Marketing Module 8 Assignment

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MKTG 5001 Marketing (MODULE 8 ASSIGNMENT 2) Group G: Hdl Case Analysis: Social Networking Assignment (ALDO Brand) Executive Summary ALDO Group also known as ALDO has been a frontrunner for five decades in fashion footwear, and is a top choice for its versatile, reasonably priced, shoes, accessories and bags. Even before the pandemic in 2014, Aldo invested $363 million in its technological infrastructure. The brand decided to go digital and develop a multi-channel approach. It was one of the first retail brands in its spectrum to launch a mobile app for consumers to shop from. ALDO is aware of the explosive spread of social networking sites like Instagram used by many consumers, in order not only to interact and communicate with other individuals, but also to seek information about products and services. In today’s fashion industry, Instagram has presented visual-based capabilities that are considered effective for marketing fashion brands and products. This has made ALDO shift its social-cultural to fashion brands that interact with potential customers as reflected in the behavioral changes among consumers using Instagram that has resulted in increased efficiency of social word-of- mouth marketing. Instagram is a marketing social website which uses visuals and descriptions to communicate to the audience and facilitates sharing of media to other social media platforms such as Facebook. These features have made the application appealing to millions of users and fashion brands in Canada and across the globe. 1)Problem Statements ALDO uses Instagram to share authentic brand stories on their personal profile, but consumers are in the driver’s seat nowadays, they can elevate or decimate a brand with one social media post that goes viral. Embracing this new marketing dynamic takes a very different set of skills. Marketers now curate the brand collaboratively with customers, based on their behaviors. Not every marketer is comfortable with, or capable of, that kind of engagement. Marketers are now getting used to the power sharing with consumers and to leveraging the new power of data-driven insights into consumer behavior. ALDO Group engages influencers or Instagram users who have large followers in the platform to drive their marketing initiatives. Some fashion brands are not sure on the most appropriate strategies to achieve the best results in Instagram marketing on how to increase the customer base, analyzing the opinions and trends among consumers to make data-driven decisions.

2)Situation Analysis (Current Statues) a)Company Objectives: The introduction of ALDO’s app was made to purely cater for the comfort and convenience of the consumer rather than to generate profits. The original aim of ALDO Group is to be one of the most popular mall brands with the highest engagement rate on social media. Over the years , fashion brands advertised their customers magazines, billboards, and traditional television advertisements. But over the last few years, instead of using the old method of advertisement, ALDO sensed a significant shift in consumer expectations and observed that most consumers spend more time at home and they absolutely spend more time on digital and social media. However, Instagram offers an opportunity for consumers to engage in discussions with the ALDO brand before, during, and after purchases. The visual features offered by Instagram have enabled the users to offer information about brands by adding content that promotes the products in posts and depict their daily life experiences. Background: The ALDO brand is a Canadian multinational corporation retailer that owns and operates a worldwide chain of shoe and accessories stores. ALDO Group was founded in 1972 and the company has grown to become a global leader in footwear and fashion accessories. It has sold over 46 million pairs of shoes and has nearly 3,000 stores across 100 countries. ALDO usually displays its brand through traditional photography that appears in signage and glossy magazines, typical of the fashion category. The brand has also partnered with numerous influencers on Instagram to demonstrate dance and get the word out. ALDO is a lifestyle brand for people who love fashions. ALDO specializes in the creation of high-quality fashion footwear, leather goods and accessories. The brand pays close attention to detail and to fine craftsmanship. Forecast: Aldo Group is making some big moves for its global fall campaign through the use of social media. The goal of the campaign is to “elevate the perception of the Aldo brand as a true designer brand,” said Erwin Hinteregger, chief marketing officer at Aldo Group. The brand wants to be seen as one of key voices when it comes to fashion, footwear and accessories. The ALDO Group restructured their business strategy during the pandemic and they remained open online until local stores were reopened.

