This essay sets to critically answer various case study questions that are related to the international marketing efforts of Abercrombie & Fitch Group in Europe as one of the countries that have its target market. The case study questions focus on aspects such as the most appropriate marketing strategy that Abercrombie & Fitch brand should use in Europe and whether it is preferable to adapt or standardise the product policy to the European market, the principal risks that are associated with choosing differentiated pricing policy. Other issues that are going to comprehensively analysed include the option on whether the A&F brand should stick to its exclusive distribution policy or extend its distribution channels in European countries and lastly the key elements that should be taken into consideration when developing the communication policy that is designed for the European market.
The Most Appropriate Marketing Strategy for A&F Brand in Europe
The primary target market of A&F Brand in Europe is the youngsters or teenagers and the young adults between 14 and 28 years old (Gennaro, 2013, pp.32) One the best marketing strategy that this company should employ in attracting more customers in Europe who fall under this target market segment is through personification of its brands through the use of the image of the timeless youth (Gupta, Melewar and Bourlakis, 2010, pp.68). This strategy has already proven to be effective in the East Coast of the United States of American where there the largest population is made up the young people.
A&F Brand should first focus on this target market before expanding its target market portfolio to include other clients in the other age bracket such as the elderly. Moreover, another critical geographic market segmentation that A&F Brand should focus on exploiting is the young people located in the most of the prestigious shopping districts of the existing large cities across Europe (Gennaro, 2013, pp.36). Most of the shopping districts and large cities in Europe can be considered to be made of consumers who are very trendy and fashionable. Most of the customers in this geographical area are very sensitive to lifestyle changes thus making them an excellent target for this company whose cloth products meet the needs of this group of people (Gennaro, 2013, pp.39).
Additionally, A&F Brand should use needs-based positioning strategy to meet the needs and preferences of its target customers who in this case are mainly the young people in the age between 14 and 28 years of age (Campbell, Edgar and Stonehouse, 2011, pp.38). Most of the consumer needs of this group of customers is having access to a variety of high-quality garments that are designed to meet the current or trending lifestyles at a particular period or season. This marketing strategy is the most effective for use by A&F Brand as it will enable it to serve most or all the requirements of this specific group of customers which most of its competitors in Europe are unable to do yet thus giving it a competitive advantage over them (Campbell, Edgar and Stonehouse, 2011, pp.39). Furthermore, the use of experiential strategies such as making its stores more entertaining through the use of tasteful décor highlighting a festive atmosphere in well planned obscurity and implementation of certain rituals which may involve placing a dancing personnel in the aisles among other modes of increasing consumer’s shopping experience in its stores (Same and Larimo, 2012, pp.10).
Standardising or Adapting the Product Policy to the European Market
It is preferable for A&F Brand to adapt the product policy to the European market instead of standardising it. This approach will enable it to effectively create a brand community that has a great attachment to the potential and target customers present in this particular international market environment (Eggers, 2012, pp.318). There exists a significant connection between a given brand, the identity of target consumers of that brand and the existing culture thus adopting the product policy in the European market will enable A&F Brand to create a positive consumer behaviour and perception towards this brand (Eggers, 2012, pp.319). It would, therefore, be essential for A&F Brand to ensure that the kind of clothes and accessories that it will introduce in the European market conform to the cultural background and characteristics of the young people who are the primary target market in this international environment (Eggers, 2012, pp.326).
Principal Risks Associated with Opting for a Differentiated Pricing Policy between the USA and European Markets
The differentiated Pricing Policy that Abercrombie & Fitch Group has decided to adopt entails the act of selling the same product at different prices to customers located both in the USA and European markets. This pricing policy is, however, likely to bring numerous risks to this company and may even significantly affect its performance given the fact that most of the consumers in the international market have gained a substantial level of awareness about the prices of the local and imported products. This company will use one of the possible risks that are associated with differentiated pricing policy is decrease in sales in the long run as consumers will opt to buy those similar products in the market that are cheaper than those offered by Abercrombie & Fitch Group keeping in mind that most of the consumers are being rational (Thopil and Pouris, 2013, pp.2). Secondly, the company is likely to suffer from reduced customers base and loyalty due to selling the same products at different prices in either of these two markets. Customers are always inclined to maintaining their allegiance only to those companies that exercise fair or equitable pricing strategy for their similar products both locally and internationally (Thopil and Pouris, 2013, pp.3). Thirdly, there is a high possibility that Abercrombie & Fitch Group will experience a decline in the number of profits that it will sell since it will not be able to receive the same revenue for the similar products sold (Thopil and Pouris, 2013, pp.4).
Option on Whether to Stick to the Exclusive Distribution Strategy or Extend its Distribution Channels in the European Countries
The A&F brand should consider extending its distribution channels in the European countries since it is more beneficial when compared to the exclusive distribution strategy that is currently using. The exclusive distribution strategy that this company is using is significantly hindering its ability to cover more geographical location where there exist potential customers that are located in different parts of the European market (Lafontaine and Slade, 2014, pp.389). Through limiting the number of stores that it has opened in the European market, A&F brand has failed to meet exploit the entire market in Europe thus creating a market niche that may be exploited by its competitors soon (Lafontaine and Slade, 2014, pp.392). Therefore, the best way to solve this problem is through extending its distribution channels or stores in such a direction that they cover most of the geographical regions in the European market where there exist most of its target market segments (Lafontaine and Slade, 2014, pp.396).
Elements that need to be put into Consideration when Developing a Communication Policy
There are various factors that the A&F brand has to put into consideration when developing the communication policy that is going to be employed in the European market. For instance, it will be essential to put into account the cultural background of the target market segment of this company in the European market (Wagner, Liston and Miller, 2011, pp.97). The communication policy to be used should be in line with the cultural identity of the target customers thus enabling the company easily promote its products to a wide range of potential customers. Secondly, the company should consider its marketing objective and the target market given the fact that not all communication strategies suit every customer (Wagner, Liston and Miller, 2011, pp.99).
It will have to adopt a communication policy that is most convenient for young people such as the use of slang in some of its promotional strategies. Another element for A&F brand to put into consideration is the language that is commonly used by the target customers in the European market in the effort of eradicating any communication barrier that may emerge when dealing with the targeted clients (Wagner, Liston and Miller, 2011, pp.100). Moreover, the company should put into consideration the different situational factors such as the context in which most of its target clients are found to ensure that there is no misinterpretation of the information or message being communicated (Wagner, Liston and Miller, 2011, pp.100).
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