Mkt 761 Individual Assignment.docx

MKT 761 INDIVIDUAL ASSIGNMENT

PADINI VS UNIQLO

WAN KHAIDIR BIN WAN OMAR (2019936775)

Article 1: Padini’s Next Growth Phase to Come from Brands Outlet 1.0 Introduction Padini is a local apparel manufacturer, based in Malaysia and has been operating in manufacturing, trading and supplying garments for retailers and distributors across the country. It has expanded its operation through its local network of retail outlets comprising standalone stores, consignment counters and franchise stores for its mainstream brands such as Vincci, Padini Authentics, PDI, Padini, Seed, Miki and P&Co. All these outlets are mainly in urban malls. Now Padini is looking to tap into the market in suburban areas where competition is low. Padini introduced Brands Outlet into the market which brings a new concept to the company in order to increase their market shares by targeting less saturated apparel market in areas which have less to none competition from big players such as Uniqlo, Zara and H&M. As at to date, Padini has 27 Brands Outlet in several states. 1.1 Competitive Positioning Strategy Padini decided to move out from the stagnant and saturated apparel market which targeted mainly on urban residents with high quality merchandise and premium price where it saw the sales generated from its premium brands have started to stall. Brands Outlet has been positioned by the company to be a value for money clothing stores, offering merchandise at low price and acceptable level of quality. The executive director of Padini personally mentioned that this brand is for the people who is concerns on the budget but still wants to have stylish clothes with low price tag. Obviously, the quality would not reach to the level as per what high quality brands offer such as Zara and Uniqlo, considering the low price Since then, several outlets were opened in Kelantan and other states and the company is expecting to open more outlets in the future. 1.2 Base of Padini’s Competitive Advantage Padini’s competitive advantage lies on its ability to drive the price down at a level where it would be hard for other competitors to beat. The main reason why Padini was able to do so is because of the cheap raw materials available locally and also abundant supply of domestic labours. 1.3 Target Market and Factors Which Affect Purchasing Behaviour Brands Outlet clothing line is aimed at toddlers to tweens and those aged 18 to 35. These are the people who usually just started working and have limited budget with low disposable income but still have the desire to be fashionable.

They are price sensitive and will always economize their purchases by comparing price and end up buying lower one. Any slight increase or decrease in price of clothes will affect the demand significantly.

Article 2: Uniqlo, The Strategy Behind the Global Japanese Fast Fashion Retail Brand 2.0 Introduction Uniqlo is a Japanese brand name, established in 1984 by Tadashi Yanai and has been very successful globally, thanks to the aggressive expansion plan implemented by Tadashi. Since its inception, Uniqlo was perceived to be a discount retailer selling cheap and low quality apparel to suburbs. Now the perception has completely changed after Tadashi made the decision to position Uniqlo as a retailer selling middle to high price apparels with high quality after he opened a 3-storey store in Harajuku, central of Tokyo in 1998. Since then, Uniqlo has created a strong presence in global market and has been accepted by consumer all over world with more than 1,300 stores in 15 countries across Asia, Europe and US. In Malaysia, Uniqlo is seen as a brand at par with other top international brands such as Zara, H&M and Forever21. Currently it has 48 stores located mainly in big malls such as Sunway Pyramid, 1 Utama, and IOI Malls. 2.1 Competitive Positioning Strategy The company adopted a differentiation strategy to position its brand. It takes pride on its commitment to innovation and company culture and views itself as a brand which offers unique functional performance clothes owing to in – house fabric and design innovation. Uniqlo differentiates itself from the competitors by branding its signature innovations with names like HeatTech, LifeWear and AIRism. In addition to that, it also provides first rate physical shopping experience by successfully managing its store through inculcation of positive vibes among employees and interactive consumer interaction by having in – store technology like video tutorials that describe product features. All Uniqlo stores were purposely opened in prime areas especially in central cities to avoid from being perceived as a low quality brand. 2.2 Base of Uniqlo’s Competitive Advantage Uniqlo’s competitive advantage comes from its ability to design the clothes based on ongoing innovation which emphasise on unique functional performance. Besides, clothes design is not the only strong success factor where Uniqlo leverages on its in-store customer service which goes beyond the normal standards.

2.3 Target Market and Factors Which Affect Purchasing Behaviour Uniqlo’s target market is basically everyone. The brand philosophy ‘Made for All’ positions its clothing to transcend age, gender, ethnicity and all other ways to define people. It does not have any particular target market since it always believes that the clothes are made to be simple, essential yet universal where they can be worn by almost everyone. The biggest factor which affect the purchasing behaviour of consumer is the design of the clothes produced. Uniqlo’s consumer buys the clothes because of their unique functional performance. Each cloth is designed to cater to a very specific needs of consumer. For example, HeatTech is designed for those who wear cloth to keep their body warm and comfortable during winter or cold weather. Any design which does not take into account the needs of consumer will see the demand reduces significantly. For example, the sales for HeatTech apparels in Malaysia were not performing very well since most of the time, the weather here is always hot and humid.

3.0 Which Strategy is Superior: Padini or Uniqlo? Based on the discussion above, competitive strategy adopted by Uniqlo proved to be sustainable and superior. Competing through differentiation strategy enables the company to stay relevant and sustain in the market. Generic competitive strategy through low price initiative will not give the company a very strong competitive advantage since it will instantly lose if new competitors started to offer lower price in price war. Being innovative enables Uniqlo to be one step ahead of its competitors. Through innovation, it would be difficult for other competitors to imitate and to be able to come out with similar innovation, competitors have to invest heavily in research and development. Realising that, now Uniqlo brings the definition of being innovative to a higher level by differentiating itself through its fabric innovations. These new fabrics are all branded and copyrighted, which poses a struggle for competitors to come out with similar fabrics and attempt to match this point of differentiation. Uniqlo’s founder, Tadashi Yanai used to say that Uniqlo’s largest competitor is Apple because of the company’s desire to be the most innovative company in the wold.