Analysis of Marketing Effectiveness

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Marketing Effectiveness Analysis – Retail and Non-Profit Sectors

Marketing effectiveness is defined as the ability of an organization to reach its marketing

objectives while taking into account the organization’s resource constraints. A website's marketing

effectiveness can be determined by a number of different factors including value proposition,

segmentation and positioning strategies, on-site personalization elements, the site’s ability to drive

traffic, user engagement, reassurance elements, integration of services, and the “fit” of informational

content with the goals of the site. In this paper, both the retail-apparel and non-profit sectors are

analyzed to determine which factors are most critical in determining the marketing effectiveness of an

online site. Both sectors are also analyzed to highlight the similarities and differences among marketing

effectiveness factors.

The Retail-Apparel Industry Sector

The US retail-apparel industry consists of approximately 100,000 stores with a combined annual

revenue of around $150 billion. This industry is comprised of many large companies such as The TJX

Companies, Inc. (TJ Maxx, Marshalls), Gap, Limited Brands, Ross, and Abercrombie & Fitch. The industry

is concentrated: the 50 largest companies account for roughly 65 percent of industry revenue. Globally,

the only US-owned company to make the top 5 companies in the industry is The TJX Companies, Inc.,

with annual sales of approximately 20 billion dollars (www.hoovers.com). Large companies in this

sector compete by offering wide selections of clothing, utilizing their advantages in purchasing,

distribution, and marketing, whereas small (niche) stores compete by offering unique merchandise,

targeting specific demographics, providing superior customer service, selling online, or simply serving a

local market (www.firstresearch.com).

Personal income and fashion trends drive demand for retail apparel; as such sales trends

fluctuate with the economy. The recent economic downturn has moved consumers in the direction of

less expensive clothing, fueling the growth of companies like TJ Maxx (www.ibisworld.com). However,

the market is improving: US retail sales for clothing and clothing accessories stores, a measure of

consumer spending on clothing, increased 4.4 percent in the first nine months of 2010 compared to the

same period in 2009. The plus size clothing market’s demand is also trending upward as Americans’

waist lines continue to expand (www.hoovers.com). Online and discount stores are continuing to grow

Marketing Effectiveness Factors: Patagonia, The North Face, and prAna

The retail-apparel sector relies heavily on marketing and brand identity/awareness in order to

increase sales and become profitable in this large, concentrated industry. Retailers must have a good

understanding of their mission and objectives in order to create a marketing strategy that differentiates

them from their competition. After analyzing the three retail-apparel industry websites, several factors

emerged that contribute to the marketing effectiveness of the retailers who choose to have an online

presence.

One of the most critical factors in determining the marketing effectiveness in the retail-apparel

sector is the presence of a clear segmentation strategy. Patagonia and prAna clearly target niche

segments of the population, with Patagonia targeting environmentally friendly, extreme outdoor

enthusiasts and prAna catering to the yoga and rock climbing markets. The North Face, while still

targeting a niche segment (outdoor enthusiasts), tries to reach a wider audience by forming a multi-

segmentation strategy of offering a wide variety of products for everyone in the family from the casual

hiker to extreme mountaineer. None of these companies are very large and, as such, have limited

resources, so utilizing a niche segment...
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