Free Essay: Zappos Shoes
Zappos is a company established in 1999. The idea came to the founder, Nick Swinmurn because he was unable to fund a set of brown Airwalks shoes at the local shopping center. As a result of this, he approached Hsieh and Lin, his two friends with the proposal of selling shoes online. At first, Tony was pessimistic and almost erased Nick’s voicemail. However, when Nick stated the US footwear market is approximately 45 billion dollars in where 5% of the market was currently supplied through mail order catalogs, Hsieh and Lin were motivated to raise $ 2 million from Frogs, their investment enterprise. Formally, Zappos was launched in 1999 June with its initial domain name as shoesitte.com.
Zappos which is an Amazon supplementary is known as the leader in Internet apparel sales and footwear. It strives to ensure consumers’ are served with the best possible services and selections. It supplied millions of products to consumers in more than 1000 footwear and clothing categories. Over the year, Zappos developed mainly providing services that are diverse and customer friendly like generous return policy which is not offered by other dealers of shoes on the internet and shipping. Zappos also provides these services at costs that are considerable to the company.
The main selling basis for the company is footwear which accounts for 80% of its sales. At present, there are more than 50,000 footwear types sold in Zappos and these range from brands like Steve, Ugg boots, Nike and Madden heels. The company is in the supply niche of show markets which include shoes made in America, sizes that are hard to find, broad and narrow widths as well as vegetarian shoes.
The company, in 2007 expanded its collection to include outfits like eyewear, watches, kids’ products and handbags that currently account for 20% of the approximate annual income.
Marketing strategies of Zappos Shoes company
Zappos marketing strategies can be broken down into 2 sections: direct and brand marketing. Brand marketing general goals include concentrating on creation of awareness, action as well as shaping perceptions. The ‘4Cs’ that drive the messaging of the company include: culture, customer service, community and clothing. In terms of marketing study, every 3 years, the company is able to complete its general health brand analysis, besides the quarterly product advertisement and tracking research. The concentration in 2010 was on building of product likeability and in 2011, it aimed at creating product awareness especially clothes that were a fraction besides “just 1, 112 shoes”.
The marketing mix strategy in 2012 established that radio and TV were out. As such, they focused 75% of its marketing financial plan on high print ads distinctiveness and 25% on advertisements out of home like airport security bin and sponsorship. The ad promotion, conceptualized by Mullen attempted to bring awareness to reality that Zappos sells other great stuff apart from shoes. The company also featured naked models carrying out daily activities like playing Fresbee, hailing a cab and jogging. Due to the sexual nature of the campaign, it received some disparagement from a couple of groups. The promotion was targeted towards mid-career women who have medial family earning of more than $ 100,000 and featured digital advertisements, videos as well as QR codes that were entrenched in print ads. These print ads included 4 pages spread in magazines like the Real Simple and Lucky, and QR code tracking thus establishing high commitment level. Additionally, they featured a man poorly clothes running across their takeover Yahoo homepage to convey the point clothing was necessary. Zappos existing social media promotions were also leveraged. Their campaign on Twitter led to discussions that were interactive regarding style with customer care representatives and the manner in which the company could assist consumers in the discovery of what they were looking for in order to get the best from their closet.
The biggest weaknesses of Zappos is the fact its outlet channels are not designed in a manner that they ca run as specialized retailers in areas of manufactured products minor customized retailers might capitalize on. Lower accessible income is going to affect the strategic focus and call for amendments in lowering the cost of basic goods that with less concentration on high priced goods that suggest there is a change in the structural price design.
Recommendations
The backbone of performance in business is the pricing strategies. Products are supposed to have a pricing strategy that is inclusive and definite to ensure the profits are earned while at the same time retaining customers. There are varying ways of selling services and goods that the company used in order to affect pricing strategies that are adopted for use by Zappos. Pricing services require adequate market analysis which should attract sustainable revenue sales for diverse products. A strategy for pricing that works ought to ensure the business entity recovers its unit costs as well as some marginal profits so it can raise income. The income is then used to pay for other business indirect expenses that cannot be attributable to specific unit products.
Also, Zappos needs to use its mass marketing and niche marketing technique. Niche marketing makes it possible for the company to pick market segments that are small and attempts to cater to them specifically. Among the benefits of niche is that a business is able to have loyal customers- who often, are willing to pay premium prices for products that are right for them. The benefit of mass marketing is that a firm is able to produce large numbers of standardized relative products. This means production process is repetitive and cost per unit is low. However, though a form is able to produce thousands of similar products, it will still need to differentiate itself from competitors.