Crocs Brand Study

INTEGRATED PROJECT ON

A SUBMISSION Submitted to: Pearl Academy School of Fashion

In partial fulfillments of the Post Graduate Diploma in Fashion Business (Marketing and Merchandising)

By: Stalin Joy Himanshi Gupta Anjali Jindal (2018-2020)

ACKNOWLEDGEMENT

The successful completion of this file marks the beginning of a learning experience on such an interesting subject. It would be worthwhile to mention the contributions made by the people around us leading to the completion of this research.

I would like to thank Our Teachers, Mentors and Course Leaders for their unending encouragement. All the more, we would also like to thank them for having trust and confidenceonus.Theyprovidedthemostvaluableinformationonpagesettin gandlogical arrangementofmyproject.Theirlastminutesuggestionsprovedveryusefuli ncompleting my research ontime.

Wearealsothankfultoourparents,allourfriendsandothersourceswhogaveu salltheir much needed support and inspiration as well as time we needed in preparing thisproject.

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DECLARATION We hereby declare that the integrated project entitled , ‘Study on Crocs as a declining brand’ , is an original work done by us under the guidance of Prof. Ritu Jain ,Affiliation and is being submitted in partial fulfillment of the requirements for completion of 1stsemester course work in the program of FashionBusiness(MarketingandMerchandising)(201820)inPearlAcademy.

Theresultembodiesinthisprojecthavenotbeensubmittedtoanyotherinstitute or university for any kind of degree ordiploma.

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EXECUTIVE SUMMARY Chapter 1 In the world where fashion only meant wearing long uncomfortable heels, the brand Crocs. Inc came up with the idea of ugly fashion which is comfortable and durable. In 2002 the brand Crocs was found in Colorado, U.S. and they manufactured only 1000 pairs and threw them on a beach at people to show them how strong and at the same time soft this innovative crocodile shaped shoe is. And on the first day itself they sold out all the pairs.

This chapter will include all the information that defines the brand from its introduction to current stage and the reasons of the declining of the brand Crocs. It will contain brand history and the brands that have been acquired by Crocs over the years of its existence. The vision of the brand and its mission and objectives can also be found in the chapter.

The brand Crocs is declining in India and the data for same is given in this chapter to prove it.

Chapter-2 This chapter will have the research objectives and the design of research we did to prove our rationale and the methodology that was required for each objective. We were given 4 objectives that are mentioned in this chapter and the process of work that has been done is shown with explanation in the chapter.

Chapter-3 This chapter contains the findings of our research on the given objectives and the analysis of the data that we received form the research we did. It contains of the environmental analysis as well as marketing analysis of the brand Crocs. Inc. it contains all the data about how the micro and macro factors affect the working of a brand and how important marketing strategies are for a brand to grow in any market.

Chapter-4 This chapter will include the limitations and problems we faced while doing the study on the brand. We faced several problems while doing primary and secondary research like a low number of samples, unreliable data and aged journals and articles.

Chapter-5 This chapter will include our understanding of the data that we have received from our primary and secondary research. It will have the analysis and our understanding of the received data.

Chapter-6 This chapter will have the detailed conclusion of our understanding of the data received and found from various sources.

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TABLE OF CONTENT 1.

2.

3.

4.

5.

6.

7.

CHAPTER PAGE NO. Introduction 1.1.1.

Rationale……………………………………………….

5 1.1.2.

Brand Overview………………………………………..

6 1.1.3.

Parent Company………………………………………..

7-10 1.1.4.

History …………………………………………………

11 1.1.5.

Mission…………………………………………………

11 1.1.6.

USP…………………………………………………….

11-12 Research objectives and Methodology 2.1. Research problem statement………………………………...

13 2.2. Research objectives………………………………………….

2.2.1.1. RO 1 – To analyze the marketing strategies 13 of the brand 2.2.1.2. RO 2 – To analyze the consumer satisfaction 13-14 towards retail mix elements 2.2.1.3. RO 3 – To identify the Autumn Winter 2018 15-22 trends followed by the chosen brand ( using WGSN) 2.2.1.4. RO 4 – To identify the details of the styles 23-24 2.3. Research design…………………………………………….

25-26 2.4. Research methods …………………………………………

26-29 2.5. Data collection……………………………………………..

29-30 2.6. Sampling Technique……………………………………….

30-32 2.7. Data analysis……………………………………………….

32 Findings and Analysis 3.1. Environmental analysis…………………………………….  PESTLE………………………………………………

33-36  Competitor analysis…………………………………..

36-38  SWOT analysis……………………………………….

39-40  Product Life Cycle……………………………………

41-42  Porter five force analysis……………………………..

43-45 3.2. Marketing analysis………………………………………….  Branding – Brand logo and Tagline………………….

46  Segmentation, Targeting and Positioning…………….

47-48  Ansoff matrix…………………………………….……

48-49  BCG matrix……………………………………………

50 3.3. Retail mix Analysis………………………….………………

50-56 3.4. Consumer analysis………………………………..…………56-64 Limitations faced………………………………..……………….64-65 Insight……………………………………..……………………..66 Conclusion………………………………………………………..66-67 Recommendations………………………………………………..68 4

Chapter 1- Introduction 1.1.1 Rationale In 2002, Crocs, Inc. was founded. A rapid growth in demand of these ‘one of a kind’ shoes impressedthe whole industry. Most competitors viewed Crocs as an ugly shoe, which in turn would not appealto many customers. But, in various segments the shoe was very attractive due to their low weight,comfort, slip-resistance and functionality. Besides the fact that Crocs were used by professionals, after a short period of time, peopleconsidered the anti-slip shoe as a fashion statement. The Croc product succeeded beyond thefounders’ wildest dreams and profit kept coming in.

However, after four years the market started to saturate. Competitors and customers thought of theCrocs to be a ‘one trick pony’. Although profits remained very high and market share for Crocs was favorable, Crocs needs to prevent an expected decrease in both of these aspects. Croc wants totackle these problems and wants to ensure profits in the future. It faces several intense challenges.

First of all, competitors find it easy to imitate the popular Crocs concept. Minor modifications canmake sure that Crocs’ patent is not offended. The imitators are mostly easily accessible and are lessexpensive.

Second, Crocs faced severe competition from established competitors who run a more efficient distribution system. Sketcher’s is one of the main rivals that has better established distributionchannels. By doing so, they are able to take more in-store display spots. The limited distributionchannel of Crocs can kept a fair amount of customers away.

The third and final challenge is the expansion problem. Crocs are forced to expand their product lineto prevent becoming the above mentioned ‘one trick pony’. What markets need to be targeted, andwhich one will be most profitable? Is it feasible to transfer their core business activities to the other,new products?

In conclusion, why is Crocs declining and in what way can Crocs attack the problems/ challenges best?

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1.1.2Brand Overview Crocs has sold more than 300 million pairs of shoes. That’s a lot of shoes!

Crocs™ shoes are sold in more than 90 countries – the brand now does business in more than 30 languages. That means you can spot Crocs whether you are walking the streets of New York City, Hong Kong or London.

Headquartered in Niwot, Colorado, Crocs has more than 4,000 employees globally.

Crocs is traded on the NASDAQ stock market (NASDAQ: CROX).

Crocs has regional offices in Boston, Massachusetts; Amsterdam, Netherlands; Singapore; Seoul, Korea; Tokyo, Japan; Shanghai and Padua, Italy.

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1.1.3 Parent Company

The Crocsbrand stands for innovation, fun and comfort for people around the who want shoes that conform to their personalities and lifestyles, as well as to their feet. Crocsis taking a big step forward in providing intuitive comfort to feet everywhere now in more styles and in more places for more occasions than ever before.  Brand Heritage In 2002 the finding year, Croc introduced an innovative shoe made of a revolutionary material called Croslite. Croslite technology hold unique characteristics that allow it to perform on both land and in water, characteristics that were new to the footwear industry. The name Croc was given to the company after the multi-environment, amphibious nature of Crocodiles.

Building momentum with a shoe unlike any other, Crocsprovide consumers with innovative, fun and comfortable footwear that can be worn for a variety of lifestyle occasions.

The Crocsbrand name started to build a feel-good physical and emotional experience with a life of its own. Crocshas quickly evolved to cross-cultural boundaries and now leads a global consumer movement of over 100 million pairs of shoes sold to date  Brand Attributes 1. Innovative What separates Crocs™ from ordinary shoes? Radical thinking, industry-leading innovation, meticulous health-minded research, and never forgetting who we ultimately answer to: Feet.

