CASE STUDY: Natalia Norman (About: Competitors and customers)

Natalia Norman is a designer and manufacturer of knitwear clothing. She has based her designs on ethnic patterns, inspired by clothing she has seen in Central Asia. She has sourced her products both from these Asian regions - Uzbekistan and Kazakhstan - as well as from small factories in parts of the United Kingdom. Her products, though stylish, are relatively cheap, but her marketing strategy is totally passive.

She has a website and most of her sales are reactive, responding to orders over the internet. The resultant sales and, in particular, profits have been disappointing and so she has hired a marketing consultant to give her some advice. The following are extracts from the consultant's report.

'Your product, although distinctive, is insufficiently unique. The designs have no patents or copyright and because the production technology is so simple and inexpensive there are few barriers to entry.

Competition is all too prevalent. Your promotion is too general. It focuses on no specific market. By relying on the internet your advertising is rather indiscriminate and you have failed to create a loyal following and your image is diffused with little opportunity for building brand awareness. There is a failure within distribution. Most consumers wish to see, handle or try on products before making a purchase, particularly if the products do not already have a well-established reputation and/or a brand name. In your case the only exposure your products have is via the world-wide web. Your pricing structure is too cost based. You are able to source your products cheaply but your margins are too low to provide you with the necessary capital to reinvest if the business is to develop profitably in the future.

You have failed to establish yourself in the market place as a dominant player. Too many of your business decisions are reactive and often too late to have adequate impact. You are following market trends and not attempting to lead them.'

Natalia is naturally disturbed by the criticisms which this report has leveled at her company's operations and has decided that she must be more positive in her actions. In particular she has decided that her marketing efforts must be more focused and she must pursue more proactively her competitive activities.

REQUIRED

In order to focus her company's marketing efforts more precisely Natalia has decided to segment the market for knitwear products.

(1) Suggest potential bases for segmenting (segmentation) this knitwear market and discuss the benefits which a more focused segmentation could bring to the company.

(2) Evaluate strategies which Natalia might pursue as a market follower to make her knitwear company more competitive.