Skechers Rebranding Strategy

Skechers Rebranding Strategy

By: Breaking Ads

Skechers: Performance Line

University of Illinois at Chicago

Professor James Cooper

Jenna Barnard, Rosie Alicea, Shane Sperling,

Fanny Tan, Zaga Zeqiri, Sean Reedy

Table of Contents

Agency Philosophy

At Breaking Ads we believe that through our creativity and attention to detail we can help companies step out of their comfort zone to become the next best thing. We are guided and inspired through our standard of excellence and preciseness.

Executive Summary

This report was commissioned to develop an integrated marketing campaign for Skechers, Inc. Skechers is looking to improve its sales and market share within the athletic shoe and apparel industry. This campaign has been designed as a comprehensive approach to accomplishing this goal. Breaking Ads campaign slogan is the same as the one we will project to the consumers: #DareToBeLegendary

The campaign will primarily target the attention of men and women between the ages of 18 and 25 in the USA. The successful implementation of this campaign will result in a projected 25% increase in yearly sales revenue for Skechers, Inc. It will focus on repositioning the Skechers brand in the minds of consumers within the target market from the current playful, fashionably distasteful perspective to a cool, attention- grabbing and desirable one. It will accomplish this by use of the following components:

· A complete overhaul of the current use of social media that directs the focus away from Skechers products and over to user oriented, interactive original content

· New celebrity endorsers that represent the values of youth, health & fitness, and competition

· Print and television advertising projecting the new brand position placed locations that reach our target market

· Attaining shelf space in major retailers that as of yet do not sell Skechers products

The campaign will run from 11/20/2014 (one week prior to Black Wednesday”) until the end of the next year, 2015. This will allow all the components to gain attention and traction while still taking advantage of the upcoming holiday season. The proposed budget is $20,392,650.00, compared to $450,000,000, a 25% increase in Skechers 2013 sales revenue.

For the sake of simplicity ad savings on cost and time, we will run our evaluation program online. We will use metrics gained from analyzing user traffic through our social media and sales reports to evaluate ongoing success.

Company/Industry Overview

Skechers, a leader in the footwear industry, was founded in 1992 by Robert Greenberg and son, Michael Greenburg. Currently, their headquarters is located in Manhattan Beach, California. Skechers is traded in the New York Stock Exchange under the symbol SKK. This diverse footwear company had $2.27 billion dollars in revenue in 2013, up 25% from last year. Their currently growth and developments include the Skechers Performance line.

Skechers initially broke into the market by producing a “knock-off” of Dr.Marten shoes. Thier initial product offering also included skating shows. However, a lawsuit with Dr. Martens eventual. They eventually found their niche in casual, athletic, and even dress styles of shoes for men, women, and children as well. Through their diversified domestic and international channels as of February 15, 2014 Skechers owns and operates 122 concept stores, 131 factory outlet stores, and 71 warehouse outlets in the United States. Internationally, Skechers operates 44 concept stores and 26 outlet stores. Skechers also sells its products through various department stores, specialty stores, and independent stores. Their distribution center is also in California for North America.

Performance gear, the sector that we are going to be concentrating on, is the largest growing sector for athletic companies. This year the sector has grown 12% compared to only 6% in the past year. Skechers performance direct competitor is Nike whose market share is at 59% and had a revenue of $28.81 billion last year. Adidas holds 10% of the market share. One of the up and coming competitors is Under Armour who is quickly growing but only has about 2% of the market share now. Skechers falls at the 5th highest market share position behind New Balance.

Skechers Product Offerings

Currently, Skechers product categories are broken down into two distinct footwear categories. The first is Skechers lifestyle division that includes the Skechers Memory Foam line, BOBS line , and Skechers Performance. The memory foam line includes various casual and trendy styles for all age groups. The BOBS line is a charity line that has very similar styles to TOMS shoes. Lastly, the Skechers Performance line includes Skechers GOWalk and GORun footwear. Skechers also sells licensed products such as apparel, bags, watches, eyewear, and toys. Skechers is best known for their wide selection of memory foam styles and classic athletic footwear made for the casual consumer. More recently, Skechers has been offering more lightweight performance and athletic-inspired footwear. Their product offerings also range from summer sandals to unisex boots.

