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Ethan Cramer

on 5 December 2014

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Transcript of Footlocker

Foot Locker’s Vision
E-commerce & Social Media
Marketing Research Process: Globalization
Marketing Research Areas
Industry Structure
Headquartered in New York City
Retailer in malls
Athletic shoes and apparel
8 Brand Names
Many divisions (Mens, Womens, Kids)
30 countries (Corporate and franchises)

Offers entire catalog online
easy to navigate and purchase
Huge social media presence-making marketing and advertising at customers fingertips
YouTube channel

Global Expansion: Assessing the risks and rewards of implementing a more globalized strategy could be of great use for Foot Locker. Researching international regions where there is a market for athletic apparel stand for potential brand expansion. Spreading their brand’s name internationally and operating on more than a domestic level can hold a greater opportunity for growth and ultimately increase their brand’s worth.
Income: While globalization attempts to increase their reach, income research can broaden the knowledge of the customers Foot Locker already has. Diving into data about their customer income can: provide crucial information on how to potentially target markets more effectively; increase awareness of age, gender, lifestyle of the current customers. Being able to grasp a better understanding of customers will ensure brand loyalty in the future especially with the ever changing competition and resources.

Brett Kokkales
Taylor Schmidt
Will Held
Noah Rice
Ethan Cramer
Living Case Project

Company Description
- one stop stores,department stores

Intermediaries & buyers
- Outlet stores, end consumer, Secondary market

Nike, Reebok, Adidas

Potential Entrants
Another shoe store with same supplier

Rivalry Among existing firms
- Finish Line, Dicks, Dunhams

Problem Definition
Foot Locker has broken the domestic barrier, but not extensively. The current state of the world economy makes it much more difficult to spread businesses internationally.

Quantitative Research Design
To globalize, Foot Locker should increase efficiency with current operations and direct more cash flow to operations internationally. Taking the secondary and the primary data gathered from international surveys and using them to implement creative ways to advertise these ideas to a global market would be one way to broaden Foot Locker’s marketing range.

Exploratory Research Design
The entire athletic apparel industry too has yet to significantly globalize therefore Foot Locker must be the first to do so. They will then pose as a barrier to entry to potential competitors or threats setting them atop the industry. E-commerce and internet interaction with international customers can eliminate barriers of culture to further understand the needs and wants overseas.

Psychological Factor: Learning

Using classical conditioning, Foot Locker influences consumer decisions by using NBA players to demonstrate their products.

This approach causes consumers to believe that if they buy their featured products, they’ll achieve athletic excellence. Such as the “Be the Baddest” commercial featuring NBA MVP Kevin Durant

Creating Satisfaction & Loyalty
Foot Locker is able to create customer satisfaction and loyalty through the following:
Easy-going, fun, and social in-store environments
Employees who are committed to satisfying customer needs
24/7 customer service
A loyalty program, referred to as the “VIP Club” where customers receive exclusive deals and extensive perks at Foot Locker
Loyal customers can be promoted to a “Platinum Club” in which they receive rewards for every dollar spent

Customer Satisfaction and Loyalty Plan

In order to enhance customer satisfaction and increase loyalty, Foot locker could:
create a point program, assigning a point value to each dollar spent, rewarding loyal customers for their purchases
further investigate customer preferences in merchandise to offer the products that customers are most interested in purchasing

Major Target Market Segments

Foot Locker exploites differentiated targeting approach. As a multinational corporation, Foot Locker must identify and target profitable market segments around the world. Some of these major targets markets include:
Teens Males Adult Women Families

Positioning Map
A major target market for Foot Locker is teen males. The attributes of Foot Locker that contribute to the formation of a brand image for these customers include:
Product Line Up
Product Sponsors
In Store Employees (appearance and personality)
Two important attributes of Foot Lockers position in relation to competitors are price and product lines offered.
Brand Strategy
Foot Locker uses recognizable uniforms
Top brands including Nike, Adidas and Reebok
They have a lot of locations worldwide
The competitors carry similar brands

Brand Equity
Brand Awareness: Customers recognize brands due to TV ads and they are global
Perceived Quality: They have high quality reputable lines. Broad and Deep lines also
Brand Associations: Associate with professionals. They use Nike and Adidas products
Nike could be a brand that may have a replica product, but nothing specific could be found about piracy on Foot Locker
Foot Locker works with Nike and offers Nike products to promote both companies.
Organizational Benefits: Foot Locker has a loyalty program, Some of the top brands in the world sold, and very in depth product lines

