An Overview Of Speedo

Published Date: 02 Nov 2017

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Table of contents

1 Executive Summary……………………………………………………………..4

2 Overview of Speedo .............................................................................................4

3 Analysis of Speedo’s Environment .....................................................................6

3.1 STEEP Analysis ...............................................................................................7

3.1.1 Social factors .................................................................................................7

3.1.2 Technological factors ....................................................................................7

3.1.3 Environmental factors ...................................................................................7

3.1.4 Economical factors.........................................................................................7

3.1.5 Political factors ..............................................................................................7

3.2 SWOT Analysis.................................................................................................7

3.2.1 Strengths ........................................................................................................8

3.2.2 Weaknesses ....................................................................................................8

3.2.3 Opportunities ..................................................................................................9

3.2.4 Threats ............................................................................................................9

4 Objectives of the marketing plan.................................................................. …...9

5. Segmentation and Positioning ...........................................................................10

5.1 Segmentation ...................................................................................................10

5.1.1 UK Professional athletes ..............................................................................11

5.1.2 UK women and men aged between 17 and 60 years of age .........................11

5.1.3 UK girls and boys aged between 1 and 16 years of age ................................11

5.2 Positioning ........................................................................................................12

5.2.1 Feature positioning ........................................................................................12

5.2.2 Product positioning.........................................................................................12

5.2.3 Benefits positioning .......................................................................................12

5.2.4 User positioning .............................................................................................13

6 Branding ...............................................................................................................13

7 Speedo’s Marketing Mix ......................................................................................14

7.1 Product ...............................................................................................................14

7.2 Pricing ................................................................................................................15

7.3 Place ...................................................................................................................16

7.3.1 Speedo’s website..............................................................................................16

7.3.2 Established high street stores ...........................................................................17

7.4 Promotion ............................................................................................................17

8 Monitoring and Controlling ........................................................................... ……18

9 Milestones ...............................................................................................................19

References ..................................................................................................................20

1. Executive Summary

This paper contains the Speedo UK three year marketing plan. The key objective of the marketing plan is to assist Speedo to acquire a 50% market share in the UK leisure and beachwear market, and at the same time maintain its 60% market share in the professional swim apparel. The total target customers have been categorized into two groups and total sixteen million. This number has been arrived at after carefully reviewing the population statistics of the UK including other considerations such as the number of Britons who go for holidays abroad. According to the projections of the marketing plan, fifteen million out of the sixteen million customers will be spending $100 on average by the third year of the plan. This means that by the third year, the company will have 1.5 billion sterling pounds as total sales revenue which will be over the 50% market share mark of the UK beachwear and leisure markets.

The marketing plan among others proposes marketing strategies which will involve newspaper advertisements, billboard advertisements, online advertisements, and TV and radio advertisements. In addition to this, several open air events will take place across various UK beaches where the general public can interact with the Speedo team and ask questions which they have with regard to Speedo’s products. One of the main objectives of these marketing activities is to popularize Speedo’s leisure and beachwear among the general public. This will disqualify public perception that the company only produces professional swimwear.

2. Overview of Speedo

Speedo was formed by formed by Alexander MacRae in 1914 after moving from his native country, Scotland, to Australia, in 1910. Speedo was originally called Hosiery Manufacturers, which only manufactured underwear. The company later changed its name to Mac Rae Knitting as it ventured into the expanding beach culture of Australia. In 1928, the company became known as Speedo after one of its employees, Captain Parsons, came up with the slogan, ‘Speed in your Speedos.’ This was after the introduction of a figure hugging costume by the company, which allowed greater freedom of movement, hence, facilitating faster swimming for swimmers who wore them.

Speedo’s swimwear quickly gained popularity especially after a new world swimming record was set by Anne Borg in her Speedo swimwear. Following this, Speedo’s success increased and the company was incorporated as Speedo Knitting Mill Ltd in 1951, thus, enabling it to trade in the Sydney Stock Exchange. The company was propelled to new heights after eight Australian swimmers scooped gold medals in their respective categories while in Speedo swimwear suits during the 1956 Melbourne Olympics. In 1959, Speedo established its presence abroad. Among the foreign countries which Speedo ventured into are: South Africa, Japan, UK, and the USA.