2. Fun Whether it’s with colour, clever design, or in the way we get our message out, Crocs™ always strives for smiles in an effort to elicit a feel-good emotional experience.

3. Comfort Our bread and butter, profound comfort is all about a feel-good physical experience. Innovations like advanced ergonomic design, über lightweight technology, and a massaging foot bed all make sure you’re comfortable from toe to head, and vice versa.

4. Simple Utilitarian design with versatile function helps Crocs™ stand out. In a world full of bells and whistles, less is more.

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 Sub-brands  Ocean Minded

Mission Statement 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.

Be Ocean Minded™ That simple idea is the foundation of the company. Being ‘ocean minded’ and living an ‘ocean lifestyle’ begins with the inspiration and allure that the world’s oceans and beaches offer each one of us. The Ocean Minded™ brand enables an individual to identify, visualize, and embrace their personal beach and water-oriented passions in the course of their daily adventure.

Live. Protect. Respect.™ People can no longer deny that this planet is rapidly becoming a crowded and polluted place. Ocean Minded™ believes people should utilize recycled and sustainable materials in their footwear, apparel, and accessories whenever possible, and they consistently strive to achieve this.

Additionally, they feel that as both a corporation and a group of individuals, it is essential to Live, Protect, and Respect this environment. Since 1996, they have been organizing community beach clean-ups around the world, and educating the customers on the importance of leaving their chosen playgrounds in better condition than when they were found.

Their belief that everything eventually ends up in the ocean has led them to host additional clean-ups in the mountains, as well as on the banks of inland rivers and lakes.

These are the cornerstones of the brand, and they invite you to Be Ocean Minded.

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 YOU by Crocs

Mission To bring profound comfort with unexpected style and intelligent fashion to women’s footwear.

Who We They?

It’s the miracle brainchild of uber footwear phenomenon Crocs & fashionista Samantha Bryan.

YOU by crocs™ is classic, fashionable & ageless. Samantha stays true to the notion of comfort without compromising style!!

Combining fashion & comfort footwear; created with YOU in mind.

Brand History Following back surgery in 2004, YOU by crocs™ designer Samantha Bryan was advised against wearing high heels. This inspired her to start designing shoes in her native Australia, that were comfortable while still making her feel stylish. Her passion led her to explore international markets where her concept was noticed by Crocs, thus the collaboration began.

Brand Attributes Partnering with Crocs Inc brings the comfort component of the proprietary Croslite™ material into the footbeds of all the YOU by crocs™ styles. Crocs Inc comfort technology is proudly part of every shoe to make sure with every step you feel the love!

YOU by crocs™ leather lined fashionable wedges, heels, flats & boots offer supreme comfort with unexpected style for every savvy girl.

Enjoy and keep your feet happy.

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 Jibbitz

Jibbitz makes unique, colourful products for kids to personalize their Crocs shoes and accessory items.

All over the world, millions of kids have been using Jibbitz charms to personalize their Crocs shoes with their unique designs, entertainment and sports licenses, and new 3-D styles. Now, Jibbitz charms can be used with wristbands, purses, cell phone cases, beach bags, and backpacks, to personalize those items as well – every item is designed to show off your favourite charms!

Their accessory items are designed to complement your favorite Crocs shoes – everything from the new Crocband styles to the best-selling Mammoth clogs for those cold winter months – so you can show your style with almost every kids Crocs shoe we sell.

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1.1.4History Born in the city Boulder, Colo. as a simple and comfortable boat shoe, today Crocs™ footwear is being found across the world and in more than 120 styles for men, women and children. With its distinct collections, Crocs offers colourful, lightweight comfort for any occasion and every season.

All Crocs™ shoes are uniquely designed and manufactured using the company’s proprietary closed-cell resin, Croslite™, a technology that gives each pair of shoes the soft, comfortable, lightweight, non-marking and odour-resistant qualities that Crocs wearers love. Crocs™ footwear is ideal for casual wear, as well as for professional use and recreational activities.

More than 100 million pairs of Crocs™ footwear have been sold.

1.1.5 Mission 

Bring profound comfort, fun and innovation to the world’s feet. – Crocs Inc. mission statement.



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. – Ocean Minded’s Mission statement.



At Crocs, we take our fun as seriously as we take our collective mission to make the world's most delightfully comfortable shoes.

1.1.6 USP  Durability

Durability being one of the unique selling propositions for Crocs, the products are well known for their durability. Most of the products are all season footwear which is perfect for extreme 11

weather conditions. The unique material used in Crocs products are highly flexible and can easily bend and fold over rugged paths while trekking, hiking or if used for river crossing.

 Customization

Most Crocs products can be customized and decorated to add to its uniqueness. Although, it may appear that one can customize only kids’ shoes, all the shoes with holes on them can be customized. Along with kids, more and more youngsters are adopting to this trend of shoe customization. The leftmost picture above is an example of a customized shoe wherein customers fix different types of attachments. These attachments are termed as ‘Jibbitz’ by Crocs and fall under their accessories category of offerings.

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Chapter-2 Research objectives and methodology 2.1 Research problem statement To prove that the brand Crocs is on the declining stage in India and to recommend the ways for the revival of the brand in Indian market. Higher prices, cheaper alternatives(knockoffs) available in the market, unavailability of the product in tier 2& 3 states and are the possible reasons behind the decline of the brand in India.

2.2 Research Objectives 2.2.1 RO 1 – To analyze the marketing strategies of the brand Crocs is one of the world’s best shoe makers. They achieved success by using very inexpensive materials to make their shoes. And especially their clog designed shoes are the best and most selling product they have.

As per our research we came to know that crocs basically use vertical integration. They utilize the additional suppliers of resin. They also use additional in house to maintain a quality and minimize backlog. As a single facility of their production accounts for 55% of footwear products. Again they have a strict limit over their diversification of products.

Crocs usually focuses on their high marginal products. They always protect intellectual property rights and trademarks as they were one of the best shoemakers. They have also developed stand-alone retail stores for brand recognition. And also acquired a different brand to diversity.

After discussing all these things we can see that crocs is following some certain strategies to market their products.it is basically corporate level strategy. Where all their goal is to market and expand their market through some tactics. But first they started their business through mouth marketing where they don’t have to spend a lot of money before any model or actors.

And also their croslite is designed as a loveable kind hearted animated foamy friend of feet.

2.2.2 RO 2 – Toanalyze the Consumer Satisfaction towards Retail Mix Elements A retail marketing mix has four parts, each directed toward the target audience. The way you design your marketing mix affects your value proposition and the way customers perceive your store. It will vary based on the type of consumers you serve and the market in which you operate. Finding the correct marketing mix is an important part of positioning your retail outlet to stand out from competitors.

Customer satisfaction is a critical concept for customer success professionals to understand and live by, and it's actually about more than a money-back guarantee. In this post, we'll start discussing customer satisfaction: what it is, and why it's important for your business to start measuring.

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From the survey done, majority of consumers purchase experience is marked as average and more of the consumers said the=at they were last satisfied than that of who said they were most satisfied.

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2.2.3 RO 3: To identify the Autumn Winter 2018 trends followed by the chosen brand (Using WGSN as a source of Information) FOOTWEAR TRENDSAutumn Winter 2018

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17

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19

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21

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2.2.4 RO 4: To identify the details of the styles in chosen category

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Crocs New Arrival Collection According to Autum Winter 2018 Trends

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2.3 Research Design A research design is a basic plan that guides the data collection and analysis phases of the research project. It provides the framework that specifies the type of information to be collected, its sources and collection procedure (Kinnear & Taylor, 1996; Churchill &Iacobucci 2005) define research design: “it is the blueprint that is followed to complete the study” and it “ensures that the study is relevant to the problem and will use economical procedure”.

Decisions regarding what, when, where, how much, by what means, concerning an inquiry constitute a research design. A research design is the arrangement of conditions for collection and analysis of data in a manner that aims to combine the relevance to the research purpose with economy in procedure.

"While designing a research, one is faced with a continual series of trade-offs. Since there are tropically numerous design alternatives that will work, the goal is to find the design that enhances the value of the information obtained, while reducing the cost of obtaining it" (Malhotra, 2005).

While conducting the present study, it has been taken to incorporate these concepts in the research deign. There are many frameworks of research design which can be classified into two major categories: Exploratory and descriptive.

Exploratory research is more to do with secondary research while descriptive research is associated with primary research. The secondary research provides insight and understanding of the problem setting, while primary research seeks to quantify the data and typically applies some form of statistical analysis. In this thesis, both these research designs have been employed in different degrees.

