Crocs Company Essay

I have chosen crocs company to make the report that required in my first assessment. I choose this company because I am interested to make analysis about this company. In my opinion this company is unique. Based on (Wikipedia crocs), Crocs, Inc. is a shoe manufacturer founded by 3 friends – Scott Seamans, Lyndon â€Å"Duke† Hanson, and George Boedecker, Jr. They produce and distribute a foam clog design acquired from a Quebec company called Foam Creations. The shoe had originally been developed as a spa shoe. The first model produced by Crocs â€Å"The Beach† was unveiled in 2002 at the Ft. Lauderdale Boat Show in Florida, and sold out the 200 pairs produced at that time. After a great success selling the 200 pair of Crocs â€Å"the Beach† spa shoe, George realize the potential and try to go beyond the 200 pair. Every pair of Crocs Shoes is from a material called Crosliteâ„ ¢. Croslite is a made from the company’s PCCR (Proprietary Closed-Cell Resin). It is not plastic nor rubber and it is a closed-cell in nature and anti-microbial (eliminates that foot odor). The special Patented Closed Cell Resin (PCCR) warms and softens with your body heat and molds to your feet. The Crocs European styling of the orthotic heel, built-in arch support, and tarsal bar position your feet for ultimate foot comfort and health. Say No to Painful Shoes and Hallo crocs Crocs, Inc, a world leader in innovative casual footwear for men, women and children, celebrated its 10th anniversary in 2012. Crocs offer several distinct shoe collections with more than 300 four-season footwear styles. All Crocsâ„ ¢ shoes feature Crosliteâ„ ¢ material, a proprietary, revolutionary technology that gives each pair of shoes the soft, comfortable, lightweight and odor-resistant qualities that Crocs fans know and love. Crocs fans â€Å"Get Crocs Inside† every pair of shoes, from the iconic clog to new sneakers, sandals, boots and heels. Since its inception in 2002, Crocs has sold more than 200 million pairs of shoes in more than 90 countries around the world. The brand celebrated reaching $1 billion in annual sales in 2011. Marketing Concept have 4 elements that briefly explain what the marketing concept is; Customers Orientation, Competitor Orientation, Inter-functional Coordination and Profit Orientation. In Crocs Inc. Marketing concept is implemented to help the organization identify and give the customer need and want while also trying to achieve their organizational goals. I will explain more about the marketing concept that have been applied by Crocs Company. Customer Orientation This Customer Orientation is mostly about how the organization understands their core customers, their target buyers and their consumers in the industries. This people play a great part to them in creating the ideal product to the optimum valued. Based on the Crocs mission statement â€Å"Bring profound comfort, fun and innovation to the world’s feet â€Å". Crocs do their research what customer need and want. They value their customer toward comfort, fun and innovation footwear. They treat their customer so much better that they make their shoes according to what customer want in their feet. Crocs have made research and collect various types of information that may help them to satisfy their customer needs. That why Crocs have made various types of shoes that cater to all their customer’s need. The Croslite material that make it possible. Crocs defined Croslite as Ergonomic, lightweight, comfortable and odor resistant. Who ever thought that having an ugly shoe can make our feet feel absolutely relax? Well, Crocs did and it was a success. Crocs shoes do not only give absolute comfort like other shoes or stylish appearance but it gave more. No more foot odor, no more aching feet, no more heavy shoes and say Hello to better Healthy Shoes. (crocs, 2013) Crocs have launched an advertisement called â€Å"Feel The Love by Crocs†. In the television commercial for Crocs footwear, the actress wearing black high-heel shoes enters an apartment building and with tired climbs a flight of stairs. When she opens the door, two small red animated characters based on the Crocs original clog model, with stubby arms and legs and blinking  ventilation holes representing eyes, scamper toward her like puppies. The characters cling to her ankles and then, as she sits on the couch to read her mail, they remove her shoes, massage her feet, and then slip a new style of Crocs flats onto her feet. â€Å"Meet Croslite,† says a voice over toward the end and lastly says â€Å"the loyal, loving, good-for-you technology, in every pair of Crocs.