However, like any other organization, Speedo has also had a share of its challenges. Some of these challenges include accusations by competitors that the swimwear produced by Speedo constitutes cheating because they assist swimmers to swim faster. Consequently, this has posed several challenges to the company as depicted by the specific International Swimming Federation guidelines which bind the company products. Another challenge faced by the company is that it has failed to dominate the beach and leisurewear sector despite its leading role in the professional swim wear sectors

This marketing plan gives the approaches which can be implemented by Speedo over the next three years in order to assist the company get a 50% share of the beach and leisurewear market in the UK, while maintaining its leading role in the professional swimwear market. This plan will include an environmental analysis with regard to the company’s operations. Also, this plan includes Michael Porter’s five forces framework used in analyzing the industry. STEEP (Social, Technological, Economical, Environmental, Political) and SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis is also included in establishing the types of internal and external environments within which the company operates. Following the environmental analysis, this plan takes into account different marketing concepts which are crucial to developing the best marketing approach, which will assist Speedo in attaining its specified objectives.

3. Analysis of Speedo’s environment

An environmental scan involves an analysis of the economic, social, technological, and political forces, which influence the manner in which an organization functions. It involves an analysis of the present environment including the trends which may affect it (Kotler, 2010). Different scholars have developed different techniques for analyzing the environment to assist organizations carry out environmental analysis within which they operate. Among the most common techniques include the SWOT analysis, Porters five forces framework, and PEST (Political, Economic, Social, Technological) analysis.

3.1 STEEP analysis

According to Fleisher and Bensoussan (2009), environmental conditions mostly affect the whole strategic management process of a firm. Fleisher and Bensoussan contend that a firm’s internal factors such as strengths, capabilities, and weaknesses, determine which kind of response an organization will take in relation to specific circumstances. In this regard, it is, therefore, important for an organization to carry a STEEP analysis in order to establish factors which influence or affect the way the organization operates.

3.1.1 Social factors

The organization has to develop different products for the different social segments which it intends to serve. Acceptance of swimwear and bikinis by the UK society will mean high sales of beachwear and leisure products.

3.1.2 Technological factors

The large number of visitors to the web page of Speedo UK means that the organization can consider and make use of the web page as one of its main distribution channels. By using popular social media networks such as MySpace, facebook, and twitter, Speedo UK can actively engage with existing customers as well as potential customers.

3.1.3 Environmental factors

Speedo must be cautious with how its products are produced including the impact of production on the environment

3.1.4 Economical factors

The economy of the UK is almost stagnant, which means that several of the targeted customers will not be able to purchase Speedo’s products. The closure of high street outlets due to low sales will have a negative impact on the distribution channels of Speedo. Due to high rates of inflation as well as increases in VAT, supplier costs are likely to increase. The profit margins of Speedo will be affected in the event that UK taxation rates are increased.

3.1.5 Political factors

Changes in the European Union regulations affect the designs in which Speedo operates.

3.2 SWOT analysis

According to Verado (2008), SWOT analysis is an environmental scan which is important to any company intending to develop a significant strategic plan. Farrell and Hartline (2010) state that SWOT analysis is useful in examining a firm’s external environment and at the same time analyzing its internal environment. SWOT analysis is important in developing the marketing plan for Speedo since the main strengths and weaknesses of the company will be determined. In addition to this, the SWOT analysis will assist in establishing the potential threats and opportunities which Speedo is likely to face in the future. The results from the analysis will assist Speedo in capitalizing on the potential opportunities and utilize its strengths in order to achieve the marketing plan objectives.

3.2.1 Strengths

Due to the consistent wins of Speedo swimwear in several swimming competitions, Speedo brand equity is exceptionally strong.

In the UK, Speedo’s distribution channels are well established with a network of over 4100 distributors. Some of the retailers are directly owned by Pentland, which is Speedo’s parent company. The 4100 outlets imply that Speedo has the potential to distribute its products all over the UK. This means that the company has accessibility to the UK market.

Speedo’s relationship with NASA implies that it can develop the latest innovative swimwear which cannot be rivaled by its competitors.

The company’s UK web page is extremely active with approximately 80% of the web page visitors directly going to the virtual store.

3.2.2 Weaknesses

Speedo’s existence will be threatened in the event that its competitors develop innovative swimwear which can prove their performance in swimming races.

Speedo’s products sell at higher prices compared to products by its rival companies which are almost identical. Its rival companies include Mizuno, Adidas, and Nike.

With regard to the UK climatic conditions, Speedo’s leisure and beachwear products are only useful during the summer seasons.

3.2.3 Opportunities

Speedo’s products have the potential to appeal to more clients with the increasing change in societal values where clothes showing more human flesh such as bikinis, are increasingly becoming accepted in society.

The markets for Speedo’s leisure and beachwear products are on the increase with more Britons going abroad for holidays in search of warmer climates.

Speedo’s strong presence in the internet can be instrumental in reaching out to customers in areas where the company’s products are not distributed.