The research questions were framed keeping the objectives of the research in consideration. The research questions are followed by formulation of research methodology, identification of sampling procedures (sampling frame, sample size), scale formation, followed by validity and reliability tests of the instrument (pilot testing), data collection and analysis of the data collected.

Hence, the research design used for this research work is exploratory research for identification of variables followed by descriptive research design for sampling and data collection.

Research Objective

RO 1

Research Design

Exploratory

Data Collection Method

Data Collection Tool

Secondary

Articles, Reports, Websites, Research Papers.

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RO 2

Descriptive &Exploratory

Primary & secondary

Articles, Reports, Websites, Research Paper. Survey through Questionnaire (Simple random sampling)

Consumer sample size- 200 RO 3

Exploratory

RO4

Exploratory

Secondary

Secondary

Websites, WGSN, Crocs official site

Websites, WGSN, Crocs official site

2.4 Research Methods Research methods are the various procedures, schemes and algorithms used in research. All the methods used by a researcher during a research study are termed as research methods. They are essentially planned, scientific and value-neutral. They include theoretical procedures, experimental studies, numerical schemes, statistical approaches, etc. Research methods help us collect samples, data and find a solution to a problem. Particularly, scientific research methods call for explanations based on collected facts, measurements and observations and not on reasoning alone. They accept only those explanations which can be verified by experiments.

Research can be conducted in a quantitative and/or qualitative manner. Quantitative research refers to the systematic empirical investigation of social phenomena via statistical, mathematical or computational techniques. Qualitative research, generates statistics through the use of large-scale survey research, using methods such as questionnaire or structured interviews. The goal of the quantitative approach is to add to the body of knowledge by building formal theory that explains, predicts and controls the phenomenon of interest. The first step in the quantitative approach is to review appropriate literature in order to develop a conceptual framework that specifies relevant variables and expected relationships among them(Bickman& Rog, 1998).

This research is done the quantitative approach for the collection of data to have enough evidence to prove rationale. Also to find about the consumer satisfaction and response about Crocs footwear, which required a large enough sample to be able to test the rationale and get the findings and gather enough evidence to conduct a credible analysis. The main features in a quantitative study are larger population samples, the data collection is done with numbers or percentage calculations, and it can be used to generalise to other populations (Bryman & Bell, 2007, p.155).

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The area of study is confined to Delhi. The data collected for the study through a structured questionnaire. The study consists of both primary and secondary data. Simple random sampling technique was adopted to determine the sample size. The data for the study were collected from 200 respondents.

 Research Methodology of Research Objective 1: “To analyze the Marketing Strategies of the Brand.”

The research design used to understand the first research objectives is Exploratory Research. It was the initial research conducted to clarify and understand the nature of the topic. To have a deep understanding of what are the marketing strategies and which of the strategies are being used by Crocs. This research design was used because of the limited amount of knowledge and to gain more knowledge on this subject. Secondary data was collected data through existing data sources such as research papers, reports, journals and websites to gather information. Secondary data was an inexpensive way to collect data. Data collected helped in the deeper understanding and exploration about the generation, their characteristics.

Research Objective - 1 “To analyze the Marketing Strategies of the Brand.”

Exploratary Research

Secondary Research

http://www.busines sdictionary.com/defi nition/marketingstrategy.html

ReportMarketing strategy

https://www.inves topedia.com/term s/m/marketingstrategy.asp

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 Research Methodology of Research Objective 2: “To analyze the Consumer Satisfaction towards Retail Mix Elements” The most appropriate method of research design to understand the research objective 2 was Descriptive as well as Exploratory Research. To have a deep understanding of how much the consumer satisfaction towards the retail mix of the brand Crocs in India. This research design was used because of the limited amount of knowledge and to gain more knowledge on this subject. Primary data and Secondary datawas collected data through Consumer feedback forms and existing data sources such as research papers , reports, journals and websites to gather information. Primary data was an expensive way to collect data whereas Secondary data was an inexpensive way to collect data. Data collected helped in the deeper understanding andexploration about the generation , their characteristics.

Research Objective 2: To analyse the consumer satisfaction towards retail mix elements.

Descriptiv e Research

Exploratory Research

Survey Online Reviews of Crocs.

Questionnaire responses from 50 respondants

Official site Comments

Articles on Consumer satisfaction

Simple Random Sampling

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

Research Methodology of Research Objective 3&4

“To identify the Autumn Winter 2018 trends followed by the chosen brand.”

“To identify the details of the styles in chosen category.”

Research objective 3 & 4 To identify the Autumn Winter 2018 trends followed by the chosen brand.

To identify the details of the styles in chosen category

Exploratory Research

Secondary Data

WGSN Page

Official website of Crocs (latest collection)

2.5 SAMPLING AND DATA COLLECTION One of the cornerstones of interpretive research is theoretical sampling, i.e. data gathering that is driven by concepts derived from the evolving theory, going to places, people, or events that will maximize opportunities to discover variations among concepts (Glaser and Strauss, 1967). This investigation focuses on one organization in which the entrepreneur is also a marketing expert.

Data were collected as part of a larger study occurring over more than 18 months of intermittent engagement. This longitudinal method corresponds with Gilmore and Coviello’s (1999) call for contextualized research methodologies at the marketing/ entrepreneurship interface.

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 RESEARCH OBJECTIVE-1 “To analyze the marketing strategies of Crocs.”

SECONDARY DATA – SOURCES OF DATA Secondary data refers to data collected from a different source by the investigator. Previous researchers or agents collect data for their study. The researcher is the first researcher to collect these data. In addition, the investigator has no clear idea of the intricacies of the data.The sample size and the sample technique can be ambiguous. It may also be unreliable for the accuracy of the data. Below are 2 broad classifications of secondary data sources.

Published Sources Many national organizations, international organizations and official publications collect different statistical data. Data relating to business, trade, trade, prices, economy, production, services, industry, currency and foreign affairs are collected.They also gather and publish information about different (internal and external) socio - economic phenomena. These publications contain various types of statistical reports. Central Government Official Publications, Research Institutions Publications, Committee reports and international publications are some secondary data published sources.

Unpublished Sources Some statistical data are not always published. Such data are stored by private companies ' institutions. Such unpublished data are often used by researchers to make their research even more original.

RESEARCH OBJECTIVE- 2 “To analyze the consumer satisfaction towards retail mix.”

Primary Research Primary Research includesquantitative data which is collected through questionnaire to understand and confirm the reliability in India.

Quantitative Data

 Questionnaire The quantitative data for research objective was collected through questionnaires with an aim to seek information on consumer satisfaction towards retail mix of Crocs in India.

 Sample Size Ross defines the sample size as the number of data collection units selected (Ross 2005). The study investigates consumer awareness and consumer satisfaction with the Crocs brand's retail 30

mix. In order to study this research goal, a total of 200 respondents were selected as the larger the sample, the more answers that are reflected. According to Rescoe, an appropriate study involves more than 30 respondents and less than 500 respondents (Jamalzadeh, 2012). So a questionnaire was designed for 350 people in order to achieve a more accurate and reliable result. Interviewers were drawn from different levels of education and gender. Respondents of both the genders and age groups were chosen as the brand is a supplier of footwear of all the age groups. Whereas for income group, people belonging to middle class and above were chosen as the prices of the products provided by Crocs are quite expensive for a rational consumer.

 Sample Unit Sample unit used for this research is from the age group of 15-60 years, both men & women. It is one of the units into which an aggregate is divided for the purpose of sampling, each unit being regarded as individual and indivisible when the selection is made (Explorable.com, 2010).

 Sample technique The survey was also conducted using Simple random sampling. A simple random sample is a subset of a statistical population in which each member of the subset has an equal probability of being chosen. There is, no need to divide the population into sub-populations or take any other additional steps before selecting members of the population at random. A simple random sample is meant to be an unbiased representation of a group. It is considered a fair way to select a sample from a larger population, since every member of the population has an equal chance of getting selected.(Investopedia.com)

 Sample Frame The selection of a sample for the survey from a target population requires the construction of a sampling frame, without which the survey will not be possible. It is prepared in the form of a list with elements of population (Ross, 2005). The reason behind the selection of the area was due to the access of location easily and interacting with the respondents face to face in an effective manner. With the sample size of 50 respondents for the survey, the sample frame area selected was Delhi/ NCR.

 Statistical Method Cronbach's alpha was used to test the scales that were adapted which was used to compile the questionnaire. Correlation was used to analyze the relation between factors, the data and results from the filled questionnaires was used to test the hypothesis.