† It was a great TV commercial that shows how Crocs understand their core customer, buyers and consumer’s needs and wants. Crocs knows that most of us will have a tiring day and it is a hassle to walk back home with an uncomfortable shoes. The advertisement wanted to deliver that Crocs is the ideal footwear to wear anytime anywhere. Besides that, another example of Crocs is Customer orientation is developing a shoe called † Crocs Prepair Flip† that focus on Athletic like runners and cyclists, etc. The flip-flop enhance recovery after athletic activity thus help lower muscle exertions can provide an improved opportunity for blood flow and fatigue relief, creating greater recovery potential after a hard sporty activities. This doesn’t focus on the athletics but to the customers that like to do sports. This shows that rather than they focus on general customer need them also specific to certain group of customer needs. Like in this Crocs Prepair case, they focus on the active runners, cyclist or other types of sports that might causes some of feet damage like fatigue or muscle exertions. Crocs have proven that they are Customer Orientation organization. (crocs, 2013) Competitor orientation Competitor Orientation means an organization that look at how its competitors are able to satisfy their buyers, customer or consumers. The organization should collect information about their competitor strategy and in the same time making their competitors as their benchmark for either short term or long term marketing strategy. Crocs major competitor is Decker’s, NIKE and Timberland. This major footwear brands have been around for many decade compared to Crocs that is consider as a â€Å"baby† in this Industries. But, to compare the success of crocs to them is actually same. The thing that make  these other competitor different from Crocs is they have the experience and well-known to the world. Crocs have collected some information of their competitor. Based on an article found from the internet called The Strategic Move of Crocs, Inc, 2009, Crocs have identified their competitors and what their competitors are doing in the industries. Crocs also realize that the global casual footwear and apparel is a highly competitive industry. Every competitor is competition with each other’s. In relating Crocs with its Competitor, I will be using Nike to make comparisons with crocs. (HOOVERS) Well-known Brand Name Nike began in the 1971 sold its functional running shoes to the jogging set, but then quickly expanded its offerings to include all athletes in virtually every sport. The shoes were customized to handle the rigors of the individual sport. Nike also expanded its line to be fashionable and cool to wear even when its wearers weren’t sweating. Compare Crocs and NIKE, NIKE has been in the global casual footwear and apparel industry since 1964. It is not surprising if Crocs has a long way to go and face many problems before they are on par with the well-known large companies around the world like Nike. But the potential is very good as Crocs is appear as category-dominant shoes. Even both are different in age but both brands are equally well known to the customers. Who in the world does not know Nike or Crocs? Both have carved a name their brand name in the mind of the customers when they think about shoes. (NIKE,Inc) Inter-functional coordination Inter-Functional Coordination means the people in the organizational that help in developing a marketing plan to achieve the organizational goals and satisfy the customer need and wants. The cooperation within the individual in the organization plays a part in this Marketing concept. In 2007, Crocs acquisition a Designer/manufacturer of sandals for beach/action sports called Ocean Minded. In the acquisition, Ocean Minded is introduced by Crocs  and helping Ocean Mind to boost up their product. Ocean Minded mission statement is; To become the global leader in sustainable lifestyle footwear, apparel and accessories whilst ensuring that the four pillars of the Ocean Minded brand – Quality, Authenticity, Responsibility and Community – resonate throughout our company, products, associates and actions. This brand helps Crocs to boost up their social responsibilities toward their employees, their organization, the customer, the environment and to the world. Crocs, Inc. and its founders continue to live the Ocean Minded lifestyle by actively leading beach clean-ups, and supporting and educating customers on the importance of leaving the ocean and all waterways in better condition than when they were found. Thus this shows that not only Crocs is Inter-functional coordination but also a responsible organization that wanted to help another brand that sole purpose to keep the world a better place. (crocs, 2013) Profit orientation Profit orientation Profit Orientation means a term used to describe a business that operates under the primary objective of making money. Although most commercial enterprises have some form of profit orientation to motivate employees to maximize revenues, the most successful producers also incorporate a customer orientation into their corporate philosophy to protect the company’s reputation and facilitate client satisfaction with its products. (BusinessDictionary) Profit Oriented organization means a business that main objective to generate profit. There are ways an organization may achieve the greatest profit for their organization while still giving the customer the satisfaction of their products.In Crocs Inc, the company wanted to make money by selling their clog shoes to the customers. Crocs Inc also have some ways to be Profit Orientation; Cheapest Marketing Strategy Crocs were able to build its brand and build momentum with word-of-mouth marketing without traditional high advertising costs. Crocs Inc started their name by using the cheapest way of Marketing. Word-of-mouth marketing (WOMM), also called word of mouth advertising, is an unpaid form of promotion; oral or written. In which satisfied customers tell other people how much they like a business, product, service, or