, South Africa, Russia and Greece. Condé Nast Publications Pty Ltd launched Vogue in Australia in 1959. The mission of Condé Nast Publications Pty Ltd is to provide its readers with the latest information on fashion, living, traveling and gourmet cooking. The customers targeted by their range of products are typically in the higher end of the society, whom often demand superior product quality and products that reflect their status in the society. In recent years, there has been a boom in the range of women’s fashion magazine in Australia; with the launching of B in 1999, Harper’s Bazaar in 1998, Marie Claire in 1995 and SHE in 1993. Along with the traditional women’s fashion magazines such as Cleo, Cosmopolitan and InStyle, the market is extremely competitive. The purpose of this marketing plan would be to investigate the dynamics of the market at the moment in order to formulate a marketing strategy plan which would be best suited for the market environment and the prosperity of Vogue Australia. The scope of the marketing plan would cover both external and internal analysis and with the help of portfolio analysis tools, a competitive marketing strategy would be formed. In order to achieve the marketing strategy objectives the marketing mix tactics need to be addressed. These are product, place, promotion and price. The guidelines and marketing budget would be implemented for the controlling purposes to ensure the success of the marketing strategy. Research Findings Primary research was conducted primarily by interview. 40 people who fall into the target audience category were interviewed with the questionnaire (See Appendix A). The questionnaire consists of both closed – end and open – end questions. Quantitative and qualitative data were extracted from part A and part B of the questionnaire from the interview. Part A: All of the interviewees were female, the age ranged from 20 to 40, which was within range of the target audiences. The average income was about $50,000. With some exceptions of extremely high and some at the lower end of the income scale. Most of the interviewees were married. The occupation was well diverse but with majority of them being managers. Part B: With regards to product features, the interviewees generally view them favorably, however a few exceptions have been identified. Vogue Australia has been identified as an old fashion and European magazine by the younger segment of the people interviewed. The suggestions from the target audiences are that Vogue Australia should include more feature articles that are more relevant to Australia women while maintaining its global perspective. It is also suggested that Vogue Australia should change its traditional approach to fashion in order to appeal more to the younger segment of the audience. The uses of the magazine range from passing time to using the magazine as the fashion information provider. The price charged for Vogue Australia has generally been acceptable by the consumers. Friends and advertisements mostly exposed the magazine to the interviewees, providing Vogue Australia the chance to explore the effect of positive word of mouth and promoting via other mediums. External – Market definition and brand segmentation The industry, in which Vogue Australia is in, is to provide information to its readers. Vogue Australia competes with the information providers such as fellow publication houses, newspaper, radio, TV, movies, and all sorts of information communication medium. Vogue Australia is in the market to provide women with the latest fashion tips, entertainment and gossip. Its main competitors are InStyle, Marie Claire, SHE, Harper’s Bazaar, Cleo, Cosmopolitan and B. They also face somewhat indirect competition from all media types that provide information for the latest women’s fashion, entertainment news, and gossip. Market segmentation is the corner stone of a market-based strategy. A market segment is a specific group of customers with unique customer needs, purchase behaviors and identifying characteristics. Market segmentation opens the door to multiple market-based strategies and greater marketing efficiency. Organizations that sell to consumer and business markets recognize that they cannot appeal to all buyers in those markets, or at least not to all buyers in the same way. Buyers are too numerous, too widely scattered and too varied in their needs and buying practices. Different companies vary widely in their abilities to serve different segments of the market. Rather than trying to compete in an entire market, sometimes against superior competitors, each company must identify the parts of the market that it can serve best. In trying to segment the market in which Vogue Australia operates in, several of variables can be utilized: demographics, psychographics and behavioral. Demographic: It consists of dividing the market into groups based on variables such as age, sex, family size, income, occupation, education etc. Demographic factors are the most popular bases for segmenting customer groups. These demographic variables are often used in marketing for three reasons: (1) they are easy to identify and measure (2) they are associated with the sale of many products and services (3) they are typically referred to in describing the audiences of advertising media so media buyers and others can easily pinpoint the desired market target2. Psychographics: Under this category, the segments can be formed from the different needs of the consumers. According to Maslow the needs can be divided into the following 5 areas; physiological, safety, belongingness, self – esteem and self – actualization. Behavioral: This variable is the third major element that shapes the customer needs. It is concerned with how the product is used, how much it is used and when it is used. All those elements are likely to shape consumer needs of Vogue Australia. With the aid of primary research, a conclusion can be reach that the potential consumers of Vogue Australia is most likely to be young females who have relatively few financial burdens, tend to be interested in fashion and are recreation oriented1. The typical psychological profile of readers of Vogue Australia are associated with characteristics of being young optimist, having a look at me mentality and often socially aware. Market Segments Aspirers: Age 20 – 25, most of this target segment is still at university, works part time, affectionate fashion followers and trendy, they usually are the fashion leaders in their environment, they hope that one day they would be just like the young female professionals in segment two (2). Young Professional Female: Age 25 – 35, earnings in the top 20% of the population, usually in the managerial positions, have tertiary education or higher, affectionate fashion followers and trendy and they are usually opinion leaders who try new things and being admired by general female population for their achievements. Trendy Middle-aged Women: Age 35 – 45, usually belongs to higher end of the scale of the society most of them in the managerial positions or housewife of top income households, usually had higher or tertiary education, likes to look elegant, young and trendy, they are fashion followers as well. External – Market analysis The general trend in the women’s magazine publishing is that they have capitalized on every woman’s need to learn what is new quickly and where to find it by providing them with one easily digestible package – “A one stop shopping guide for a girls every whim”. These magazines have engaged in differing marketing strategies but have similar goals: to engage modern, young women and to increase the number of their advertising pages. The magazine industry, in particular the women’s sector is continually being challenged by the times. They are always struggling with how to keep current and thus they always have to change. High-fashion magazines like Vogue Australia, Harper’s Bazaar, and Marie Claire were once tailor made for an elite group of people wearing clothes that only an elite few could afford. The big challenge today is to engage the modern woman; new consumers, especially young women. This has led to the growing trend of reworking the classic model of the fashion magazine. Magazines are reinventing fashion in a more cultural or social context. It is no longer enough to merely produce a commercial photo anymore, “You have to tell more of a story, and you have to supply more of a context or personality” The analysis of the market can be demonstrated more thoroughly by the analysis tools such as the Porter’s Five Forces Model and the PEST analysis.
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