The data and results from the filled questionnaires was later used to form and compile the questions for the focus group to justify the hypothesis.

 Research Objective 3&4“To identify the Autumn Winter 2018 trends followed by the chosen brand (Using WGSN as a source of Information)”

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“To identify the details of the styles in chosen category (10 Styles in Men’s/ 10 Styles in Women’s or 10 Styles each in Men/Women).”

 SECONDARY DATA – SOURCES OF DATA Secondary data refers to the data that the investigator collects from another source. Past investigators or agents collect data required for their study. The investigator is the first researcher or statistician to collect this data. Moreover, the investigator does not have a clear idea about the intricacies of the data. There may be ambiguity in terms of the sample size and sample technique. There may also be unreliability with respect to the accuracy of the data.

2.7 Data Analysis Proposed Data analysis is a process by which statistical and/or logical techniques are systematically used to describe and illustrate, condense and recapture and evaluate data. Different analytical procedures according to Shamoo and Resnik (2003) " provide a way to draw inductive inferences from data and distinguish the signal from the noise (statistical fluctuations) present in the data”.

While data analysis can include statistical procedures in qualitative research, analysis often becomes an ongoing iterative process in which data is collected and analyzed almost simultaneously. In fact, researchers generally analyze patterns during the entire data collection phase in observations (Savenye, Robinson, 2004). The form of the analysis is determined by the specific qualitative approach taken (field study, ethnography content analysis, oral history, biography, unobtrusive research) and the form of the data (field notes, documents, audiotape, videotape).

An essential component of ensuring data integrity is the accurate and appropriate analysis of research findings. Improper statistical analyses distort scientific findings, mislead casual readers (Shepard, 2002), and may negatively influence the public perception of research. Integrity issues are just as relevant to analysis of non-statistical data as well.

The process of evaluating data using analytical and logical reasoning to examine each component of the data provided. Data from various sources is gathered, reviewed, and then analyzed to form some sort of finding or conclusion. There are a variety of specific data analysis method, some of which include data mining, text analytics, business intelligence, and data visualizations.(businessdictionary,2016)

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Chapter 3 – Findings and analysis 3.1 Environmental analysis 3.1.1PESTLE

Political

Legal

Economical

PESTEL Environme ntal

Social

Technologi cal

PESTEL analysis provided us valuable insight into the challenges that CROC’S Inc. faced in the industry. An understanding of the overall competitive landscape that prevented investors and entrepreneurs from partaking any risky ventures if the risk arises out of, say, an unstable political regime or a sudden economic recession. This may be best exemplified by the recent exit of the United Kingdom from the European Union. The sudden fallout was political and caused many investors to pull out of new ventures and halt their expansions, as the future became uncertain in the wake of this decision.  Political Financial regulations of a country like India, surely impacts any business that enters. Every nation and its government have different outlook on business. Not many of them are open to Foreign Direct Investment. In many nations local laws can make entry difficult to very difficult.

Partnering the local brands is the only way to penetrate such markets. In nations like India, red tape is a major barrier for the foreign brands trying to enter. Similar, other barriers exist when a foreign brand tries to enter or expand in a local market. The political environment of any nation affects the condition of businesses there.

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Political disruption results in the disruption of the market because it affects the economy.

Political turmoil can also disrupt the supply chain and then give rise to several difficulties for the brands. In countries where political turmoil is regular, businesses are always under a threat.

Moreover, government policies too can spoil the game of brands if they are not friendly.

 Economic Economic activities in Indian market also hada major effect on how Crocs are going to do businessthere. As the Crocs footwear pricing is not so affordable, and if the economic activity is declining and people are cost cutting, they may have switched away from Crocs to some other brand that sells at affordable prices. Affordable pricing strategy surely helps fight off some of the effects of low economic activity.

India has been through a web of low economic activity. The recession had hurt many brands deeply which the dollar even more powerful. A stronger dollar means reduced profits from the markets outside US. Lower economic activity lead to decline in the purchasing power of the customers who were forced to do cost cutting. This brought significant change on sales. Moreover, a rise in labor or production costs also increased financial burden on the brand.

 Social/Socio-cultural: Crocs cannot stand separated from the society. They had to work according to social trends and mind their social responsibility too. Many companies are investing in social responsibility not just to attract attention but because investing in society is always a notable thing to do. It is always worth it and has generated proven results. Society and culture are important for businesses and has been proved by research. Brands that lose attention of cultural aspect of business and marketing are at the risk of losing their customers.

Crocs Inc. has minded this aspect of business. It hasn’t entered any new market without doing its primary research. The reason is that if proper research is not done, the risk of the brand and products not gaining popularity gets high. So, Crocs researches new markets and cultures before releasing any new product or investing in new markets. It eases a lot of risks.

Culture has always influenced people’s buying decisions. People generally prefer buying things which are connected to their culture. Something not familiar to the culture finds lower acceptance among the customers from a particular cultural group. So, Crocs does its research and tries to make products that goes with the local culture. It believes in experimentation and makes and sells fashion that is acceptable for local people.

Florent Andre Bailly, Vice-President (Middle East, India and Africa), Crocs, says for all other markets blacks, blues and olive greens will work fine. But not for India, he points out.

“India is so vibrant. We realized we have to be more Indian and localize our products to appeal to a large segment of consumers,” he says.

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The Crocs design team played around with purple, yellow and orange to attract Indian buyers.

And bang on, consumers young and old lapped up its casuals range. It is not just the color of the shoes that were tweaked to tickle the Indian palate but also the style, design and retail ambience.

The class distribution among the population is also of paramount importance. Crocs Inc is unable to promote a premium product to the general public as the majority of the population is lower class; rather, they have to rely on very niche marketing.

 Technology: Technology can rapidly strip down the price structure and competitive scenario of the industry in a very short amount of time. It thus becomes very important to constantly and consistently innovate, not only for the sake of increasing profits, but also to prevent obsolescence in the near future. Crocs footwear is the best example of innovative products completely redesigning the norm for an entire industry.

The recent technological developments and breakthroughs made by competitors, If Crocs Inc. encounters a new technology that is gaining popularity in the industry, it is important to monitor the level of popularity and how quickly it is growing and disrupting its competitors’ revenues.

This would tell how to adequately respond to the innovation, either by matching the same technology or finding an innovative alternative.

Also it was very easy, and thus quickly, the technology got diffused to other firms in the industry, leading to other firms copying the features of Crocs footwear but improvement of technology would have transformed what the product actually offered. If this improvement was drastic, then other firms in the industry would have suffered.

 Environmental: Footwear industry holds standards of environmental protection in their head as the norm. This norm then tells what the brand should aim for, to prevent boycotts due to a lack of environmental conscientiousness.

A company in the footwear industry, for example, is not expected to cause the same level of pollution and environmental degradation as an oil company. The new consumer, with the interest and the knowledge, tend to give its business to brands which is more ethical, particularly about the environment in the wake of global warming.

The current weather conditions may significantly impact the ability of Crocs Inc to manage the transportation of both the resources and the finished product. This, in turn, would affect the delivery dates of the final product in the case of, say, an unexpected monsoon.

 Legal As the popular saying goes Law is everywhere, a business cannot expect to remain uninfluenced by it. There are several laws that businesses are required to comply with. Crocs Inc policies on their own are not enough to efficiently protect Crocs Inc and its workers, making Crocs Inc appear an undesirable place of employment that may repel skilled, talented workers.

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Intellectual property laws and other data protection laws are, in place to protect the ideas and patents of companies who are only profiting because of that information. If there is a likelihood that the data is stolen, then Crocs Inc will lose its competitive edge and have a high chance of failure.

Laws are also placed to ensure a certain level of quality or reasonable price for certain products to keep the customer safe and prevent them for being provided. The industries this applies to find often their costs elevated.

3.1.2 Competitor analysis The global casual footwear and apparel industry is highly competitive. Major competitors in the footwear segment include Nike Inc., Heelys Inc., Deckers Outdoor Corp., Skechers USA Inc., and Wolverine World Wide, Inc. In the retail segment, significant competitors include Macy’s Inc., Nordstrom Inc., Dick’s Sporting Goods Inc., and Collective Brands Inc. The principal qualitative traits that provide retailers a competitive advantage in the footwear

industry include a well-known brand name, product differentiation, favorable customer demographics/target market, an expanded distribution network, active new product development, a superior management team, established manufacturing processes/low manufacturing costs, efficient inventory management, good real estate (sales locations) and well-designed technology systems. There are many established players in this space that have strong financial resources, comprehensive product lines, broad market presence, long-standing relationships with wholesalers, long operating histories, great distribution capabilities, strong brand recognition, and considerable marketing resources. Additionally, there are very low barriers to entry which invites new market entrants to imitate popular styles andfashions( apparelandfootwear.org, 2017).

