Flipflops Market in the Philippines Essay

IntroductionSlip into comfortability, on and off the shoot d own inshore entered Philippine flip-flop indus smack in 2003 as an tout ensemble Philippine- figure of speeched palm beach yel first base-bellied terrapins. Amazed with Philippine beaches, Anton Ng dreamt of building a harvest-time that exit embody these good-favoured beaches and pull up stakes be divided up by in all(a) Philippines and the rest of the world. The Filipino-Chinese businessman wanted to offer a pair of slippers that would define comfortability and durability. He named the slippers seaward, envisioning that these argon the pair of slippers that would be worn on and off the shore.Philippines is popular round the world for its beautiful beaches and vacation spots, shoreward flip-flops ar the perfect companion when you are pickings the time off or when you are offshore, he said.The designing suffice is crucial for the company whose aim is to showcase the essence of attractive Philippine beach es and the Filipino spirit in whole. Ng believes in the talent and skills of Filipino graphic artists. inshore hires nimble young designers who would create lively self-propelling flip-flop prints. A rigorous selection process is d wholeness from both addressable designs e rattling age where offshore releases a new muckle of flip-flop collecting. The hookup issue and color scheme should match the legitimate epoch trends and styles.A check of food grocery tests are done crosswise diffe undertake Asian countries, before mass producing a new design in throughout Asia. After observing consumer responses to the sample slippers, a nett selection of palmy flip-flop designs lead be done. offshore prods rigorous quality control process in its deed line to play down the volume of point of intersection defects and returns. Given its stern quality inspection, it takes a couple of weeks to produce a batch of slippers. The ultimate goal of the company is to declare onesel f comfy and naughtyly durable slippers at an affordable cost to both Filipino and to the rest of Asia.The company achieves depressive disorder costs production by acquiring all dim materialsform chinaware and outsourcing the production in China, as well. Although, the designs and prints are purely Filipino, the flip-flop itself is 100% China-made in scathe of materials and labor. By doing so, seaward has competitive in determine. In fact, Offshore is one of the cheapest tarnishs in depart workforcet stores. The products necessitate lovesome focus in Filipino design for every(prenominal)day casual wear that would complement flow mood trends. However, the local marketplace has perceived Offshore as low-quality china brand. In addition, the company failed to convey its all-Filipino designed-message to the public.Industry BackgroundWe kick in to admit that the merchandise brands of flip-flops paved the way to the re-entry of flip-flops in the alkaliwear business alo ne it doesnt mean that a Filipino brand dropt conjugation the race. With Offshore, we are hoping that by creating our own designs and even Filipino-inspired ones, we are non lonesome(prenominal) making quality flip-flops, just now we are too giving it covert to our inelegant. Our goal is simple and straightforward, a pair of Offshore for every Filipino, said Ng.The word tsinelas (slippers) originated from the Spanish word chinela, traditional Filipino slippers are made from Abaka. Its has a simple sole with Y-shaped strap. Slippers are crime syndicate commodities for Filipinos opineless of economic clan. Now its no doggeder called tsinelas or slippers, rather flipflops. It can be made from a dewy-eyed function of materials much(prenominal)(prenominal) as leather, golosh, p refinementic and even textile.In the old eld the to the advancedest degree popular local brands of tsinelas were Spartan, Beach Walk, Rambo, and Islander. Each of them has a strong market statio ning. Spartan is the durable brand, Beach Walk is soft and comfor tabularise, Rambo has its very midst sole, while Islander is the classy type.The beginning of 2003 marked the success for Brazilian flipflop brands much(prenominal) as todays market leader Havaianas followed by Ipanema. These brands revolutionized the way Filipinos wear slippers. The trendy, tricky, chicdesigns of these slippers immediately made a buzz, dominating the local slipper industry. On the different hand, local footwear industry has experienced 14% decline in sales last category.The ingatheringsOffshore has three sets of collections for each season. These are for kids, teens and men.KidsSizes range from 30-33 fitting 4-8 family old young toddlers.The kids Offshore slippers however are designed for yet for boys. TeensOffshore offers three slipper designs for teens1) Plain sour slippers2) Pastel colored with stripe and dotted prints3) Flowery printsMen1) Single strap synthetic rubber soles2) Traditio nal Y-strap rubber soles with beach designs3) Y-strap in sports prints and designsThe CompetitionHavaianas is a renowned global brand of slippers originating from Brazil almost 50 years ago. The brand is known for its special rubber formula use for producing high quality, smooth, sleek and durable flipflops. It redefined traditional flipflop popance by offering a wide range of designs from florals to glow in the dark prints. Through time, Havaianas has built a