Goods and Services
Almost Pure Goods: Shoes and Apparel
Goods with Services: Spraying the shoes in store
Half Goods, Half Services: Shoe Fitting and assistance
Services With Goods: Shoe purchases and checkout in stores
Almost Pure Services: Online orders and Delivery
Marketing Strategy
Consumers tend to evaluate the goods and services from Foot Locker based on Search Qualities
Evidence to support search qualities:
Foot Locker sells primarily clothing
Offer plenty of styles and brands to choose from
They allow customers to try on products before buying
Provide product reviews online from previous buyers

Product Planning / Innovation Strategy
Foot Locker uses a
Product Development
strategy for innovation
Foot Locker works exclusively with the major athletic wear brands (Nike, adidas, Under Armour, New Balance) and focuses primarily on basketball footwear
Instead of adding new product lines, they work to constantly add new products to their existing lines

New Product Development
New Product Development
Very important because their target market always wants the newest and top-of-the-line product
Having the most up to date products is necessary to remain competitive

Continuous Innovation
John Wall 1 signature shoe

Dynamically Continuous Innovation
Nike Zoom Fit Agility shoe at Lady Foot Locker

Discontinuous Innovation
Nike Fuel Band

Types of Mass Communication Activities

Sales Promotion
- through social media, t.v. commercials
“Week of Greatness”-exclusive week of sales
Trade promotion between brands like Nike

- National and Brand ads using professional athletes
Public Relations
- Veterans receive 20% off on Veterans Day
Media Options (Top outlets Bolded)
Newspaper: 3/10

Outdoor Ads:4/10
Social Media
Direct Sales- Foot Locker uses a commission based system as well as team selling
Types of Salespeople
Inside Sales Support
Field Salesperson
Retail Salesperson: most important

Retail sales with commission, equates to employees trying harder to sell shoes. Communicating the benefits of the shoe to close the sale
Personal Selling
Roles & Responsibilities of Salespeople

During one of our group meetings, we participated in a live chat with a Customer Service Representative for Foot Locker to ask about the roles and responsibilities of sales people. After our conversation with Dan K. we learned that Foot Locker employees are paid on commission, “have little roles in online shopping but do deal a little with inside sales”, and that the major value proposition sales people use when selling products in store are customer intimacy and product leadership.
Pricing of Foot Locker Products
Price Sensitivity: Low.

Cross-Price Elasticity: Yes. If the price of one pair of Jordan shoes goes up, the demand for another pair will also go up.

Price Competition: As a group, we think that there is a lot of price competition in the athletic apparel industry. There is little to no product variation between Foot Locker and their main competitors, so price plays a major influence in the consumer’s ultimate decision.
Pricing Strategy: Value Based

We believe Foot Locker uses a value-based pricing strategy to give their customers a satisfactory return. Cost-based pricing ignores the customer and competition, while value-based looks more at the competitive marketplace. In such a price-competitive industry, it is imperative for Foot Locker to provide the best and latest products at competitive and appropriately “valued” prices.
Foot Locker Value Propositions
As a group, we concluded that Foot Locker excelled in two areas that deliver customer value.
Product Leadership
: Foot Locker builds customer value by differentiating their products and providing multiple high value brands. Nike, Adidas & Under Armour have high perceived value and each
Customer Intimacy
: In-store salesmen at Foot Locker work face-to-face with customers in an effort to create a trusting, empathic buyer to consumer relationship.
Product Life Cycle Curve
Integrated Marketing Communication Objectives
Footlockers primary market communication objectives are to communicate and create value for the product lines available in their stores. Footlocker has to communicate to customers that it offers the best brands and has a created selection then their competitors. As Footlocker offers many of the same products they must also demonstrate that the in-store experience is superior to competitios.
Integrated Marketing Communication Campaign
Footlockers recent multimedia campaign has been focused around the use of professional athletes as spokespeople for the various brands they offer. They also have been increasing the number of adds that target young teens, running commercials that depict teens interacting with well know sports figures. These adds add value to the brands sold at Footlocker and result in higher sales.
Consensus ranking, 1 low reliance, 9 high reliance
Solar Bears
Brett Kokkales A45700931
Taylor Schmidt A46528907
Will Held A44166148
Noah Rice A45984851
Ethan Cramer A46140635
Core Values: Integrity, Leadership, Excellence, Service, Teamwork, Innovation, Community
Strategic Direction: To be the leading global retailer of athletically inspired shoes and apparel
Footlocker is continuously adding and dropping brands as they fall in and out of style, in order to keep up with and influence consumer preferences. Some brands that fit the various stages of the product life cycle are:
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