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Comparison of Crocs and Key Competitors $ in 000s

CROX

DECK

HLYS1

NIKE2

SKX

WWW3

Full time employees

3,560

1,000

51

34,300

2,160

4,018

Revenues by Geography Total Revenues Americas 645,767 100% International/Other 298,004 46% 347,763 54%

813,177 645,993 167,184

100% 43,777 100% 79% 21% 15,157 35% 28,620 65%

Revenues by Distribution Channel Retail Revenues Wholesale 152,300 Revenues Online 404,500 Revenues 89,000

78,951 658,560 75,666

10% 81% 9%

Retail store count Manufacturing % International % in house

24% 63% 14%

19,176,100 7,827,600 11,348,500

100% 41% 1,436,440 59% 1,117,833

100% 78% 1,101,056 22% 779,678

318,607

0% n/a n/an/a 43,777 100% 0%

321,829 1,091,980 22,631

100% 71% 29%

321,378

22% 76% 2%

n/a n/an/a

317

18

0

674

246

88

100% 27%

100% 0%

100% 0%

100% 0%

100% 0%

93% 7%

Source: Capital IQ, 2009 10-K for CROX, DECk, HLYS, NIKE, SKX and WWW

1. Heelys only sells via retail and online. Online revenue data was not made available.

2. Nike has a May 31 year-end. Approximately $10.3b (53%) of revenue is footwear 3. The Wolverine Footwear Group represents $233.2m of total revenues. Wolverine manufacturers 7% of its product in-house. Company manufacturing facilities are located within Michigan and the Dominican Republic.

Nike Inc. Nike offers shoes, apparel, equipment and accessories for virtually all athletic and recreational activities. The company markets its products under nine additional brand names: Converse, Chuck Taylor, All Star, One Star, Umbro, Jack Purcell, Cole Haan, Bragano, and Hurley. The company sells its products through retail stores, independent distributors, licensees and itswebsite. Nike has a significant presence abroad and a majority of their 2009 sales were international. In addition, footwear revenues of $10.3 billion accounted for approximately 55% of total revenues. Nike operates 338 retail stores in the United States and 336 retail stores internationally. The company was founded in 1964. ( Capital IQ ) Skechers USA, Inc. Skechers offers a large variety of footwear products for men, women and kids. The company markets its own brands, including Skechers Sport, Skechers Cali, Skechers Work and Skechers Kids. The company sells its products at its own retail stores and website as well as through department stores, specialty stores, athletic retailers, boutiques and catalog and internet retailers.

Skechers operates 219 retail stores in the United States, as well as 27 internationally. The company was founded in 1992.

Wolverine World Wide, Inc. Wolverine World Wide offers footwear, apparel, and accessories in approximately 180 countries. The company markets its products under the brands of Bates, Harley-Davidson Footwear, Hush Puppies, Merrell, Patagonia Footwear and Wolverine. The company sells its products at department stores, national chains, catalogs, specialty retailers, mass merchants, internet retailers and governments and municipalities in the United States. Wolverine also operates 83 retail stores in North America and 5 in the United Kingdom. The company was founded in 1883.

Heelys, Inc. Heelys primarily offers their own branded wheeled shoes that allow wearers to easily transition 37

from walking or running to rolling (by shifting weight to the heel). The company also markets non-wheeled footwear and accessories. Heelys sells its products to sporting goods retailers, specialty apparel and footwear retailers, department stores, family footwear stores and online retailers. The company was founded in 2000.

Summary of Crocs and Competitors

Trading Multiples

Operating Statistics

Financial Data

Company Name

DECK HLYS

Market Cap Net Debt EV Total Revenue LTM EBITDA LTM Diluted EPS Excl. Extra Items LTM

CRO X 939 (77) 862 646 33 (1)

Gross Margin % LTM EBITDA Margin % LTM EBIT Margin % LTM Net Income Margin % LTM TotalRevenues,1YrGrowth%LTM Total Debt/Capital % Total Debt/EBITDA LTM

47.7 5.1 (0.5) (6.5) (10.5) 0.5 0.0x

46.7 24.2 23.0 14.7 15.0 ‐ ‐

2,027 76 (357) (60) 1,671 16 835 44 202 (2) 9 (0)

TEV/EBITDA LTM

26.0

P/E LTM

NM 17.7

P/TangBV LTM

3.7

35.8 (4.5) (6.4) (11.7) (38.1) ‐ ‐

8.7 NM 4.3

NM 1.0

NIKE SKX WWW Avg* 37,836 (3,471) 34,366 18,650 2,810 4

1,934 (278) 1,660 1,436 94 1

1,610 (84) 1,526 1,131 149 2

8,697 (850) 7,848 4,419 651 3

45.2 15.1 13.2 9.3 (4.6) 5.7 0.2x

43.2 6.5 5.1 3.8 (0.3) 2.4 0.2x

39.9 13.1 11.6 7.0 (4.8) 0.2 0.0x

42.2 10.9 9.3 4.6 (6.6) 2.8 0.1x

12.2

17.7 10.3

12.2

22.2

35.7 20.4

24.0

4.3

2.6

3.4

3.1

*Simple Average

Current Environment As a result of the economic conditions, consumers have become more “value-focused” purchasers. The middle-class group “is the most challenged and this has lead to an even greater bifurcation in retail thereby benefiting luxury positioned retailers on one end and off-price warehouse clubs on the other.”(Driscoll, Marie, 2010) According to the Bureau of Labor Statistics, unemployment reached 15.3 million in 2009, a yearly increase of 3.9 million.

According to the NPD Group, “total footwear dollar sales decreased 3.6% to $42.4 billion in 2009, while total unit sales dropped 7.3%. In 2008, footwear sales totaled $44 billion, a decrease of 2.6% from the previous year.”

The shoe industry is broken down into fashion, performance and leisure segment. As a percent of sales, the segments represent (through first nine months of 2009) On the manufacturing slide, US imports slid in 2008 year over year to 2.2 billion pairs from 2.4 billion pairs, respectively. However, the value of imported footwear rose during this period from $18.9 billion to $19.1 billion. The vast majority of these imports come from China(American Apparel and Footwear Association).

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3.1.3 SWOT Analysis  Strengths: 

   



Goodwill: Crocs is a well-known brand and is recognized around the world. They have proprietary rights to the material Crosslite, which gives them a competitive advantage in the marketplace and increases the popularity of their shoes.

Brightly coloured: crocs shoes are very bright colored.

Lightweight shoes: Crocs shoes are very lightweight, so they attract a large number of customers.

Odor-resistant shoes: Since crocs have holes in it and is made of a special material which makes it odor-resistant.

Has control over manufacturing and timing: The company has the control over manufacturing and timing because it is not depending on other companies for manufacturing activities.

Just in time inventory management: Where retailers could order only several weeks in advance and order low amounts to deliver currently popular styles and colors quickly to customers.

 Weaknesses:     





Relatively limited distribution channel: Crocs has limited distribution channel so they cannot operate their sales over whole country.

Seasonal usage: Crocs does not have a diversified products offering beyond footwears which causes revenues to be seasonal and also very cyclical.

Having no other various products:Company financial performance is highly concentrated and dependent on footwear products.

Ugly shoes:Crocs shoes are kind of ugly. They are not very trendy. They are not appealing to all.

Company Owned Outlets: Although the company in the footwear industry operates with the business model of franchisee as well as company-owned outlets Crocs operates 556 companyowned outlets which imply that company has created the redundant assets which may affect its profitability.

Product Myopia: Companies like Nike, Adidas, and others offers a wide range of footwear from casual wear, sportswear to formal wear but Crocs being present in the only non-athletic segment may affect its profitability in the competitive market.

Safety Issues: The quality of material used by the Crocs is non-biodegradable and is unsafe as it slips on the surface and has other Health issues.

 Opportunities: 

Expand their business: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.

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



Include products in addition to shoes: They can expand their business by including wide range of products in addition to shoes. They can make various types of products to increase sales.

Other investor’s willingness: In various current job segments, Companies and institutes are willing to invest in croc gear. So that will be a great opportunity for crocs to expand their business forward.

 Threats: 



  

Anti-Crocs sentiment in the market:There is anti-Crocs sentiment in the market, as evidenced by the website “I Hate Crocs.com”31 which could reduce demand for its products.