On their Instagram page, ALDO Group is communicating directly with over 800 million active users from around the world. Instagram allows individuals to share ideas, connect with foreign worlds, increase humankind’s knowledge, and increase diversity. b)Company fit in the environment: internal and external factors. (SWOT with implications) One Strength of ALDO is the awareness on how to earn customer loyalty with its brand reputation by creating an app and open online page on different social networks which have the greatest number of users. Customers trust social media more than corporate-sponsored messages concerning product information and that is why Instagram allows ALDO to establish a strong relationship with its customers. They share their vision, values, and products, as well as receive in return feedback and new customers. ALDO weakness depends on its purchasing power on medium because it is very easy for buyers to switch from one brand to another if they saw the value of other brand products on Instagram advert. Since fashion is ever-changing, there is high pressure on Aldo to keep up-to-date with trends and offer products that people would want to buy. Moreover, Stealing photos, videos and ideas on Instagram has become a weakness to fashion firms and this could be detrimental to a brand. The opportunity to communicate and sell ALDOs’ products to customers online through the use of App and other social networks has significantly helped to understand consumers’ behavior, attitudes, and emotional bonding towards brands. Social Network is used as part of an integrated marketing communication strategy of the marketing mix to ALDO, this has created a higher upper hand for ALDO’s marketers among other marketers as it provides new channels of interactive communication with consumers. The biggest threat for Aldo is the overall industry rivalries which are very high. It is very easy to enter the market but harder to establish the brand and get followers. Consumers don’t have very high brand loyalty, especially since switching costs are barely existent. As trends keep changing every few months, it is difficult to compete with the numerous competitors in the market because some brands may even roll out the latest trend before Aldo. There is low differentiation between Aldo and its major competitors as all are fighting for the same target market. c)Market Analysis:

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The ALDO Group is a Canadian retailer that owns and operates a global chain of footwear and accessory stores. The company currently has 3,000 stores in more than 100 countries. More than 50,000 footwear shoppers visit ALDO stores across North America and the UK every day. ALDO was an early e-commerce success but due to the improvement of e-commerce, the company has shifted to social media and Mobile shopping. Their site is built with a scalable design system that helps ALDO serve customers across all touchpoints and all devices. On social websites like Instagram, ALDO has garnered more than 44,502k likes and its followers grew by 44,500k after the campaign. Rather than approach the Canadian market with a unique strategy, the brand has taken a broader North American perspective through a partnership with New-York based women’s style and entertainment website Refinery29. The four-month program includes a branded content series as well experiential activations. In addition to a strong digital push, Aldo has put significant focus on a series of billboards in Manhattan. d)Segmentation Analysis: Demographic: ALDO targets both women and men who are passionate about fashions around the age 16 to 45, with a chic, trendy, bold fashion sense, medium to high purchasing power and willingness to spend on their appearance or image. The firm realized that many life-changing moments take place between the ages of 21 and 35 (the age of its core customer demographic) whether it’s landing a new job, graduating from school, meeting a romantic partner or simply doing something outside the norm. Geographic: The company has stores in Canada, the US, the UK, and through franchises in more than 85 other countries worldwide. ALDO produces English shoes, wears and accessories targeting the Western world and also diverse their product to various cultural groups around the world. Nowadays, businesses seek to integrate social media into their strategy to attract and interact with geographical communities. Organizations are able to reach the global market through social media due to millions of users worldwide e) Competition Analysis : Aldo Group’s burgeoning competition includes popular discount and fast-fashion trendsetters like H&M and Zara. Its competitors include other brands that sell a similar array of products. These competitors are not a bigger threat to Aldo because some of them focus primarily on accessories and others on clothing. Both brands do not have similar price or style offerings as Aldo. Aldo is not a luxury brand, the brand usually takes inspiration from luxury brands and creates products similar to them but at a very affordable price.

Increased competition in the fashion industry has resulted in the application of innovative strategies to increase the market share and profitability. Social media has emerged as an effective and reliable channel of marketing fashion products. Instagram forms a virtual community, which brings forth an opportunity for influencers to engage in marketing initiatives. f)Financial Analysis : Aldo Group filed for creditor protection which makes them the first major Canadian retailer to buckle under new pressures brought on by the COVID-19 crisis. During the pandemic, the company drastically reduced its expenses in order to restructure its operations to survive the economic and financial crisis, thus, the company terminated a number of leases in Canada and US to focus on online sales. As a private company, Aldo does not release public financial reports, but industry estimates and statements from the company have put revenue above $1 billion for each of the last several years. However, according to the filings, Aldo has not been profitable for a few years and has experienced consolidated operating losses. For the fiscal year ending in Feb. 2020, the company had $108.1 million in operating losses, 8.5% of its sales volume of $1.28 billion. For the two months ending April 4, Aldo had an additional $44 million in operating losses, 37.4% of its sales volume of $117.8 million, a downward trend it expects to continue. By comparison, in the first two months of last year, Aldo had a $18.9 million sales loss, 9.5% of its $199.8 million sales volume. Sales have decreased dramatically due to the government-mandated store closures. The pandemic also affected the Group's normal procurement schedules, resulting in its spring merchandise being unsold and delaying the delivery of fall merchandise ordered from suppliers in Asia. While under creditor protection, the company intends to terminate various leases while considering various restructuring alternatives. 3)Case Keys: 1) What is the best way to grow ALDO cyber fashion? How to ensure a sustainable fashion brand that will last for a long period? 2) What is ALDO’s basis of competitive advantage and what makes the brand different from others? Which method of distribution is cheaper and faster to transport their products around the globe? 3) How does ALDO attract and respond to their loyal and new customers? What strategies are they using to keep these customers?