Buyer Analysis

Although Skechers offers a wide assortment of styles for men and women of almost all age groups, the core Skechers customers are men, women, and children between the ages of 12-25. The Skechers customer is someone who is attracted to style, quality, and value. According to Skechers.com “[Our] core consumers are style-consious and attrached to our youthful brand image and fashion-forward desings, and with our new performance footwear, athletes and fitness enthusiats.” Most of the traditional Skechers reflect a playful image through materials and colors. All of the shoes are designed with comfort in mind and known for having casual every-day styles. Skechers are also for the consumer who seek inspired looks whether it be athletic inspired or designer inspired.

Current Marketing Mix & Strategies

Skechers utilizes a multi-channel marketing system to promote their products. They use an extensive amount of celebrity endorsements that will be described later in this report. The company uses various forms of social media such as Facebook, Instagram, Twitter, and Pinterest to promote product. They advertise in many major magazines such as Cosmopolitan, Seventeen, and People magazine. They also run TV commercials on major networks such as ESPN.

Currently Skechers objectives include focus on their new product line to increase retail sales in the performance division. Other strategies include cost containments and inventory management.

Skechers utilizes a celebrity endorser strategy for almost all of their collections. They have an extensive list of celebrity endorsers and are constantly adding more. Some female celebrity endorsers include Demi Lovato (singer), Kelly Brook (model and artist), Brooke Burke (TV personality). Male celebrity endorsers include legendary quarterbacks Joe Montana and Joe Namath. Other male endorsers include Pete Rose (baseball), Marian Rivera (baseball), and Matt Kuchar (golf). Recently, Ringo Starr has been added to the list of celebrity endorsers. The Skechers Performance line endorser is Meb Kelfezighi who is last years Boston Marathon winner. Skechers even offers their premium shoe called Med Game Speed 3. Skechers also sponsors the New York Race.

SWOT Analysis

We performed a SWOT Analysis to be able to focus on our strengths and take advantage of the opportunities in our market while minimizing threats. Comfort, Strong Brand Identity and Product Quality are the three strengths that Skechers carries as a brand. It is worldwide known for its comfort. The brand has been around for twenty-two years, the name alone is recognizable and the price reflects the quality. The weaknesses in our SWOT Analysis of Skechers were: Brand Image, Marketing and Advertising, Location and Lack of Popularity within the 18-25 age market. Even though Skechers carries strong brand identity, it has a negative image. This brand is not considered fashion forward. The shoes are viewed as boring and distasteful. Another weakness within the brand would be their marketing and advertising team. They do not understand their target market or how to effectively reach them. Worst of all they keep signing outdated celebrities and lack the ability to keep up with popular trends. Location is another weakness. Skechers should be distributed in stores such as Finish Line and Champs like their competitors instead of being distributed in department stores. Because of their brand image and the inability to stay trendy, they are missing out on popularity and additional revenue from the target market of 18-24 that Adidas and Nike work so closely with. The opportunities from the SWOT analysis would be: innovation of the symbol, new healthy lifestyle trend, social media and the target market of consumer age of 18 to 25. We want to take advantage of the current trend of living a healthy lifestyle by innovating the symbol and integrating social media within our promotion efforts, in order to target our new market. Increased Labor Cost in US, Intense Competition, and Mature Markets are the current threats to our brand.

Target Market & Repositioning

The target market of consumers’ ages of 18 to 25, we identified as a market with unfulfilled needs. The market segmentation strategy that is employed to the market of athletic shoe wear is consumer’s lifestyle and other factors such as age, income and geographic region. We want to target only United States. As previously stated, this country is obsessed with the new healthy lifestyle trend and our chosen celebrity endorsers, Blake Griffin and Jen Sleter represent exactly that. For selecting a target market we proceeded with concentrated marketing. We want a brand that speaks to, “the athlete in everyone” and captures a large share of this 18-25 market of men and women. Repositioning is our strategy because we want to innovate the symbol, change the brand’s position and the way consumers of this target market view Skechers. Our main goal is to reposition the brand from a monotone self to a cool, demanding, yet magnetizing brand.

