Principles of Practice and Marketing: Hollister Case Study

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PRINCIPLES OF PRACTICE AND
MARKETING
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Table of Contents
INTRODUCTION........................................................................................................................3
TASK 1...................................................................................................................................... 4
BACKGROUND OF THE COMPANY........................................................................................4
MARKETING STRATEGY........................................................................................................ 5
SITUATIONAL ANALYSIS........................................................................................................6
SOSTAC MODEL....................................................................................................................7
TASK 2...................................................................................................................................... 9
PRICING STRATEGIES AND TACTICS OF HIGH STREET CLOTHING RETAILER.........................9
CONCLUSION.......................................................................................................................... 13
REFERENCES........................................................................................................................... 14
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INTRODUCTION
To generate the maximum amount of profit in an organization, it serves important to
determine the pricing strategies and tactics being applied in an organization. In the sector of
clothing, there are many different marketing strategies and tactics which are applied over
the working environment of the organization. An organization which has been focused on
the entire report is named as Hollister (Raji, 2018). As the marketing consultant, there are a
various set of strategies and tactics which are determined as per satisfying the marketing
demands of the customers. The report includes the evaluation of the creative things and
marketing skills applied in a marketing environment of an organization (Farooqui and
Litofsky, 2015).
Along with the set of implementing the effective set of the skills and strategies, the report
provides an analysis of the current theories and marketing concepts applied over the
management strategy of an organization. The report includes a detailed evaluation of the
techniques and how the retailer applies the special offers, penetration, loss leaders,
promotions, discounts and physiological pricing (Kaur and Singh, 2018).
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TASK 1
BACKGROUND OF THE COMPANY
The convent garden of London has been recognised as the favourite destination for the UK
store of the Abercrombie & Fitch's teen brand Hollister. Hollister has been defined as an
American lifestyle brand. The company majorly belongs to the retail sector. It was founded
on 27 July 2000. At present, the company has expanded its ability to the profit generation
by establishing 578 locations all over the world (Kaur and Singh, 2018). The company
focuses on the selling of clothing based products such as jeans, jackets, shirts, scarves and
many other items dealing with the clothing sector. The company was originally developed to
become the centre of attraction for the customers belonging to the age group of 14-18
years. Hollister has been recognised as a good brand for the guys an girls (Chakraborty and
Das, 2018).
An important factor which has been considered by the Hollister to generate a higher
amount of sales and profit is by maximising the sales over the youth market. The mission of
the company named as the Hollister is to introduce the term ‘cool’ to the existing and newly
manufactured products of the brands. This has been made possible by the company by
implementing the marketing campaigns. In these marketing campaigns, the pictures of the
young adults have been demonstrated by the motive of defining the comfort and relaxation
faced by the younger people after wearing the clothes of the brand named as Hollister
(Dayama, 2018).
According to CNBC (2015), Hollister has been recognised as the most appealing average
income brand among teens. As then result of which Hollister has been able to determine
stability in terms of the overall business and marketing environment. As per the evolving
trends and movement of the procedures to the digital world (Dayama, 2018), Hollister
provides its communication effectively by the digital marketing using the social media
platforms such as Facebook, Instagram and many other social media sources. To increase
the demand for the clothes being manufactured by the Hollister, the anti-bullying campaign
has been launched recently in the UK. As per the Google search, no paid search aids are
defined by the Hollister (Newman, 2017).
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Hollister aims to develop the perfect and flawless finish to the entire set of the models
being manufactured by the company. It uses the manufactured clothes to add the rugged
style. It helps in enhancing the overall development and popularity of the clothes delivered
by the company. The shops of the company are itself recognized as the market in which the
shop is recognizable and unique which adds an advantage in gaining the overall popularity
of the brand (Matsushima et al., 2016).
The company has defined its unique way of delivering the set of products to its customers. It
provides an effective and unique design of the shopping bags. These uniquely designed
shopping bags act as the source of advertising about the company. The company
implements the set of procedures and theories in such a way that the brand of the company
is always considered to look modern and fresh. This adds an advantage to the overall
popularity and profit generation ability of the company (Thirlaway et al., 2015).
MARKETING STRATEGY
The marketing strategy of the Hollister is based on the implementation of various
procedures and tactics being implemented over the product and profit generation. In
Hollister, there are various products which are considered to be expensive such as the cost
of a hoodie is defined to be £ 60 and other sets of the expensive products are sold up to
£130. The company used high-grade material (Thirlaway et al., 2015). It aims to define the
price of their products in such a way that the company can meet the upcoming competitive
challenges. The company defined the price of the products depending upon the type the
product such as the price of the t-shirt was considered cheap and was sold at £20.
