Defining the lillybee Brand

Defining the “lillybee” Brand:Strategic Market Development and Penetration Strategy

Katrina McDowJohns Hopkins University

Carey School of Business

Applied Research Project

May 2009

AGENDA

Introduction Overview of ARP Objectives Secondary Research Findings Research Methodology Primary Research Questions Results Recommendations

INTRODUCTION

Kassie Rempel - Founder/CEO SimplySoles established in 2004 “lillybee” debuted in 2008 Three-tier Distribution Channels 2008: $2.5 Million in sales

WWW. SIMPLYSOLES.COM

LILLYBEE: THE PRIVATE LABEL Expand the customer base Open new distribution channels Accelerate growth Leverage and amortize core production

costs Yield higher margins

THE COLLECTION

BUSINESS STRUCTURE

Vertical integration strategy “Entry level” luxury shoes and handbags Price points: $135- $195 Manufactured in Brazil 5 designs Emphasis on Customer Service

attributes

DEFINING THE LILLYBEE BRAND

#1 Identifying the target markettarget market

#2 Determining the key competitorscompetitors

#3 Communicating the valuevalue proposition to the customer base

#4 Developing alternative cost friendlyalternative cost friendly marketing strategies

#5 Implementing technologies technologies to improve customer service and point of sale process.

OBJECTIVES

Research Topic1: Determine the TARGET MARKET of Lillybee including the demographics, psychographics and socio economic factors to determine the purchase motivations and preferences of the consumer. Research Topic 2: Identify “lillybee’s” COMPETITION to benchmark price points, distribution channels, trends and design and customer feedback for strategic marketing planning

Managerial Issue: How to market “lillybee” to existing SimplySoles customers and capture and retain new customers and markets to increase sales. Research Problem: How can “lillybee” incorporate CUSTOMER FEEDBACK on design, sales channel distribution and customer brand experience to create innovative marketing concepts such as green marketing, promotion and social networking strategies to market share.

SECONDARY RESEARCH Women account for 70% of “all” shoe buying US footwear sales rose 19% to $49B 2010- sales will increase 23% Shoe shopping is a sport for women Passionate past-time “lillybee’s” General Sales Statistics:

Inbound Sales Channels

Catalog26%

Retail2%Website

72%

RESEARCH METHODOLOGY

Exploratory Research: One on One interviews SimplySoles blog

Descriptive Research: Question Pro internet survey 21 questions Adjusted Sample size – 115 respondents SimplySoles and “lillybee” current customers

PRIMARY RESEARCH QUESTIONS

Research Question #1: Are price, style and eco-friendly attributes of the “lillybee” brand determining factors in a customers purchase decision .

Ho: There is no relationship between price, style and eco-friendly design and purchase decision.

Ha: There is a relationship between price, style and eco-friendly design

and purchase decision.

RESEARCH Q#1 RESULTS

Cross Tabulation:

x2 = 115.577

8 degrees of freedomp-value = .000

Null hypothesis is REJECTED


Cross Tabulation:

x2 = 9.487


FAIL to REJECT the Null Hypothesis


Cross Tabulation:

x2 = 8.694


FAIL to REJECT the Null Hypothesis

PRIMARY RESEARCH RESULTS

Research Question #2: How significant is the association of “lillybee” with SimplySoles as a purchase decision criteria?

Ho: There is no relationship between the association of “lillybee” and SimplySoles as it relates to purchase decisions.

Ha: There is a relationship between the association of “lillybee” and SimplySoles to purchase decisions.


Cross Tabulation:

x2 = 123.602



PRIMARY RESEARCH RESULTS

Research Question #3: Is there a differentiation in age between the “lillybee” customer and the SimplySoles customer?

Ho: There is no relationship in age between the “lillybee” consumer and the SimplySoles customer?

Ha: There is a relationship in age between the “lillybee” consumer and the SimplySoles customer?


Cross Tabulation:

x2 = 123.026




Cross Tabulation:

x2 = 115.924




Scatterplot:

20-35 Age –website purchase

35-50 Age – website/catalog purchase

Primary Research Question

Research Question #4: Does “lillybee’s” price and customer loyalty variables have a competitive advantage over its competition?

Ho: There is a relationship between “lillybee’s” price and customer loyalty and its competitive advantage over its competition.

Ha: There is no relationship between “lillybee’s” price and customer loyalty and its competitive advantage over its competition.


Coefficientsa

Model

Unstandardized Coefficients

Standardized Coeffici

ents

t Sig.B Std. Error Beta

1 (Constant) 2.397 .560 4.277 .000

Price -.091 .068 -.178 -1.338 .186

ProductQuality -.010 .074 -.020 -.142 .888

Brand -.072 .078 -.161 -.924 .359

DesignStyle -.066 .067 -.156 -.981 .330

Comfort -.017 .068 -.036 -.255 .799

CustomerService -.009 .075 -.020 -.125 .901

a. Dependent Variable: RetailPurchase

Regression Analysis:

Criterion/Dependent Variable: Retail Purchase and Catalog PurchasePredictor/Independent Variable: Price, Product/Quality, Brand, Comfort and Customer Service


Fail to REJECT the Null Hypothesis


Coefficientsa

Model

Unstandardized Coefficients

Standardized Coefficients

t Sig.B Std. Error Beta

1 (Constant) 1.397 .696 2.007 .049

Price .048 .082 .075 .586 .560

ProductQuality -.049 .090 -.078 -.550 .584

Brand .097 .090 .181 1.079 .284

DesignStyle .006 .081 .011 .068 .946

Comfort .077 .083 .127 .933 .354

CustomerService

-.012 .091 -.022 -.138 .891

a. Dependent Variable: CatalogPurchase


Brand has the greatest impact- likelihood to purchase from catalog

B = .097 T-value = 1.079

RECOMMENDATIONS AND CONCLUSIONS

#1 Target “eco-friendly” sub-niche

Develop streamlined strength and opportunity strategies to market eco-friendly competitive advantage

Green marketing campaigns i.e. Earth Day and promotion pairings of eco-products.

73% respondent “Somewhat eco-friendly” 16% respondents “Very eco-friendly”


#2 Create a marketing motto emphasizing viral marketing techniques

www.ilovelillybee.com Supported by SimplySoles’ strong brand equity Incorporate customer feedback as a pivotal component:

“They don’t fit! No half sizes”“Pictured items did not match the shoes received”“Not aware of brand”“Just learning of the website”


#3: Targeted web 2.0 initiatives incorporating data profile of the 20-35 age market

16%: Ages 20-35 38%: Ages 35-50 37%: Ages 60-65 83% of respondents – www.simplysoles.com online purchase Twitter, interactive games and web casts, Facebook, You Tube


#4: Further analyze the variables of age and yearly shoe expense to determine marketability and price compatibility of the 20-35 target market

20%: $1,000 - $2,000/yearly 20%: $500 - $1,000/yearly Implement CRM Database techniques


#5: Strategic brand positioning of lillybee in distribution channels:

“lillybee” Purchase - 56% “Bettye Muller” Purchase - 13% “Butter” Purchase – 14% 25% respondents – combined lillybee, Butter and/or Bettye Muller

as favorite Simply Soles brands. Analyze common appeal of designs, style and comfort amongst

three brands

Thank You!!

Kassie Rempel Karen Hollingsworth

and the Simply Soles teamDr. Paul Duffy

Family and Friends

Defining the lillybee Brand

Documents

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