MKTG1374 Report: Analyzing Consumer Behavior for Fav in Australia

This report examines the market potential of Fav, a new fashion brand entering the Australian market. It analyzes the overall fashion market, including its value, growth, and segmentation into clothing, footwear, and accessories, with a focus on the online market's potential. The report identifies the target customer segment as young adults with a focus on the higher-end niche market, highlighting their characteristics, such as the snob effect and preference for exclusive retail experiences. It explores the application of Porter's generic strategies, specifically cost leadership and focus strategies, to gain a competitive advantage. The report concludes that Fav has significant opportunities in the Australian market if its strategies are effectively implemented, emphasizing the importance of understanding consumer behavior and market trends for success.

Running head: MARKETING CONSUMER BEHAVIOR
Marketing consumer behavior
Name of the student
Name of the university
Author note

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Executive summary
The aim of this report is to analyze the market potentiality of a newly entered fashion firm
known as Fav in the Australian market. Having analyzed the various aspects for market profiling,
it had been concluded that they are having huge opportunities ahead if the strategies are being
effectively implemented.

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Table of Contents
Introduction......................................................................................................................................4
Market potentiality of Fav...............................................................................................................4
Potentiality of the online market......................................................................................................5
Target customer segment.................................................................................................................5
Target segment profiling..................................................................................................................6
Conclusion.......................................................................................................................................7
Reference.........................................................................................................................................8
Appendix........................................................................................................................................10

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Introduction
Fashion industry is one of the most promising industries around the world and due to the
reason of rapid globalization; it is growing at a huge pace. Currently, the domestic value of the
fashion industry in Australia is 21 billion dollar. It is also been seen that the annual expenditure
of the Australian customer in the fashion accessories is estimated at 28 billion dollars. Thus, it
can be stated that there is a huge opportunity in the Australian fashion market
(Au.fashionunited.com 2017). The export scenario of the Australian fashion items is also
favorable with having value more than 6 billion dollar. Fav is a new entrant in this market. They
will introduce number of product under their brand name. The product portfolio will include
footwear, clothing and apparels. The main vision of Fav is to create a benchmark in the niche
market in terms of the quality and innovative designs. Majority of the fashion chains cater to vast
number of customer segments. However, Fav will cater to the particular niche market which will
help them to maintain their exclusiveness. In the initial stage, they will start their business from
Sydney and later on international business will be considered. The existing fashion market
scenario is quite competitive with having large number of competitors (Unay and Zehir 2012).
Thus, this report will analyze the potentiality of Fav in the Australian market.
Market potentiality of Fav
As discussed earlier, the fashion market in the Australian regions is growing at a rapid
pace. The fashion market is being further classified in various segments such as garments,
footwear and accessories. Among all this classifications, clothing is the most promising sector
followed by the footwear sector. Hence, Fav will cater to these sectors covering vast customer
segments. According to the latest data available, footwear constitutes the second most market

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share among all the fashion apparels in the Australian market (Casidy 2012). Thus, it is a huge
potential for Fav to have footwear in their product portfolio. Moreover, initial demographic
target segment for Fav will be the adult population. This is due to the reason that, according to
figure 2, women and men aged between 20 to 49 years is the main contributor in the sales of the
fashion industry. Thus, it can be concluded that the target market for Fav is quite potential in the
Australian market.
Potentiality of the online market
Online market is the new trend in the retail business. Thus, fav will also leverage on this
opportunity. It will help them in catering to larger number of customers. Moreover, the customer
base will not be domestically restricted, rather than it will target to the global customers. Online
distribution will also help in effective marketing of the product of their products (Wang et al.
2013). According to the data being given in the figure 3, it is shown that the online expenditure
has being grown by leaps and bounds in the recent years. Thus, initiating the online distribution
system will help Fav to cater effectively to more number of customers.
Target customer segment
As discussed earlier, the target customer segment for Fav will be the young adults in the
Australian market. However, the target customers for Fav will be the higher end customers. They
will cater to the niche market. Accordingly, the marketing and promotional activities will be
designed which will attract the targeted customers (Riefler, Diamantopoulos and Siguaw 2012).
Niche market of the higher end customers is being selected as the target market of Fav due to the
reason that, the mass market of fashion items in the Australian regions is quite densely populated
with having numerous numbers of competitors. Moreover, in the mass market, price is mainly