The sponsorship deal between Speedo and the British Swimming Association can be useful in promoting the company’s brand to the British public.

Sponsored swimming personalities have the potential to endorse the company’s products which will convince more customers into purchasing Speedo’s products.

3.2.4 Threats

Uncertainties in the financial situations with regard to the UK economy can result to low sales due to low disposable incomes of customers.

Speedo encounters strong competition from its competitors such as Arena, Adidas, and Nike, who are well established and produce almost identical products as Speedo.

4. Objectives of the marketing plan

The objective of Speedo’s marketing plan is to ensure that the company attains a 50% market share in the UK leisurewear market while at the same time retaining a 60% market share in the professional swimwear, which the company currently enjoys. The following goals need to be achieved in order for the company to realize its stated objective.

First is the short term goal, which dictates that the company should make its brand a household name. This should be done within 1 year of implementing the marketing plan. Second is the medium term goal, which dictates that, the company should attain a 35% market share in the leisure and beachwear within 2 years of implementing the marketing plan. Lastly is the long term goal, which dictates that the company should attain a 50% market share in the leisure and beachwear within 26 months of implementing the marketing plan.

5. Segmentation and Positioning

5.1 Segmentation

According to Kotler and Keller (2011), market segmentation is the process by which the total potential market of a product or a service is split up into smaller groups which are manageable. These groups are created by bringing together customers with the same needs. The criteria used in creating these groups and segments are identical, which implies that customers for each segment have the same purchasing behavior. The segmentation process involves two key phases: selection of the segment variables is the first phase which is then followed by the second phase, which involves the profile of segments. With regard to Speedo, this marketing plan classifies the target market into three segments. Professional swimming athletes make up the first segment, while the other segments are made up of women and men between the ages of 17 and 34 years who are interested in the blending of leisure, sports, fashion, and lifestyle. This segment also comprises young girls and boys between the ages of 3 and 16 years.

5.1.1 UK professional athletes

This segment is principally concerned with a swim wear which guarantees performance. Customers in this segment will purchase Speedo’s product because the company’s swim wear has proven to be scientifically designed, hence, giving swimmers a competitive added advantage. At times, Speedo’s competitors such as Nike have allowed their sponsored swimmers to wear Speedo swim wear. This demonstrates Speedo’s product dominance in the competitive professional swim wear market. The main customers in this segment are swimming professionals who will be willing to purchase Speedo’s swim wear irrespective of the price due to its competitive advantage.

5.1.2 UK women and men aged between 17 and 60 years of age

Individuals in this segment are middle income earners who are aware of the Speedo brand and want to associate themselves with it because wearing Speedo's brand makes them unique. In addition, this segment comprises individuals who involve themselves in leisure activities such as jogging, sunbathing, and swimming, and prefer wearing Speedo’s brands during such activities. This segment is also characterized by individuals who go for holidays abroad in sunny destinations. According to the 2012 UK government statistics, approximately more than half of UK's current population falls under this segment.

5.1.3 UK girls and boys aged between 1 and 16 years of age

This segment comprises the children of the middle income earners aged between 17 and 60 years of age who have the perception that their children can look smart in Speedo’s products. This segment comprises individuals who do not have disposable incomes and rely on their guardians and parents to buy them what they require.

5.2 Positioning

Positioning involves how an organization presents its products in the minds of prospective customers. In this regard, Speedo has positioned its products as the ultimate solutions to professional swimmers seeking swim wear which is performance enhanced. The challenge that Speedo faces, is the positioning of its leisure and beachwear products as products that will meet the needs of the target customers. In this regard, Speedo will adopt several approaches in positioning its products such as feature positioning, product positioning, and user positioning.

5.2.1 Feature positioning

In the minds of potential customers, products manufactured by Speedo will be positioned as the ultimate best products. This will be achieved by presenting the products with additional features such as durability and fashionable in comparison to identical products, which are offered by its competitors.

5.2.2 Product positioning

Speedo will adopt marketing initiatives aimed at presenting its products as the best in the market in comparison to its competitors’ products.

5.2.3 Benefits positioning

Benefits achieved by individuals who use Speedo’s products will be highlighted with the intention of attracting potential customers to purchase the company’s products and derive the same benefits. Some of these benefits will include warranty of full performance in swim wear products.

5.2.4 User positioning

Speedo will make every effort to ensure that its products are seen as the best with regard to the most fashionable and latest products within the professional swim wear markets. This perception will also encompass the leisure and beachwear markets.