Hollister uses the opening of stores as events and makes them look like parties. In the UK,
the company does not advertise its products. At the time of the new store opening, the
customers come to know either by the events or the mouth of the other people over the
social networks (Gebhardt et al., 2017). The shops opened by the Hollister defined as the
zone of attracting the majority of the customers by the recognizable and unique design of
the shops. The other tactic used by the company for advertising is the introduction of its
unique shopping bags design. The pricing strategy of the Hollister is considered to be
effective and unique as it has been defined as the clever strategy. The implementation of
this type of strategy provides the modern and fresh structure to the brand. The selling of
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the products oh Hollister has been only done by their websites and stores. The products of
the company are not sold over the departmental stores. The company provides the
distribution of the channels over the international way (Gebhardt et al., 2017).
SITUATIONAL ANALYSIS
As the Hollister has expanded its business environment in various parts of the world, it has
surfer patterns in major elements of the products. It has added the antique and mysterious
vibes to the existing products. The company provides the new set of the products by
enhancing the quality delivery of the services such as the company provides the variety of
the whitewash, worn-out jeans along with the holes upon knees. As the company has been
served as the boon for the establishment of the effective brand in terms of the international
marketing, the company has been operating efficiently and dealing effectively with the 50%
of the marketing abilities (KOMMCHE, 2017).
The company has taken advantages of the niches and changed into the product
manufacturing of the male and female teenagers clothing style. The logo has been defined
as the sign of enhancing the company’s target marketplace as a golden opportunity for the
company. There are various other stores which are established in competition to the
Hollister such as Zumeiz and PacSun. These types of organizations provide tough
competition to the Hollister due to the reason for implementing a similar set of the products
and materials provided by the Hollister (Hirshkowitz, 2015).
Along with these factors, Hollister has felt the pressure of decreasing marketplace. As a
result of which the income of the company has been decreased by 15% in the past few
years. To overcome this loss and decrease in the market share, the company needs to
deliver the new set of the products and services which serves as the source of attraction for
the males and females belonging to the age of the teens (Hirshkowitz, 2015). As Hollister
has less price apparel as compared to that of the Abercrombie & Fitch, the fees of the
Hollister co-operation is defined to be high. The Hollister aims to create its retail stores
highly productively and effectively manage the demonstrate their products to the client. To
demonstrate its products effectively, the tables, rounds, striking racks and wall shelves are
implemented to represent the products in an effective way (Arias, 2015).
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In addition to this, the major advantage determined for the effective profit generation has
been recognized as stores location. The majority of the shops are defined to be situated in
the high traffic areas, acquiring excessive visibility. The layout of the stores is wide open to
allow for the smooth navigation during the implementation of some stages and procedures
defined to be the part of entire profit generation strategies (Forrester, 2017). The offerings
provided by the Hollister consists of the t-shirts, sweatshirts, bathing suits, denim, polos,
turn-flops and the products developed according to the beach-related topics. The product
line of the company keeps varying from season to season.
The employees of the Hollister corporation are known to report the maltreatment in
situations where they have been treated unequally. Hollister has been popularly known to
ignore the folks which do not satisfy the needs and demands of the agencies (Hanselman et
al., 2018).
SOSTAC MODEL
It has been defined as the planning model. It was developed in 1990 to help in marketing
planning defined by the PR Smith. This type of model consists of the situation
determination, the identification of the organization's objectives, the ways of meeting the
set of the objectives, the tactics defining the ways to accomplish the defined set of the
objectives, the suitable e actions taken over the effective implementation of the plan and
the control defining the overall profit generation of the company (Forrester, 2017).
Situation: The convent garden of he London has been recognised as the favourite
destination for the UK store of the Abercrombie & Fitch's teen brand Hollister. Hollister has
been Tdeifned as an American lifestyle brand. The company majorly belongs to the retail
sector. It was founded on 27 July 2000. At present, the company has expanded its ability to
the profit generation by establishing 578 locations all over the world (Bolin, 2017).
Objectives: The company become the centre of attraction for the customers belonging to
the age group of 14-18 years. Hollister has been recognised as a good brand for the guys an
girls. An important factor which has been considered by the Hollister to generate a higher
amount of sales and profit is by maximising the sales over the youth market. The mission of
the company named as the Hollister is to introduce the term ‘cool' to the existing and newly
manufactured products of the brands (Bui, 2017).
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Strategy: Hollister aims to develop the perfect and flawless finish to the entire set of the
models being manufactured by the company. It uses the manufactured clothes to add the
rugged style. It helps in enhancing the overall development and popularity of the clothes
delivered by the company.
Tactics: the company has been served as the boon for the establishment of the effective
brand in terms of the international marketing, the company has been operating efficiently
and dealing effectively with the 50% of the marketing abilities (Bui, 2017).
Action: The company has taken advantages of the niches and changed into the product
manufacturing of the male and female teenagers clothing style. The logo has been defined
as the sign of enhancing the company’s target marketplace as a golden opportunity for the
company
Control: The Hollister aims to create its retail stores highly productively and effectively
manage the demonstrate their products to the client. To demonstrate its products
effectively, the tables, rounds, striking racks and wall shelves are implemented to represent
the products in an effective way (Crews and Wilkinson, 2015).