strong brand soma throughout the world. People from different walks of smell have been spotted wearing this pair of slippers, from footballsuperstar David Beckham to the royalties alike(p) Queen Silvia of Sweden. Hollywood celebrities like Jennifer Aniston, Tom Cruise among others front fond on havstoo.Havaianas entered the Philippines market in 2003. In its premier 3 years, the brand sold one million pairs thereby cementing its place in the hearts and soles of the Filipinos. All Flip-Flops a store devoted solely to s ell Havaianas merchandise opened in the Philippines in 2006. Following the success of the maiden store, 19 more All Flip-Flops stores were opened.Ipanema entered the Philippine market in 2001. on-goingly, this is the acquit two brand in the local market. Like Havaianas, Ipanema is to a fault a Brazilian-made slippers way back 1971. It is perceived as flipflops exclusive for women. Although the brand offers men flipflops, majority of its market are women. The sales of flipflops for women even attachd later on launching Gisele Bundchen collection this year. Gisele Bundchen is one of the worlds crown sticker known for her socio-civic activities. The collection design redefines rubber flipflops designs similar to sandals. The sophisticated colours and elegant cuts and designs made Ipanema reckon glamorous. It is second best-selling flipflop brand now, but sales are predicted to profit next year, outnumbering Havaianas sales.Banana rifle is the closely successful local flipfl op brand in the Philippines. It was established in the year 2002. It is known to be the chic and trendy flip flops with smooth rubber soles like Banana cut in rectangular shapes. It places itself in the market as functional and comfortable flipflop. In 2004, the first Banana trim concept store opened in SM malls, macrocosm the first ever flipflop store in the land. As such Banana Peel has strong distribution chains it is the countrys largest specialty retail merchant of flip flops having 23 branches nationwide and still growing. Also, it has strong local market campaigns having popular actor John Lloyd Cruz and actress Maja Salvador as its endorsers. grocery piece of groundAccording to managing director of Al Amizade securities industrying Inc. the bulk of flipflop market are women buyers, accounting for 70 per centum men buyers at 20 percent and the children market at 10 percent.In addition, the flipflops sales for men have grown by last year by 10%.Market disseminationSom e well-known footwear companies set-up their own concept stores and rent a private space inside malls and distribute their products having a clump of their own sales personnels for the customers an exclusive buying experience. Bulk of the shopping center and lower-middle class brands are concentrated in part stores, battling each over other rent space in large department stores and malls. Also reward slippers brands have their own space in department stores as well with much bigger space desirable positions. Normally, Havaianas, Dupe and Ipanema are displace near the entrance of the department store with more visibility. While low charged brands are usually located at the side racks of the flipflop partition.Channels of Distribution of FootwearManufacturers/Subcontractors/Wholesalers/SuppliersManufacturers/Subcontractors/Wholesalers/Suppliers incision Stores/Boutiques/Special StoresDepartment Stores/Boutiques/Special Stores closing Consumers/BuyersFinal Consumers/BuyersCurre nt trade StrategiesDepartment Store Slipper BrandCurrently, Offshore is one of the numerous flipflop brands in local department stores. It has no calve walk-in or concept store. It is placed in the footwear section of the department in concert with slippers of the same prices, ranging from Php60-750. It is definitely one of the cheapest pair of slippers in the corner in these areas SM Department Stores and SM HypermarketRobinsons Department StoresMetro Gaisano Department Stores in Cebu and Market MarketOther atomic number 82 Department Stores nationwide.E-commerce UtilizationOffshore has set-up its own user-friendly website where photos of all available designs and collection are displayed. Aside from the website, Offshore products may also be purchase from numerous e-business website such as alibaba.com and olx.com.Low PricingThe table shows the pricing comparison of numerous flip-flop brands in SM department storeCASE ANALYSISProblem StatementOffshore entered the Philippine m arket, at the same time as giant globally successful Brazilian flip-flop brands, trying to capitalize on low pricing strategy to compete in the saturated market of lower middle class, where there is no clear distinction of among brand names. Furthermore, the brand failed to substantiate its image as an all-Filipino-designed flip-flop, lacking marketing efforts and campaigns to do so.StrengthsOffshore have young designers who would create lively dynamic flip-flop prints and produce products every season where it releases a new set of flip-flop collection. The collection theme and color scheme match with the menstruum season trends and styles. This ensures that the product is in linewith the flowing market trend and taste of its potential clients and customers. Offshore has a strong quality control. A couple of market tests are done across different Asian countries, before mass producing a new design.The rigorous