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Table of Contents

Executive Summary____________________________________Page 3

Knowledge Inventory_________________________________Pages 3-7

SWOT Analysis_____________________________________Pages 7-8

Brand Essence______________________________________Pages 8-9

Target____________________________________________Pages 9-10

Positioning_______________________________________Pages 10-14

A Day in the Life__________________________________Pages 14-15

Creative Evaluation________________________________Pages 15-19

Overall Brand Assessment___________________________Pages 19-20

Bibliography____________________________________Pages 21 to 22

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Executive Summary:

The UGG Australia brand is the leading footwear line of its industry. They top all

sheepskin brands with popularity, comfort and quality. The brand re-positioned itself to a high-

fashion luxury brand after originally targeting surfers from 1978 to 1998. In, 1998 Deckers

Outdoor Corporation bought UGG Australia aiding the line’s transformation. With a little luck

and strong positioning tactics, UGG Australia boots became and remain popular. What once was

predicted as a trend that would fade away after a few seasons, UGG Australia defied predictions

and continues enhancing their products to keep up with fashion trends and consumer needs.

UGG Australia originally gained popularity from celebrities when the boots hit the

fashion scene. The brand quickly gained mainstream awareness through celebrities

photographed wearing the shoes in fashion magazines, tabloid magazines and entertainment

television shows. Next, Oprah featured the shoes on three of her Christmas specials, “Oprah’s

Favorite Things.” Demand for UGG boots skyrocketed after the first show, and UGG Australia

aligned with popular department store Nordstrom. They also expanded their international market

by opening retail stores around the world. Finally, UGG Australia wanted to give back to the

community and started the Art & Sole Auction to raise money for St. Jude Children’s Research

Hospital. UGG boots continue to stay in high-demand, and Deckers Outdoor Corporation

recently reported that UGG Australia sales totaled $104.4 million in the first quarter ending on

March 31, 2010. UGG Australia does not need to worry about a fade in popularity anytime soon.

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Knowledge Inventory:

Explicit knowledge about the UGG Australia brand begins with exactly what their

products include. UGG Australia produces Unisex sheepskin boots that are made of twin-faced

sheepskin with fleece lined inside and tanned outer surfaces (Uggaustralia.com, 2010). UGG

boots typically have a synthetic sole. The heights, colors and materials of UGG boots vary based

on the style of boot or shoe. The boots have insulation inside the boots because of the

thermostatic properties of sheepskin; the thick fleece fiber inside the boot lets air circulate and

keep the feet at body temperature. UGG boots stay high in demand despite the current recession

because they have brand loyalty as well as an international following.

The UGG Australia brand began in 1978 when an Australian surfer named Brian Smith

came to the United States with a bag of sheepskin boots. Smith decided to stay in the U.S. and

make California his home. Next, he made the UGG boots popular among his fellow California

surfers (Uggaustralia.com, 2010). The brand continued to evolve and grow. In 1995, Deckers

Outdoor Corporation acquired UGG Australia and by 1998 the product line had already started to

grow. It added two boots, four slippers and a few casual options. In 1998, the UGG Australia

brand became recognized alongside some of the worlds most famous and fashionable footwear

brands and was positioned as a high luxury brand. This change was enhanced by the premium

distribution strategy and their high-end fashion marketing and communications campaign. The

brand directed most of their advertising efforts to high scale fashion magazine. In 2003, UGG

Australia was named Footwear News ‘Brand of the Year’ and was single-handedly responsible

for creating a completely new footwear category.

Nordstrom department stores soon became the main destination for UGG boot sales. At

the same time, UGG Australia opened 18 concept and outlet stores, 12 of which are in the United

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States. The main competitors and brands that have attempted to create similar products are Emu

Australia, Warmbat, RocketDog, Bear Paw, Koolaburra, and Steve Madden.

