Critical Analysis: Handbags and Wallets

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Question 1:
Conduct a critical analysis
of the mini-case.

CRITICAL ANALYSIS OF THE CASE

CRITICAL ANALYSIS OF THE CASE
• The product mix of the company is Handbags and Wallets.
• These company operates within a dynamic and ever-changing environment as it produces fashionable products.

CRITICAL ANALYSIS OF THE CASE
Buying situations for Handbags and Wallets:
Limited Problem Solving
Impulse Buying

CRITICAL ANALYSIS OF THE CASE
SWOT ANALYSIS

CRITICAL ANALYSIS OF THE CASE
Strengths
• Extremely popular / High reputation
• Already has an established customer base and market share • On growth stage on the Product Life Cycle
• Tania’s skills and inner instinct for fashion and trends; she is a talent oriented person
• Droning on differentiation, segmentation and positioning • If able to compete with other companies, it will acquire a greater market share

CRITICAL ANALYSIS OF THE CASE
Weaknesses
• It is a small company; it might struggle to survive
• Tania is uninspired and could therefore lead to her demotivation • Lack of marketing knowledge from Tania
• Unwillingness to learn further – “Innovate or evaporate” • The handbags and wallets are popular among existing customers but it is not focused on customer needs and requirements of
customers.

CRITICAL ANALYSIS OF THE CASE
Opportunities
• Year-on-year industry growth
• There is scope for market development; market penetration • Scope for customerisation
• Technological advances

CRITICAL ANALYSIS OF THE CASE
Threats
• Fashion industry is competitive and dynamic; it is a forever changing environment, therefore, the company needs to adapt itself or perish.
• Counterfeit products can also affect the sales of handbags and wallets
wallets
• Growing influence of lobbyists (PETA, WWF)

CRITICAL ANALYSIS OF THE CASE
• Carry out a market research

CRITICAL ANALYSIS OF THE CASE
• Tania should grasp the marketing concepts to understand customer needs so as to innovate and adapt her designs as per customer requirements.

CRITICAL ANALYSIS OF THE CASE
Branding
• A Proper branding can result in higher sales of not only one product, but on other products associated with that brand
• Branding will also encourage brand loyalty which in return will lead to greater market share in the future.
• Customers normally associate a brand with products or services of value. Therefore if the Handbags and wallets are being produced under a brand name, this will prove highly beneficial for the customers as it will strengthen the market share in terms of market growth.

CRITICAL ANALYSIS OF THE CASE
• Handbags and wallets can be categorized here as Stars as they represent products with rapid growth and if they are successful products, this will lead to a dominant market share. If the company is also successful in implementing differentiation, segmentation and positioning of the handbags and wallets, they will generate high returns in the future.

Question 2:
Discuss the relevance of
product differentiation in
the context of the abovenamed industry.

PRODUCT DIFFERENTIATION

PRODUCT DIFFERENTIATION
• Product differentiation is the process of generating
economic value by offering a product that customers
prefer over competitors’ product; i.e. offering product
or service that differs from that of competitors or
from the product line of the Company.
• Customer preferences allow firms to make above
normal profits and thus differentiating the product
becomes important for profitability.

PRODUCT DIFFERENTIATION
• Product differentiation can be achieved
through:
▫ Distinctive design – e.g. Louis Vuitton Logo

▫ Branding - e.g. Nike, adidas

PRODUCT DIFFERENTIATION
• A business should look at emphasizing its
Unique Selling Proposition (USP) to allow for
product differentiation.

• Product
differentiation
increases
the
perceived value of the firm’s products
and/or services relative to the value of...
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