Competition from the local players: Although Crocs is a global brand it is facing fierce competition from the counterfeit products, Stylish products of other brands like Wolverine World Wide, Sketchers USA, Nike Inc., Reebok, Lotto, and Adidas, etc.

Short Lifecycle: Continuously changing lifestyle & fashion resulting into short life Cycle of the designs of the footwear are a major threat as far as industry is concerned.

Supplier Dominancy: Since major of its production is outsourced; Suppliers and valuechain entities have more bargaining power over the company.

Government Regulations: Import restrictions, foreign investment policies of the government, duty& tariffs plays a critical role in the success of the company and affect the operation and business of the company in the long run.

Strengths Goodwill Brightly Colored Lightweight shoes Odor-resistant shoes Has control over manufacturing and timing Just in time inventory management

Weaknesses Relatively limited distribution channel Seasonal usage Ugly shoes Having no other various products Product myopia Safety issues

Threats Oppurtunities Expand their business Include products in addition to shoes Other investor's willingness

Anti--Crocs sentiment in the market Competition from local players Short Lifecycle Supplier dominancy Government regulations

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3.1.4 Product Life Cycle  INTRODUCTION For Crocs, the introduction of their infamous rubber clog-type shoes was during 2002-2003. Without any products too similar to it, Crocs came onto the market as it own against some speculation that the company would not be successful. During this stage also puts the product out there and usually creates competition through actions such as implementing a skimming strategy. This is when a company goes about setting a high price to cover the cost of making the product.

 GROWTH From 2006 to 2007, the growth period of the shoe was at a high peak, the "fad" element of the product was more than prominent. There are some components to the growth stage which Crocs hit when they first came out. Their sales grew rapidly as you could see through the profit, and this resulted in more competitors including knock-off Crocs. There were also little widgets you could design your Crocs with which was popular for their child market.     

Rapid Sales Growth More Competitors Repeat Purchasers New Features Broad Distribution

 MATURITY This stage followed not too far after the growth stage for Crocs because their fad lasted only so long.

This stage is where profits started to decline and sales slowed down. The shoes have been popular and began to prove that they were more of a fad product as opposed to a fashion product with a longer life cycle.

 DECLINE The decline of a product in the product life cycle consists of sales dropping and environmental change occurring such as society's changing favors and likes of products. Fad products have a quicker time frame which is what happened to Crocs.

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3.1.5 Porter Five force analysis Porter Five Forces Analysis is a strategic management tool to analyze industry and understand underlying levers of profitability in a given industry. Crocs, Inc. managers can use Porter Five Forces to understand how the five competitive forces influence profitability and develop a strategy for enhancing Crocs, Inc. competitive advantage and long term profitability in Textile Footwear & Accessories industry.

What are Porter Five (5) Forces In his revolutionary article - "Five Forces that Shape Strategy", Michael Porter observed five forces that have significant impact on a firm's profitability in its industry. These five forces analysis today in business world is also known as -Porter Five Forces Analysis. The Porter Five (5) Forces are     

Threat of New Entrants Bargaining Power of Suppliers Bargaining Power of Buyers Threat from Substitute Products Rivalry among the existing players.

Porter Five Forces is a holistic strategy framework that took strategic decision away from just analysing the present competition. Porter Five Forces focuses on - how Crocs, Inc. can build a sustainable competitive advantage in Apparel Footwear & Accessories industry. Managers at Crocs, Inc. can not only use Porter Five Forces to develop a strategic position with in Apparel 42

Footwear & Accessories industry but also can explore profitable opportunities in whole Consumer Goods sector.

Crocs, Inc. Porter Five (5) Forces Analysis for Consumer Goods Industry

Threat of new entrants (Low)

Bargainig power of suppliers (Medium)

Industry Rivalory

Bargainin g power of the buyer (High)

Threat of substitute s (High)

Threats of New Entrants New entrants in Apparel Footwear & Accessories brings innovation, new ways of doing things and put pressure on Crocs, Inc. through lower pricing strategy, reducing costs, and providing new value propositions to the customers. Crocs, Inc. has to manage all these challenges and build effective barriers to safeguard its competitive edge.

How Crocs, Inc. can tackle the Threats of New Entrants   

By innovating new products and services. New products not only brings new customers to the fold but also give old customer a reason to buy Crocs, Inc. ‘s products.

By building economies of scale so that it can lower the fixed cost per unit.

Building capacities and spending money on research and development. New entrants are less likely to enter a dynamic industry where the established players such as Crocs, Inc. keep defining the standards regularly. It significantly reduces the window of extraordinary profits for the new firms thus discourage new players in the industry.

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Bargaining Power of Suppliers All most all the companies in the Apparel Footwear & Accessories industry buy their raw material from numerous suppliers. Suppliers in dominant position can decrease the margins Crocs, Inc. can earn in the market. Powerful suppliers in Consumer Goods sector use their negotiating power to extract higher prices from the firms in Apparel Footwear & Accessories field. The overall impact of higher supplier bargaining power is that it lowers the overall profitability of Apparel Footwear & Accessories.

How Crocs, Inc. can tackle Bargaining Power of the Suppliers   

By building efficient supply chain with multiple suppliers.

By experimenting with product designs using different materials so that if the prices go up of one raw material then company can shift to another.

Developing dedicated suppliers whose business depends upon the firm. One of the lessons Crocs, Inc. can learn from Wal-Mart and Nike is how these companies developed third party manufacturers whose business solely depends on them thus creating a scenario where these third party manufacturers have significantly less bargaining power compare to Wal-Mart and Nike.

Bargaining Power of Buyers Buyers are often a demanding lot. They want to buy the best offerings available by paying the minimum price as possible. This put pressure on Crocs, Inc. profitability in the long run. The smaller and more powerful the customer base is of Crocs, Inc. the higher the bargaining power of the customers and higher their ability to seek increasing discounts and offers.

How Crocs, Inc. can tackle the Bargaining Power of Buyer 





By building a large base of customers. This will be helpful in two ways. It will reduce the bargaining power of the buyers plus it will provide an opportunity to the firm to streamline its sales and production process.

By rapidly innovating new products. Customers often seek discounts and offerings on established products so if Crocs, Inc. keep on coming up with new products then it can limit the bargaining power of buyers.

New products will also reduce the defection of existing customers of Crocs, Inc. to its competitors.

Threats of Substitute Products or Services When a new product or service meets a similar customer needs in different ways, industry profitability suffers. For example services like Dropbox and Google Drive are substitute to storage hardware drives. The threat of a substitute product or service is high if it offers a value proposition that is uniquely different from present offerings of the industry.

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How Crocs, Inc. can tackle the Treat of Substitute Products / Services   

By being service oriented rather than just product oriented.

By understanding the core need of the customer rather than what the customer is buying.

By increasing the switching cost for the customers.

Rivalry among the Existing Competitors If the rivalry among the existing players in an industry is intense then it will drive down prices and decrease the overall profitability of the industry. Crocs, Inc. operates in a very competitive Apparel Footwear & Accessories industry. This competition does take toll on the overall long term profitability of the organization.

How Crocs, Inc. can tackle Intense Rivalry among the Existing Competitors in Textile Apparel Footwear & Accessories industry

  

By building a sustainable differentiation By building scale so that it can compete better Collaborating with competitors to increase the market size rather than just competing for small market.

Implications of Porter Five Forces on Crocs, Inc. By analysing all the five competitive forces Crocs, Inc. strategists can gain a complete picture of what impacts the profitability of the organization in Textile - Apparel Footwear & Accessories industry. They can identify game changing trends early on and can swiftly respond to exploit the emerging opportunity. By understanding the Porter Five Forces in great detail Crocs, Inc. 's managers can shape those forces in their favour.

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3.2 Marketing Analysis 3.2.1 Branding – Brand logo and Tagline The process involved in creating a unique name and image for a product in the mind of consumers, mainly by means of publicity campaigns with a consistent theme. Branding aims to create an important and differentiated market presence that attracts and retains loyal customers.(businessdictionary,2018)

LOGO: The logo of Crocs is a face of a Crocodile who is an amphibian and survives on land and in water and so does Crocs footwear. They were specialized as beach-wear in the beginning.

Secondly, Crocs footwear are very durable and strong just like a crocodile has a tough skin and can bear a lot of resistance.

Tagline-In 2002 when the Brand Crocs was introduced, they started off with the tagline “Feel the love” by which they sent the message that your footwears will love your feet and provide you the comfort that your heels and other shoes fails too.