4)Analysis of alternative solutions (pros and cons of each plus quantitative assessment and key uncertainties). ALDOs Marketers focus on the ways consumers use products and how they connect with them, through social media, in order to build and sustain a social profile and identity. Pros: 1) ALDO’s investment on social media is to increase communication and create bridges between their brands and consumers. Creating ties with consumers and active interactions online creates trust and promotes brand loyalty. Consumers are now able to create information and content concerning a brand, and share them rapidly in more effective brand communities without being controlled by the firm. 2) ALDO launched a campaign “to inspire and move forward” was successful and was awarded as the best footwear and accessories in 2018. The brand worked with top fashion photographers like Mikael Jansson and renowned stylist Alex White on the campaign which added to their success including their involvement in print, online, mobile, in-store and social media. While their campaign includes traditional advertising, such as fashion magazines in North America and abroad, Aldo is putting a big push on social media. 3) According to ALDO Group, the video campaign on Instagram and TikTok dance challenge tied to last year’s campaign garnered more than 5.4 billion views on the social media platform. The brand also has larger following on Facebook and other social media platforms. Most of their campaigns are seen online by their consumers (Gen Z and millennials) who are the active users of social media. Cons: 1) Social media is a greater threat to Aldo because it is very easy for a new product to enter the footwear and accessories market through online posting on social networks and selling similar products in local stores. Brand loyalty is also not very high for shoes, bags, and accessories, especially with the vast number of competitors and options available in the market. Moreover, information distributed through online communities may not be perceived as highly credible trust due to the higher rate of cybercrimes. 2) Initially, ALDO struggled to understand how to effectively utilize Mobile App and Instagram due to various challenges that have resulted in the engagement of third parties like the Instagram influencers who result in the creation of the Instagram economy. Challenges faced by organizations include the difficulties of navigating and integrating

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Instagram into the existing pool of social media. Fashion brands that have a substantial presence on Instagram have a higher chance of enhanced consumer engagement compared to other platforms such as Facebook. 5)Recommendation(s) 1) I will recommend that a profile should be controlled by the company itself to support establishing a community of interests, sharing knowledge, or connecting customers to the ALDO brand. Fanpage should only be used by the brand and fan in supporting marketing campaigns, communicating, social interaction, and gaining collective ideas from its members. 2) To generate and maintain influence within social networks, ALDO must identify themselves and attract user groups that connect with the brand and act on their behalf. These groups do not necessarily have to be large but they should be influential. 3) Popular social media platforms such as Instagram gain an increased number of users, there is a need for companies to follow and learn how to communicate and drive marketing initiatives among the users effectively. 6)Action Plans 1) To boost a large following of more than 1.4million followers weekly, ALDO should treat their followers daily with about two to three beautiful photos each day. The mixture of shoes and clothes photos to families to keep their followers interested and wanting more. 2) Personal attachment to online social media should be positively related to consumer behaviors and brand advocacy. This will attract more customers and increase their desirable target to maximize the effectiveness and efficiency of campaigns designed for social media. Reference: Grewal, D., Levy, M., & Lichti, S. (2021). Marketing (5th Canadian ed.). McGraw-Hill Ryerson. https://www.aldoshoes.com/ca/en? utm_source=rewardStyle&utm_medium=affiliate&utm_campaign=2575853&utm_content=553389&ut m_term=553389&ranMID=38479&ranEAID=QFGLnEolOWg&ranSiteID=QFGLnEolOWg- ksSmPwCUnZStZVLd7VwWbQ

https://www.aldoshoes.com/ca/en/store-locator/store/1083 https://instagram.com/aldo_shoes?utm_medium=copy_link http://www.bloomberg.com/news/videos/b/b52be99b-c26b-494c-904b-d5ecdeb34ed7 www.socialsignal.com www.chrisbrogan.com https://postbeyond.com/molson-coors-scale-social-brand/ http://www.beingpeterkim.com/ www.mashable.com

Marketing Module 8 Assignment

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