UGG Australia’s mission statement is that they “market the premier brand in luxury and

comfort.” The philosophy that drives UGG Australia is that they “deliver on its promise of

luxury and comfort. UGG Australia is about accessible luxury. Ugg Australia products fit into

the consumer’s every day life offering them products that are fashionable, comfortable and

attainable” (Uggaustralia.com, 2010). UGG boots have a number of unique features and benefits

including using the highest-grade sheepskin available and using twin face sheepskin in many of

the core products. This makes the fleece on the inside soft because it is treated on both sides.

Grade A sheepskin is also very dense and soft making a comfortable and durable product. The

boot allows the material to breathe naturally, which takes away any moisture and lets the air

inside the boot circulate freely allowing feet to remain dry. Sheepskin is naturally thermostatic

keeping bare feet close to the natural body temperature regardless of hot or cold temperatures.

UGG boots keep feet warm in 30 degrees or below temperatures and let feet breathe in 80

degrees or above.

The chic appearance and versatility of the sheepskin makes them extremely popular,

especially when coupled with materials that offer insulation (McBrady, 2009). The boots feature

comfort, which is one of the many reasons they have a strong following around the world. Many

Hollywood stars and celebrities in the United States wear UGG boots, which has made these

boots staples in the wardrobes of those who follow and idolize mainstream pop-culture icons.

Females are the main target purchasing and wearing UGG boots. However, there have been

some backlashes against UGG boots and their brand by some celebrities and protesters.

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The first of these controversies was in 2007 when celebrity Pamela Anderson, who is a

PETA member, had endorsed these boots and then realized they were made of sheepskin.

Moreover, she publicly bashed the brand and told others on her website not to buy the brand.

She continued to recommend other boot brands to rally against UGG Australia (Neal). The next

of these backlashes was in 2008 when the Princeton Animal Welfare Society staged a campus

protest against the fur industry—in particular against UGG Australia. There have been other

calls for the public to boycott the UGG Australia brand; however, these efforts have been far

from successful because the UGG Australia brand has a large consumer following.

According to an article, UGG Brand’s Staying Power Drives Growth For Footwear

Market, the company sales growth has reached double digits for eleven straight quarters. Most

recently, UGG Australia (in the 4th quarter, where sales rose from 15.7 percent compared to one

year ago) helped Deckers profit climb 29 percent from a year before to $5.22 per share (Much,

2010). They enjoyed their twelfth straight quarter earnings and sales went up 15 percent to $348

million. Although Deckers includes other shoe brands and companies, UGG boots and products

make up 87 percent of Decker’s revenue. Deckers also has UGG Australia to thank for their

increased ability to develop other brands due to the success of UGG; for example, the fall e-

commerce sales increased 27 percent (Much, 2010). In addition, the amount of UGG Australia

retailers increased 88.7 percent, and the brand’s overseas sales grew 96 percent, which accounted

for 20 percent of sales in 2009 (this is a four percent increase from 2008.) According to the same

article, the Deckers footwear market is currently up 10 percent and UGG Australia sales are

expected to be up 9 percent in comparison to sales in 2009 (Much, 2010). These numbers are

impressive in any economy, but particularly impressive during a recession. UGG Australia

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continues to deliver quality products and customer relationships, which keeps customers

returning and purchasing the trusted product.

SWOT Analysis:

The UGG Australia brand is a strong and popular luxury brand. UGG boots are

considered to be luxurious and are known for their high production quality. The brand also has a

wide assortment of styles and colors that satisfy the many demands of consumers. The brand

also has very loyal consumer base that continue to purchase UGG boots because other brands in

the same category lack quality materials. This is all evident when Oprah endorsed them on her

daytime television show when she included them in her Christmas show, “Oprah’s Favorite

Things,” in 2003, 2005 and 2007.