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being determined by the market and the profit sharing is very low compared to the niche market.
Thus, being operating in the niche market, the profit ratio of Fav will be more and the price will
be determined by them rather than by the market. The exclusivity for the brand can also be
maintained due to operating in the niche market. In addition, another advantage that Fav can
possess is their diversified product portfolio. In the niche market, they will introduce their
products in footwear, clothing and fashion apparel sector. Thus, they can cater to the diversified
requirement of the customers. Compared to the mass market, the niche market is much smaller
but the main advantage is the high volume of profit being associated with this market.
Target segment profiling
Being the niche market as the target segment, customer possesses some unique
characteristics that are quite different from the customers from the mass market. One of these
key characteristics is the snob effect. According to the snob effect, higher end customer tends to
buy more of the products which are priced higher (Ghosh and Varshney 2013). In this case, the
economical value of the product is being considered as the main buying criterion compared to its
utility. As shown in the figure 4, the market expenditure for the luxury items is ever increasing.
Thus, customers are spending more in having luxury items. With the enhancement of the
Australian economy, the niche market of higher end product is increasing which is an
opportunity for the future development. Average customers in this are belonging from affluent
background with having high salaried job or business firms. They spend leisure in the weekends
and Fav will come up with products which will compliment in their weekend activities.
Moreover, the average working hours of this segment is less than the mass market customers.
Thus, evening leisure is also an important business sector for Fav. They will offer high end party
wear also. They prefer offline shopping more than online shopping. However, offline shopping

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from the exclusive retail outlets is more preferable. Thus, Fav will have their own retail outlets
accompanied by experts. This is due to the reason that these customers prefer consultation of
fashion experts in their buying process. It is also been noted that they do not buy only the
products from the store, rather than they buy lifestyles. Thus, the stores of Fav will be designed
to offer a holistic approach to the customers. Thus, Fav can be benefited from this scenario by
having implemented the premium pricing for their products. It will be the competitive advantage
for them if the products can be priced accordingly and can be maintained as exclusive. It will
create a distinct value among the customers.
Porter generic strategies can be applied in this scenario. According to this theory, the first
step of having competitive advantage is having the cost or price leadership in the market.
However, as Fav is operating in the higher end niche market, thus, cost leadership is applicable
(Teeratansirikool et al. 2013). Implementing effective production process and outsourcing the
manufacturing facilities to the south Asian countries having low cost production process will
help the organization in having the cost leadership in the industry. The second step is focus
strategy. According to this strategy, Fav will only focus on their targeted market and the
marketing and promotional activities will be that target market oriented. The product will be
offered and designed according to the taste and preference pattern of the customers. It will help
in enhancing the customer loyalty among the targeted segments. The last step is the product
differentiation strategy. According to this strategy, Fav will create a distinctive brand image in
the market. The products of Fav will be 100 percent eco-friendly. In addition, a part of the profit
from the sales will be donated for the social responsibilities. It will help to create a sense of
achievement among the customers.

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Conclusion
Having discussed the market potential of Fav in the Australian region, it can be
concluded that they are having a huge opportunities in their targeted segments. Effective
implementation of the strategies will help them to tap the market and to stay ahead in the
competition.

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Reference
Au.fashionunited.com. (2017). Fashion industry statistics Australia. [online] Available at:
https://au.fashionunited.com/fashion-industry-statistics-australia [Accessed 17 Aug. 2017].
Brito, P.Q., Soares, C., Almeida, S., Monte, A. and Byvoet, M., 2015. Customer segmentation in
a large database of an online customized fashion business. Robotics and Computer-Integrated
Manufacturing, 36, pp.93-100.
Casidy, R., 2012. An empirical investigation of the relationship between personality traits,
prestige sensitivity, and fashion consciousness of Generation Y in Australia. Australasian
Marketing Journal (AMJ), 20(4), pp.242-249.
Ghosh, A. and Varshney, S., 2013. Luxury goods consumption: a conceptual framework based
on literature review. South Asian Journal of Management, 20(2), p.146.
Ko, E. and Megehee, C.M., 2012. Fashion marketing of luxury brands: Recent research issues
and contributions. Journal of Business Research, 65(10), pp.1395-1398.
Laudon, K.C. and Traver, C.G., 2013. E-commerce. Pearson.
Riefler, P., Diamantopoulos, A. and Siguaw, J.A., 2012. Cosmopolitan consumers as a target
group for segmentation. Journal of International Business Studies, 43(3), pp.285-305.
Teeratansirikool, L., Siengthai, S., Badir, Y. and Charoenngam, C., 2013. Competitive strategies
and firm performance: the mediating role of performance measurement. International Journal of
Productivity and Performance Management, 62(2), pp.168-184.

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Ünay, F.G. and Zehir, C., 2012. Innovation intelligence and entrepreneurship in the fashion
industry. Procedia-Social and Behavioral Sciences, 41, pp.315-321.
Wang, Y., Wang, S., Fang, Y. and Chau, P.Y., 2013. Store survival in online marketplace: An
empirical investigation. Decision Support Systems, 56, pp.482-493.

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Appendix
Figure: 1. Segmentation of the fashion products
Source: (Ko and Megehee 2012)

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Figure: 2. Demographic segmentation for fashion industry
Source: Brito 2015

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Figure: 3. Online market trend
Source: Laudon and Traver 2013
Figure: 4. Customer spending rate in luxury items
Source: BNP Paribus