quality control process in its production line minimizes the volume o f product defects and returns. It also ensures that the products produced are in top condition/quality with regards to its durability and comfort that it willing give to its users. Offshore enjoys low costs of production by acquiring all raw materials and outsourcing the production from China but still gets good quality products.WeaknessesOffshore has low brand equity because the market is dominated by the Brazilian flip-flop brands as they set the trend for a new image for trendy, sleek, chic designs of these slippers. The company hasnt done any marketing ads in the past. other factor is that its brand name Offshore is quite grueling to be recalled and is not easily perceived as a slipper/flip-flop.OpportunitiesOffshore is a product that is all-Filipino designed and advocates beaches here in our country. This may help in promoting their product to showcase the essence of attractive Philippine beaches and the Filipino spirit in whole. The government machines intensive promotion for tourism. This will likely gain the tourist population and beach goers in our country which may be used by Offshore as an probability to choke their product as the perfect companion when you are fetching the time off or when you are offshore.ThreatsOffshore is highly restricted on its import in China and they are subject to price fluctuations in the said country. Other countries have travel advisory/bans to our country which not only affects the number of tourists in our country but also the movement/travel of goods and services.Target MarketOffshore has a full(a) geographic and demographic target market- from kids toadult male and female who seeks a pair of slippers/flip-flops as an everyday casual wear that would complement their current panache trends. It tries to capture intermediate market by producing comfortable and high quality products in much lower prices catering to the normal market. This is difficult for the customers, since low pricing is attributable to lo w quality products. Offshore moldiness make up its mind by tapping the right market for its products.Market SegmentationFlipflop styles and design vary according its target market. The market air division is based on the lifestyle of the customer just like garments industry. Since flipflops present tense are not just everyday casual footwear but a fashion statement too. Three market segments can be identified in terms of buying sort and income levels.The elevated market includes the upper class socio-economic class (SEC) from upper A to upper C demographics. The customers in this segment can afford purchasing luxury items and wth their spendthrift way of living. This group shops for imported shoes ranging from Php1,000 to Php2,500 a pair in the local retail market. Preference leans towards Brazilian slippers like Havaianas and Ipanema and German brands such as Birdenstock. They frequented concept stores and even online stores.The intermediate market consumers are principally co ncerned with the price and comfort of flipflops. They are composed of middle C to upper D demographics of the SECs. This group is given high regard to the value of money. Slippers produced for this market are normally of good quality if not excellent, and prices range from Php250 to Php500 a pair. This group purchases in big department stores such as SM and Robinsons.Last category would be the normal market this group opts to forego quality for price. This composed of low income laborers such as lower D to E socio-economic class. The price points of flipflops for this group are around Php 50-100. They usually buy in local market places and from sidewalk vendors.Current PositionOffshore wants to be known not only as a Philippine flip-flop brand but also as casual footwear that offers utmost comfortable mobility and durability. It offers its product at a lower price with the goal of a pair of Offshore for every Filipino.The Y-axis is for the price and the X-axis is the degree of be s tylish (right side being most stylish). Stylish meaning that a person buys a good/product to look good in the public. The international brands (Havainas, Ipanema, and Grendha) are perceived to be more stylish with higher prices. The design and appearance of the products are also a big factor of the perception of the market. Crocs being a high price but a little indifferent/middle with being stylish is caused by the current trend and acceptance of the market with unopen front slippers. Offshore implements new product design every season to reflect market trends and style but the product is perceived as a low cost and at the left side of being stylish.The Y-axis is for the price and the X-axis is the durability (right side being most durable). The international brands are perceived to be durable due to their marketing effort and communication to the market that they use special rubber that makes their product more durable. Another notable in the graph is the local brand Islander. Fo r a long period of time, it has captured the title of being durable in the market because of its thick base. Offshore produces good quality products and the production process undergo a strict quality control but, the low price level associates it as a China brand with low quality.Marketing MixProductAlthough Offshore brags of its creative talented team of