6. Branding

A brand is a sign or a name or a combination of both aimed at identifying offers of a particular seller and differentiating them with those of competitors (Murphy, 2009). According to this marketing plan, Speedo will maintain its current existing brands. The justification for maintaining its current brands is that it will take more resources and time in creating new brands. This marketing plan also proposes that in the event that new brands will be created, they should be associated with the current existing brands.

Target Group

Existing Brand Name

Professional Swimmers

(Racing Suits)

LZR Racer

FastSkins3

Other Accessories (LZR Racer caps and goggles and FastSkin3)

UK Adults

(Aged between 17 and 60 years)

LZR Racer

FastSkins3

Legsuits

Jammers

Aquashorts

Tankinis

Other Accessories (shorts, shoes, caps, goggles and T-Shirts)

UK Girls and Boys

(Aged between 1 and 16 years)

Swim shorts

Jammers

FastSkins3

Other Speedo branded accessories (shoes, T-Shirts, caps, goggles, shoes)

7. Speedo’s Marketing Mix

Marketing mix involves a set of tools which are put in place by the management of most firms with the objective of increasing sales. Marketing mix elements are at times known as the 4Ps of marketing, and include place, pricing, promotion, and product.

7.1 Product

Consumers when making decisions on what to purchase and what not to purchase, look for products or services which will meet their needs or even exceed these needs. In light of this, Kotler and Keller (2011) contend that the decision making process with regard to consumer purchases means that marketers will have to present their services or products into five different levels. The basic level is the core benefit, which is the benefit the customers purchase when they buy the products or services. It is the simple or main reason why customers purchase or are willing to purchase the products (Kotler and Keller, 2011). The core product with regard to Speedo’s products is the variety of products including bikinis, goggles, and swim wear offered by the company to customers in order to meet their basic needs.

The second level of the product comprises the basic product. This involves the reasons why customers purchase specific products or services. In the case of Speedo, the basic product is the leisurewear or swim wear. The next level involves the expected product, which basically meets the needs of customers. The fourth level comprises an augmented product. This product is described as one which actually exceeds market expectations. Speedos swim wear can be viewed as augmented products since these swim wear guarantee high performance and are innovative.

The fifth level includes a potential product. This is a product which satisfies customers’ needs and distinguishes itself from similar products in the market. This marketing plan proposes frequent review of all Speedo products in comparison to other similar products in the market in order to ensure that the company’s offerings are always on the forefront. This is in terms of the benefits derived from using the company’s products and ensuring that the products remain fashionable in the markets.

7.2 Pricing

Price is the amount of money paid in exchange for receiving goods or services (Phillips, 2008). With regard to Speedo, price involves the amount paid by customers for acquiring Speedo's products. Since the target customers for Speedo are not price conscious of the products, the prices of Speedo’s products will be almost similar to the prices charged by the other well established competitors in the market. Actually, the prices of Speedo products will be higher with a 5% margin so as long as the customers feel that they are purchasing the best products in the market if price was the determining factor.

However, it is important that Speedo develops a pricing strategy which is flexible. The rationale is that the economy is dynamic, hence, the pricing strategy of Speedo should accommodate hard economic times as well as promotions, which will demand lower prices compared to what is normally charged. Speedo’s marketing plan proposes that the company’s latest innovative accessories and products should be priced at a premium. Furthermore, the professional athlete swim wear of the company should also be priced at a premium. This is because professional swimmers do not have other alternatives apart from purchasing Speedo’s swim wear if they want to stand any chances of winning in the swimming championships, in which they participate.

This marketing plan also proposes that with the exceptions of professional swim wear, all other product lines will be charged at prices not exceeding 5% of what the company’s competitors are charging. This approach is advisable because it means that the products of Speedo will not be seen to be extremely expensive in relation to other products in the market, even though the performance and quality of its products is different to what is on offer in the market. Also, according to the plan, leisure and beachwear accessories (bikinis and shorts) will be priced slightly lower than the market average prices in the first 2 years. This move is aimed at increasing the product’s market share in the market. In the third year, according to the plan, the lower priced bikinis and shorts will then be priced at the same level with competing products with a margin not exceeding 4%. It is assumed that towards the final year of the marketing plan, potential customers who initially had not tried Speedo products, will have tried them and will be comfortable paying more for the products since they will now be aware of the benefits which come with using Speedo’s products.

7.3 Place

This marketing plan proposes that the existing channels of distribution should be maintained. However, the only changes which are proposed in this plan are increases to the numbers of retail outlets which stock Speedo’s products in areas like the Island of Jersey, where some high street shops stock the company’s products. This marketing plan also proposes that the current web page of the company be updated to include more features.