Crocs then expanding its footwear's availability into the booming Indian marketin 2007 with a new tagline, " Walk in comfort, wear in style. "The new brand campaign sends the message that Crocs can be worn every day, for every occasion.

In 2017 the concept of“Come As You Are” is built on the insight that it has never been easier to judge others. As a brand that has been bullied themselves, Crocs wanted to convey empathy for and understanding of their consumers through this campaign.

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3.2.2 STP analysis  SEGMENTATION Crocs inc. uses psychographic and demographic segmentation strategies with factors such as age, gender, location, marital status and income groups as to serve thechanging needs of the customers.

Needs such as providing protection to their feet from any type of danger. ‘

 TARGETING The main motive of targeting strategy is to understand whether to have same products for all consumers or different products for different customer groups. Crocs Inc. uses a differentiated targeting strategy to target customers looking for casual style footwear and those customers who are looking for mix styles and personal look styles.

Crocs Clogs (Main product) can remain with an undifferentiated strategy, where the other parts of the product mix are dedicated for a certain segment and will lean more towards a concentrated strategy.

MEN AND WOMEN DEMOGRAPHIC Age Occupation PSYCHOGRAPHIC Social Class Lifestyle BEHAVIOUR Occasion Benefits Attitude

KIDS

12+ years Professionals

3 to 12

Middle and working class Likes to play outdoors Walk a lot Lightweight and Comfortable Relieved that this product exists

Easy to clean and water resistant

Mainstream casual style with functionMix popular casual styles for personal look Prefers brands providing personal casual style options to match each family member’s unique personality, while providing comfort and versatility in support of everyday adventures.  Adults (35-54)  • 62% female  • 85% Married, 66% Kids in household  • Middle-class

Always mixing it up with tried-and-true classics, new popular styles, or maybe, a bit of both.

Anything goes as these active and independent young adults create their casual personal looks.

• Young adults (21-34) • Even male/female • Single, newly married • Middle-class

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 POSITIONING Positioning helps in understanding where the brand stands in the minds of the consumers. Crocs uses value based positioning strategy to position itself as a brand offering comfortable and styled casual footwear which suits customer’s personality.

3.2.3 Ansoff matrix

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Market Development Market development is the market growth strategy adopted by the brand Crocs Ltd. The firm used this strategy to target new markets with the existing products. Several other leading footwear firms like Nike, Adidas, Puma, etc. also follow the same strategy to enter different markets for market expansion. Crocs Ltd. sells its footwear in more than 90 countries, this expansion from the current market to another market where the product did not existed shows market development.

In market development, the product is a new entrant in the market. Thus there were several factors which influenced the market development strategy of a firm. The product already had a high brand equity, it just required distribution points in the new market. On the other hand, Croc’s was not established in their current market, they should have never adopted a market development strategy as the brand needs to first cater the existing markets.

The risk factor of a market development strategy is higher. This is because lots of investment needs to be done when entering new markets. The brand needs to advertise and market the product for the customers to accept it. For the same investment in admin expenses, advertising expenses or possibly new production facilities is required. Thus the brand might have to develop new strategic business units itself to have a strong market development. This is exactly what is done in international firms, wherein the unit in another country is treated as a separate business unit. (www.marketing91.com)

3.2.4 BCG matrix

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Crocs Ltd. came up with an innovative product which immediately gained good growth rate. In the year 2006 the sales growth rate was 226.7%. Initially the product increased customer interest and more and more people were buying the product which made it a high market share product. Here the product moved on to be a Cash Cow as it had lower competition and high market share.

However the market share of such a product was unknown. After 2009 the product lost customer interest and was not purchased anymore due to which it did not gain market share, the growth rate went down to -10.5% and it ultimately became a Dog. Question marks are products which may give high returns but at the same time may also flop and may have to be taken out of the market. The major problem associated with having Question marks is the amount of investment which it might need and whether the investment will give returns in the end or whether it will be completely wasted.

Dogs Crocs Inc. currently can be classified as dogs because they have low market share and low growth rate.

Among the 25 competitors Crocs has a market share of 0.28% which is very low. The products are neither generating high amount of profits nor requiring higher investments. Over here the brand has to take a decision whether they should divest these products or they can rebuild them and thereby make them saleable again which will eventually increase the market share of the product.

Strategies for Dogs – Depending on the amount of cash which is already invested by the brand, the company can either divest the product altogether or it can rebuild the product through rebranding / innovation / adding new features etc. However, moving a dog towards a star or a cash cow is very difficult. It can be moved only to the question mark region where again the future of the product is unknown.

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3.3 Retail Mix analysis Crocs is into designing, manufacturing, developing, marketing and distributing accessories and footwear for children, women and men in the global market. Its footwear products include boots, sneakers, flats, wedges, sandals and clogs.

Crocs is a specialty store as it specializes in one product line-casual footwear Crocs have a broad portfolio that includes shoes made from Croslite material to provide a lightweight, comfortable and odour-resistant pair of shoes. Product segment of this quality brand is divided into style, casual, active and core. Crocs also deal in fashion accessories that complement its brand image.

Location: High Street Shop No-5, Usha Niketan, 32 Bunglow Road, Kamla Nagar, C-10, Connaught Place, Delhi - 110001, C Block Mall Pacific Mall Subash Nagar Select City Walk Saket DLF Promenard Vasant Kunj Store Size: 500 sq.ft. to 2000 sq. ft.

Pricing- 700-6000 Rs. Store Design: Visual Merchandising

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MARKETING MIX Crocs is a public company that basically started as a manufacturer of shoes. It was founded in the year 2002 by its founders George Boedecker, Lyndon Hanson and Scott Seamans. It is a global company with its headquarter based in Niwot in the United States. Some of its main rival companies are as follows –   

Nike Timberland Deckers Outdoor Corporation

PRODUCT: Crocs is a multi-talented company and along with its subsidiaries is responsible for designing, manufacturing, developing, marketing and distributing accessories and footwear for children, women and men in the global market. Its footwear products include boots, sneakers, flats, wedges, sandals and clogs. They are produced in several colour schemes, for instance, there are twenty colour choices for its Classic styles, whereas other styles have four to six colour choices.

Crocs have a broad portfolio that includes shoes made from Croslite material to provide a lightweight, comfortable and odour-resistant pair of shoes. Product segment of this quality brand is divided into style, casual, active and core. Crocs also deal in fashion accessories that complement its brand image.

Sunglasses, as well as colourful and lightweight knee pads, are in demand products along with a line of logo apparel. Products include socks, beanies, hats, sweatshirts and t-shirts in several colour schemes and having Crocs logo. In the year 2003, Crocs launched the Nile, its first style statement especially for women and in the year 2005 company introduced CrocsRx collection for people with a foot problem. In the year 2008, Crocs Cares was introduced and in 2009, Prepare collection came into being. Later the brand was also responsible for Hover sneakers and Crocs Chameleons line.

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PLACE: Crocs is an international brand and cater to clients in at least ninety countries of the world. Its distribution channel includes international and domestic distributors and retailers along with direct-dealing consumers. This is possible through a wide network that consists of nearly two hundred and seventy-five brand operated retail stores, twelve Webstores, one hundred and eighty-sixes outlets and ninety-eight kiosks. Manufacturing of Crocs footwear takes place in its manufacturing facilities in China, Mexico, Romania, Italy, Bosnia, Argentina and Vietnam. 61% of its sales are through wholesale channels, 29.5% through retail and 9.5% through its online stores.

PRICE: Crocs Company has tried to maintain the low-cost base for manufacturing of its products.

Minimization of costs has helped them in retaining their reasonable pricing policy and in increasing sales of various products. Revenues of the brand have increased in each region because of positive customer reception. Crocs have maintained a competitive pricingpolicy so that it does not lose its customers to its rival companies. The brand has several products in the consumer market with different prices for each line. Some of them have an economic pricing policy and some reasonable pricing policy. It is relatively a new company and hence in order to penetrate new markets it has kept its pricing range open and affordable. This is done to increase its sales as an increase in volumes will ultimately lead to better revenues.

PROMOTION: Crocs as a qualitative brand have always believed in a strong marketing policy to promote its brand name in the international market. Its commercial on television was entertaining and revolved around its tagline Find Your Fun. The company has also used other platforms in social media like Facebook and YouTube and magazines like the InStyle magazine to market its products. The brand has made a deal with Twitter for launching a brand new advertising campaign.