No brand is perfect or appeals to everyone. First, UGG boots are also not inherently

weather friendly and require aftermarket products to keep them in pristine condition. In addition,

UGG boots provide no additional foot support. Another weakness is the limited exposure of the

UGG Australia men’s line. This line is largely unknown to its potential consumer base. Finally,

the brand is not animal-activist friendly due to the use of sheepskin and leather materials.

There is a lot of opportunity for the UGG brand to expand. The brand could promote its

beachwear line of sandals. They may also want to expand their product line to include women’s

heels. They can also promote their winter items and miscellaneous products including jackets,

hats, rugs, sheets and pillows. Finally, UGG Australia could do a considerably better job of

promoting their men’s line. Promotion of their products is the overall theme when it comes to

business opportunities.

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UGG Australia also faces some threats. As mentioned earlier in the weaknesses, animal

activists may be a threat to the brand along with the outcry from officials who speak out against

production techniques. Competition and knock-off brands are another direct threat to UGG

Australia because they take away potential consumers. Lastly, the overall state of the economy

is a threat to the UGG brand because the economy decreases the amount of money spent in the

marketplace and consumers may begin to shy away from more expensive products such as UGG

boots.

Brand Essence:

~High-quality, fashionable footwear focusing on luxury and comfort

The UGG Australia mission statement states, “UGG Australia markets the premiere

brand in luxury and comfort” (UggAustralia.com, 2010). They focus on manufacturing shoes

that are fashionable, comfortable and attainable. The UGG Australia brand focuses on

consumers who value luxury and have higher incomes to afford the boots. They offer quality

over quantity by ensuring longevity and comfort through utilizing the best materials for their

boots. Grade A sheepskin and leathers are used to produce UGG boots, making them more

comfortable than knock-off brands that do not use real sheepskin. The materials and

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craftsmanship are high quality to ensure longevity. Once the brand developed widespread brand

recognition and increased consumption, the logo along with the brand became a high-fashion

staple. People can instantly recognize a pair of real UGG boots as opposed to knock-off brands

because each pair has the logo sewed onto the back of the boots. Therefore, wearing real UGG

boots is a fashion statement because they are popular and recognizable worldwide.

Target:

UGG Australia targets women ages 25 to 45 years old; however, they are also popular

among suburban middle school and high school girls (Silverstein, 2007). This is primarily

because UGG boots are sold in high-end department stores, and department stores are located

within upper-class suburbs. UGG Australia also has a large university following nationwide

(Silverstein, 2007). Walking down a university campus in the winter, the majority of girls wear

UGG boots or knock-off pairs to reflect UGG boots as their first choice winter boot. In fact,

Blink Associates found that 56 percent of female students at Marquette University own UGG

boots and of that 56 percent, 55 percent own more than one pair. Students want to wear real

UGG boots because it shows that they own a luxury item and to keep their feet warm throughout

the fall and winter.

Although UGG Australia started as a shoe company designed around the surfing circuit,

most people do not associate UGG boots with warm weather regions. Moreover, they are more

popular in areas with four seasons or primarily cool weather climates because the sheepskin

keeps feet warm throughout the winter.

UGG Australia targets a large range of consumers. They offer shoes marketed toward the

entire family including infants, kids, men and women’s shoes by hitting the souvenir market,

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fashion market and family stores (Silverstein, 2007). In addition, the brand also strongly targets

the international market. Today, the international market is one of the brands strongest target

markets proving the effectiveness of their logo worldwide.

Positioning:

Ten years after Smith introduced the UGG shoe line to surfers across California, the

UGG footwear line switched the product positioning to a high-end luxury and international high

fashion footwear line (Silverstein, 2007). In 1998, Decker Outdoor Corporation, who decided to

position the brand as a high-end maker of luxury footwear, bought the company. The line

consisted of two boot styles, four slipper styles and a few casual footwear styles. (Larkin, 2008).

Within three years, the UGG Australia brand was internationally recognized and vastly gaining

popularity. This strategic change in positioning was aided by aligning with specific retailers,

seeking prominent media forces and starting an annual philanthropy.