7.3.1 Speedo’s website

Speedo’s current website will be upgraded and the end result is more user friendly compared to its current status. The website will include virtual games in different sports where the winners will be athletes wearing Speedo’s products. This website will play a crucial role in terms of distributing Speedo’s products because it will afford customers the opportunities to make online orders. Customers will have products delivered to their addresses within 3 business working days. This online feature will make sure that clients who cannot visit the high street stores, which store Speedo’s products, are able to access the products by making purchases from the websites. In addition to this, the web page will also attract potential and international customers and international deliveries will be made to international orders placed through this website.

7.3.2 Established high street stores

Speedo will make use of the already existing channels of distribution of its products, which is strengthened by sports retail giants such as JD Sports. JD Sports have distribution channels across UK and are owned by Pentland Group, which also happens to be the parent company of Speedo. The Pentland Group owns several retail outlets which will be used in distribution of Speedo’s products. In addition to this, the marketing plan advocates that Speedo should establish partnerships with other high street retail stores such as Top Shop, Marks and Spencer, Evans, Dorothy Perkins, Wallis, and Miss Selfridge, so that these outlets also stock Speedo’s products. This approach means that clients will be able to purchase Speedo’s products from high street stores. Customers are more likely to purchase swim wear from high street stores like Top Shop than from newly established stores which are yet to make their presence felt in the retail sector.

7.4 Promotion

A lot of money will be spent by Speedo in well planned marketing drives aimed at increasing the sales and popularity of Speedo brand, especially in the beachwear and leisure sectors. Despite the fact that the main marketing activities will be conducted by an established marketing consultant, the marketing department of Speedo will be responsible for analyzing and evaluating whether the implemented marketing initiatives are effective. The marketing initiatives which will be adopted include strategic online advertisements, TV advertisements, radio advertisements, and open-air events. The main purpose of marketing initiatives will be to assist in getting the Speedo brand to the public, which will in turn result to increases in the company’s total turnover by the time the books of accounts are being closed.

8. Monitoring and controlling

The sole purpose of this marketing plan is to serve as a guide for Speedo’s objective of increasing its market share in beachwear and lifestyle, and at the same time, retain its leadership status in the professional swim wear market. In light of this, in order to ensure that the marketing plan is well implemented towards achieving this desired objective, it has to be regularly monitored. Monitoring will involve the marketing department, which will conduct market research entailing the handing out of questionnaires to the general public, or even carrying out online surveys (Fifield, 2009).

The main purpose of the market research is to establish whether the general public is conscious of the variety of products offered by Speedo apart from the professional swim wear. In the event that the findings of the market research show that the respondents are conscious of that fact, then the adopted marketing strategies will be considered to be successful. During the three years of this marketing plan, the marketing department will assume overall responsibility for monitoring the success and progress of the plan. At the end of the third year, the success or failure of the plan will be determined by the increase or decrease in total revenues. If in the third year of the plan the total revenues will reflect a 60% share in the UK leisure and beachwear industry, then the plan will be said to be successful.

9. Milestones

Start Date

End Date

Budget (Pounds ‘000)

Responsibility

ADVERTISING

Recording of TV and radio adverts and booking adverts spots

01/06/2013

07/08/2012

655

Marketing Department

Design of Newsprint adverts including bill board adverts and paying for them

06/07/2013

30/07/2013

1,400

Marketing agency

PUBLIC RELATIONS

Creating target press list

1/08/2013

30/08/2013

0

Communications officer

Sending press releases to the target list

1/09/2013

30/05/2015

0

Communications officer

Updating the current website

1/07/2013

30/09/2013

0

IT Department

Redesigning social network pages

1/07/2013

30/08/2013

0

IT Department

Design of templates of monthly email newsletters

15/08/2013

15/10/2013

0

IT Department

Planning of open air events to be held in various beaches across the UK

01/09/2013

25/09/2013

0

Marketing Department

Design of feedback mechanism

01/09/2013

15/10/2013

0

IT Department and Marketing Department

LAUNCHING MARKETING ACTIVITIES

TV and Radio adverts

01/10/2013

30/09/2016

20,000

Marketing Department & the Advertising Agency

Open air events in various UK beaches

02/06/2013

15/08/2016

7,000

Marketing Department

Placing Strategic adverts online

01/10/2013

30/09/2016

1,000

Marketing & IT Departments

The target market population is estimated to be 16 million individuals. According to the marketing plan, the target is to make 15 million individuals spend over a hundred Sterling Pounds per year. This will result to an estimated 1.5 billion Pounds per year in total sales revenues from the UK. This will mean that the objective of the marketing plan will have been achieved.