Competitors

The main competitors for Skechers are Nike and Adidas. Compared to Nike’s 25.3 billion dollar revenue and Adidas’s 18 billion dollar revenue, Skechers is a much smaller company. However, Skechers’ small size should not be a negative factor because we will be aiming to create a bigger impact with what Skechers has.

Nike holds more prominence in the athletic industry, especially for the younger generation of fitness buffs who not only want a quality product, but also want it to be cool and stylish. Just through simple observation, we have noticed that most students (our target market and the more financially influential generation) wear Nike shoes and apparel. Nike is the more popular brand when it comes to the casual exerciser as well as the “stylish” fashion aficionado. Many fashion bloggers and YouTube stars wear Nike as active wear and even pair Nike athletic shoes with their fashion outfits. Nike shoes have expanded into the style world and become the latest “it” item for the masses. They has succeeded in becoming a stylish lifestyle brand.

Adidas is another competitor that Skechers has to be careful of. Because we are hoping to make people look at Skechers athletic shoes more seriously, Adidas is a major competitor. Adidas probably sponsors the most sports and athletes globally. Not only are they very involved in sports and athletes, but Adidas has a “streetwear” brand under Adidas Originals. Through Adidas Originals, collaborations with current popular musicians (such as Rita Ora, Nicki Minaj, 2NE1, and Katy Perry) and fashion designer Jeremy Scott have made the brand very popular with the young adult generation. These collaborations include limited edition designs and promotional advertisement. Overall, Adidas is a powerhouse in the market for 18-25 year-olds.

Campaign Objectives

Our Integrated marketing communications objectives are to: stimulate growth in our product category, encourage nonusers to wear Skechers, change our target audience’s view of the brand, deliver an exhilarating message to get the consumers talking such as, #DaretobeLegendary, increase our sales by 25% . The time frame to accomplish this objective would start a week before Black Friday and push the product through next year’s Christmas and New Year’s. Skechers current sales and revenue is 1,850,000,000 and with our objective of having an 25% increase, we should bring in additional revenue of 462,500,000 million. First we want to achieve our lowel-level objectives such as awareness and knowledge. The advertising goal is to change the target markets’ image of the brand and move consumers through to purchase. With repositioning our product , we push to change the consumer’s perceptions which takes much more time. This is why we are innovating our symbol and increasing advertising expenditures to gain awareness and influence consumers to purchase. Celebrity endorsements will use social media networks to help the brand gain exposure, create buzz and gain consideration.

Celebrity Endorsements / Print Advertisements

In order to give the Skechers campaign credibility and a new image, celebrity endorsements will be implemented. As stated above, Skechers’ current endorsements include older, retired athletes or people that the target demographic can’t relate to. So, for this campaign there will be two endorsements, a male and a female. As a woman that others see as a fitness inspiration, Jen Selter would be a great fit for the new and improved Skechers image. She started out as an Instagram sensation; posting photos of her healthy physique and sharing videos of her workout routines. Today, Selter has 5 million followers on Instagram, 757 followers on twitter and has been featured in Vanity Fair and Elle magazines, making her an online sensation as well as a brand all her own (Selter).

This campaign also needs a strong, athletic male figure. This spot can be filled by basketball superstar, Blake Griffin. Griffin currently plays for the Los Angeles Clippers of the NBA and has endorsed for a few other companies. These include KIA Motors, Gamefly, Subway, and Vizio making him a recognizable name. He has 1.6 million followers on Instagram, 2.78 million followers on Twitter, and has also been featured on the cover of magazines such as GQ and Sports Illustrated (JockBio). Therefore, Griffin will bring creditable athleticism to the campaign that the target audience can respond to.

The role of these endorsements is to relate the new Skechers look to celebrities that our audience knows and trusts in the media world. Mainly, they will be featured in print ads that will be posted on billboards, bus stops, and placed in magazines such as Men’s Health, Seventeen, Sports Illustrated, and Cosmopolitan. They will also post pictures on Instagram and twitter in their new Skechers shoes in order to reach millions of individuals. Overall, they will be the jump-off point of this campaign by being the face of the new Skechers look.