Currently, the brand is featured in department stores, various authorized retailers,

authorized online retailers and a flagship stores throughout the world. UGG boots and products

can be found in United States department stores such as Nordstrom, Bloomingdales, Von Maur,

Neiman Marcus, Saks Fifth Avenue, Lord & Taylor and Dillards. In addition, UGG Australia

has flagship stores in Tokyo, London, Manchester, China, Montreal and five flagship stores in

the United States (UggAustralia.com, 2010). Outside flagship stores the brand is primarily

outfitted with Nordstrom (Larkin, 2008). Throughout their stores, UGG boots are positioned at

these retailers in big displays near the aisles of their shoe sections.

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UGG Australia also continues its popularity through heavy media attention and

positioning. UGG Australia boots are often featured in celebrity gossip magazines and television

shows because numerous celebrities are captured wearing them. In fact, this form of product

placement was one of the original ways UGG boots were first marketed and seen by the public.

Celebrities including Jessica Alba, Gwen Stefani, Pamela Anderson, Liv Tyler, Carmen Electra

and Kate Hudson are a few of the celebrities who are frequently caught wearing UGG boots

(Manning-Schaffel, 2006). In addition, through positioning and capturing celebrities wearing

UGG boots, keeps them a popular trend and “must have” style because celebrities are a main

outlet the public seeks for trend setting and fashion forecasting. Therefore, if celebrities stopped

wearing UGG boots, they would be less popular and cause sales to decrease.

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The brand acquired its first major breakthrough when Oprah Winfrey took part in the

celebrity UGG boot craze after she received a pair of UGG boots. In 2000, two years after UGG

Australia’s new positioning as a luxury brand, Oprah loved the boots so much that she bought

350 pairs of UGG Ultra Boots for her staff (Larkin, 2008). In 2003, Oprah put UGG boots on

the map when she added the baby pink and baby blue classic short UGG boots to her annual

“Oprah’s Favorite Things” Christmas show. After the show aired, UGG Australia’s line became

a holiday bestseller and UGG Australia was named Footwear News’ Brand of the Year (Larkin,

2008). She continued to feature popular UGG boots on the same show. In 2005 she featured

UGG Uptown Boots, and in 2007 she featured UGG Classic Crochet Tall Boots (Larkin, 2008).

Now, UGG boots are regularly seen worldwide on high fashion runways and as popular street

wear.

UGG Australia is currently positioned through collaborations with other popular shoe

designers. Recently, UGG Australia announced they will collaborate with Jimmy Choo to create

a limited edition UGG boot line available in stores October 2010. By pairing with Jimmy Choo,

UGG Australia will not only broaden their brand awareness, they will increase profits because

this limited edition line will be priced between $495-$795 (Mellon, 2010). Since UGG Australia

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and Jimmy Choo are well known international brands, these unique shoes will most likely sell

quickly.

UGG Australia also holds their annual Art & Sole Auction to raise money for the St. Jude

Children’s Research Hospital (St. Jude, 2010). This philanthropy project not only gains

recognition for the brand, it sheds a positive light on the brand by donating one of a kind UGG

boots to raise money for research. This annual event pairs with top designers and luxury fashion

brands such as Manolo Blahnik, Betsey Johnson and Stuart Weitzman to put their artistic skill to

work and design UGG boots. Each unique pair is auctioned off on the UGG Australia website

with 100 percent of the proceeds benefitting the hospital (St. Jude, 2010). While working with

philanthropy, this also gets consumers to the UGG Australia website in hopes that they will stop

to purchase more shoes. To date, the Art & Sole Auction has raised over $315,000 for hospital

research (St. Jude, 2010) and was named the Best Charity Event of the Year by Accessories

Magazine in 2007 (Larkin, 2008). Sharon Stone, John Travolta, Reese Witherspoon and Donald

Trump are a few top industry figures that annually participate in the event (Larkin, 2008).