Crocs wordmark and its logo are included in every product. The company has always been associated with events like fashion runways and sports. It was title sponsor from years 2006 to 2009 of Association of Volleyball Professionals. Mario Batali, a celebrity was seen wearing shoes from Crocs. Numerous famous personalities have been seen wearing shoes from Crocs brand. In the year 2007, American president George Bush was wearing black crocs and Michelle Obama, wife of President Obama was seen wearing a pair of Crocs in the year 2009.

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These are some of the social media marketing campaigns of Crocs

These are the brand ambassador of Crocs.

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3.4 Consumer analysis

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Statistical Analysis Pearson Correlation Pearson's correlation coefficient is the covariance of the two variables divided by the product of their standard deviations. The form of the definition involves a "product moment", that is, the mean (the first moment about the origin) of the product of the mean-adjusted random variables; hence the modifier product-moment in the name.

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The Correlation has come to the value 0.9 which means there is a highly positiveans strong relationship between the income and quality. From the Pearson correlation analysis, it can be concluded that there is a higher demand of good quality products with higher the purchasing power. More the Income of the consumer more they want their shoes to be of good quality.

The Correlation has come to the value -0.12 which means there is a weak negative relationship between the gender and merchandise liking. This means there is no connection between the different genders finding any difference between the merchandise collection of the brand.

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Consumer analysis - II

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Chapter – 4 Limitations 

Sample size –Our sample size is too small which made it very difficult to find significant relationships from the data, as statistical tests normally require a larger sample size to ensure a representative distribution of the population

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Availability of reliable data – Lack of data limited the scope of our analysis, the size of our sample, and it was a significant obstacle in finding the trends and a meaningful relationships

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Age of the data – Most of the above study is based on secondary data and some sections like the competitor analysis are having data which is more than 5 years old. So, on the basis of old data making current assumptions was a big limitation.

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Lack of previous studies in this area – Literature review is the most important part of this research as it helps to identify the scope of the work we have done so far. However, there was very little prior research on our topic. We were not able to find tons of scholarly paper addressing the research problem.

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Chapter – 5 Insights As one of the leading manufacturer and retailer of casual shoes, Crocs Inc. is a well-known brand that offers lightweight, comfortable and durable footwear for men, women and children.

Croc’s Inc. was growing very fast and the key was their revolutionary technology CROSLITE which gave them advantage compared to the competitors. As a case study for ‘Declining brand – Crocs’ at pearl academy , we have been following Crocs Inc. for past few months. After our in depth research of the brand, we have come up with a strategy to improve Crocs. By using PESTLE, SWOT, Ansoff matrix, Product life cycle and developing marketing mix,we have evaluated the current business modeland strategy in order to come up with recommendationsonhowtomake Crocs even strongerinthemarket. By examining the key strategies from marketing communication and branding as well as competitor analysis, we are able to work out a new strategy. Almost everything in the Market research has been covered and analyzed, by doing so, we have developed recommendations on how we believe Crocs should improve.

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Chapter- 6 Conclusion In 2002, Crocs, Inc. was founded. A quick growth in demand of these ‘special’ shoes impressedthe whole industry. Everyone was looking Crocs as an ugly shoe, which would not tempt many buyers. But, in various areas the shoe was very attractive due to their low weight,comfort, slip-resistance and other functions. Being very famous amongst the professionals, after a short period of time, the shoe became a fashion statement. The founders’ never imagined such type of success which they got.

However, just after 5 to 6 years the market started to saturate. Competitors and customers started looking the Crocs as a ‘one trick pony’. Although profits remained very high and market share for Crocs was also favorable, Crocs just needed to avoid an expected decrease in both of these areas. Crocs while tackling these problems faced many serious challenges.

First of all, imitating their popular concept was becoming easy. Small changes made sure that even the patent was not offended. The imitators or duplicates present in India are easily accessible and are cheap too.

Secondly, Crocs faced tough competition from their established competitors who had a better distribution system. Sketcher’s one of their main competitor hasa better established distribution channels. Due to which they were able to take more in-store display spots. The limited distribution channel of Crocs kept a bigamount of customers away.

Lastly, the expansion problem was becoming a big challenge. Crocs needed to expand their product lineto prevent becoming the above mentioned ‘one trick pony’.

Since its inception, it has focused on three issues: market counteraction and industry risk; lower production costs; market trend adaptation.We recommend that Crocs implement a turnaround strategy with the following key features: Focus on the shoes and key customer segments- Crocs should refocus its entire organization (design, manufacturing, marketing) on the unique appeal of its shoes Management Information Systems and Supply Chain Logistics- Systems and supply chain improvements should occupy a significant portion of management’s time until the issues are satisfactorily resolved.

Building momentum with a shoe unlike any other, Crocs™ provide consumers with innovative, fun and comfortable footwear that can be worn for a variety of lifestyle occasions.

The Crocs™ brand name started to build a feel-good physical and emotional experience with a life of its own. Crocs™ has quickly evolved to cross-cultural boundaries and now leads a global consumer movement of over 100 million pairs of shoes sold to date

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Crocs closed most of the manufacturing units in China and Asia after facing a major decline in the sales.Crocs will still have seven stores in the United States, including ones in New York and Miami, Colorado and it plans on expanding there again, focusing on key cities such as these.

The company, which is owned by three friends and has the USP of Croslite technology which makes the footwear soft and durable can still come back to its monopoly.

Crocs has stores in more than 125 countries, and has sold more than 120million pairs globally.

Crocs ' revenue fell rapidly, from a peak of $ 847.4 million in 2007 to a $ 645.8 million in 2009.

This decline has increased in all the regions in which the company operates. Management attributes to a combination of macroeconomic factors for the deterioration of operating and financial performance (the global economic crisis resulted in a reduction in consumer spending and decreased volume in malls and retail establishments) and difficulty in executing Crocs’ long-term business strategy (significant challenges in merchandising an expanded product line through existing wholesale channels, and both the declining demand for mature products and the increasing competition from imitation products The combination of decreasing revenues, restructuring costs and other one-time expenditures resulted in losses of $ 185.1 million and $ 42.1 million respectively in FY08 and FY09. When the market price fell, many investors lost their faith because CROCS management was relatively young and therefore unproven. It is therefore essential to analyze the track of CROCS management. The management of Crocs has proven very competent. Since its inception, it has focused on three issues: market counteraction and industry risk; lower production costs; market trend adaptation.

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Chapter – 7 Recommendations Based on our analysis of current strategic and financial situation of Crocs Inc. , we have prepared a set of near-term recommendations for Crocs management: Realign the model of distribution We believe that Crocs should focus on retail expansion and instead recommend migration to a model that has proved successful for Uggs, another one-hit - wonder seasonal fashion shoes that has succeeded in emerging from its early high - growth stage.

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 performers, Crocs should naturally discontinue operations as leasesexpire.

Focus on a limited number of “flagship” stores in key geographic areas. Uggs has successfully built its brand with only eleven flagship stores in major cities worldwide. The flagships provide marketing “buzz” and “increased exposure to the brand driven by retail concept stores which showcase all of the productofferings.

Apart from the competitor’s model we would recommend the following strategies: Indianmarkets In Indian markets, Crocs should continue to operate its own stores in the near term in order to maintain control over its brand image and merchandisingmix.

Kiosks - Crocs’ kiosk locations seem to be cost effective and flexible. We recommend keeping these stores largely intact, but subjecting them to thesame rigorous financial returns analysis as the traditional retailstores.

Internet - Crocs should continue to focus on its sales channel on the Internet, which accounted for 13.7 percent of its 2009 sales. Since Croc buyers usually require relatively little knowledge, Crocs are suitable for online sales.

Focus on shoes Crocs should concentrate its whole organization (design, manufacturing, marketing) on the unique appeal of its shoes. There is reason to be optimistic that this is already happening: the publicity campaign " Feel the Love " of Crocs focuses on the quirky appeal of the shoes, as well ascomfort and therapeutic aspects of the Croslite technology. Another sign of the company 's intention to return to its roots is the discontinuation of efforts to expand into apparel and more radical shoe designs.

Supply chain.

We recommend that Crocs spend the money necessary to reduce lead time both in design and production. Management should also dedicate efforts toidentify additional suppliers, and/or lock up these suppliers in long term exclusive contracts, or possibly even to find alternative raw materials for its Crosliteproduct.

Consider a strategic transaction Finally, we recognize that a public company may not have the means to make the necessary changes in distribution, systems and marketing that we suggest. In this context, we recommend that the management of Crocs engage an investment consultant to consider the options of going to a private company or selling to a strategic buyer.

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Referencing   

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