A Critical Analysis of Crocs’ Marketing Strategy

Agenda

• Analysis of Current Marketing Strategy– Company, Competition, Customers– Product, Price, Place, Promotion– SWOT Analysis

• Proposed Marketing Strategy

• Video Advertisement

Current Marketing Strategy – 3Cs• Company

– Design, manufacture, and distribute footwear and footwear accessories– Emphasis on comfort, functionality, and style – Proprietary Croslite™ material

• Competition– Highly competitive market

• Countless other manufacturers of comfortable and stylish shoes• Operate standalone Crocs retail outlets that compete with footwear

retailers

• Customers– Original target markets: gardeners and boat owners– Current target markets: men, women, and children looking for

comfortable and stylish shoes

Current Marketing Strategy – 4Ps• Product

– Footwear for men, women, and children– 4 product segments

• Core, Active, Casual, Style– Maximize comfort, maintain fashion

• Price Breakdown– Core: $29.99-$49.99– Casual & Active: $34.99-$89.99– Style: $39.99-$140.00

• Rubber boots as low as $39.99• Leather boots as high as $140.00

$29.99

$39.99

$140.00

Current Marketing Strategy – 4Ps• Place

– Wholesale Channel – 61% of sales– Crocs Retail Channel – 29.5% of sales– Crocs.com – 9.5%

• Promotion– Relatively small advertising budget

• Crocs 5.58% of Sales ($44.1 million)• Nike 11.73% of Sales ($2,448 billion)

– Print advertisements InStyle Magazine– Internet advertisements YouTube – Social media Facebook, Twitter– Little to no television advertising

SWOT Analysis - Internal• Strengths

– Proprietary Croslite ™ material• Ergonomic, lightweight, odor-resistant

– Unique designs– Competitively priced – Comfortable, functional, and stylish

• Weakness– Stereotype of fad – Lack of awareness of newer styles – Misconception that classic shoes are appropriate for all situations – Poor marketing execution; underfunded department

SWOT Analysis - External• Opportunities

– Potential to gain market share in shoe types other than their core product offering

– Growing e-retail industry– Lightweight shoes might appeal to an elderly target market

• Threats– Increase in counterfeit products– Highly competitive market

• Some retailers with more product differentiation– Decrease in consumer spending resulting from global economic

conditions– Poor publicity from escalator incidents

Primary Weaknesses• Lack of effective advertising

– Little focus on functionality of products in commercials– Weak brand image

• Customers believe that Crocs are a “fad”

• Lack of awareness for Crocs’ newer footwear offerings in the Active, Casual, and Style segments

• Poor distribution– Products are not sold in many department stores or well-known

shoe retailers

Proposed Marketing Strategy• “What Crocs are you wearing to your next…” campaign

– Implementation process:

1. Create entertaining commercial to play during a big event, such as the Super Bowl (biggest cash outlay similar to P&G)

2. Use the commercial to drive traffic to both Crocs’ website and Crocs’ YouTube page

3. Allow customers to submit events answering the question “what Crocs should I wear to my next ______?”

4. Film 30-second YouTube responses that highlight the product features and benefits of Crocs’ shoes and also introduce and expand visibility of their more fashionable footwear lines

Proposed Marketing Strategy – 4Ps

• Product Current styles remain unchanged, continue to expand product offerings

• Price Remains unchanged

• Place Expand distribution of products– Enter department stores and more traditional shoe retailers– Leverage style and quality of fashionable footwear lines

• Promotion “What Crocs are you wearing to your next…” campaign

Video Advertisement

Benefits of Video Advertisement

• Focus on functionality

• Creates new buzz about the product– Eliminates stereotype of a fad

• YouTube responses will introduce and create brand awareness for newer product offerings

• Reduces customer backlash towards original Crocs– Creates the understanding that not every shoe is appropriate for

every situations

Feasibility Study

• Largest cost will be the initial advertising push– Super Bowl commercials cost roughly $3 million per 30 seconds

• Follow-up YouTube responses are a cost effective way to reach a broader customer base and create dialogue between Crocs and the consumer

• No anticipated legal impediments or customer backlash

• Healthy gross margin 53.7% in 2010– 45.6% for Nike

Questions?