Marc Jacobs Marketing Strategies
Marc Jacobs, a skimming pricing strategy
B. The concrete example of Marc Jacobs : A skimming
Marc by Marc Jacobs, a penetration pricing strategy
A. An important marketing tool : The penetration pricing strategy.B. Marc by Marc Jacobs : a successfull example of market penetration pricing strategy.
II- Marc by Marc Jacobs, a penetration pricing strategy
Marketing is playing a great part in today’s society. Moreover that is a powerfull tool in the fashion industry that should not be neglected.
Fashion Marketing works by using current trends in fashion to analyze,develop, and implement sales strategies. Fashion marketing investigates the relationship between fashion design and marketing including the development, promotion, advertising, and retailing aspects of the billion dollar fashion industry. Successful fashion marketers understand that recognizing consumer trends, strong branding, and a desirable product image are all essential elements to build aneffective and meaningful campaign.
We have seen that Marc Jacobs, througout his career has built a design compagny with a great image based on a smart style. But in 2001, Jacobs introduced a secondary line, « Marc by Marc », mixing funcky and trashy styles, which can be seen as a new marketing strategy, and it makes me ask myself, can we talk about a market penetration pricing strategy ?
A- Animportant marketing tool : The penetration pricing strategy.
Penetration pricing involves the setting of lower, rather than higher prices in order to achieve a large, if not dominant market share.
This strategy is most often used by businesses wishing to enter a new market or build on a relatively small market share.
This will only be possible where demand for the product is believed to behighly elastic, that is to say that the demand is price-sensitive and either new buyers will be attracted, or existing buyers will buy more of the product as a result of a low price.
A successful penetration pricing strategy may lead to large sales volumes/market shares and therefore lower costs per unit. The effects of economies of both scale and experience lead to lower production costs, whichjustify the use of penetration pricing strategies to gain market share. Penetration strategies are often used by businesses that need to use up spare resources, for example factory capacity..
Before implementing a penetration pricing strategy, a supplier must be certain that it has the production and distribution capabilities to meet the anticipated increase in demand.
That marketing strategypresents some advantages and drawbacks.
- We have seen that it is a good way to gain market shares or to enter a new market.
- But in the same time, I can notice two main drawbacks :
The most obvious potential disadvantage of implementing a penetration pricing strategy is the likelihood of competing suppliers following suit by reducing their prices also, thus nullifying any advantage of thereduced price (if prices are sufficiently differentiated the impact of this disadvantage may be reduced).
A second potential disadvantage is the impact of the reduced price on the image of the offering, furthermore when buyers associate price with quality.
B- Marc by Marc Jacobs : a successfull example of market penetration pricing strategy.
In 1993, Marc Jacobs and his business partnerRobert Duffy launched their own licensing and design company: Marc Jacobs International Company; Jacobs designed his first line, which was, like Latifah told u a smart line, practicing “deluxe” prices (expensive prices) as a result of a skimming pricing strategy.
But, a few years later a change in their strategy seemed to happen.
Launched in 2001, Marc by Marc Jacobs is the contemporary arm of the...