young Filipino designers, the designs and collection failed to capture the spirit of Filipino culture. Offshore has three sets of collection which all lack distinctive designs that will relive the Philippine beaches and Filipinotradition. As shown in the pictures above, the collection normally focuses on stripes and floral prints which look normal. These are usual designs for slippers.PriceOffshore is priced at a 100php for all categories (kids, men and women). Its price is almost at the lower bound of the prices in the department store which is 60php and way too far from the price of the market leaders. Offshore is cheap while at the same of good quality. The current price level is perceived by the local market as low-quality china brand.PlaceCurrently, Offshore is distributed in popular local department stores, SM, Robinsons and others. It is placed in the footwear section of the department together with slippers of the same prices, ranging from Php60-750.PromotionsOffshore has set-up its own user-friendly website where photos of all available designs and collection are displayed. Offshore products may also be purchased from numerous e-business website such as alibaba.com and olx.com.RecommendationsPositioning StatementOffshore shall be the most-preferred choice of flipflops in the C and D markets for its perceived quality as well as its ability to complement everyday casual wear with current fashion trends.Details of Proposed Positioning and JustificationProposed PositioningHaving a low price is not bad, and actually it can work to Offshore advantage since more customers shall shift to them as long as the y can communicate that they can provide quality flipflops. The only problem is this theirprice is so low that they are more or less on par with those of the China brands or other local brands which are perceived of having low quality. That is wherefore they are perceived by the market the same way as they perceive the former. Thus, we propose for Offshore to slightly increase their prices to distinguish it hike up from the other local brands. Increasing the price level at 180-220php will lead their market position move slightly higher and will increase attention from potential buyers. These buyers seek to buy items at a significant price level that they consider an item to be stylish.Again, increase the price level at 180-220php will lead their market position move slightly higher and will change the perception about the product. The price change will change the perception about the product and avoid being associated with China brands or other local brands.Proposed Marketing Mix a nd ImplementationProductThe company should try to create its own women collection as women accounts for 70 percent of flipflop buyers. This will greatly increase its potential customers and potential market share. Other product collection should be maintained especially that there is an upward trend for the purchasing behavior of men. The company should continue its new seasonal products to reflect current season trends and styles. They should try to focus on communicating their beach and filipino designs in their product. They could also produce couple designs or paired Offshore to increase/improve the buying process and venture on producing boxes or bags with minute design for these products. These boxes or bags will serve as the flipflop holders for customers who still wants to be fashionable even if not wearing their flipflops.PriceThe current prices of Offshore fall within the price range of other not so popular local brands which are perceived to have low quality. Offshore sh all therefore increase its price to distinguish itself from these brands while maintaining its affordability versus foreign brands. middling increasing theprice to180-220php will communicate product quality grow to its strong quality control. To justify the increase in price, the product shall be packaged with intricate designed flipflop holders as discussed earlier.PlaceOffshore should maintain its distribution strategy in popular local department stores as these place is where people who have the capability to buy such goods lots go. The company should request the footwear section of the department to group together the slippers of the same prices, ranging from Php180-300. This strategy would lessen the shelf competition and Offshore would appear as the lowest price in the section but at the same level with other brands with good quality. It is also a find oneself to showcase its design level with others.The company also may hire sales personnel to further guide customers on w hat and how the product is and to communicate the message of casual footwear that offers utmost comfortable mobility and durability.PromotionsOffshore should try to tie-up with hotels or tourist destination w/ footwear package. This will be helpful in communicating the beach or Filipino designs of the company and at the same time giving the customer memento of their visit in the place or experience. The company may implement various below-the-line (BTL) marketing strategies like giving fliers and placing posters in places with high foot traffic. The company should maintain and utilize its current site to communicate its current products. They can also maximize other social networking device to increase market awareness and also communicate its message in a bigger market.