event. Word-of-mouth is one of the most credible forms of advertising because people who don’t stand to gain personally by promoting something put their reputations on the line every time they make a recommendation. (Word-of-mouth marketing, 2013) This strategy is the cheapest way to spread the word about Crocs Brand to the world. Crocs use the social network to market and promotes their product toward their potential customer. Thus, they save up a lot by not having an expensive advertisement or building a billboard that might cost them a lot. Cutting cost Costs were lowered by the elimination of standard box packaging for individual pairs of shoes. They were also decreased by the reduction of stock-keeping units (fewer styles, sizes, etc) and by the use of inexpensive plastic resin material compared to leather and other fabrics. In addition, the plastic resin material allowed Crocs to lower manufacturing costs because the product could be made faster and cheaper using injection molding machines compared to traditional labor intensive methods. This speedy production, also made it possible for Crocs to revolutionize the traditional supply chain approach and make its shoes available to a wide range of retailers and consumers within weeks, not months. By lowering the cost, Crocs can obtain larger amount of profit. This is a great step toward not only to the organization profit margined but helping the other brand realize that Crocs have better ways of managing it cost. This show that Crocs uses the cheapest Marketing Strategy to promote it product, uses the Cheapest distribution Channel to sell their product and cut unnecessary cost to obtain larger amount of profit. Crocs are genius ways of profit orientation  organization. Marketing process consist of 4 step; Situation Analysis, Marketing Strategy, Marketing Mix Decision and Implementation and Control. Situation Analysis SWOT Analysis Strength In Croc Inc, they give not just comfort but by created a material called Croslite, that technologically design to gives each of Crocs Shoe comfort, softness, lightweight, non-marking and odor-resistant. If we think back, Crocs have eliminates most of the problem that we suffer about shoes. When we buy a shoe, we seek comfort, soft and stylish. Plus I always have a problem with new shoe that hurt my feet when I wear it the first time. Well with crocs, they no more painful shoes. The Croslite material ensures that Crocs will never hurt our feet when we wear it. Plus with Crocs, there is no more feet odor. They satisfied the most of customer’s needs, desires and expectation in one material. The product design also unique with many shapes that is very interesting. The price also reasonable based on the material that crocs use to create the product. The product very comfortable and stylish. Weakness Crocs does not have a diversified product offering beyond footwear, which causes revenues to be seasonal (since most of their footwear is worn in summer) and also very cyclical (dependent on consumer spending and performance of the retail sector). Demand for â€Å"Crocs Classic† shoes has been declining over time (from 30% of total sales in 2007 to 16% in 2009) as they transition to a mature product and therefore, revenues are contingent upon the success of new models and fads. Crocs has poor IT systems and depends on manual processes which are not efficient or scalable Opportunities Crocs has the ability to expand through growth in direct to consumer sales and internet sales. Given Crocs’ success internationally, they can continue expanding abroad by reaching untapped markets. In addition, it’s possible that the Crocs â€Å"fad† is in a different part of the fashion trend cycle  abroad and Crocs can even take advantage of further growth in countries where it already has a presence. Lastly, there is an industry movement towards more comfortable and casual shoes, so Crocs has the opportunity to attract new consumers by highlighting the benefits of Croslite. Threats The product of Crocs increase in counterfeit product and highly competitive market. Highly competitive market for example Crocs have to competitive with NIKE. Some retailer with more product differentiation. Decrease in consumer spending resulting from global economic condition poor publicity escalator incident Marketing Strategy The marketing strategy for Crocs is the different target of customer. They do not only focus to one type of customers. Crocs has defines their customers and what they need from Crocs. A) Kids. The Kids which comprised their 23% revenue of sales in 2009, is the number one customers for Crocs. Kids love their Crocs shoes because Crocs’ comfort, easy-on, easy-off style, bright colors and customizable Jibbitz accessories make them ideal for kids. And their low price point and broad size range make them ideal for parents on a budget with fast-growing children. Crocs Inc introduced a fall kids’ collection for school. Kids do love Crocs shoes and they wanted to wear them everywhere even to school. That why this falls collection comes with a â€Å"School Approve† symbol. This â€Å"School Approve symbol comes with meaning of features of closed toes, enclosed heels and non-marking soles that meet typical school dress code. Now kids can wear Crocs everywhere even in school. B) Women. 