Marketing Across Borders
Course and Code
Question One (a): Shein Fashion Retailer Marketing Mix Strategies
Shein is the largest cross-border Chinese E-commerce company. The company adopts a path-breaking marketing mix strategy that covers price, product, promotion, and place.
Shein’s Market Strategy: Product
The fashion retailer has a wide range of products for men, women, and children. Shein employs an inclusive and diverse approach in stocking its products; it provides products for all body sizes incorporating the often overlooked plus-size women. Additionally, the fashion retailer offers unlimited product options to its customers; the company launches an average of 150 000 products annually. The inclusivity and diversity of Shein’s products contribute to its most significant share of the young generation market and the general global population. Its extensive customer base contributes to its vast sales volume, ultimately contributing to its financial success.
Shein’s Market Strategy: Pricing
Shein offers the lowest price than other fashion retailers attracting customers at all levels of disposable income. Additionally, Shein frequently offers discounts to customers. The company operates various discounts strategies such as discounts for downloading applications, purchasing through influencers, and rotating sales discounts. The heavy discount and low prices strategies increase the sales volume contributing to the fashion retailer’s high-profit margins.
Shein’s Market strategy: Promotion
Shein employs a unique marketing strategy. Unlike most companies that use celebrities for product promotion, Shein employs customer review as a product marketing technique. The company depends on reviews from satisfied customers and lesser-known influencers to promote its products. Additionally, the fashion retailer depends on reviews by buyers on their E-commerce site who describes product qualities in detail. Word of mouth and reviews from product consumers on social media increases customer base and purchase (Buttle and Groeger 2017), ultimately contributing to a rise in the company’s revenue and profit margin.
Shein’s Market Strategy: Place
The fashion retail company has a comprehensive coverage; it sells to over 220 counties and regions globally. The company has a well-established social media site such as YouTube and Tik Tok to reach out to its existing and potential customers. This makes the fashion retailer relevant to young consumers and convenient for other customers. Winning social media war and being a preferred shop by the younger generation and the bulk of the society is essential in today’s business. This contributes to the growth and the financial success of Shein fashion retailers.
Question One (b): Shein Fashion Retailer Market Segment
Market segmentation is essential in targeting individuals who are likely to become customers of the company, and it involves splitting consumers into groups with similar characteristics (Hunt 2018). Shein fashion retailer intended market segments are demographic and behavioural segmentation.
Demographic segmentation involves splitting consumers based on identifiable people-based differences such as income, age, gender, religion, education level, occupation, among others. Shein fashion retailer employs demographic segmentation through pricing, promotion, and products. For instance, the lower pricing of the company products targets customers with low income. The overwhelming use of social media in marketing and advertising targets younger individuals.
Behavioural segmentation involves splitting consumers based on the behaviours they display regarding the product. It evaluates how customers interact with the company application, brand, and products through studying customer product ratings and reviews, spending, browsing and purchasing habits, and customer interactions and loyalty to the brand. Behavioural segmentation is evident in Shein fashion retailers’ use of E-commerce sites and promotional products. For instance, the fashion retailer uses commercial sites to understand how customers react to its products. Additionally, the company base various promotional products on customers browsing and purchase habits.
Question One (c): Shein Fashion Retailer Competitors in Perceptual Map
A perceptual map is essential in understanding how consumers rank a company’s products in terms of their characteristics and comparisons to the competition company’s. Zara, a Spanish clothing retailer, and ASOS British online fashion and cosmetic retailers are the major competitors of Shein in the Perceptual Map. These companies offer a wide variety of men, women, and children wares globally. However, Shein retail company is still the global market leader in the fashion retail industry. Therefore, for these companies to effectively compete with Shein worldwide, they should have a specific target customer in their production, invest more in social media marketing, and invest in product differentiation.
Unlike other retail companies without a specific target customer, Shein targets generation Z globally through the pricing and promotions of its products. Thus, for fashion retail companies such as Zara and ASOS to effectively compete with Shein, they should develop products with a specific target group in mind. Additionally, Shein is known for vigorous social media use and marketing compared to other fashion retail companies. Social media provides a powerful platform for companies to keep in touch with existing and attract customers; hence, these companies should invest more in this platform to increase their customers’ base. Shein is globally known for producing inclusive and diverse products, majorly the plus size women’s clothing. This differentiates it from other fashion retailers in the apparel industry. In this regard, for other fashion retail companies such as Zara and ASOS to effectively compete with Shein in the global market, they should produce products that stand out to their target audiences.
Question One (d): Shein Fashion Retailer Ethical Issues
Several ethical issues surround the operation of the Shein fashion retailer. There is a question on the company’s labour conditions, product type, information disclosure, and pricing.
Shein Fashion Retailer has not provided public information on the working conditions along its supply chain and the steps it intends to take to improve its employees’ working conditions and curb forced labour. According to the United Kingdom Modern Slavery Act 2015, companies over a specific size must clearly state on their website the steps they are taking to combat forced labour in their organisations. This act will be necessary to have Shein fashion retailer outline its labour conditions and steps towards curbing forced labour on its website.
Institutions and individuals raise questions on the lack of crucial information about Shein company on its websites, accusing the company of lack of transparency. For instance, the company declines from providing its annual returns to institutions such as Reuters, stating it does not disclose its revenue publicly. The United Kingdom law requires companies with more than 36 million pounds of goods worldwide to provide their financial information on their websites. Analysts estimated Shein company to be worth over $ 15 billion. Hence, the act will be necessary to have the company provide its financial information.