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Zang Toi Classic Tall Ugg Boots Stuart Weitzman Classic Tall Ugg Boots Rafe New York Classic Tall Ugg Boots

A Day in the Life:

Christina wakes up at 7 a.m. in order to make it to her 8 a.m. class. She straightens her

hair, brushes her teeth and goes to her closet to pick out an outfit. She is not in the mood to dress

up because it is cold outside. She wants to be comfortable and warm as she sits through classes.

Therefore, she puts on Pink! By Victoria Secret sweatpants and a Juicy Couture zip-up. This is a

typical casual outfit for her because her week consists of sitting in classes, studying at the library

and hanging out with her friends in the dorms watching Gossip Girl and the Bravo Network. She

quickly puts on socks and boots so her feet will be warm while walking to class. It is almost 8

a.m. so she grabs her North Face backpack and leaves for her first class.

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After her first two classes, she goes back to her dorm cafeteria and eats lunch with her

girl friends. After lunch, she goes up to her room to study for a test she has in her next class.

Finally, she is done with class for the day so she heads back to her dorm room and stops to check

her Facebook before heading to dinner with her roommate. After dinner, their friends come up

to their room, and they watch a romantic comedy together before starting homework. She begins

working on a psychology paper due at the end of the week. She works on it for a few hours and

spends her last hour before bed chatting on Facebook with friends from home. After they finish

gossiping about boys and last weekend’s parties, she goes to sleep since she has to wake up early

for class.

Creative Evaluation:

The UGG Australia advertising campaigns communicates the strength of their brand

throughout their ads. UGG Australia primarily places advertisements in fashion magazines,

snowboarding magazines and surfing magazines. Each advertisement depicts a sense of luxury

because there is no copy, slogans or headlines. They merely show a model wearing the shoes

and the UGG Australia logo. UGG Australia focuses on comfort rather than performance, which

they try to promote in every ad campaign.

Below is an example of an advertisement found in a high fashion magazine:

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This image portrays comfort and confidence. The ad uses a monochromatic brown color

scheme signifying warmth, comfort and relaxation. Brown is also the primary color of UGG

boots, so the viewer automatically connects the color with UGG boots. In addition, the model is

nude, which is usually a vulnerable state for most; however, her face flaunts sultry confidence

because she is wearing her UGG Australia boots. Her pose directs our eyes from her face and up

her legs to focus and rest on the UGG Australia logo. Lastly, the UGG boots are the final focus

of the ad to portray luxurious comfort.

Before seeing the advertisement shown above, many may not be aware that UGG

Australia has a men’s line because UGG boots are more popular among female consumers. This

advertisement also focuses on the topic of comfort because the couple appears comfortable

together and cozy wearing their UGG boots during a cold winter day. Another purpose of this

advertisement is to spark interest toward the men’s line.

The next advertisements are examples of UGG Australia’s attempt to reposition their

brand as a luxury item. The first picture shows their attempt to be different. There is a very

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eccentric looking model wearing something one would only see on a runway. In the picture the

model is wearing two different styles of UGG boots sending the subconscious messages that

even though they are different, one can be comfortable while standing out.

The second image above is UGG Australia’s attempt to put UGG boots in the run for

“high fashion.” UGG boots were introduced on the runway in London fashion week. This

changed the position of UGG boots as a high fashion brand versus an outdoor boot. Currently,

UGG boots are displayed with other luxury brands like Versace and Dolce & Gabbana in

department stores worldwide. In the third advertisement above, UGG Australia not only portrays

that their shoes are rugged and very enduring, they also introduce the new accessory line. The

purse in the advertisement unites with the UGG boots because they are the same color and

feature similar qualities.

UGG Australia uses a lot of is “gratis” product placement. Gratis product placement is

the use of often capturing celebrities and prominent figures wearing UGG boots in magazines

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and television shows. Companies have little control over gratis product placement because they

do not tell celebrities to wear the boots; they wear them because they like the product.