77% of Crocs sales in 2009 were from products geared towards adults, and suspect that the majority of those sales are to women. Continued focus on understanding the needs of this segment as well as effectively marketing to it. Crocs introduce the Feel the Love campaign seems to focus on female protagonists Marketing Mix Decision Product The Product that provided by Crocs is a brand new type of casual shoe, it is a clog that partly a shoe and a part sandal. This clog shoe is fun, whimsy, brightly-colored, comfortable and lightweight with perfect balance of functional appeal. Crocs Inc provides various types of shoes for women, men, girls and boys. The clog like shoe look ugly at first but with the appealing bright colors that the come with, it catches the buyers and customers. The bright color catches the attention of customers to try it on. Well, the materials that Crocs shoe made from actually make it far. The special Patented Closed Cell Resin (PCCR) warms and softens with your body heat and molds to your feet. The material eliminates all the shoes problem that we have in life. That what sold it worldwide. The wonder shoes. Pricing Croc wanted their product is accessible to many people so their base price point is RM90. They also eliminated a standard box packaging for individual pair of Crocs shoes. This step help them to lower their cost as well decrease their stock keeping unit. Place When we say The Place in Marketing Mix, there may explain how providing the product at a place which is convenient for consumers to know. Crocs evolves their distribution in retail by having each stores in every shopping complex, malls and even streets worldwide. But, recently they reduce on retail expansion and focus on others distribution strategies like having Crocs Kiosk and Online Crocs Shop. All the distribution strategies that implemented by Croc is focusing on the customer’s convenient to purchase a Crocs Shoes. There are now no boundaries in distribution. Promotion Last in Marketing Mix is The Promotion, it represents all of the methods of communication that a marketer may use to provide information to different parties about the product. Promotion comprises elements such as: advertising, public relations, personal selling and sales promotion. In Crocs Inc., they started their marketing strategies in having a Word-To-Mouth Marketing that is an unpaid form of promotion whereby it may be in oral or written form. It created a buzz that will make other people  satisfaction toward the clog shoe to another person. Crocs Inc spend less in promotion because of the word-to-mouth marketing that is the cheapest way of promotion. When the word get out, the influence people like celebrities like Al Pacino, Faith Hill and Paris Hilton were seen wearing the clogs shoes and with their social class influence the other people to wear one clog shoes. Even US President Bush wear one and he actually loves the clogs shoes. Other than using this word-to-mouth marketing, Crocs Inc also do some discounts, promotion online and public relations. Define marketing and related it with Crocs Inc understand us how Marketing works. It is more than Selling and Advertising a product. The major focus is the Customer Satisfaction towards a product. That why a study have been made and a strategies like The 4P’s Marketing Mix is developed. It is to understand more how marketing works. The company’s growth strategy includes: 1- distributing new and internally developed products through a wide range of channels e.g department stores, specialty footwear stores, sporting goods and outdoor retailers and Cocs website 2- acquisition of small footwear companies e.g Foam Creations in June 2004, Fury and EXO in October 2006, Jibbitz in December 2006, Ocean Minded in February 2007 and Bite in August 2007. 3- expansion into global markets with products distributed through more than 8000 international retail stores sold in about 90 countries. The company was able to realize high margins on its products due to high economies of scale and shift to third party operated facilities (83% of third-party manufacturers in China, Bosnia, Vietnam and Romania). The company faces a lot of challenges. 4- Crocs core competencies are supply chain management and small-retailer level marketing, just in time distribution. Croc has used its core competencies to build a brand familiarity and popularity and to distribute new models and accessories in mid-season. Their supply chain management has helped the company to create a stronger maturity map for their products, and to extend the maturity map through marketing How could Crocs exploit their core competencies in the future? Consider the following alternatives: a.Further vertical integration into materials a.Growth by acquisition b.Growth by product extension (Bogari, 2009) My recommendation Crocs have to focuses more on the shoes. Crocs should refocus its entire organization (design, manufacturing, and marketing) on the unique appeal of its shoes. Realign the distribution model in U.S. We believe that Crocs should reduce its focus on retail expansion and instead recommend migration to the model that has proven Reduce retail store presence. Crocs should carefully evaluate the returns on existing stores, and suspend plans to open new stores. For those stores that are not in key geographic areas and that are not strong performance.