Shein company’s low clothing prices have attracted the attention of labour watchdogs such as Worker Rights Consortium that questions the company’s ability to produce merchandise very cheaply and the quality of the products. Shein dresses and shoes cost as low as $9 and $15 respectively. The United Kingdom Unfair trading regulations protect consumers from unfair commercial practices such as poor-quality products. Therefore, these regulations will be fundamental in handling the allegations that Shein produces low-quality products sold at low prices.
Consumers globally have accused Shein of producing offensive products such as Islamic prayer rugs as decorative mats and a necklace in the shape of a swastika as a Metal Pendant Necklace. These scenarios depict a company that’s is not diligent in its product creation and service provisions. The United Kingdom Unfair Trading regulations protect consumers from unfair commercial practices. Therefore, the law provides a ground for curbing incidences of production and release of products that consumers consider offensive.
Question Four: Product Adaptation
Product adaptation is essential in ensuring the products meet the local cultural and legal requirements. By definition, product adaptation is the process of modifying an existing product to meet the needs of consumers in a particular market. Customers’ preferences and competition conditions differ across countries. Thus, for international brands to be successful, it is essential to introduce product adaption in the overseas market. Product adaptation will be essential in meeting the cultural requirements of the overseas market and for the company’s competitive edge.
Cultural requirements in the overseas market play a significant role in the success of international brands’ products. Fundamentally, the multinational company should consider a country’s cultural beliefs before deciding on product standardisation or adaptation. Companies that offer industrial products, automobiles, and credit cards or products for the younger generation can succeed without product adaptation. These products are less cultural bounds. However, product adaptation is essential for companies that offer consumer products such as foodstuffs as these products are culture-bound. Cultural consideration is fundamental in the food industry’s decision in adopting product adaptation or standardisation. For example, international food companies operating in a Muslim culture will offer different foodstuff to subsidiaries of the international company in a Christian culture. Designing and adopting products that meet the cultural requirements of the overseas market plays a significant role in the success of international brands in these countries.
Secondly, product adaptation and standardisation play a vital role in the ability of an international company to gain a competitive edge in overseas markets. Product adaptation is an essential strategy in dealing with competitive threats and achieving a competitive advantage in overseas markets. For instance, companies can identify the aspects of their products to improve to eliminate threats and gain a competitive advantage. International companies that join overseas markets are venturing into markets with other already established companies; hence, adopting products that speak to members of that country is crucial for the success of the international companies. Competition is stiff in the food industry in most countries. A global brand joining this industry in an overseas market should consider product adaptation. Consumers tend to shy away from unfamiliar food products, hence, the need for companies to modify their products to fit the needs of the consumers in these industries.
Competition in the contemporary business world lies majorly on customer satisfaction. Therefore, this business needs to provide customers with products that satisfy their needs effectively. Price, quality standards, and consumers’ tastes and preferences differ across countries. International brands joining overseas markets should consider this as customers play a significant role in organisational success. For international companies joining the food industry overseas, product adaptation is crucial. Unlike other businesses, the success of the food industry depends entirely on customer satisfaction.
Question Six: Marketing by Attraction
Customer satisfaction and brand loyalty play a significant role in the success of international companies. However, attracting and retaining customers remains a significant challenge for money companies in the competitive and globalised economy. Multinational companies should adopt strategies that enhance customer attraction and retention. Most global companies adopt various marketing strategies to build customer base and loyalty. One of these strategies is marketing by attraction. By definition, marketing by attraction is a culmination of marketing efforts to draw customers to the company and brand. It involves adopting measures that show buyers the desirability of the products and set the company apart from competitors.
Companies can attract and build customers loyalty through inbound marketing. Business engages in inbound marketing, using social media such as blog posts to attract and keep customers informed about the brand. For instance, when a company consistently informs customers of its products, it will be their first choice when they need a product that aligns with the company. For example, the Home Depot company uses this strategy to draw customers and build loyalty. The company provides weekly classes on how to use their equipment. This keeps customers informed about the company and the product and aligns the company as the first choice when an individual needs such products.
Secondly, companies can develop attraction marketing through lead generation. Every day a new generation of consumers join the market; companies can create strategies that draw this group to their products before they begin the buyer’s journey. A company can share accessible and educational information about products that target individuals who are yet to join the purchase economy. This creates the companies’ products and brands on these people’s minds. For instance, a company can run a weekly advertisement that targets young adults but still inform them of its products to create awareness.
Attracting marketing involves appealing to the emotions of the consumers. To effectively achieve this strategy, companies should develop and share a story with the market, be accessible and visible to customers, and be a leader in the industry and society. Customers are the backbone of business success. Therefore, a business must develop strategies that draw customers to the company and brand.
Buttle, Francis, and Lars Groeger. 2017. “Who says what to whom in what channel? A rules
theoretic perspective on word-of-mouth marketing.” Journal of Marketing Management 33 (13-14): 1035-1059. https://doi.org/10.1080/0267257x.2017.1325390
Hunt, Shelby. 2018. “Advancing marketing strategy in the marketing discipline and beyond:
From promise, to neglect, to prominence, to fragment (to promise?).” Journal of Marketing Management 34 (1-2): 16-51. https://doi.org/10.1080/0267257x.2017.1326973