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TASK 2
PRICING STRATEGIES AND TACTICS OF HIGH STREET CLOTHING RETAILER
The pricing strategies and the set of the tactics which are defined in the Hollister are defined
as a following:
DISCOUNT
In Hollister the strategies included before the planning of the discounting includes the
analysis of the current profit margin, calculation of the best discount price to make the
effective profit generation, determining the current positioning and offerings defined by its
competitors and deciding the duration till which the sales price would be offered
(Chakraborty, 2019).
To effectively evaluate the sales without defining nay loss, the company analyses the gross
margin and breakeven figures in terms of defining its effect over the profit generation.
The types of strategies being implemented within the Hollister relating to the pricing and
tactics are defined as follows:
QUANTITY DISCOUNTS
The implementation of this type of strategy increases the overall size and value of the
customers. It helps in moving the stock needed for the clearance of the items. It serves
helpful during the implementation of the offers for the huge order volumes.
The clothing retailers regularly encourage the customers to purchase the new products by
offering the scheme of buy 1get 1 free at the decreased price (Ameyaw et al., 2015).
VALUE ADDED OFFERS
The maximum number of these types of offers is defined to be priceless items which serves
beneficial for the customers. These types of offers demand the time of the customer instead
of the pricing strategy. These types of offers add a source of generating a high amount of
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profit by delivering the set of services which not delivered by the competitors (Leonhardt et
al., 2015).
SEASONAL OFFERS
The time is divided into three basic categories such as a month, year and time. These types
of offers are introduced by the company on then the occurrence of the special occasion or
celebration.
The offers defined by the Hollister includes the discounts provided over the clothes as per
the changing season such as in case of the winter season, Hollister provides discounts over
the hoodies and other winter wears (Leonhardt et al., 2015).
SALES PROMOTION
Sales Promotion is the techniques of marketing which are used to persuade the customers
to buy the product. It is suitable to achieve a short term goal of increasing sales. In this
technique, various methods and tactics are involved to increase the sales of the
organization. There are various methods which can be used to promote sales like- money off
coupon, discount vouchers, competition, gifts, loyalty cards, etc.
Hollister Co also uses various techniques to promote the sales of the company. These
techniques may be monetary or non-monetary. The company aims at individual between 14
to 20 years of age (Mendez et al., 2015). These techniques include:
 Discount Vouchers: Hollister provides its customer with a discount voucher which let
them use these vouchers to buy more products of the same brands at a discounted
price.
 Free Gifts: The Company gives gifts to its customer at some special occasion which
helps them to attract customers. This enhances the brand value among the
competitors.
 Competitions and Contests: The Company involves in organizing various contests
and competition at a particular place and advertise their product with these
techniques which led them to increase their sales by brand valuation. (Gedenk,
2019)
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 Free Samples: The Hollister Co provides their potential customers with a free sample
to use and analyse the product which can be used in increasing the trust of
customers and substitution of other brands with the Hollister.
 Price Discount: This sales promotion technique is highly used by Hollister Co as it is
the best way to attract more and more customers. As the target market of the
company comprises of teenagers. They will be easily attracted by the low price or
discount and influenced for purchasing more products.
EFFECTIVENESS
The effectiveness of defining the various pricing strategies over the Hollister based on the
discounting is defined as:
 It attracts the existing and new set of customers without defining the huge
marketing campaign.
 It encourages undecided customers to purchase the goods in a larger amount. It may
include the type of discounts which are available for a limited period.
 It helps in clearing the end of season stocks and out-dated models effectively.
 It helps in defining free advertising over the websites of the sales
 It helps in making a new set of customers by defining new and attractive offers
(Chakraborty, 2019).
Effectiveness of Sales Promotion Techniques on the sales of Hollister
The promotional techniques discussed above help increase the sales of Hollister with a
positive percentage. As people are more attracted to additional goods than the original one.
As the target market of Hollister includes customers of 14 to 20 years of age group. These
teenagers are easily influenced by these promotional techniques. The Discount Vouchers
and the price discount attract a large number of customers for Hollister. The people are
more fascinated by discounted things. The Hollister brand is already an expensive brand and
any discount will attract customers as people can buy more at fewer prices. The gifts and
free samples are used to advertise the product in the potential market which is new to the
company and the people. The contests help the company in engaging the customers with
the brand, which helps in promoting the brand at a big level (Gedenk, 2019).
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All these techniques can be used in the short term to attract customer and it will also help
increase the sales. But at the same time, it also increases the cost of the company. The cost
may include the cost of gifts and samples, the amount involved in organizing competitions
and discounted price. But it will increase the customer base of Hollister for the future.
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