Therefore, gratis product placement can be considered a good form of publicity.

Above is an example of what the target sees in everyday magazines and tabloids. These

celebrities are merely walking advertisements for UGG Australia and Deckers Outdoor

Corporation.

UGG Australia targets their audience in a wide array of magazines. UGG Australia

advertisements are featured in magazines that reach massive audiences such as, but not limited to

Nylon, Teen Vogue, Glamour and O the Oprah magazine.

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UGG Australia ads stay consistent among all magazines. They all consist of feelings of

luxurious comfort and most ads feature outdoor or high fashion images. Each advertisement has

no body copy and only shows the model, the shoes and the logo.

Overall Brand Assessment:

UGG Australia holds in itself a strong core product with its line of women’s boots. This

line is extremely popular among females ranging from teens through middle-aged adults. The

product has established a loyal consumer base that not only purchases a first pair but continue to

purchase the product. At the same time, their competition offers up answers to the demands of

some consumers including lower prices, different styles and faux animal materials. Another

shortcoming of UGG Australia is their widely unknown men’s line of footwear. According to

our on-campus survey, the majority of male respondents were unaware of anything UGG

currently offers to their demographic. Those who were aware of UGG offering male products

believed that they only offered traditional looking UGG boots for men, which they considered

“too feminine.”

In response to these weaknesses, we came up with a few ways to turn them into

opportunities. The first issue we addressed was the high-end cost that comes with UGG

Australia footwear. Lowering the costs would hurt the product’s image so we propose a way that

can benefit both UGG Australia and consumers. UGG Australia could partner their counterfeit

education program with special discounts to those who report sites selling knock-offs. This

would help eliminate some of the competition and allow those who might be looking elsewhere

to purchase UGG Australia products. In addition, UGG Australia could advertise this under a

new campaign promoting authenticity by showing that other products are not as good as UGG

Australia. Another issue to address is the promotion of the men’s footwear line. UGG Australia

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could promote the largely unknown line by putting print-ads in men’s magazines including GQ,

Men’s Health, and Men’s Vogue or incorporate the men’s line into a campaign that promotes

UGG Australia footwear for the whole family. Finally, UGG Australia could promote the shoe

to college-aged males through viral videos that parody the women’s line and establish the fact

that a men’s line exists.

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Bibliography

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index.jsp?vgnextoid=00962f4277e70110VgnVCM1000001e0215acRCRD&vgnextchannel=e2b24616a86d1110VgnVCM1000001e0215acRCRD

Manning-Schaffel, V. (2006, February 13). Brands Get Celebrity Exposure. In Brand Channel. Retrieved from http://www.brandchannel.com/ features_effect.asp?pf_id=301

Much, M. (2010, April 1). Ugg Brand Staying Power Drives Growth for Footwear Maker. In Investors.com. Retrieved from http://www.investors.com/NewsAndAnalysis/Article.aspx?id=529115

Neal, Kim. The Brand of Ugg. Article Snatch. Retrieved from http://www.articlesnatch.com/Article/The-Brand-Of-Ugg/1440

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Ugg Austrailia. (n.d.). WatchMojo TV - Hulu- Vogue.TV. Retrieved from http://www.watchmojo.com/tv/Hulu/Vogue.TV/9863331/index.php?id=1 Ugg Australia. (2010). Retrieved from http://www.uggaustralia.com/ UGG® Australia and Jimmy Choo Announce a Limited Edition Collaboration. (2010, January 11). Ugg Australia. Retrieved from http://www.uggaustralia.com/ experience/pressreleases.aspx?p=pr

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Ugg the Brand to Trust When Shopping for Your Family’s Boots? (2009). The Free Library. Retrieved from http://www.thefreelibrary.com/UGG+Australia+the+Brand+to+Trust+when+Shopping+for+Your+Family%3Fs+Boots-a01073939980